Evaluation of Best Price Clauses in Online Hotel Bookings


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.

International Journal of Industrial Organization, 61:542-571
Reinhold Kesler
Reinhold Kesler
Senior Research Associate

My research agenda involves studying the power of digital platforms and the value of user data by means of innovative data collection and state-of-the-art empirical methods.