Abracadabra, Your Hotel Has a Marketing Budget. By Antonio Anguiano Sunday, 25th May 2014
When it comes to hotels, as for any marketing budget, you need a goal; marketing is all about how much you will earn, not about how much you will spend.
You have an online marketing budget. Even if you don’t think you do. The commissions you pay to OTAs are indirect marketing. What they spend in their visibility to provide your bookings, they make you repay in commissions, plus their margin.
When you look at the « OTA commissions » line of your P&L, there you have your online budget marketing for the year. Pretty big for a marketing budget, right?
This leads to your marketing goal: spend this money for a better purpose. Selling your rooms through your own website is a higher purpose.
First, that money is spent entirely on your brand, not for some hotel aggregator’s brand.
Second, this is money you won’t have to spend every year for each client. When your clients book on your website, you build loyalty. These clients know you personally, you have their e-mail address. You can communicate with them, offer promotions to them, you can… well, market your hotel to them.
Now some math. You sell your rooms at $100 ADR via OTAs.
Let your objective be to switch 10 of those rooms from OTAs to your own website this year.
With an average commission rate on OTAs of 20% and an average commission of your website booking engine of 4%, you will save 16% of your room price.
That’s $16 / room / day.
To make sure clients will book on your website, make it $1 less expensive there, that’s all it takes.
$15 x 10 room x 365 days of the year. Your marketing budget this year is roughly 55.000 dollars.
How hard can it be to spend that much money?
First, put 10K every year on a highly converting, highly convincing website for your hotel. For example a new 30K website every 3 years. That’s including media production (content photos, videos) and updates.
Then, you need to bring traffic. 30K a year seems right to reach your objective of switching 10 rooms from OTAs.
Split it in 2: half for Search Engine Advertising, and half on meta-search websites such as Tripadvisor. $30K to « buy
» 3650 room night brings it down to $8,2 per room night acquired, a very reachable ROI through adwords and meta-search.
OTAs get many bookings through their link on your Tripadvisor page. How simple is it to have them book on your website instead? As simple as $1 per room.
And if you’re afraid this won’t work and you could lose all your money, find a Booking Engine / Hotel Marketing provider that will be happy to invest that money for you.
But you have spent only 40K out of the 55K of your budget. Reinvest 10K in your hotel, or send them to your happy investor.
And with the remaining 5? Take your family on a holiday trip. And make sure you book it on the hotel’s website.
Antonio ANGUIANO Revenue Optimization Services Director Asia www.FASTBOOKING.com Twitter: @anguian6
FASTBOOKING offers leading edge products and services to hotels willing to develop a direct sales strategy. In an optimal support, FASTBOOKING offers tailor-made strategies in order to maximize performances and improve independence. FASTBOOKING employs 200 people worldwide (head office in Paris and 6 subsidiaries: New-York, Venice, New-Delhi, Singapore, Beijing and Tokyo) who, each day, serve its 8000 clients.
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