Path to Travel Purchase: Bouncing Between Brand.com & OTAs
Understanding and attributing each step in the traveler’s path to purchase is the Holy Grail of hotel marketing and revenue management. It’s a highly variable, and thus, difficult-to-track path. Something akin to watching a toddler move around a playroom in short 3 or 4 minute spurts. There is method—the brain is making connections from one location to the next, perhaps suggesting the desire to do look at something related to the last activity but still new—and there is also something haphazard about it. There are unanticipated influences such as other friends becoming involved or the distraction of something shiny on the other side of the room.
The path of play is similar to the path to purchase. From search to OTA to brand.com. Pause. Move to mobile. More search. Click to call. OTA. And so forth. Every step may be related, there is traceable movement, but there are unanticipated influences that change the process, such as banner ads or a family member who decides to tag along at the last minute changing the search from a standard King to a suite. You get the picture.
While the direct channel has priority status for hotels, a direct booking follows a circuitous path. The long and short of it is that OTAs influence direct bookings, as does social as does meta search. However, OTAs have market share, whereas the others have only influence. A true exploration of increasing direct channel bookings can’t come without consideration for OTAs and their role in the planning and booking process.
Why do OTAs Matter When It Comes to the Direct Channel?
So why do OTAs matter so much when it comes to direct bookings? More often than not, you’ll hear that the “billboard effect” is the answer. The idea of the billboard effect arose out of two Cornell School of Hospitality studies (one in 2009 and the second in 2011) that established a link between a prominent, first-page presence on Expedia and an increase in direct bookings. While the studies have been critiqued repeatedly, we can safely posit that under certain circumstances, OTAs can and will drive direct traffic to brand.com. It is also safe to say that those circumstances, driving OTA traffic to brand.com, that is, are more likely when a hotel ensures that branding and reputation are consistent across all channels.
The billboard effect is further confirmed by the fact that, according to a 2013 Google study, 51% of travelers consult OTAs when they are still considering a few destinations, during the inspiration phase of planning, that is. So begins the herringbone path of research—bouncing back and forth between OTAs, meta search, review sites, and Brand.com sizing up the possibilities, the pattern getting smaller and smaller as travelers hone in on a property.
These travelers aren’t just looking for the best available rate and valuable perks. They are also coming to their research with a perception of service; they want to book where they believe they will receive the best service in the event something goes awry with their reservation or their plans change. They desire cancellation flexibility, no doubt, but they also want to know they aren’t going to get a room by the elevator. And that the reservation is going to be honored in exactly the way they made it. This is where hotels have an important edge if they are transparent about their level of service and commitment to the guest.
How Hotels Can Capture “Channel Agnostic” Travelers
As an AH&LA/STR report suggests, hotels and OTAs are “fishing from the same pond” of “channel agnostic online shoppers,” so for hotels the goal is to drive market share from OTAs to the direct channel (Distribution Channel Analysis: A Guide for Hotels). This starts with enticing travelers back to brand.com, and part and parcel to this is ensuring that review ratings are prominent and that service, when booked direct, is exceptional around the whole experience, in particular around reservations changes.
To entice OTA-leaning travelers back to the direct channel, HeBS Digital suggests hotels may look toward market parity, reviewing competition for their direct value-added promotions rather than just best available rates. For instance, a neighboring hotel may appear to have the same best available rate but may be offering website promotions that highlight the lowest rate but attach value adds such as F&B or transportation perks.
Additionally, this is where service and facilities ratings come into play. If the competition has better review ratings, travelers will give them more value, which translates to a willingness to pay more. OTAs have reviews down. They have invested tremendous energy in ensuring travelers are served review data in user-friendly and prominent formats. Attentiveness to posting reviews and ratings on brand.com (for example, as Meta-Reviews), as well as quick and rich responses to guest feedback are essential if hotels are to maintain the attention of travelers who are on the meandering path to travel purchase.