The Billboard Effect: Online Travel Agent Impact on Non-OTA

17th Apr 2011

Book Discription

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

As a rule, when it comes to online distribution, hotels would prefer to sell rooms through their own websites, and they usually view third-party websites, known as online travel agents (OTAs) as a competitor in terms of distribution—even though OTAs are instrumental in filling rooms that might otherwise go unsold. The research presented here explores another, often unmentioned facet of the relationship between hotels and OTAs. In a
phenomenon called the billboard effect, the fact that a hotel is listed on an OTA has the effect of pushing up bookings on the hotel’s own website. In this report, I review a small test of this effect that was published as an earlier CHR report, and then I present a considerably larger study, which confirms that hotels gain additional reservations on their own websites when they are listed on online travel sites.1

The Billboard Effect: Online Travel Agent Impact on Non-OTA

To measure the impact of the OTA on reservation volume on “” and not the total reservations coming through the OTA. When the hotel properties were listed on, we excluded the bookings coming through the OTA. Consequently, the reservations summarized in Exhibit 1 are all non-Expedia reservation volumes. Based on this methodology, I concluded that listing on Expedia created a lift of between a 7.5 and 26 percent on non-Expedia reservations, depending on the hotel.