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

“Here’s a quick snapshot of what we found in a preliminary analysis of data. We are looking at how people are searching online in their search and booking process. What we have is data about their clickstream behavior from a syndicated market research firm. We looked at two different years, 2012 and 2014, to see how behavior is changing. We did a path analysis. We track how long users visit sites, how many pages they visit at each site, and whether they complete a transaction via that site, such as an intermediary like Expedia. If they booked a hotel, we know what brand they booked. The market research firm gives us session data as well as the transaction data. Once we know there was a conversion, we merge that particular point with the transaction data, which gives us a lot more information about what they did, such as which brand hotel they booked a stay with and if they also booked a car or a flight. We have done an individual-level analysis of visitors to find out how loyal they are to various domains. We track each individual user and see whether, if they visit a hotel site, what are the chances they’ll book at the hotel site, and if they visit a hotel site, what are the chances they’d book at an intermediary site. We’re able to map how loyal consumers are to particular domains. We’ve created three broad categories: Those who exclusively visit hotel sites, those who exclusively visit intermediary sites, and those who visit both domains. Between 2012 and 2014, the number of people who exclusively visit hotel sites has come down from 12% to 10%. Whereas people who visit exclusively intermediary sites have gone up from 48% to 60%. People who go to both types of sites have dropped from 40% to 30%. We then drilled down on the data about people who visit both domains and checked to see what kind of behavior they exhibited. We tried to figure out how many booked at hotel chains versus those who booked at intermediary sites. What we find is that, between 2012 and 2014, the number has increased for hotel chains from 7.9% to 10.8%. The number for intermediaries has dropped from 7.7% to 6%. There is not an appreciable change in the percentage of people who browse at both types of domains that then book at both types of domains. This is not good news for hotels, despite first impressions. Note that we found that the segment of shoppers who go to both types of sites has dropped from 40% to 30% in the past two years. People who in 2012 were willing to visit both domains are in 2014 opting disproportionately to use intermediaries exclusively. We also looked for search behavior. How many visits happen at intermediary sites and how many visits happen at hotel sites? 82% end up at an intermediary shop for browsing, while hotel sites get 18%. Here is another look at the data. What happens between two consecutive visits? If you went to a hotel site, where do you go later? Do you go back or go somewhere else? Some people repeat visit hotel sites. That demographic has increased from 57.4% to 62.9% over two years. The people who leave hotel sites and go to intermediary sites later was 42.6% and dropped 37.1% (the complements of the previous numbers). At first that seems like good news for hotels. But the repeat visits for intermediary sites is fairly high: 90%. If you go to an intermediary site, there’s only a 10% chance your next visit will be a hotel site. We tried to look at each individual’s string of path data and relate it against it against conversions. The metric we used for this is called Generalized Transfer Entropy (GTE). What this technique does is let you, at the individual level and in a statistically significant way, indicate whether a user is more likely to go to point B if he or she went to point A. In 2012, users who browsed hotel sites had a significant directional tendency of transacting at those hotel chain sites. In 2014, this changed. Users who went to a hotel site in 2014 were more likely to actually convert at intermediary sites. Meanwhile, intermediaries retained their popularity. In 2012, users who went to intermediaries tended to book at intermediaries and were very unlikely to book at a hotel site instead. This held true in 2014…. To say that differently, in 2012, people who browse to hotel sites have a significant directional impact to actually transact at the hotel sites. If you went to an intermediary site, you were very unlikely to go to hotel site to transact. It’s a negative impact on you transacting elsewhere. If you book some other travel product at an intermediary, such as a rental car, it has a negative impact on you booking a hotel at a hotel site. In 2014, if you went to a hotel site, you’re also more likely to go book at an intermediary. We have a lot more data to go through, such as at the chain-level and intermediary-by-intermediary."