Billboard effect – for small independent hotels
This is the positive effect in direct reservations that is created when advertising on OTA’s (online travel agents). Websites as Booking.com and Tripadvisor have a huge number of website visitors. Potential guests looking for an accommodation in your area, might be unaware of your hotel brand so far. Once exposed to it on the website of for example Booking.com, they might Google your hotel brand and end up on your hotel website. When you do offer a hotel website with a response booking engine and minimum the same rate or lower, the guest will book via your website. So the OTA does not only bring in extra bookings that you otherwise would not have received via the OTA, but they also bring in more direct bookers!
The term “Billboard effect” was first discovered by a Cornell research, indicating an increase up to 20% in revenues earned just from being listed on OTA’s. The exact percentage depends on the size of the OTA you sign up with.
There are some people arguing that the Billboard effect is in decline, but I dare to disagree with them. Especially for smaller independent properties. The Billboard effect is an important factor that drives website visits and direct bookings, for the simple reason that potential guests are unfamiliar with the brand name of the smaller independent properties and are only exposed to the brands when searching on the major OTA’s.
How to benefit the most of the Billboard effect?
- Register with different OTA’s that target different target groups, leisure vs. business, different continents, etc.
- Improve the booking process; make sure you have a smooth and responsive booking engine, allign room offering with your offering on OTA’s.
- Lower your rates for a limited audience, also called closed user group. This can be a member rate or a email discount.
- Package your rooms. You can offer the same rate as on the OTA’s, but offer something extra like breakfast, free parking, or an entrance tickets to a museum close by.
OTA’s should drive about 30% of your bookings. If the number is higher for your hotel, please check what you can improve about your hotel website. Don’t complain about the succes of the OTA’s but work continuously to improve your own website. I am more than happy to consult you for your website improvement, please email me at firstname.lastname@example.org