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Cornell University study shows promotion effect of online travel sites

Mandarin Oriental, Hong Kong, Lichfield Suite

A new study issued by Cornell University confirms the existence of the so-called “billboard effect” for hotels that are listed on third-party websites operated by online travel agents (OTAs). The study used publicly available data from comScore on brands operated by InterContinental Hotels Group to assess the impact of listing at OTAs upon bookings on the “hotelbrand.com” site.

The study, “Search, OTAs, and Online Booking: An Expanded Analysis of the Billboard Effect,” by Chris Anderson, an assistant professor at the Cornell School of Hotel Administration, who replicated and expanded an earlier study, which found that a hotel’s listing on Expedia increased total reservation volume-not including reservations processed through Expedia itself. This larger study looks at 1,720 transactions for InterContinental Hotels brands during the summer months of three years (2008, 2009, and 2010).

“It’s clear that there is increased reservation volume on the ‘brand.com’ site as a result of having the hotel appear on the online travel agent site,” said Anderson, “and it appears that the commissions paid to online travel agents actually should be considered a marketing expense.”

Anderson also tracked the surfing behavior of would-be hotel guests. He found that almost 75 percent of the consumers who booked at the brand’s site visited the OTA, with 83 percent performing a web search prior to the booking (and two-thirds doing both). “Some travelers spend enormous time researching hotels online,” he said. “On average, hotel consumers made twelve visits to an OTA’s website, requested 7.5 pages per visit, and spent almost five minutes on each page before booking.”

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