Are your 2012 Hotel Targets, Budget and Marketing Plan Ready?
By Patrick Landman - Xotels
Monday, 17th October 2011
No time to loose, 2012 is almost here and a good plan isn't made overnight - 

How far are you with your targets, budget and plan of attack for next year? What REVPAR and GOPPAR do you need to achive? Is your hotel marketing plan complete, and does it describe all actions in detail? Does everyone on the team know what the objectives are and which steps to take to get there?

4Hoteliers Image LibraryDid you make your 2012 budget already or are you right in the middle? What methodology are you using? Are you simply adding a 3% to 5% each month based on last year's performance? Or are you really putting your teeth into it and drilling down per segment, per channel, per account, per day?

The basis of the target or budget lays in a detailed demand calendar. Get a clear overview of what drove revenues each day. Map the events, conferences, expositions, trade-fairs, concerts, holidays, vacations, long weekends, etc to 2012. You will start seeing a clear shift already.

Perform displacement calculations on all segments, channels and accounts to uncover hidden revenue potential. Incorporate channel distribution cost like travel agent commission, agency fees and marketing investments, payroll for sales, marketing and reservation, to determine the true net value of each segment.

It seems though not everyone goes into as much detail when making their budget. I have to share with you a funny story to budgeting with you. So we are working with many different hoteliers, and in this case it pertains to management of a resort. Hotels in vacation markets for many have been influenced (indoctrinated) by tour operators on how to manage their property. As a result budgets are made per person rather than per room, meaning that the total revenue objectives become ‘flexible' if measurement of results does not incorporate enough factors.

In this particular case the hotel's management was under the impression the hotel was performing on target as the correct average rate per person was achieved. Unfortunately the average occupancy per person per room was actually 20% lower than normal, which made it impossible to reach total revenue target, because the average room rate was totally off.

Hold on, it gets even funnier. When we were working through the budget for each month, we noticed that several months had targets at revenue levels below last year. Upon probing the reasoning behind this, we were explained that some tour operators had informed them they were expecting a 10% less bookings from a particular country. No one ever raised the thought to initiate partnerships with other distribution channels to offset this possible decrease in demand. Capturing more market share, or penetrating new markets was just not in their mindset.

Sorry, I just had to get this rant of my chest. But unfortunately it is very typical for our industry. Especially in resort hotel markets, tour operators have for too long influenced hoteliers on how to run their business. Hoteliers need to get more strategic insight and understanding of the financial side of the business. Moreover they have to become more creative in methods to increase the revenue performance of their property.

An industry colleague I respect highly called me last week, asking if I knew of any online tool which helps hoteliers developing a professional marketing plan. Not just a standard one, like most hotels punch out, listing a few trade fairs and shows a % increase per segment. No, he was looking for a system that really guides you through every detail and forces you to look at all aspects that need to be incorporated.

And he is right; hotel marketing plans in general are too superficial. It is time they are taken to a more professional level, and become complete. Hotels are multi-million dollar or euro businesses and they demand an expert strategic and structural approach.

So what are elements you need to incorporate in your 2012 marketing plan? Taking into consideration the continuing growth of online sales and the quick adoption of mobile technology by consumers, we have put together some questions that will need your attention in 2012:

Internet Marketing
  • How much revenue do we expect our hotel website to produce in 2012?
  • What growth are we expecting from 2011?
  • What is the balance between print and internet marketing?
  • Are we shifting budget from offline to online?
  • What is our plan to attract more traffic to our website?
  • What will we do to increase more conversion of our hotel website?
  • What new online marketing initiatives will we launch next year?
  • How will we collect more emails, mobile phone numbers, and FaceBook connections to be able to directly engage with our guests?
  • How will we attract our different client target markets and niche guest segments?
  • How will we measure the effect and ROI of all our marketing actions?
  • What will we focus on, how much financial and human resources will you dedicate to;
    - Website Redesign or Optimization
    - Links from local and travel directories
    - Search engine marketing SEM / PPC
    - Search engine optimization / SEO
    - Banner advertising
    - Advertising on Meta-Search, Review Websites and Travel Forums / Communities
    - Interactive campaigns / promotions (contests, games, quizzes, sweepstakes)
    - Email marketing
    - Mobile Website
    - Mobile Search Engine marketing SEM / PPC
    - Social media marketing / Travel 2.0
    - Online reputation management
    - Blog
    - Video
    - Analytics / ROI tracking
    - Webmaster
    - External marketing agency (experts)
Online Distribution
  • Have you identified new local or international sales channels your hotel needs to be on?
  • What are your key segments, niche segments and feeder markets?
  • Are there any travel agency channels or forums out there that can help you attract these customer target markets?
  • How will you manage to keep a healthy balance between direct and indirect (third party) sales online?
  • What is your approach to protect your hotel from brand hijacking by OTA?
  • Are your FIT and wholesalers respecting the contract?
  • How will you prevent wholesalers to distribute and publish package rates as room only deals on online travel agency websites?
  • How will you control your cost of distribution?
  • Will we use rate parity as a strategy to drive business through more cost-effective distribution channels?
  • Will we guard against cannibalization by costly distribution channels like Flash, Group and Lastminute sales websites?
  • Will we let ourselves be caught up website trends and hypes which only lead to an erosion of the hotel's net rate?
As you can see many things have to be considered and included in the hotel marketing plan. We need to look at these aspects of the business, and many more, as they influence your financial results.

I hope these thoughts will help you to make a more complete hotel marketing plan for 2012.


Patrick Landman - Xotels

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