Cornell University’s Center for Hospitality Research recently conducted an experiment with JHM Hotels and Expedia.com to study what, if any, effect being visible on large online travel agent sites (OTAs) have on hotel bookings. The study was conducted by Chris Anderson Ph.D., an assistant professor at Cornell’s School of Hotel Administration who used four hotels (chain and independent) and listed each for a period of time on Expedia.com, then removed them completely from the site. The properties reported they experienced excess bookings through other distribution channels when they were on Expedia vs. when they were not.
Often referred to as the “billboard effect,” the experiment determined that visibility on large sites like Expedia and hotels.com leads to a boost in reservations through the property’s own distribution systems, e.g. property website or contact directly with the property. “The study found that when the hotels were listed on Expedia, they saw an increase in reservations from their own distribution channels (that is, not through Expedia).”
Anderson concludes that “the theory behind this phenomenon is that the would-be guest gains information about the hotel from its OTA listing, but then books the room through a channel controlled by the hotel or its chain family.” The study went on to estimate that being seen on the site generated up to a 26% increase in total bookings.
The study summarized that “the benefits of being displayed on an online travel website like Expedia.com should not only be measured by the revenues gained by the specific distribution channel, but also the marketing and direct sales benefits the hotel receives through the billboard effect.”
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