Evaluating information asymmetry effects on hotel pricing: a comparative analysis before and during the COVID-19 pandemic in the Taiwan’s market

Abstract

The outbreak of the COVID-19 pandemic has imposed substantial impacts on the global hotel industry. This study employed a two-tier stochastic frontier model to investigate the dynamics of transaction information distribution within the tourist hotel lodging prices in Taiwan from July 2019 to November 2020. The primary objective was to analyze the disparities in price information between consumers and hoteliers before and after the outbreak of COVID-19. Empirical findings reveal a notable reduction in the divergence of lodging price information between consumers and hoteliers post the COVID-19 outbreak, particularly in metropolitan areas. The shift in consumer group structures within hotel operations induced by the pandemic has, in turn, exerted an influence on the pricing strategies adopted by hoteliers. The empirical results underscore that the outbreak of COVID-19 has contributed to a more transparent and comprehensive market price information environment, consequently diminishing the asymmetry in information between hoteliers and consumers.