Recently updated research from Cornell University* shows how being listed on an OTA site will boost bookings through your own website and other direct channels. It’s called the “Billboard Effect” and the theory is that potential guests gain information about your property from the listing on OTAs like booking.com or laterooms.
This visibility could be a crucial element in the promotion of your property with the benefits of additional bookings through the OTA and also an increase in direct bookings. If you can process these direct bookings without paying commission this could save you a considerable amount of money and make the OTA commissions more palatable.
To take full advantage of the billboard effect you will need to have online booking capability on your own website. After seeing your property listed on the OTA, customers visiting your website will expect to find online booking (after all they first found your information on an online booking site!). You will certainly be losing money if you list with the OTAs and don’t have a capability for online booking on your own website.
Cornell research did an experiment to try and quantify the billboard effect and they concluded that properties can expect a lift in direct reservations of between 7.5% and 26%. They also found that “data would indicate that there is a greater billboard effect with independent hotels” In the follow-up study** they conclude with this summary “the magnitude of the billboard effect indicates the effectiveness of OTAs in marketing to consumers and educating them on product assortment and characteristics”
In conclusion, it seems clear that a winning strategy will include listing with OTAs and having online booking on your own website to capture more direct bookings resulting from the billboard effect. I strongly suspect this is a well known strategy with the big hotel chains and one that independent accommodation providers should consider carefully.
The Center for Hospitality Research – Cornell University
*Cornell Hospitality report Vol9 No16 October 2009: The Billboard Effect by Chris K. Anderson
**Cornell Hospitality report Vol11 No8 April 2011: Search, OTAs, and Online Booking by Chris K. Anderson