Aug 15, 2013

Price Discrimination 2.0. Opaque Bookings

Imagine a customer attempting to book a room on a three–star hotel located in Downtown–Manhattan on January 14th. When using, the consumer is presented with a list of hotels, one for each area–star pair, displaying room rates and hotel amenities (e.g. parking, fitness room, etc). The booking process and user interface mimics that of a transparent platform like The key difference however is that hotels names are hidden from the buyer and only revealed after the booking has been paid. P. 3.
That is from this paper by Cossa & Tappata (June 2013). 

From the abstract:
Our results suggest that the opaque selling channel constitutes the main device used by hotels to segment demand and even replaced traditional segmentation strategies. On average, consumers obtain a 49 percent discount when booking through a fully opaque platform. This discount drops to 40 percent when the booking is done through a semi–opaque platform. As suggested by the theory, discounts are proportionally larger for high quality hotels.

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