A better last-minute hotel deal via app? Cross-channel price disparities between HotelTonight and OTAs

To better understand hotels' cross-channel pricing mechanisms, this study aims to investigate various factors behind price discounts (as a type of price disparity) from a popular last-minute hotel deal app, HotelTonight, compared to major online travel agency (OTA) websites. Using pricing data collected from the HotelTonight app and OTA websites in six U.S. cities, we estimate several regression models to examine price discounts. The results reveal that after controlling for other variables, price discounts are largely shaped by online reputation metrics (i.e., relative review valence and volume on TripAdvisor compared to on HotelTonight), complimentary access to services with high marginal variable costs, and uncertainty in the room type offered. However, hotels' market power does not explain price discounts. Lastly, implications are discussed.