Demand and Revenue Impacts of an Opaque Channel: Evidence from the Airline Industry

• 成果类型: Article
• 署名作者: Granados, Nelson; Han, Kunsoo; Zhang, Dan
• 署名单位: Pepperdine University; McGill University; University of Colorado System; University of Colorado Boulder
• 刊物名称: PRODUCTION AND OPERATIONS MANAGEMENT
• ISSN/ISSBN: 1059-1478
• DOI: 10.1111/poms.12704
• 发表日期: 2018
• 页码: 2010-2024
• 关键词: your-own-price; Cannibalization; TRANSPARENCY; PRODUCTS; COSTS

摘要

Over time, opaque intermediaries, such as Hotwire and Priceline.com, have become an established distribution channel for the travel industry. We use a market response model and a dataset of economy class reservations from a major international airline to empirically examine the demand and cannibalization effects of the opaque channel. We find that: (1) the impact of the opaque channel on total demand is positive and significant in markets with high levels of competition; and (2) overall, the opaque channel cannibalizes the online transparent channel, but not the offline channel nor the full-fare segment. However, we find that cannibalization of the offline channel moderately increases as markets become more concentrated. These results together suggest that airlines can benefit from opaque offerings mainly in markets with high levels of competition. Further, we develop a methodology to assess the revenue impacts of the opaque channel and show how it can be used by managers to develop and implement pricing tactics to increase demand and decrease cannibalization.