Sustainability of Service Intermediary Platform Ecosystems: Analysis and Simulation of Japanese Hotel Booking Platform-Based Markets

Abstract

To achieve both a large number of platform users and the sustainability of service intermediation platform ecosystems, this study attempts to clarify appropriate platform fee settings and promising market types. It focuses on hotel-booking platforms and platform-based markets. We conduct agent-based simulation experiments with the conditions of (a) platform fee setting, (b) supply and demand balance, and (c) the consumer type categorized as “mandatorily” purchasing consumers (e.g., business travelers whose purchase of a hotel service is mandatory) and “optionally” purchasing consumers (who can refuse services if their requirements are not satisfied). Our simulation results reveal that when the platforms focus on mandatorily purchasing consumers, they could acquire larger platform users through fee settings, depending on the balance of supply and demand; however, they could not maintain ecosystem sustainability in any of the cases. When the platform focuses on optionally purchasing consumers, it can achieve both a large number of platform users and ecosystem sustainability with platform fee settings of consumer incentives, especially in excessive supply markets.