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The indirect distribution dilemma: assessing the financial impact of participation in Booking.com for hotels

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dc.contributor.authorAbdullah, S.
dc.contributor.authorVan Cauwenberge, P.
dc.contributor.authorVander Bauwhede, H.
dc.contributor.authorO'Connor, P.
dc.date.issued2022
dc.description.abstractPurpose: This study aims to assess if the benefits outweigh the costs of participation in online travel agencies (OTAs) such as Booking.com. Design/methodology/approach: A two-step system generalised method of moments estimation of a regression model of firm-level return on assets (ROA) is used on a dummy variable indicating whether a lodging facility participates in Booking.com. The assessment contained various control variables, including size, age, leverage, liquidity and lagged ROA. The moderating effect of firm age and size was studied by including interaction variables between the Booking.com dummy and age and size, respectively. The model was estimated using participation and financial data of 775 Belgian firms over a 20-year period (1999–2018). Findings: The findings indicate that participation in Booking.com is associated with higher profitability,with this effect more economically important and pronounced for smaller hotel properties. Research limitations/implications: The study provides a broadly applicable empirical model to assess the impact of platform participation on the financial performance of tourism, hospitality or retail businesses. Practical implications: The study provides empirical evidence that, from a transaction cost perspective, the benefits of participation in OTAs outweigh the costs, resulting in substantially higher profitability. The evidence can be used to justify the use of OTAs as distribution channels. Originality/value: While prior studies have described and conceptually analysed the evolution and role of OTAs in the hotel sector, and speculated on the net effect of OTA participation, to the best of the authors’ knowledge, this is the first study to empirically assess whether OTA participation creates value for hotel owners and investors
dc.identifier.citationTourism Review, 2022; 77(4):1024-1042
dc.identifier.doi10.1108/TR-03-2020-0101
dc.identifier.issn1660-5373
dc.identifier.issn1759-8451
dc.identifier.urihttps://hdl.handle.net/11541.2/147704
dc.language.isoen
dc.publisherEmerald
dc.relation.fundingHigher Education Commission, Pakistan HEC/HRD/AHBP/B-II/OS/17/547
dc.rightsCopyright 2021 Emerald Publishing Limited
dc.source.urihttps://doi.org/10.1108/TR-03-2020-0101
dc.subjectBelgium
dc.subjectprofitability
dc.subjectOTA
dc.subjectBooking.com
dc.subjectonline travel agencies
dc.titleThe indirect distribution dilemma: assessing the financial impact of participation in Booking.com for hotels
dc.typeJournal article
pubs.publication-statusPublished
ror.fileinfo12227545750001831 13227556180001831 PDF_Proof coversheet.pdf
ror.mmsid9916530300401831

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