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The Billboard Effect is dead, says a study of hotels listed on OTAs

08/03/2015| 10:56:47 AM| 中文

A new study on how US travelers book hotels online contradicts earlier research on the topic. It suggests that “billboard effect” for hotels listed on OTA websites may no longer exist.

The study of about 50,000 online travel shoppers in 2014 found that users who browsed hotel sites tended to ultimately purchase their hotel stays via intermediaries, such as Expedia, Booking.com, and TripAdvisor, on average.

The behavior was not true in reverse. Internet users who began their browsing on OTAs and similar intermediary sites tended to purchase hotel stays through those intermediaries, too.

The study was teased during a panel talk at the Revenue Strategy Summit held on Wednesday in Washington, D.C.

Different study, different sponsors, different results

The just-released study was sponsored by the American Hotel & Lodging Association’s Consumer Innovation Forum, many of whose members are leery of the large commissions they pay to intermediaries.

The data was analyzed by P. K. Kannan, chair of the department of marketing at the Robert H. Smith School of Business at the University of Maryland.

The results were presented at a conference hosted by the consultancy Kalibri Labs, the revenue management software firm Duetto Research, and marketing-and-event agency Silver Hospitality Group.

Changed consumer behavior?

The study’s results suggest a shift in consumer behavior since 2009, when Chris Anderson, an associate professor at Cornell University, published a study about Expedia and hotels in the JHM Hotels.

His study found that the appearance of a hotel chain on the first page of results on Expedia coincided with a rise in reservations through JMH Hotels’ own websites. The direct booking uplifted ranged between 7.5% and 26% uplift.

His follow-up April 2011 study of 1,720 reservations at InterContinental Hotel brands found a similar behavior. For every commissionable hotel reservation that came through Expedia, there were between three and nine reservations at an IHG-related website that were influenced by the hotel having been listed on Expedia, on average.

The studies were touted by Expedia and others as proof of a so-called “billboard effect”, where OTAs pull double duty as a kind of search engine marketing tool for hotels’ own websites.

Bye-bye, billboard effect?

Unlike the Cornell work, which used data from Expedia and hotel chains directly, this study used clickstream data from a market research firm and it was analyzed via attribution modeling.

Yet like the Cornell research, this study did not include mobile device users.

Kannan declined to share details of the study with Tnooz prior to the report’s publication this winter.

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TAGS: hotel booking | OTA | hotel distribution | Expedia
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