The Smart Hotelier's Guide to 2012 Digital Marketing Budget Planning.
By Max Starkov and Mariana Mechoso Safer
Thursday, 15th September 2011
2012 is quickly approaching and budget-planning season is upon us; whether you are just starting to think about where you are going to allocate your dollars, or are moving towards finalizing your budget for next year, this is the perfect time to take a step back, review the state of the industry as well as your property's successes and failures in 2011, and prepare for a year of driving the most revenue ever through your most cost-efficient channel – the hotel website.

In an industry as dynamic as ours, it is important to stay on top of quickly moving trends, prioritize initiatives that generate direct online bookings, and be flexible enough to continuously adjust your hotel digital marketing campaigns for optimal results.

Recapping 2011 and Preparing for 2012

Despite the current rocky state of the economy, the hotel industry enjoys a relative robust travel demand.  The U.S. hotel industry reported increases in all three key performance metrics for second-quarter 2011 in year-over-year measurements, according to data from Smith Travel Research (STR).

The industry's occupancy increased 4.5 percent to 63.4 percent, average daily rate rose 3.5 percent, and revenue per available room was up 8.1 percent. STR projects that all three key performance measurements will realize increases for the year as a whole.

So what are the main criteria hoteliers should use when determining their 2012 digital marketing budgets?

Sources of Business:

The 2012 hotel digital marketing budget cannot be developed in isolation from the dynamics of the marketplace.  It should be a direct reflection of the sources of business:
  • What are your main distribution channels?
  • What are your property's main feeder markets?
  • What are your property's main customer segments: transient corporate or leisure, corporate group, meetings, social events, family travelers, etc.
Here are the main distribution channels in hospitality in the U.S.
  • Rapidly Growing Online Channel (+25% in 4 years)
  • Decreasing GDS Travel Agent Channel (-25% in 4 years)
  • Decreasing/Flat Voice Channel (-11.1% in 4 years)
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