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The Benefits of the TripAdvisor 'Show Prices' Program Go Beyond Just Direct Return.
By Chris Poda, Josh Runes, and Drew Whang
Monday, 26th November 2012
 
Hotels have long struggled with OTA booking, while the Travelocity's, Orbitz's and Hotwire's of the world are a valuable advertising tool, many hotels would prefer to keep reservations within their own booking engine funnel.

TripAdvisor offers a powerful opportunity for hotels to compete with these OTAs through a CPC "show rates" link embedded within their own profile page.

The result? Hotels offering a direct booking link showed, on average, a 122% cost savings compared to those with just OTA links, with an average cost per booking of just $65 versus $144 had those bookings been made through the OTAs.

The Study

MICROS eCommerce, through a specialized partnership with TripAdvisor, offers the opportunity for clients to feature a direct link back into their booking engine, a perk previously reserved only for large brands and major OTAs.

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The results make a clear case for the power of these booking engine links.

The MICROS eCommerce study sampled 192 hotels that had the "Show Prices" link live on their TripAdvisor profile for at least three months within the past year. Hotels sampled varied in class, size and market. Using analytics software, we were able to analyze and adjust for KPMs such as traffic, reservations, revenue, conversion rates, and total costs.

The study evaluated the Cost-Per-Booking on reservations made through this link, Average Order, and the Average Commission Fee hotels would pay if those bookings were made through an OTA rather than directly via their own site.

The Results

On average, hotels spent $457 per month by having a "Show Prices" link directly into their booking engine. The hotels studied showed an average of seven (7) incremental reservations per month and $4,100 in direct revenue. This resulted in a 9:1 Return on Ad Spend (ROAS).

Hotels spent, on average, $65 per booking by participating in the "Show Prices" program, with an average order of $576. If a hotel did not participate in the "Show Prices" program and those same bookings were made through an OTA, hotels spent on average, $144 per booking, a 122% cost increase to the hotel. This was calculated using a 25% commission fee.

Of the 192 hotels in this study, 93% were better off paying the CPC of the "Show Prices" link offered by MICROS eCommerce.

Conclusion

The study is clear of the positive financial effect the "Show Prices" link can have on direct returns, but the benefits have proven to go far beyond that. While hotels might balk at upfront costs, smart revenue managers will realize that waiting for OTA bookings will simply add costs in the long run.

MICROS eCommerce is happy to provide additional information about this program and an estimated budget for participation if your hotel meets the qualification criteria. Questions or comments? Let us know in the comments section below, and one of our experts will provide a response to your questions.

Interested in ramping up your online strategy? Check out the full suite of MICROS eCommerce interactive marketing tools, send us an email, or give us a call +1 301.841.4700(US) +44 (0)20 3004 9468(UK).

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