This is a guest post written by Chris Johnson of Fillmore Hospitality and is a part of our effort to present the hoteliers’ point-of-view of digital marketing.
A successful digital marketing plan for your hotel in 2019 needs to be centered around your guests, potential guests, past guests, meeting planners, followers, clients, Millennials, Baby Boomers, and Gen X.
With all of these people to reach and engage, how in the world do we do it?
It is all about creating the best possible experience from the top of the booking funnel, through conversion, to the property experience and beyond. It includes web, mobile, social media, paid, and organic efforts.
Leisure Travelers Continue to Evolve How They Make Travel Decisions
A study by Fuel Travel and Flip.to reveals your typical leisure traveler who used to visit around 38 sites before booking (Expedia Media Solutions study 2015) now only visits 4.4 sites per decision. Which 4-5 sites is this traveler using and how do we improve our booking odds?
We have to take a step back and understand what we are trying to achieve and understand if we are applying the necessary resources to create a desirable experience for our guests to book with us directly and spend money in our outlets. We need to, internally and externally, target guests to support our digital efforts in person to further engagement with our message.
Now more than ever, it is crucial for hotels to actively target, capture, and engage guests by building an engine that drives not only our revenue, but also our messaging, and branding. It includes online and in-house efforts that support and execute our marketing and sales efforts and it is always evolving.
Hoteliers Need to Adapt to a Changing Digital Landscape
The digital landscape changes at a pace that seems to reinvent itself every few years. Right now, over 63.5% of bookings are made online – 30% of which are done through booking engines like VRBO, Expedia, and Airbnb. Just a few short years ago, we did not have to worry about someone renting out their apartment. Now, rental inventories are skewing traditional supply and flooding markets with additional inventory.
However, not only where consumers book has changed, but how they book has changed as well. Cell phones have now replaced computers in volume of traffic. Five years ago, we were only concerned with our mobile functionality. Now, we need for our mobile sites to have a clean and fast version all their own. How to keep up is frustrating, but we can do so with effort, application of resources, and the development of strong relationships with professional partners.
The beauty of digital marketing is the ability to change and adapt instantaneously. We can move our efforts around quickly, stay in front of the next trend, identify where and how we create the best ROI’s, and continue to challenge ourselves and our partners in the space.
Marketing Budgets Need to Reflect the New Marketplace Demands
We must target niche travel and need not only dates, but peak booking periods as well. I cannot tell you how many times I have heard, “It is busy over those dates, with strong rates, so we can pull back our efforts.” Whatever your online travel agent (OTA) margin is, it becomes a higher cost of doing business when rates climb, eating your net operating income (NOI).
The challenge is committing resources and sticking to it. I have seen countless budgets cut spending trying to hit a flow, not realizing pulling back on these marketing efforts delivers a lower return as we surrender our efforts to the third-party sites.
Competing with well-funded companies in a cluttered space can be overwhelming. With the OTA merchant pay model, most operators neither see nor acknowledge the huge expense burden on the asset. By altering its payment option, Expedia has quantified its cost with more guests moving to the hotel pay option. A one-time “no cost” site now is driving huge monthly expenses to TA commission lines across the country.
Although OTA margins continue to move down with direct push back from major brands, we are now creating additional expense with direct marketing efforts, like Expedia Travel Ads. Not only are OTA’s finding new and creative opportunities to reduce our bottom lines, but now some brands are offering hotels the “option” as well to engage in PPC, optimize their performance, increasing the brand’s contribution to the market. So how do we play against Goliath?
Budgeting Guidance for Hotel’s with Vanity Websites
For hotels with independent vanity websites, I would suggest 65% of a hotel’s marketing budget should be directed towards digital efforts and deployed against all channels. All activities and plans should include:
- Website: $1500-$2000 per month. Including the hosting, maintenance and ongoing optimization to improve organic performance. It is important to meet with your team monthly and be creative, study your results, and keep the content fresh and engaging.
- Paid Digital Advertising: $3000-$5000 per month. It takes a consistent and ongoing paid effort to maintain visibility, ramp new websites, target specific niche travelers, and provide data that helps us understand how to consistently improve our ability to sell.
- Social Media: $1200 -$2000 per month. Partner with a professional company that provides ongoing and active content, support, and direction. Utilize data to maximize our efforts. Focus on ROI through revenue conversion and growing exposure to engage and create customer loyalty and product influencers.
- Social Media Paid: $700-$1100 per month. It is not good enough to have the coolest kid at the front desk run hotel social platforms anymore. You need to create targeted promotions to generate revenue, exposure, and client engagement by leveraging data to target specific goals.
It is a crowded and rapidly changing space. As hotel leaders we have a choice. We can periodically do the minimum in order to check a box indicating that we did something, across some media. Or, we can invest in growing our culture across every platform in a targeted method with outstanding partners who are all engaged in developing our property’s ability to outperform our competitors.
It is our choice.
About the Author
Chris Johnson is the VP of Sales Marketing and Revenue Management at Fillmore Hospitality.