Cornell Study of Hotel Internet Marketing Tactics Quantifies "Billboard Effect" of Online Travel Agents

When a hotel is listed on Expedia.com or Travelocity.com, it receives reservations not only through that channel, but it also gains reservations through other channels, such as its own website or telephone reservations. According to a hotel internet marketing study by Cornell assistant professor Chris K. Anderson, this "billboard effect" increases both reservation levels and average daily rate. He calculates the value of the billboard effect in a new report from Cornell's Center for Hospitality Research, "The Billboard Effect: Online Travel Agent Impact on Non-OTA Reservation Volume." This travel research is available at no charge at www.hotelschool.cornell.edu/research/chr/pubs/reports/2009.html.

"The online travel agents (OTA) argue that they give hotels visibility, in addition to channeling reservations to them," Anderson explained. "I wanted my travel research to test the value of that visibility. For the four hotels I tested, the increase in total reservations ranged from 7.5 to 26 percent, not including those received from the OTA. This study adds another perspective to the relationship between OTAs and hotel chains, especially given the current disagreement between Choice Hotels and Expedia."

Expedia.com and JHM Hotels cooperated in this hotel internet marketing experiment by sharing data and allowing an unusual listing pattern for the four hotels. Each was listed for a period of time on Expedia, and then each hotel was removed totally from the site. Those hotels recorded excess bookings through other channels when they were listed on the Expedia site—indicating that they had gained visibility even if guests eventually booked through another channel. Average daily rates for the test hotels in the travel research were slightly higher during the times that the hotels were listed on Expedia.

Meet and interact with Professor Anderson, an active member of the executive education faculty, at the School of Hotel Administration, when he presents sessions in the Professional Development Program: www.hotelschool.cornell.edu/industry/executive/pdp/.

Thanks to the support of the CHR partners listed below, all publications posted on the center's website are available free of charge, at www.chr.cornell.edu.

About The Center for Hospitality Research

A unit of the Cornell School of Hotel Administration, The Center for Hospitality Research (CHR) sponsors research designed to improve practices in the hospitality industry. Under the lead of the CHR's 78 corporate affiliates, experienced scholars work closely with business executives to discover new insights into strategic, managerial and operating practices. The center also publishes the award-winning hospitality journal, the Cornell Hospitality Quarterly. To learn more about the center and its projects, visit www.chr.cornell.edu.

Center Senior Partners: McDonald's USA, Philips Hospitality, Southern Wine and Spirits of America, Inc., STR, Taj Hotels Resorts and Palaces, and TIG Global

Center Partners: AIG Global Real Estate Investment, Davis & Gilbert LLP, Deloitte & Touche USA LLP, Denihan Hospitality Group, eCornell & Executive Education, Expedia, Inc., Forbes Travel Guide, Four Seasons Hotels and Resorts, Fox Rothschild LLP, French Quarter Holdings, Inc., FX Real Estate and Entertainment, Inc., HVS, Hyatt Hotels Corporation, InterContinental Hotels Group, Jumeirah Group, LRP Publications, Maritz, Marriott International, Inc., Marsh's Hospitality Practice, PricewaterhouseCoopers, Proskauer, SAS, Schneider Electric, Sabre Hospitality Solutions, Thayer Lodging Group, Thompson Hotels, Travelport, and WATG

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