Evaluation of Best Price Clauses in Hotel Booking

We analyze the best price clauses (BPCs) of online travel agents (OTAs) using meta-search price data of nearly 30,000 hotels in different countries. We find that BPCs influence the pricing and availability of hotel rooms across online sales channels. In particular, hotels publish their offers more often at Booking.com when the OTA does not use the narrow BPC, and also tend to promote the direct online channel more actively. Moreover, the abolition of Booking.com’s narrow BPC is associated with the direct channel of chain hotels having the strictly lowest price more often.

Hunold, Matthias, Reinhold Kesler, Ulrich Laitenberger and Frank Schlütter (2018), Evaluation of Best Price Clauses in Hotel Booking, International Journal of Industrial Organization Volume 61, November 2018 , 542-571