Understanding sponsored labels: consumer skepticism and booking intentions on online travel agencies

Purpose This study examines how consumers respond to sponsored hotel listings on online travel agency (OTA) platforms. Grounded in the persuasion knowledge model (PKM), it tests a sequential chain in which advertising recognition activates persuasion knowledge, which generates advertising skepticism, which suppresses purchase intention – with both direct paths from recognition predicted to be non-significant under full serial mediation. Design/methodology/approach A cross-sectional survey of 426 OTA users in Delhi, India, was conducted using purposive sampling to ensure prior sponsored-label exposure. Partial least squares structural equation modelling (PLS-SEM)via SmartPLS 4 with 5,000-subsample bootstrapping was used for estimation. Findings All five hypotheses were supported. Advertising recognition is positively associated with persuasion knowledge (β = 0.483), which in turn is positively associated with advertising skepticism (β = 0.493); skepticism is negatively associated with purchase intention (β = −0.419). Both direct paths from advertising recognition, to skepticism and to purchase intention, were statistically non-significant, consistent with full mediation. The advertising recognition → persuasion knowledge → advertising skepticism → purchase intention (AR→PK→AS→PI) indirect effect (β = −0.100, p < 0.001) is consistent with the sponsored label's behavioural association being transmitted through this cognitive–evaluative sequence rather than through label visibility alone; because the design is cross-sectional, this pattern is interpreted as association, not proof of causal or temporal sequence. Originality/value This is among the first studies to test the complete PKM chain as an integrated sequential model in which both direct paths from advertising recognition are statistically non-significant, consistent with full mediation. The findings extend PKM boundary conditions to high-involvement, transactional digital environments and an Indian emerging market, though as a cross-sectional, single-market study these should be read as an initial extension rather than an established boundary condition.