The billboard effect shows that when hotels list with an OTA, it can help drive direct bookings through their websites. Find out if it will work for you. See the research and get tips on how to leverage the billboard effect.
What is the billboard effect?
The billboard effect is a phenomenon that occurs when hotels see additional direct bookings on their own website after listing on an online travel agency (OTA). This is because potential customers first discover the listing on an OTA, and then visit the property’s own website to directly book their trip.
Travelers today have a lot of choice when it comes to shopping and booking trips. In fact, our research shows that Americans make an average 140 visits to travel sites before making a booking. Travelers visit airline sites, hotel sites and online travel agencies (OTAs) while researching trips—but OTAs have the highest engagement, forming over 30% of total site visits.
So, does the popularity of OTAs for research affect direct bookings through your property’s own site? Research suggests OTA usage can actually encourage bookings through your site.
In a Cornell University experiment, a group of hotels was listed and then removed from Expedia.com in alternate weeks. This test found that, compared to being hidden, being listed on Expedia.com increased reservations from 9% to 26% (above transactions that occurred at Expedia.com).
Another study also found that around 75% of consumers who made a reservation with a major hotel brand had visited an OTA before booking directly with the hotel.
Does the billboard effect still work?
Even in today’s modern marketplace, a more recent report from Cornell Business, The Billboard Effect: Still Alive and Well, shows the billboard effect still very much exists, as many consumers continue to visit other travel sites before booking direct. The report suggests the influence of the effect has only decreased by around 10% in recent years. It also found that 65% of consumers who booked directly with a hotel online visited an OTA prior to purchase.
The billboard effect is less effective if travelers do not find the same room types, rates and pictures as they have seen on an OTA. They get frustrated and return to the OTA listing they saw first. That’s why it’s important to treat your OTA listings as an extension of your own website, keeping your content and offers consistent.
While OTAs are getting an increasingly larger share of the bookings, they are now visited by almost two-thirds of all online hotel direct consumers.
Will listing on an OTA increase direct bookings on my website?
Current research shows that 65% of consumers booking directly with the property visited an OTA before booking direct, and about 18% of those consumers even visited an OTA on the day of the booking.
Of course, an OTA may not be the only way to create awareness for your property, but this research suggests it’s an important channel to consider as part of your distribution strategy.
How can you make the billboard effect work for your hotel?
No matter what size hotel you may have, you can attract the right travelers, improve your overall bookings and the billboard effect by implementing a few easy tips.
1. List your rooms with the right OTA
There are a lot of OTAs out there but taking time to choose the right one can give you the best chance of standing out and increasing bookings. Visit our guide to choosing an OTA to find out what to consider when making your decision.
2. Package your rooms
Package bookings are bookings that combine accommodation with other travel listings such as flights, car rental or activities.
Research shows that travelers who use package bookings tend to book further in advance, stay longer and spend more on property than the average traveler.
Read more about the benefits of package bookings, and how they can help you drive revenue.
3. Make the booking process fast and easy
While the billboard effect may drive more travelers to book on your site, booking drop-offs are one of the most common problems with direct hotel websites. The quicker and easier to navigate your site is, the more likely travelers will be to make a booking. Consider the journey a user has to make through your site. You want to help them make a booking in as few clicks as possible.
4. Offer multiple ways to pay
Research shows that travelers often abandon booking when they get to the payment portion of the transaction. Offering travelers different ways to pay will open up more avenues that work for them.
Options include allowing travelers to pay online when they book or having guests pay you directly at check-out. You can also offer flexible, refundable options and non-refundable options for a lower price.
To appeal to the broadest number of travelers, you can choose to offer multiple options and let the guest decide what's best for them. Expedia Group offers all of these payment choices as options for you to choose to utilize or not.
5. Stay in touch
Your reservation system should trigger an email to your new guests immediately after they book. This is also an opportunity to learn more about your guests and anticipate their expectations and needs.
The billboard effect is just one of many elements to take advantage of in your distribution strategy—but it's also an excellent one to consider because it is always free to list with Expedia Group. Learn how it works and take advantage of it today!