Price dispersion,competition, and the role of online travel agents: Evidence from business routes in the Italian airline market |
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| Institution: | 1. Department of Hospitality and Service Management, School of Business, Sun Yat-sen University, Guangzhou, China;2. Hospitality Leadership, Missouri State University, Springfield, MO, USA;3. Rosen College of Hospitality Management, University of Central Florida, Florida, FL, USA;4. Marketing Department, Sultan Qaboos University, Muscat, Oman;1. Department of Economics, East Carolina University, A-426 Brewster, Tenth St., Greenville, NC 27858, United States;2. Department of Agricultural and Resource Economics, North Carolina State University, NCSU Campus Box 8109, Raleigh, NC 27695, United States;1. Tourism and Sustainable Development Institute (TIDES), University of Las Palmas de Gran Canaria, Faculty of Economy, Business and Tourism, Tafira Campus, Building C – C 1.07, Saulo Torón, 4 - Las Palmas de GC 35017, Spain;2. Tourism and Sustainable Development Institute (TIDES), University of Las Palmas de Gran Canaria, Faculty of Economy, Business and Tourism, Tafira Campus, Building C – C1.11, Saulo Torón, 4 - Las Palmas de GC 35017, Spain;3. Institute of Tourism and Sustainable Economic Development (Tides), University of Las Palmas de Gran Canaria (Canary Islands), Tafira Campus, Building E - Floor 0 – Right, Saulo Torón, 4 - Las Palmas de GC 35017, Spain |
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| Abstract: | In this article, using data from the Italian airline market, we study the role of online travel agents (OTAs) in driving price dispersion as compared to the effect of airlines’ websites. Specifically, we investigate how distinctive factors between OTAs and airlines’ direct channels influence price dispersion. We find that after controlling for OTAs’ features related to airline competition, price dispersion should be lower in the OTA channel relative to airlines’ direct channels. On the other hand, we also find that OTAs’ features related to the presence of airline competition play in favor of higher price dispersion in such indirect channel. |
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| Keywords: | Price dispersion Competition Online travel agents Airline industry |
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