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Hotel Distribution and the Billboard effect

Jul

2011

WIHP_Hoteldistribution
Illustration de l’effet billboard, présenté par Vincent Ramelli en mars au Forum 2011 “Sabre Hospitality”. (billboard signifie littéralement “panneau d’affichage”, ndlr) | L'Effet Billboard (traduction: Social Media - Resaux sociaux :: Hotel Website - Site Internet de l'hôtel

Illustration de l’effet billboard, présenté par Vincent Ramelli en mars au Forum 2011 “Sabre Hospitality”. (billboard signifie littéralement “panneau d’affichage”, ndlr) | L'Effet Billboard (traduction: Social Media - Resaux sociaux :: Hotel Website - Site Internet de l'hôtel

How the billboard effect works

What exactly is the billboard effect? The Travel Industry Dictionary defines the billboard effect as following: “billboard effect. In the hotel industry, the increase in offline bookings a property or brand experiences when it is featured on an online booking site.”

While this definition gives a good concept there is more to it. To give a more precise definition I’m going to define the billboard effect as follows: The increased visibility and bookings on a hotel’s website and off-line brought about by guests discovering the hotel on third party distribution platforms. The billboard effect is measured in increased bookings but also in increased searches for the hotel online.

A simplified analysis of the billboard effect

One third of the visitors on OTA sites will go check the hotel website either for more information, larger photos or to compare rates.
One third will go and search for the hotel on Social Media sites to find out what others are saying about the hotel, they will either go back to the OTA or search for your hotel.
One third of the guests on your website will go to OTAs to find out if rates or sales conditions are better or if booking process is easier. Or will go there because they are used to dealing with OTAs

Distribution is really about being everywhere

In March when I spoke at the Sabre Hospitality Forum I went over the subject in some detail. However I still encounter conflicting viewpoints that make me think not everyone has understood how the billboard effect creates a win-win condition for hoteliers and the distribution platforms. I still see hotel marketing professionals “bitter” at OTAs and distribution platforms for their high commissions and acting like these platforms were highway robbers. While they may have a point, they are taking a short-sighted viewpoint looking at how to save some money on short term, while leaving out the bigger picture.

The bigger picture here is that an independent hotel doesn’t have the marketing power needed to promote their property in the same way as the OTAs can. In Sept 2010 an internal document from Google showed that Expedia is Google’s third biggest customer with almost $6 million spent on search advertising every month and that’s just on search, we’re not taking into account TV, display ads etc. That’s a pretty big marketing budget. And add to that the other OTAs you begin to realize how much advertising actually happens with those platforms.

“Distribution is essentially about being everywhere.”

An independent hotel can plug into that massive marketing budget and suddenly be visible to millions with no cash outlay on his part but just paying a commission to the OTAs based on results. This is one of the safest advertising channels existing.

When I meet a hotelier that needs help getting his direct bookings going one of my first advice is to get his property properly distributed, essentially that means getting the hotel onto every platform possible as one of the first actions. Why? because that is the first and cheapest action that a hotelier can do to advertise the hotel.

Can the billboard effect go out of control?

Yes trying to leverage the billboard effect by distributing the hotel everywhere can go out of control, it happens frequently when hoteliers don’t control their inventory and yield on regular bases. And then they end up paying too much commission, then it’s time to regulate the channels and do a more complete analysis of the scene. Some of the key points to analyse are.

- Rates: Get a proper yield analysis done for the hotel by ensuring there is a proper rate parity given to all distribution channels.

- Website: Review the website, is it designed to be a proper sales funnel? Is it fast enough? How is the user experience?

- Reputation Management: What are your guests saying about you?

In summary, the billboard effect?

The billboard effect is the independent hotel’s win-win partnership that needs to be controlled by the hotelier to remain a win-win partnership. From a survey conducted of over 6000 hotel guests, 2 out of 10 guests in your hotel right now booked on your website after having found your hotel on an OTA site. So it’s to your advantage to keep working with them without selling your entire inventory through high-commission channels. But remember, you’ve got a lot to gain from working on these channels.

Example of the billboard effect

L’effet billboard : avant et après (traduction: Début de la stratégie de distribution)

L’effet billboard : avant et après (traduction: Début de la stratégie de distribution)

7 Comments

  1. admin

    Daily deals and Flash sales for hotels, right or wrong
    [...] to sell through that channel per day. Put too many rooms and you’ll miss all the “billboard effect” since people trying to book through your website will find no availability. Putting too few [...]

  2. admin

    Stimulus and the Moments of Truth in hotel marketing | Tnooz
    [...] However here is proof that selling through OTAs is healthy for direct selling as well as selling through the OTAs. Distribution is about being everywhere. [NB: Our CEO Vincent Ramelli talked about this here] [...]

  3. admin

    Stimulus in Hotel Marketing part 1 of 4
    [...] proof that selling through OTAs is healthy for direct selling as well as selling through the OTAs. Vincent Ramelli the CEO of WIHP published an article about it recently. Distribution is about being [...]

  4. Wihp Team

    Zero Moment of Truth in Hotel Marketing part 2 of 4
    [...] What isn’t included above are OTAs which play a major role as covered in this article about the billboard effect for hotels and the prior article covered the first step: The [...]

  5. Wihp Team

    The Elements of Hotel Marketing | WIHP Magazine
    [...] of channels that should be used to do that and one of the fastest and most immediate is the billboard effect. Other tools are: social media, advertising on search engines and much more. As a hotelier one of [...]

  6. Wihp Team

    Gli elementi del marketing alberghiero | WIHP Magazine
    [...] Ti possono aiutare ad aumentare la tua popolarità e uno dei più rapidi e immediati è l’”effetto bacheca”. Altri strumenti sono: social media, pubblicità sui motori di ricerca e molto altro ancora. [...]

  7. Wihp Team

    Effetto Billboard: Distribuzione Alberghiera & “Billboard Effect” | Promozione Albergo
    [...] Management Articolo di Vincent Ramelli (Linkedin, Twitter), Presidente e CEO di WihpHotel. Link all’articolo [...]

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Vincent Ramelli

Chief executive officer

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