Joint Opaque booking systems for online travel agencies

This paper analyzes the properties of the advanced Opaque booking systems used by the online travel agencies in conjunction with their traditional transparent booking system. In section 2 we present an updated literature review. This review underlines the interest and the specicities of Opaque goods in the Tourism Industry. It also characterizes properties of the Name-Your-Own-Price (NYOP) channel introduced by Priceline and oering probabilistic goods to potential travelers. In the section 3 of the paper we present a theoretical model, in which we wonder what kind of Opaque system can be implemented by a given online monopoly. We compare the "Opaque \Hotwire system", a NYOP system without any possibility of rebidding and the joint implementation of these two systems. We nd that the NYOP system and the joint implementation can have challenging properties if consumer's information is complete. Then, in section 4, we analyze the case of incomplete information. We develop an appropriate setting to integrate the lack of complete information of potential passengers on their relative propensity to pay. We analyze three cases corresponding to dierent levels of uncertainty and number of tickets available. We nd that in some relevant cases (average number of tickets, moderate uncertainty), the joint implementation of 2 dierent Opaque booking systems is advantageous for the Online travel Agencies (OTAs) and airlines. This result casts doubt on the current OTAs' strategies.Opaque Selling, Name-Your-Own-Price, Economics of Tourism, Online Travel Agencies, Probabilistic Goods.

Selling Tourism Products through the Opaque Channels

International audienceThis paper analyses the properties of the advanced Opaque booking systems used by online travel agencies in conjunction with their traditional transparent booking system. In section 2 an updated literature review is presented. This review underlines the interest and the specificities of Opaque goods in the Tourism Industry. It also characterises properties of the Name-Your-Own-Price channel introduced by Priceline and the Opaque channel developed by Hotwire. Then, in section 3, the possibility of joint-implementation of more than one opaque booking system by an online intermediary is discussed. Finally, in section 4, intuitions and preliminary results are presented

Joint Opaque Selling Systems for Online Travel Agencies

Cet article analyse les ventes opaques qui constituent un canal de distribution alternatif aux canaux traditionnels. Deux variantes sont pratiquées. La première, développée par Hotwire.com repose sur des prix affichés et un service garanti par le vendeur dès le paiement. La seconde, proposée par Priceline.com, fonctionne sur la base d’une sorte de système d’enchères, les clients potentiels formulant un prix pour une offre qui leur sera d’autant plus accessible que le prix proposé est élevé. Nous proposons un modèle analytique permettant de comparer l’application individuelle et simultanée de ces deux variantes par une agence de voyages en ligne en situation de monopole et faisant face à une demande hétérogène. Deux situations sont explorées : une information complète mais imparfaite et une information incomplète et imparfaite. Les résultats obtenus montrent qu’en information complète et imparfaite l’adoption simultanée des deux systèmes n’améliore pas les profits du monopoleur. En revanche, dans le cas où l’information est incomplète, ce qui semble le plus pertinent, l’utilisation des deux canaux opaques accroît le profit joint de la compagnie et de l’intermédiaire, ce qui jette un doute sur le bien-fondé des stratégies retenues actuellement par les intermédiaires.This paper analyses the properties of sophisticated opaque booking systems, implemented by online travel agencies in conjunction, usually, with traditional transparent systems. We characterize the opaque products as opposed to traditional transparent products. We focus on the two particular distribution models: opaque posted price system developed by Hotwire.com, and the Name-Your-Own-Price system developed by Priceline.com. We propose an analytical model to compare the results of individual implementation and joint implementation of these two models by an online travel agency in a monopoly position. We consider the cases of complete and incomplete information by introducing consumer uncertainty about their relative propensity to pay and about prevailing states of the world. We find that under realistic assumptions, including moderate levels of uncertainty and average number of ticket sales, joint implementation of both systems provides the best results for the online travel agency, which casts doubt on current dominant strategies

Re-intermédiation et stratégies de prix dans le secteur du tourisme

Cette thèse se concentre sur la question de la détermination des prix des services touristiques et celle de l’évolution de leur qualité. La première partie s’intéresse aux canaux de distribution, en particulier aux incidences de la généralisation de l’usage des TIC sur leur mode de fonctionnement et les stratégies de prix qui y sont mises en place. Le premier chapitre dresse un état des lieux des évolutions récentes. Il met l’accent sur les modalités de tarification dynamique. Puis, le deuxième chapitre est consacré à l’analyse des offres opaques qui contribuent aujourd’hui beaucoup à l’activité des canaux alternatifs. Nous montrons que la diversification des modalités de vente opaque par un monopole n’est pas souhaitable en information complète, mais qu’elle peut en revanche améliorer les profits de ce monopole en situation d’information incomplète. La deuxième partie s’articule autour de problématiques liées à l’incidence de la montée des préoccupations environnementales sur la qualité et l’offre des produits touristiques. Ainsi, le troisième chapitre étudie théoriquement l’impact de la modification de la demande sur les stratégies d’offre des professionnels, dans un contexte de monopole, puis de duopole. Nous montrons comment une offre environnementalement responsable peut émerger, évoluer, jusqu’à évincer l’offre de produits traditionnels. Le quatrième chapitre part du cadre envisagé dans le précédent, en y adjoignant une population de résidents. La prise en compte des populations locales a deux conséquences : celle d’accélérer l’adoption de normes environnementales, mais aussi de limiter l’offre de services du tourisme.This Ph.D. thesis focuses on tourism products pricing and quality evolution. The first part considers the impacts of ICT development on distribution channels, intermediation and pricing strategies. The first chapter identifies and analyzes prevailing distribution and pricing strategies. The focus is made on dynamic pricing models. Then, the second chapter focuses on alternative distribution channels, namely the innovative strategies of opaque selling. It analyzes the case of an intermediary in a situation of monopoly facing heterogeneous demand. Model results depend on consumers’ uncertainty levels. We find that when information is complete, the combination of opaque channelsis not profitable for the monopoly. On the opposite, in case of incomplete information, joint implementation of both systems provides the best results. The second part considers the influence of increasing environmental awareness on the quality of tourism products. In the third chapter, by adapting a demand-driven approach, in context of monopoly, and then duopoly, we explain the role of the industry in the adoption of environmental sustainability norms. We show, how sustainable tourism products emerge, evolve, and may even eliminate traditional products. Then, in the fourth chapter, based on the same theoretical core, we include another aspect of sustainability, which concerns interactions with local population. We consider how a population ofresidents influences the adoption of environmental norms. We show that taking into account residents’ actions leads the service provider to reduce its offer, and in most cases, to choose the sustainable solution

Sustainable Tourism and the emergence of new Environmental Norms

Since 1990s environmental protection and awareness became major issues. Consumers are more and more aware of environmental issues and conscious of existing pollution caused by mass tourism. Consequently a new segment of demand desiring sustainable tourism products have appeared, enhancing service providers to offer this type of products. This paper analyzes the evolution of service provider's offer adapting to demand preferences modification. Using a theoretical framework, it explains how environmental quality standards can become general norms in tourism industry. By analyzing a case of monopoly and duopoly, it considers different possible frameworks and strategic choices that may be implemented by the incumbent. Though, it explains the role of industry in the emergence of the new environmental norms