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New Study from Cornell's Center for Hospitality Research States Hotels Listed with Online Agents
Boost Reservations by 7.5%  to 26%

By Monique Newton, The Sun News, Myrtle Beach, S.C.McClatchy-Tribune Regional News

Nov. 15, 2009--Hotels listed on online travel sites such as Travelocity and Expedia may see an increase in average daily reservations made through traditional avenues, according to a new study from Cornell University.

In what is referred to as "the billboard effect," hotels received a boost in reservations made directly through the hotels that ranged from 7.5 to 26 percent when they were included on these sites, according to the study from the school's Center for Hospitality Research.

The theory is that the potential guest gains information about the hotel from an online travel agent listing, but then books the room through a channel controlled by the hotel.

For three months, the study cycled several hotel properties on and off of for seven to 11 days each cycle. When the hotels were taken off, potential guests could not find them anywhere else on the Web site, even if one searched specifically for one of the hotels, the researchers said.

At the end of the study, the company recorded all the reservations on each hotel's own reservation system and saw the increase.

Local hoteliers say they have few doubts this is the case for their properties as well, but they've been using these third-party sites for so many years that it's hard to see the direct effects on their traditional daily reservations.

"I think now, at least this season and last season, it's more because of comparative reason that they're hitting both the OTA [online travel agent] and the brand Web site," said Patrick Norton, director of marketing for Brittain Resort management company, which is made up of 15 hotels along the Grand Strand. "The customer that goes on and books on Expedia is probably a bargain shopper anyway. Luckily for us, everyone knows that if you go to your source, that's your best deal."

Norton said he's found that on average, people hit at least two touch points, or go through two avenues to research their accommodations, before making reservations.

Pranay Patel, owner of Days Inn Little River, said he's found that some people start on one of the online travel agent sites, but then end up calling the hotel or placing the final reservation on the business's Web site because of the advantages they discover.

"They call us to make the reservations or they go to the hotel Web site. That gives them a little bit more freedom as far as the cancellation process is concerned. They save thecommission fee and have a little bit more flexibility."

The third-party sites serve as a teaser, with snippets of information to provide for potential guests, and icons to signal certain services, but ultimately help drive people back to the source, said Bob Barenberg, managing director for Hilton Hotels Corp. in the area.

"If you want to know more, you're going to have to go to other places and I think that's what drives people back to a Web site," he said. "Those types of sites do an outstanding job of marketing themselves on the Web. ... If they book through you, thanks Expedia for the marketing, but they book through you."

Norton said the presence of the online travel agents has forced many hotels and property groups to begin more aggressive marketing to guests to ensure they come back -- and book directly through them instead of the third-party sites.

It's important that once someone stays at a hotel once or twice, that they continue to receive e-mails and other correspondence from the hotel so that they'll return back to the source, he said.

Otherwise, the hotels stand to lose up to 30 percent of their revenue from each sale because of the taxes and fees associated with a person making reservations through a third-party Web site, said Frans Mustert, president of the Oceana Resorts hotel group.

"They've stolen the demand I've created and they're booking the same people, but I've got to pay them for it," he said. "Looking at the big picture, they're good for the industry. Looking at the smaller picture, they're a necessary evil at this time."


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