Consumer engagement trends continue to evolve, in turn changing how travelers interact with online resources during the path to purchase. For hoteliers, this has made it difficult to determine which sales and marketing efforts lead to demand.
NB: This is a viewpoint by Melissa Maher, senior vice president, global partner group at Expedia Inc.
A custom study from Expedia Media Solutions and comScore found that Americans made 140 visits to travel sites during the 45-day period prior to online travel booking.
The study also showed that airline site, hotel site and online travel agency (OTA) usage is consistent throughout the purchase path, but OTAs account for more than 30 percent of total site visits, the highest engagement across travel site categories. Travelers are visiting OTAs for inspiration, research and booking.
Despite the consistent usage of OTAs and other online travel resources throughout the purchase path, changes in the online travel market are causing hotels to rethink their relationships with OTAs and take a closer look at the impact on bookings from listing their properties with OTAs.
One outcome of listing/and or advertising on an OTA is additional bookings on the brand’s own website, a phenomenon known as the billboard effect, first referenced in a 2009 study.
A later study examining consumers’ online pre-purchase research also found that approximately 75 percent of consumers who made reservations with a major hotel brand had visited an OTA website in advance of booking directly at the brand dotcom.
A new 2017 report by Chris Anderson Ph.D., “The Billboard Effect: Still Alive and Well”, shows that the ability of a second-party channel to influence an eventual reservation may have dropped slightly, but the billboard effect still occurs. This inference can be drawn since many consumers visit an OTA prior to booking direct.
Contrary to research suggesting that the billboard effect is dead, this new study’s results show that reports of its demise have been considerably exaggerated.
Per Anderson’s report, booking a hotel online remains a complex activity for all but the most loyal of hotel shoppers. While almost 39 percent of direct bookers start their travel research on a hotel site, 31 percent of consumers who start their search at a hotel site end up booking at an OTA.
Furthermore, 65 percent of consumers who booked directly with a hotel online visited an OTA prior to purchase, compared to 75 percent in 2011.
Additional findings include:
- The average number of OTA site visits per reservation is not radically different for those who booked on the OTA (8.4 visits) compared to those who booked with the hotel brand directly (7.2 visits)
- On average, hotel direct bookers make about twice as many visits to hotel websites (6.5) as OTA bookers (3.4)
- OTA bookers who visit hotel websites tend to visit about the same number as those who book direct
- Webs searches or online research behavior is consistent between OTA bookers and hotel direct bookers (4.6 vs. 5.1 visits)
So, while the demand funnel is more complex since 2009, to state that the billboard effect is dead as a function of this complexity is to make some dubious assumptions. Inherently it infers that a hotel’s participating on OTAs only influences those consumers booking at the OTA, and that consumers booking direct with hotels are not influenced by listings at OTAs.
However, “The Billboard Effect: Still Alive and Well,” indicated that over 30 percent of direct bookers started their research process at an OTA.
And, OTAs now get an increasingly larger share of the transaction landscape, but are visited by almost two-thirds of all online hotel direct consumers (down about 10% from 2011 billboard study results).
To summarize, it’s fair to say that the magnitude of the billboard effect is decreasing to some degree, but not to the levels suggested by another recent study.
Implications for the billboard effect
Recent opinions on the billboard effect, as featured in Kalibri Labs’ “Demystifying the Digital Marketplace: Spotlight on the Hospitality Industry,” contend that the effect is considerably less prevalent than previously indicated, summarizing the probabilities of switching between OTA and hotel websites:
- Low probability: moving from an OTA to a hotel website (9.3% for 2012 and 7% for 2014)
- High probability: moving from OTA to OTA (90.7% in 2012 and 93% in 2014)
These statistics indicate that it is unlikely that awareness is created at an OTA with consumers who then switch sites and book with hotels directly, as was suggested by the billboard effect. However, not prominently featured in the Kalibri report is that these switching probabilities highlighted above are for consecutive website visits and not for the consumer’s entire research process.
We can’t read too much into these transition probabilities as they are click-to-click behavior and
don’t include the entire path to purchase. In fact, and as acknowledged by Kalibri Labs, there is a stronger effect of consumers moving to OTAs from hotel direct sites versus the opposite.
“The Billboard Effect: Still Alive and Well” shows that consumers who visit OTAs, prior to booking direct with hotels, do so 7.2 times on average, not once. The study illustrates that 65 percent of consumers booking directly with the hotel visited an OTA prior to booking direct, and about 18 percent of those consumers then visit an OTA on the day of the booking.
The probability that a consumer ends up booking directly at a hotel, given they were at an OTA earlier, depends upon how many of these website-to-website transitions are made, and as such, the chance of a consumer moving from an OTA to hotel site is the same whether they are starting their travel research or are almost finished and know where they want to stay.
While research suggests that the ability of a non-direct channel to influence an eventual reservation at a hotel may be moderate (5.5 - 35 percent), the billboard effect remains and influences customers to varying degrees as they visit one of these non-direct sites prior to booking.
There are many other methods for creating product awareness, and ultimately, hoteliers who ensure that their online presence is easy to find, attractive, and competitive will capture more customers and bookings.
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NB: This is a viewpoint by Melissa Maher, senior vice president, global partner group at Expedia Inc. It appears here as part of Tnooz's sponsored content initiative.
NB2: Image by BigStock