Book Discription

NB: This is an e-book  from : Chris K. Anderson, Ph.D., is an assistant professor at the Cornell School of Hotel Administration

When it comes to online distribution, hotels usually prefer to sell rooms through their own websites. They see third-party websites, also known as online travel agents (OTAs), as competition for distribution. However, OTAs play a crucial role in filling unsold rooms. This research explores another aspect of the relationship between hotels and OTAs that is often overlooked.

The Billboard Effect: How Online Travel Agents Impact Non-OTA Reservations

In addition to filling rooms through their own websites, hotels can also benefit from being listed on OTAs. This phenomenon is known as the billboard effect. Being listed on an OTA can actually increase bookings on the hotel’s own website.

The Study

This report examines a study conducted to measure the impact of OTAs on reservation volume specifically on the hotel’s own website (“Brand.com”), excluding any reservations made through the OTA itself. For example, if a hotel property was listed on Expedia.com, any bookings made directly through Expedia.com would be excluded from the analysis.

The Findings

Based on this methodology, the study found that listing on Expedia created a lift of between 7.5% and 26% on non-Expedia reservations, depending on the hotel.

This means that being listed on an OTA like Expedia can actually drive more bookings to a hotel’s own website, resulting in additional reservations that might not have been made otherwise.

It’s important for hotels to understand this dynamic and leverage the potential benefits of working with OTAs while still prioritizing direct bookings through their own websites.