Beyond rate parity: Examining offer uniqueness and channel credibility in hotel pricing

Abstract

This study investigated how price and non-price content disparities on online travel agencies (OTA) and hotels’ direct booking websites affect consumers’ hotel booking decisions, focusing on the role of cancellation flexibility and OTA credibility. Price parity across channels can significantly shift consumer preference toward the direct hotel booking website. Conversely, price disparities can prompt further evaluation of non-price content attributes, particularly cancellation flexibility and OTA credibility. Two experimental studies showed that the uniqueness of an offer, cancellation flexibility, and the credibility of OTAs moderate the effect of price on consumers’ willingness to book. Maintaining price parity and managing non-price content disparities is crucial for fostering consumer trust and preference for hotel brands’ booking websites. This study expands the understanding of consumers’ hotel booking behavior beyond using price as the decision criteria, emphasizing the importance of holistic online content management and OTA credibility.