Curiosity and hotel revenue management challenges: Dynamics of opaque and low-end products

Abstract

This study explores the dynamics of opaque and low-end tourism products from the perspective of high-end product providers. We develop a comparative analytical model to understand the challenge of hotel revenue management, focusing on supply chains, including high-end hotels that offer both high-end and opaque products, low-end hotels that offer low-end products, and opaque travel agencies. By solving the model under specific constraints, we reveal that increased customer curiosity about opaque products does not necessarily lead to higher overall profits for high-end hotels. While curiosity can boost sales of opaque products, it may also reduce profits from transparent offerings. Importantly, when introducing opaque products, hotel managers should focus on enhancing customer satisfaction referred by opaque travel agencies.