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International Journal of
Hospitality and Tourism
An International, Biannual,
Double Blind Peer Reviewed
Journal
ISSN: 2240-5371
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Issue: V5N1

Paper Type: DOUBLE BLIND REFFERED PAPER

Paper Title: Evaluating the Best Price Guarantee Policy in Online Distribution Channels: The case of Hong Kong Hotels

Authors: Rongrong Liu, Rob Law

Abstract:
E-commerce increases information transparency and creates more price-sensitive customers. As hotels attempt to implement dynamic pricing strategies to remain competitive, maintaining rate parity across different online distribution channels has become more challenging. Consequently, numerous online travel agencies and major hotel groups have extensively adopted the best price guarantee policy. This study bridges the research gap by comparing the best price guarantee policy and room rates offered by different online channels. Empirical findings from the data collected from 123 hotels in Hong Kong and seven online travel agencies suggest that the best price guarantee varies from independent hotels to international chain hotels. Most hotels cannot deliver their promise as they maintain rate parity across channels, and claiming can be difficult under the constraints of the terms and conditions. Managerial implications are discussed, and the limitations of the study are acknowledged.