Booking.com's countermove to rate parity

Rather than resorting to retaliation, the company has adopted a strategy of "algorithmic persuasion" that focuses on influencing and guiding hoteliers' behavior rather than simply punishing them

Booking.com's "algorithmic persuasion" strategy helps maintain competitiveness and profitability by encouraging voluntary cooperation from hoteliers, ensuring a positive experience for both hotels and travelers.

Key takeaways

• Rather than harshly penalizing hotels with price disparities, Booking is likely to introduce new solutions to reward compliant hotels;
• This indirect approach effectively discourages disparities by enhancing the visibility and performance of collaborative hotels, while gradually increasing the booking acquisition costs for non-compliant ones;
• As tourism booms, this strategy drives sales without upsetting hotels, but the benefits for each hotel depend on their overall distribution strategy. The decision to adhere to or break price parity can significantly impact their economic outcomes.

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