Living Without OTAs—Goodbye Columbus: Putting the Jenie Back in the Bottle

Abstract

A recent Cornell Hospitality Quarterly article highlighted a unique natural experiment where an entire city had all its hotel delisted from all online travel agents for more than 4 years. The article provides great background to the delisting and highlights the impacts on hotel revenue and accommodation taxes for the county. The article estimates that even though the hotels relisted at all online travel agents (OTAs), there was a substantial gain to both hotels and accommodation tax collectors during the OTA delisting period. The impact estimates are based solely on the loss of demand realized in neighboring Phenix City, AL, once Columbus is relisted at OTAs. In the following, we highlight some concerns with these estimates and indicate that the losses may in fact be quite substantive and perhaps more indicative of why Columbus hotels relisted at the OTAs.

Online Travel Agencies and Their Role in the Tourism Industry

“…The method analyzes a phenomenon within a scenario (an environment) causing a simulation of certain circumstances, which can be a set of equations or symbolic representation of a problem (Gonzalez et al, 2019). The case study examines the phenomenon in its natural environment, obtaining data through interviews and analyzing documents or direct observation, being this the method chosen by 11% of the studies as seen in Table 4 (Anderson & Han, 2018;Christodoulidou et al, 2010;Díaz et al, 2015;Hamilton et al, 2012;Lee et al, 2013;Mcleod et al, 2018;Sabiote-Ortiz et al, 2016;Tekin Bilbil, 2018).…”

“…Grønflaten (2009) used binomial logistic regression to predict the result of travelers' choice between two sources (travel agent vs. service provider) and two information channels (in-person vs. internet). x (Ha & Janda, 2015) x (Hao et al, 2015) x (Sabiote-Ortiz et al, 2016) x (Beritelli & Schegg, 2016) x (Ozturk et al, 2016) x (Rianthong et al, 2016) x (Melis & Piga, 2017) x (Xie et al, 2017) x (Rajaobelina, 2018) x (Mohseni et al, 2018) x (Kirillova & Chan, 2018) x (Falk & Vieru, 2018) x (Belarmino & Koh, 2018) x (Toral et al, 2018) x (Park & Jang, 2018) x (Park et al, 2019) x (Leung et al, 2018) x (Casaló & Romero, 2019) x (Chang et al, 2019) x x (Sun et al, 2020) x (Chen et al, 2020) x HOTEL PERSPECTIVE (Toh et al, 2011) x (Lee et al, 2013) x (Hamilton et al, 2012) x (Ling et al, 2014) x (Guo et al, 2014) x (Ling et al, 2015) x (Haynes & Egan, 2015) x (Stangl et al, 2016) x (Viglia et al, 2016) x (Ivanov & Ayas, 2017) x (Tekin Bilbil, 2018) x (Yang & Leung, 2018) x (Mcleod et al, 2018) x (Anderson & Han, 2018) x (Nicolau & Sharma, 2019) x (Yin et al, 2019) x (Guizzardi et al, 2019) x OTAS PERSPECTIVE …”

“…The relationship between hotels and OTAs, often present in a conflictual way involving legal issues, as shown (Anderson & Han, 2018;Hamilton et al, 2012;Haynes & Egan, 2015;Mcleod et al, 2018) ended up provoking the exit of hotel chains and cities from online distribution platforms, showing the results of being out of OTAs. The Columbus case was addressed by Mcleod et al (2018) and Anderson and Han (2018) and reported the impacts of the case in 2006, when Columbus had all its hotels removed from the OTAs for more than four years. The authors presented the differences in occupation during the departure and after returning to OTAs and the reflexes in the drop in occupation in neighboring cities.…”

Online Travel Agencies in Hotel Distribution: Game on!

“…It is incorrect to assume that "a hotel's listing on OTAs only influences those consumers booking at the OTA, and that consumers booking directly with hotels are not influenced by listings at OTA" (Anderson and Han, 2017, p. 10). Research shows that when a hotel is listed on an OTA site, it increases bookings from the hotel's website (Anderson, 2009(Anderson, , 2011Han, 2017, 2018). This is called a billboard effect and is observed because about 35% of consumers who booked a hotel directly on the hotel's website visited at least one of the indirect sites during the decision-making process (Anderson and Han, 2017).…”

Online Travel Agent Promotions to Increase Room Occupancy

“…Online travel agent is a type of travel agent that carries out its activities online and provides an online reservation service (Ivanov, 2019). This type of travel agent provide convenience in terms of room reservations with online reservation form facilities equipped with room availability information that is easy to understand and processed directly through the site to the destination, hotel or restaurant (Anderson, 2011). Through this media, promotions are expected to be more targeted to increase hotel sales and maximize room occupancy.…”