How to introduce a livestreaming channel: a case of the hotel at a fixed capacity

Abstract

AbstractConsidering two hotels that sell substitutable rooms through the same online travel agency (OTA), we study the optimal supply chain structure for a fixed‐capacity hotel to introduce a livestreaming channel (LC). First, ideal pricing and room allocation are explored through four scenarios: (a) a single channel with no introduction, (b) a dual channel with a hotel‐operated LC, (c) a dual channel with an OTA‐operated LC, and (d) a dual channel involving an influencer retailer. Upon comparing each model's supply chain performance, we find that small and large hotels prefer influencer retailers, while medium‐sized hotels favor a self‐operated LC when influencers cannot demonstrably extend the market. An OTA‐operated livestreaming service is only appropriate for a declining economy because the platform's reputation and livestream presentation can inform consumers’ travel intentions after recovery. Furthermore, OTAs may only suffer during the introductory period, whereas a supply chain system will benefit from celebrities’ charisma and impulsive consumption.