<p>Online travel agencies (OTAs) that partner with third-party hotel suppliers to provide booking services have started to establish their own hotels to compete in the hotel market. This paper develops a game-theoretical model to analyze whether an OTA should establish its own branded hotel and how the prices and revenue sharing of the third-party hotel and the OTA platform should be determined. We find that the OTA will enter the hotel market when it can introduce a hotel with a sufficiently high valuation compared to the third-party hotel. Interestingly, when the valuation of the third-party hotel is sufficiently low, it can benefit from the OTA’s encroachment despite paying more to the OTA. Further, when the third-party hotel has a moderate valuation, the encroachment could benefit the OTA, the third-party hotel, consumers, and society, thus achieving a win–win-win–win situation.</p>