Leveraging ‘The Billboard Effect’ for Hotels in 2023

John Shortall
June 15, 2023

What exactly is the billboard effect?

Despite the negative perception held against Online Travel Agencies (OTA's) there’s an often overlooked positive impact resulting from their existence. OTA's can act as a spotlight for a hotel's brand which might not have otherwise been discovered by potential guests. This is known as the 'billboard effect'. It's why it’s so important for hoteliers to treat their OTA profiles like an extension of their own website. The billboard effect is essentially free marketing and can result in hotels generating a lot commission free revenue they would otherwise miss out out on.

Optimize your presence on OTA’s

Major OTA’s spend millions of dollars per year on marketing and offer a great chance for properties to take advantage of this in highlighting their listing. Hotels should make their OTA listings as attractive as possible to maximize the billboard effect. This includes positive guest reviews, detailed descriptions, listing all amenities, and high-quality property photography.

Take care of your online brand

Whether it's your website or an OTA channel, your online presence should make you easy to find, attractive, and stand up to the competition. A report from Cornell Business tiled 'The Billboard Effect: Still Alive' found that 65% of consumers who booked directly with a hotel online did so after visiting an OTA before purchase. Consumers are likely to spend up to 67% more with a brand they are familiar with. Have a clear, compelling description of your property on your brand website and what sets it apart from other hotels. The billboard effect can be diminished by frustration. Travelers will often make a shortlist of hotels they find on an OTA and then check each hotel's website for more info. If they don’t find the same room types, pictures, and policies they may get irritated and go back to the OTA. To increase your chances of a guest booking directly you need to offer visitors interesting and relevant information. The more time a guest spends on your site, the more familiar they become with your brand and the likelihood of them booking directly increases.

Minimize website abandonment

To capitalize on the billboard effect, start by improving your online booking process. The ease of booking directly needs to match if not be smoother than booking with OTAs. While the billboard effect can encourage more visitors to make reservations on your website, one of the most frequent issues with direct hotel websites is booking abandonment. Nothing will send a user back to the OTA quicker than a bad experience on your website. Your site needs to be fast, easy on the eye, simple to navigate, and functional on all devices, especially mobile. According to Google, the chances of a visitor leaving your site increases by 120% if the site takes more than 10 seconds to load. A fast and seamless booking experience with targeted promotions will keep visitors interested. Showcase your property’s best features with high quality images and videos to reduce website abandonment. Clear calls to action like a large BOOK NOW button and a modern design that reflects your brand will encourage guests to complete the booking.

Give direct bookers a little extra

Rate parity dictates you can't undersell or oversell in comparison to the OTA’s. However, there are ways to incentivize guests to book directly. You might offer a deluxe room at the same rate on your website and on an OTA but on your website, you can offer the room with free WiFi and breakfast included. Other benefits could include early check-in, late check-out or free mini bar. This gives guests value for money and instills a sense of brand loyalty, greatly increasing the chances of them returning. Consumers are likely to spend up to 67% more with a brand they are familiar with according to research by Adobe.

Promote your local area

By promoting your website as a guide to the local area, you'll promote your hotel brand. Feature local content or talk about places of interest that guests might visit. Include recommendations on where to find services like a pharmacy or supermarket. This will help travelers navigate as they research their trip and book their stay. Make it easy for guests to get to and from the hotel and local attractions safely and easily. A simple way to do this is to include an airport pickup option as an add-on before the guest completes their online booking.

Use a commission free booking engine

The average OTA commission cost per booking can vary between 15 to 30%. The commission cost of a direct booking through your own website is 0%. When a guest clicks on your rates, use your booking engine to highlight hot deals such as last minute offers, early-bird rates, or particular packages. This will create purchase impetus and give the traveler an extra incentive to buy.

Make paying painless

Travelers frequently cancel their reservation plans when they reach the payment stage. This can be avoided by providing more options in payment methods. You can let guests pay you directly at check-out or if your booking engine is connected to a payment gateway you can set up various payment collection rules. Payment collection rules let you include flexible rates, refundable and non-refundable options for a discounted price. You could give guests the option to pay in full at the time of booking or just 50% then charge the remaining amount at check-in. 

Choose your channels carefully

Although exposure through OTA's will help increase revenue via the billboard effect, they will still take a sizable commission on your monthly revenue. Commissions across multiple channels quickly add up. It's important to utilize the PMS reports to determine what channels provide you with the most booking revenue. This allows you to pull your time and money out of low-performing channels. The PMS will also let you choose which channels you can allocate room inventory to. You may choose to protect some rooms from OTA's, instead incentivizing guests to book directly through your brand website.