Information asymmetry evaluation in hotel E-commerce market: Dynamics and pricing strategy under pandemic

Abstract

Information asymmetry in different service products is lacking research. Tourism e-commerce as a dynamic financial market driven by advanced information technology deepens the concern for asymmetry brought to hotel consumers. COVID-19 provides a natural intervention on market asymmetry in the hotel price information, which effects are worth evaluating. This study therefore evaluates the degree of information asymmetry in terms of the lodging price of international tourist hotels (ITHs). Through applying the concept of stochastic frontier approach (SFA), this study estimates the degree of information asymmetry and the inefficiencies. The estimation results indicate that the hotel location, traveler type, operation type may cause different information asymmetry. By comparing with the asymmetry before the pandemic, it is found that the asymmetry in lodging price information decreased since the outbreak of the COVID-19 pandemic. Among the six regions studied, the mean range of information equity degree increased from the original 0.634-0.832 to 0.7633-0.866. It indicates that the outbreak of COVID-19 changed the structure of the consumer groups in hotel operations and then affect the hotelier's pricing strategy.