This study aims to examine strategic decision-making between hotels and online travel agencies (OTAs) as hotels launch destination live-streaming sales (DLS) channels, focusing on channel expansion decisions, pricing strategies and market impact.
This study develops a game-theoretic model to examine the strategic interactions between hotels and OTAs in the tourism online-to-offline (O2O) supply chain, integrating the effects of information asymmetry and live-streaming e-commerce on the traditional O2O framework.
From a market expansion perspective, hotels are incentivised to launch DLS channels. However, this strategy may reduce demand for additional services. Secondly, launching DLS channels does not guarantee profitability for all hotels but proves beneficial when pricing strategies cannot adequately mitigate the adverse effects of information asymmetry. Furthermore, destination live-streaming e-commerce serves to mitigate double marginalisation and, under specific circumstances, facilitate Pareto improvements across the supply chain, thereby enhancing market efficiency and social welfare.
By launching DLS channels, hotels can engage directly with consumers, thereby reducing reliance on OTAs and enabling more flexible pricing and competitive strategies. To maximise overall profitability, hotels should evaluate the market potential and economic trade-offs of both room sales and additional services, and adjust their channel strategies and pricing mechanisms accordingly.
This study extends the theoretical frameworks underlying strategic decision-making in both hospitality management and live-streaming e-commerce by developing and analysing a game-theoretic model that captures the unique characteristics of live-streaming applications in the hospitality industry.
