Since we are already in the budgeting season, many hoteliers are struggling to find the right answer to this question.

Budgeting adequately can lower OTA dependency, increase RevPARs, boost customer data ownership and improve the bottom line.

Some experts claim that the property must budget for marketing 4%-6%-8% of room revenue, based on the hotel location, intensity of competition, hotel category, current OTA dependency, breakdown of customer segments, etc.

So, the question is, how much should your property budget for marketing?

Here is my take:

Most hotels rely for their occupancies on a handful of feeder markets and customer segments, not on random travelers from around the world. This is the Pareto Principle at its best!

The Pareto Principle in hospitality means that hotels get 80% of their business from a handful of feeder markets and customer segments.

Hoteliers that invest their limited marketing dollars in these markets that bring 80% of their business are the winners. The remaining 20% of the markets generating occasional bookings? Leave them to the OTAs.

So, how much should hoteliers budget for their marketing in 2027?

In my view, the magic number that produces the optimal results is between 4%-6% of room revenue WITHOUT payroll included!

Combining sales and marketing into one budget line item results in most of the funds being allocated to payroll for DOSM and the sales team, and only a meager portion for pure marketing. The typical director of sales and marketing is de facto a director of sales whose salary/bonuses are tied to sales, not marketing.

Most independent hotels simply cannot afford to hire a full-time marketing manager. Outsourcing to a professional digital marketing agency specializing in hospitality is the only prudent way. The other option is to delegate the property marketing to the OTAs.

Max Starkov
Hospitality & Online Travel Tech Consultant & Strategist

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