OTAs Offer "Billboard Effect" For Brands: Cornell
-- Hotels, 10/29/2009 7:37:00 AM
Ithaca, NY, October 29, 2009 – When a hotel is listed on Expedia.com or Travelocity.com, it receives reservations not only through that channel, but it also gains reservations through other channels, such as its own website or telephone reservations. According to a hotel internet marketing study by Cornell assistant professor Chris K. Anderson, this "billboard effect" increases both reservation levels and average daily rate. He calculates the value of the billboard effect in a new report from Cornell's Center for Hospitality Research, "The Billboard Effect: Online Travel Agent Impact on Non-OTA Reservation Volume." This travel research is available at no charge at http://www.hotelschool.cornell.edu/research/chr/pubs/reports/2009.html.
"The online travel agents (OTA) argue that they give hotels visibility, in addition to channeling reservations to them," Anderson explained. "I wanted my travel research to test the value of that visibility. For the four hotels I tested, the increase in total reservations ranged from 7.5 to 26 percent, not including those received from the OTA. This study adds another perspective to the relationship between OTAs and hotel chains, especially given the current disagreement between Choice Hotels and Expedia."
Expedia.com and JHM Hotels cooperated in this hotel internet marketing experiment by sharing data and allowing an unusual listing pattern for the four hotels. Each was listed for a period of time on Expedia, and then each hotel was removed totally from the site. Those hotels recorded excess bookings through other channels when they were listed on the Expedia site—indicating that they had gained visibility even if guests eventually booked through another channel. Average daily rates for the test hotels in the travel research were slightly higher during the times that the hotels were listed on Expedia.
Meet and interact with Professor Anderson, an active member of the executive education faculty, at the School of Hotel Administration, when he presents sessions in the Professional Development Program: http://www.hotelschool.cornell.edu/industry/executive/pdp/.
Thanks to the support of the CHR partners listed below, all publications posted on the center's website are available free of charge, at www.chr.cornell.edu.
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Yes, there is a Billboard effect when the hotel is listed on the first two pages of a destination. When the hotel is buried on page six, there is not as much billboard effect. It is equivalent to putting the billboard 1 mile from the road. Expedia is a commodity buy with the lowest price, or perceived hightst value, winning. When the market has dropped its rate dramatically on this channel, often at the encouragement of the market manager, and your hotel only receives 3% from OTA's, the billboard may be on the wrong road.
RevGuy - 2009-30-10 14:45:00 PDT -
This is totally true, when we make websites for hotels we
advise them to get onto the OTAs and other sites and
ensure they have their exact name well indexed in google.
Most people will find a hotel on an OTA, google it and
check reviews on Tripadvisor and then check the hotels
site for more information.
This is the one advantage of the commission system in
that if the OTA doesn't produce, well it at least creates
brand awareness.
Martin Soler - 2009-30-10 05:37:00 PDT -
In July 2009, I was looking for the best rates, for two rooms, in Orange County, California, for ealy August. I checked both Expedia and Travelocity. After finding the best that was available, I went directly to the hotel's website to see if I could get a better deal. I ended up making two separate reservations for Embassey Suites, one directly with the hotel and the other through Expedia, which offered a $50 gas card as part of the offer. YES, there is a "Billboard" effect.
Arthur Gimson - 2009-29-10 18:34:00 PDT
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