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Hospitality Leadership Through Learning
CHR

Search, OTAs, and Online Booking: An Expanded Analysis of the Billboard Effect

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Vol 11 No 8
By: Chris Anderson Ph.D.

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Executive Summary:

Replicating and expanding an earlier study, this report confirms and quantifies the so-called billboard effect that occurs when online travel agents (OTAs) include a particular hotel in their listings. An earlier study, based on four JHM-owned hotels, found that a hotel’s listing on Expedia increased total reservation volume by 7.5 to 26 percent depending on the hotel. This number excluded reservations processed through the OTA itself. This larger and more exhaustive study analyzes the billboard effect based on booking behavior related to 1,720 reservations for InterContinental Hotel brands for the months of June, July, and August of three years (2008, 2009, and 2010). The analysis determined that for each reservation an IHG hotel receives at Expedia, the individual brand website receives between three and nine additional reservations. Although these reservations are made through “Brand.com” (the individual brand’s site), they are directly created or influenced by the listing at the online travel agent. The study also gained an indication of the amount of surfing time spent by would-be guests who are investigating and studying potential hotels to book. Some travelers recorded as many as 150 searches, but that was exceptional. The more typical activity was still considerable: the average consumer made twelve visits to an OTA’s website, requested 7.5 pages per visit, and spent almost five minutes on each page.

Study Methodology

Our comScore dataset consists of 1720 purchase events ( hotel reservations) at a InterContinental Hotels Group (IHG) related website (e.g., HolidayInn.com) during June, July, and August of 2008, 2009, and 2010. Owing to the nature of the comScore data we have all travel related website visits (e.g., TripAdvisor.com, Orbitz.com, LasVegas.com) and travel related searches (Google, Yahoo and Bing) for 60 days prior for each of these reservations.

These data are publicly available from comScore. ComScore tracks a sample of approximately 2,000,000 consumers, logging their site visits. Of these 2,000,000+ consumers, 1720 booked one or more hotel room nights at an IHG related brand online during the above mentioned sample window. We have complete travel related online site visits for each of these 1720 reservations for 60 days prior to the reservation. Consumers from the comScore sample also made 122 reservations at Expedia during the same period (note the approximately 14:1 ratio (1720:122) of IHG:Expedia bookings).

Of the 1720 bookings, approximately 62% visited an Expedia site. For 22% of the 1720 bookings Expedia was the only OTA visited prior to the IHG.com related reservation. These produce ratios of 1066:122 (.62*1720:122) or 8.75:1 and 378:122 (.22*1720:122) or 3.1:1. It is from here we indicate that each reservation at Expedia impacts 3-9 reservations at IHG.com related sites (“….for each reservation at the OTA 3 to 9 reservations at the brand’s website are directly influenced by listing at the OTA…).

It is important to note that in the first Billboard study we argue causation as a result of the experimental design, in this follow-on study we simply state correlation between bookings at the OTA and those at supplier direct sites.

About comScore: comScore has changed the face of digital marketing and media measurement by solving the challenge of accurately measuring worldwide consumer behavior through its proprietary panel design, patented data capture technology, online data retrieval network and Unified Digital Measurement™ methodology. Central to most comScore services is the comScore panel, the largest continuously measured consumer panel of its kind. With approximately 2 million worldwide consumers under continuous measurement, the comScore panel utilizes a sophisticated methodology that is designed to accurately measure people and their behavior in the digital environment. This massive information network delivers one of the highest quality, most comprehensive views of Internet browsing, buying and other activity, in both digital and offline environments.

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