Be sure to check out our updated 2024 guide to planning your hotel’s digital marketing budget.
We are only seven months into 2019 and budget season is upon us again. Sigh. While it is a long process, it is important to make the best decisions with your marketing dollars in 2020, especially when it comes to digital. The buzz continues to be about direct bookings, and if you are an independent hotel, it is crucial your team understands where to focus your dollars in order to receive the best return and drive direct bookings. In this article, you will learn best practices for properly budgeting for digital marketing services in 2020 that will maximize your returns.
If you do not think a good chunk of your marketing budget should go into digital marketing, consider the following mind-blowing stat:
Eighty-two percent (82%) of travel bookings in 2018 were completed via a website or mobile app, without human interaction.
I do not want to get too preachy or wordy this year, so I intend to get straight to the recommendations. The following are some of the most important digital channels to consider in your hotel’s 2020 marketing budget.
Your Hotel Website
Your website is the hub of your direct booking channel. If your website looks like this website, it’s about that time. You need a website built with the following:
- Modern Design
- ADA Compliant
- GDPR Compliant
- Built to Maximize Conversion
If your current site design is at least 3 years old, consider budgeting for this item in 2020.
How much should I budget for a website redesign?
If your website is more than 5 years old, you may need to build an entirely new site on a Content Management System (CMS) platform, such as WordPress, to serve as a framework that is more compatible with all the website attributes listed above. If your CMS framework is in good shape, then it might be as easy as a website redesign, where the CMS framework remains, but a new design template is placed on top.
Budget: If you are redesigning, consider a minimum of $2,000-$5,000 for a design refresh.
Budget: If you are building a completely new site, consider a minimum of $10,000-$15,000.
Additional Website Tools to Consider
Other tools that can maximize the marketing potential of your site includes:
- Marketing messaging and rate abandonment pop-ups
- Price comparison tools
- Live chat
- Content personalization
- ADA compliance monitoring
- Booking abandonment email marketing
Ongoing Website Maintenance, Management, & Hosting
Take care of your most important digital asset. Just like a car, your website needs to be maintained regularly to ensure it is running optimally. Site speed, site security, website forms, CMS version updates all need to be monitored and maintained.
Budget: $300-600/ month (minimum)
Ongoing Search Engine Optimization
Between Google making over 500 changes to their ranking algorithm each year and your competitors investing in ongoing SEO services to capture consumers that are planning and booking their stay online, investing in some level of ongoing SEO is a necessity.
Did you know?
- Search plays a big role early on in the travel booking journey. In 2018, 31% of accommodation searches started on search engines, up from 23% in 2017. (Source)
- More than half of all travelers—specifically 60% of leisure travelers and 55% of business travelers—begin their journey to booking a trip on a search engine, according to the experts at Google.
At a minimum, hotels should conduct a bi-annual SEO audit, analysis, and implementation or clean-up. This is a base level service that will maintain the foundation of a website’s organic presence.
On the other hand, if your hotel’s objective is to aggressively increase the performance of its existing web pages, as well as drive incremental traffic and revenue through the creation of new content, a more advanced level of SEO service would be required. As you would expect, the cost can significantly vary, depending on the scope and aggressiveness of the SEO services desired. Therefore, when an agency has only one SEO package, make sure the SEO service they are offering will meet your objectives.
Budget: $500-$2,000/ month
Social Media Marketing
Although social media is not typically considered to be a direct booking channel, it often plays an important role in a traveler’s booking journey. When social media is part of the buyer’s journey, customers tend to convert at a 129% higher rate and four times as likely to spend significantly more than those without a social component. (Source)
Organic Social Media Marketing is comprised of:
- Managing and optimizing social media profiles.
- Creating and publishing compelling content regularly.
- Engaging with your social media followers and managing your hotel’s reputation on these channels.
If your hotel is looking for a strategic approach to social media, where you show measurable results based on your specific objectives for your social media campaign, there is much greater value in that service, and consequently, more time involved for the agency to properly execute those services.
Budget: $500-$3,000/ month (Cost may vary based on how many social channels are being managed and the amount of content being published per week.)
There are many paid channels that a hotel can participate; however, make sure your hotel first participates in the primary channels your potential guests are utilizing to book their hotel. Some of the important paid channels include:
The amount a hotel should budget for media spend is always contingent on the competitiveness of its market and the objectives of the campaign. The budget is also dependent upon how effectively the agency manages your campaign. The greater your digital marketing agency’s competency in managing the campaign, the lower your Cost-Per-Click (CPC) will be and the greater the visibility of your ads.
If an agency is effectively running a top-to-bottom-of-the-funnel campaign, you may see an ROI on paid search as low as 2:1. We would suggest that an agency is doing a good job at a 7:1 ROI.
Minimum Media Spend Budget: In general, the following is a good place to start as long as you keep in mind there are many factors affecting these numbers like property size, competition, market, and destination:
- Small destination (secondary or tertiary markets): $2,000-$3,000+/ month
- Larger destinations or airport properties: $3,000-$5,000+/ month
- Major/primary market: $5,000-$7,000+/ month
Agency Management Fees on Paid Advertising (Paid Search): These fees can vary but are typically based on a percentage of the media spend. Depending on your budget and agency, you can expect management fees to be anywhere from 10% – 30% of your media spend.
If you are not familiar with metasearch, read our blog post, “The Importance of Meta Search Today.” In short, hotel metasearch sites compare hotel room rates from various online travel agencies (OTAs) and other booking sites all in one place. Important metasearch sites include Google Hotel Ads, Tripadvisor, Kayak, and Trivago. Once a traveler is on a metasearch site, they can search for hotels and pricing and the metasearch engine will present multiple booking options all consolidated into one location. Once the user clicks an option, they are taken to that particular website to complete their booking.
The metasearch sites we see with the highest production is Google and then TripAdvisor. It is advised to start advertising there and then fold in Kayak and Trivago as needed.
At a minimum, plan to budget:
- Google: $500/ month
- TripAdvisor: $500/ month
- Kayak: $250/ month
- Trivago: $250/ month
I would advise that all hotels look at display mostly as a brand awareness digital marketing strategy and take caution when investing in this channel. There are display products out there that charge commissions on each booking. These products suggest that the booking your hotel received is 100% due to display ads that were served to the guest at any point in the booking journey. Consider this: the percentage of bookers who actually click on a display ad they see on a site (such as cnn.com, yahoo.com) ranges from a dismal .06% to a still dismal .35%. Additionally, how would a marketer ever know that their guest’s eyes actually looked at a display ad when it appears on a given website?
I am in no way suggesting that display should not be a part of a hotel’s digital marketing mix. I do think it can play a role in branding, therefore influencing a potential guest to book your hotel. But display is only one of many marketing tactics that influences potential guests to finally book your hotel. A strategic combination of SEO, Paid Search, Display, Social, & Email all play varying levels of influence in the final booking.
If I was a hotel, I would first invest in display on a platform/product that does not charge a commission on each booking. The best platform for this is Google. At a minimum, budget $500-$1000 per month on display prospecting and remarketing campaigns.
Additional Digital Marketing Services
This means monitoring and responding to hotel reviews on various review sites.
Consider these important stats as it pertains to reviews influence over potential guests booking your hotel:
- 96% consider reviews important when researching a hotel.
- 88% of filter out hotels with an average star rating below three.
- 79% will read between six and twelve reviews before making a purchase decision.
Additionally, as it pertains to Google, high-rated hotels have higher visibility. As part of its commitment to the user experience, Google rewards high-rated businesses in several ways. First and foremost, in search rankings. Google confirms that “Google reviews count and scores are factored into local search ranking: more reviews and positive ratings will probably improve a business’s local ranking.”
Based on your market, type of hotel, number of review channels, and type of reputation management services provided by an agency consider a minimum of $500/ month for a quality review monitoring and responding service.
Whether it is SEO, Paid, or Social, each channel inherently is delivered by an agency with strategy. That being said, many hotels should consider Targeted Marketing Campaigns that are designed to aggressively promote an amenity, event, need date, or special offer for a limited period of time (typically 3 months or less). These campaigns are set up as additional, tangential goals that typically exist beyond those set forth by your ongoing SEO, Paid, or Social marketing services. Targeted campaigns are additional efforts and strategy that unify several digital channels single integrated campaign to meet a very targeted objective.
A hotel should anticipate the setup, strategy, and management of a targeted marketing campaign, running for ninety days, to cost between $800 and $2,000+. Additionally, a hotel should also budget for media spend during the campaign period.
From an SEO perspective, content development on a blog can be very lucrative for a hotel website. Executing a blog marketing campaign the right way is crucial; otherwise, the hotel will risk putting marketing dollars into a blog campaign that yields little value. Therefore, the right way can be time-intensive. A hotel should post a minimum of once per month. Each post should be very targeted to a specific topic, provide value to readers, and be optimized for search engines.
Consider spending a minimum of $200 per blog post.
Your Hotel Budget
The digital marketing industry continues to evolve at a fast pace. Stay on top of the trends and evaluate which new tools, products, and services may provide high performance for your hotel’s unique situation. That being said, first and foremost, focus on the marketing channels that historically provide the highest ROI year-after-year, many of which are outlined above.
You are not alone in understanding all these elements of digital marketing and how they will work to bring results to your hotel. Contact Blue Magnet Interactive and schedule a quick phone call to go over your budget needs. We can go through the goals for your hotel and help you determine the right marketing mix to help you achieve those goals, even if it means guiding you to a different agency or service. It is more important you feel confident you have the right marketing for your hotel’s ongoing success.