Allocating the appropriate amount of your property’s overall marketing budget to online marketing can be more of an art, than science. Here’s why you need a significant investment in online marketing to increase direct bookings and key areas to focus your efforts on to realise the highest digital ROI.

Published: 02 Sep 2011

Allocating the appropriate amount of your property’s overall marketing budget to online marketing can be more of an art, than science. Here’s why you need a significant investment in online marketing to increase direct bookings and key areas to focus your efforts on to realise the highest digital ROI.

WHY INVEST MORE IN DIGITAL MARKETING?

There are more channels than ever to reach travel shoppers. The online channels travel shoppers use to research and book travel continues to grow. From the traditional channels such as direct websites with engaging search engine optimised (SEO) copy and pay-per-click (PPC) advertising campaigns, to the growing channels like social media and mobile websites, Internet marketing is complex – a maze of branding and promotional messages from properties mixed with user generated content and reviews from travellers. With a more fragmented way to reach consumers, more resources must be allocated to reach them.

The industry is seeing steady recovery. According to STR, during the week ending August 20, overall U.S. revenue per available room grew 7.6 percent from 2010 to 2011. Furthermore, PwC’s latest research shows 2011 is on pace to have a 4.6 percent growth in lodging demand over last year. No matter how bright the horizon though, you’re likely still working with a limited budget - but that doesn’t mean you can’t make it work exponentially in your favour, especially in regards to online marketing.

Internet marketing produces the highest ROI with the most accountability. The Internet easily produces the highest ROI and best value in hotel marketing and is the only growth channel in hospitality. Unlike other areas, the results of marketing efforts are measurable and transparent. Smart hoteliers can use this information to their advantage to track, modify, and reinvest with confidence in revenue producing efforts.

This graph based on a recent International Econsultancy survey shows just how much of businesses’ marketing budgets are being devoted to online efforts:

WHERE SHOULD YOU FOCUS DIGITAL EFFORTS?

Optimised Proprietary Website

Some may ask why if you also have a brand website. While brand websites can be a terrific asset, they are built to create an even playing field for their portfolio. This can be limiting when competing against other hotels in the brand’s portfolio, as well as competitive brands in your area. Having a proprietary website can fill gaps and help your hotel gain visibility for searches like “hotels near Mall of America” or “Bethesda hotel wedding.” Proprietary sites supplement brand efforts in a big way, giving you twice the amount of online real estate space. If you’re an independent hotel, a proprietary website is basically a necessity.

Some marketing strategies need to be covered with any website. It needs to have powerful SEO, including optimised content, link building and a local search distribution that make it easy to find in search engines. It should also have relevant, compelling copy. If your property has an independent website that is currently underperforming, you may need to increase the amount of budget directed to your site, or consider a new vendor.

Social Media

According to a TripAdvisor survey, most hotel owners embrace social media, as 57 percent plan to increase their social media marketing budgets. And with the popularity of social media as a channel consumers prefer to use, it’s a no brainer for properties to have a social media plan. From travel shoppers visiting hotels’ Facebook and Twitter profiles to read guest comments, to shoppers searching for videos on YouTube, social has become THE favorite channel of some. Take advantage by engaging with past and prospective guests and using custom tabs on Facebook to offer specials and the ability to book.

Reviews

According to the same TripAdvisor survey, 99 percent of hotel owners plan to respond to guest reviews. TripAdvisor has over 50 million reviews… and travels shoppers read them. It’s crucial your staff monitors and responds to all negative reviews and many positive reviews. It helps generate loyalty and show potential future guests that you care about making their stay a first-class experience.

Mobile

eMarketer reports 25 percent of leisure travellers use mobile devices to book rooms, and Google reports that 19 percent of all hotel searches happen on mobile devices. With that type of explosive growth, it’s imperative hotels have mobile friendly websites to reach travellers on-the-go and increase bookings. It’s yet another channel that many consumers prefer, which means your property should make it convenient for them to reach you there.

This graph shows specific digital channels where companies plan to increase spend:

SO, HOW MUCH SHOULD YOU SPEND?

The question of how much exactly a hotel should invest in Internet marketing is still up to the individual property, since each faces unique market segments and has unique goals and objectives for growth. For example, if you’re a select service brand with meeting space, you may need more budget allocated to creating or updating your proprietary website and SEO. If you’re an upscale independent resort, you may need to increase the amount allocated to PPC advertising.

A general rule of thumb focuses on proportional spending. If you have a goal that 30 percent of your total sales be Internet generated, roughly 30 percent of your budget should be Internet allocated. Now this is by no means an exact science (some brands have more marketing support than others, some independents rely more heavily on independent websites, etc.), but serves as a good starting point for most properties.

It’s crucial that online marketing is a priority when planning your 2012 marketing budget. The Internet and travel shopper buying process is far too complex, and your competitors are far too aggressive to put online marketing on the back burner.

(Contributed by hotel Internet marketing company Vizergy).