Contract design for a multi-channel hotel service supply chain
Nankai Business Review International
ISSN: 2040-8749
Article publication date: 9 January 2020
Issue publication date: 16 June 2020
Abstract
Purpose
This paper aims to reduce the confliction between different retail channels.
Design/methodology/approach
By investigating a game-theoretic model consisting of a dominant hotel, a promoter and an OTA, the authors analyze the optimal amount of reserved rooms on the hotel's official website and realize the coordination between the hotel and the promoter with an appropriate contact.
Findings
When the gap between promoter’s reservation profits under different promotion cost coefficients is reasonable, complete coordination can be achieved in the supply chain. In addition, numerical examples are conducted to show that the profit of hotel and supply chain can be maximized with a moderate amount of reserved rooms on OTA.
Research limitations/implications
The authors only focus on one OTA scenarios, which overlooks the competition between OTAs.
Practical implications
Coordination strategy can fierce the increase on profit when the customer conversion rate increases.
Originality/value
The authors propose a contract menu to help the hotel avoid the profit loss under asymmetric promotion cost information.
Keywords
Citation
Zeng, X., Shi, P. and Xie, W. (2020), "Contract design for a multi-channel hotel service supply chain", Nankai Business Review International, Vol. 11 No. 3, pp. 371-392. https://doi.org/10.1108/NBRI-10-2018-0059
Publisher
:Emerald Publishing Limited
Copyright © 2019, Emerald Publishing Limited