Increase room ADR, sell more hotel rooms direct, increase you market share, reduce channel spend on OTA’s…familiar? Well, I guess it’s time to start waving the magic digital wand for 2015. The next article will look into top ways to allocate your marketing budget in 2015.
The Golden 20%
I seriously think the OTA’s are like heroin for hotels and it’s a pretty tough habit to kick. It feels pretty good to dump a load of inventory their way and have rooms magically sold. The reality is that your hotel is immediately down in profitability by up to 20% on each booking (commission) and also losing the ability to obtain loyal customers direct. In addition, these channels are increasing the cost of your online advertising by bidding on your brand terms and driving down your avg ADR and soon this becomes a really niggling problem.
Please don’t misunderstand, I do genuinely feel that OTA’s have a part to play in the marketing mix. However, if you are able to sell rooms for the hotel direct for less than that OTA commission of 20% then why not?
Let me repeat that, if you can sell rooms direct at a lower cost per acquisition than through OTA’s then why not do it! (e.g. CPA <20%) This requires that hotels to take a different and more fluid approach to their hotel marketing budget allocation. Why not spend uncapped while your CPA remains below that of an OTA. Increase direct web conversions and slowly wean yourself off the OTA’s. Unfortunately, there is not really a magical digital wand so to do this effectively takes strategy, effort and planning. However, the rewards are great and many hotels have enjoyed taking the power back and increasing the bottom line.
Hotels, it’s time to get smarter with Meta Search Marketing. It’s no longer the domain of just the big OTA’s and chains. It’s time to catch potential guests on the most popular travel research sites and entice them to book direct with your hotel. Most Meta Search sites such as TripAdvisor (Tripconnect) and Google Hotel Finder (HPA) run at a reasonable Cost-per-click basis (CPC) i.e. you only pay for the click of a user and no further commission.
Working with a professional team that understands how to push your hotel into such areas and maximise returns on your spend in these lucrative Meta channels can make a real difference. For more information on the potential of Meta Search Marketing follow this link.
Compared to a lot of companies, hotels have access to decent sized email lists at their finger tips. The big shame is that a lot of hotels do not make smart use of the data available. If you aren’t already communicating with your clients regularly via email, then start with an easier goal of once every quarter. Plan your emails around events and interesting information to the user. Hotel emails should not simply be an excuse to send out offers like dropping flyers. Give the recipient extra “bonus” information and exclusives that keep them interested and eager to remain on the list even of they are not immediately ready to reserve then and there. Regular email updates are a great way to build brand trust, loyalty and increase direct bookings.
Once you have the basics in place, then start to get a little more creative by targeting more specific messages to applicable segments of your list.
Targeted Facebook Campaigns
Facebook marketing is often underestimated by hotels. Upon further review, many hotels have found Facebook a great way to reach defined and targeted audiences with key messages and offers. Facebook allows the advertiser to get really granular and enables very cost effective campaigns to be run and tested with minimum effort. For example, a hotel could target wedding package sales at couples within a 30 mile radius who are between a certain age and engaged.
Many hotels are fully aware that the although traffic numbers can be high, encouraging users to make the final booking can sometimes be quite difficult. There are a number of factors that can cause the user to drop out before clicking the all important final “Book” button. The user may need to check one more time before confirming, experience interruptions, read reviews or simply check that it’s the cheapest place to buy. This is where cart recovery can really help to increase the propensity of many to finalise the booking. If the user goes through the booking process, but does not purchase, it’s possible to send an email to the user with their booking saved and prompting them to pick up their booking with just a click of a button. Many hotels have found this to be a great way to catch some bookings which could have slipped through the net. It’s especially more tempting when many of the “cart recovery” services only charge a percentage fee on the bookings that are recovered.
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UP Hotel Agency Specialises in helping hotels to drive online sales and increase profitability through direct channels. Why not contact UP to see how they can help your hotel to succeed online today?