Platform-enabled innovation adoption: a case study on Booking.com

Abstract

This paper analyzes the strategic opportunities enabled by the adoption of innovative features offered by a platform to partner firms. These features are part of a managerial innovation process and, if properly implemented, can enrich the whole platform ecosystem. Our analysis sheds empirical light on the antecedents of platform-enabled innovation adoption. In particular, we consider a new form of online discount offered by Booking.com, which renders the lodgings more prominent in the eyes of customers. This enables us to explore the role of heterogeneity in characteristics that makes lodgings more likely to embrace innovative practises. The empirical analysis indicates that the propensity to adopt this type of managerial innovation is positively affected by ratings and user perception, as well as online sales experience and chain affiliation. Conversely, we find that the type of lodging does not significantly affect the propensity to adopt the innovative discount feature.

Keywords: innovation adoption, managerial innovation, online platforms, online discounts

JEL Classification: Z30, Z31, M21, O32, M30