Thursday, 12 September 2019

2020 Budget Guide for Hotel Digital Marketing

Devising your hotel sales and marketing plan can be frustrating: having to satisfy key stakeholders, managers and accounting teams, while also ensuring you can deliver on major goals for the business is a big challenge. It can be overwhelming, considering new hotel advertising opportunities seem to appear every week and the market becoming increasingly competitive. A roadmap is essential to ensure hotel marketing budgets aren’t wasted and the correct channels are used to satisfy your hotel marketing plan’s goals. As this article explains, all hotels are different and a one-size-fits-all approach won't work - your plan needs to be bespoke.

How is digital marketing important for business?

Many of your guests’ journeys begin online: researching the location, getting a sense of accommodation available and fun things to do on their trip. Users are likely to discover your hotel on metasearch engines, organic search results, social channels, paid campaigns such as Google search or display advertising and much more. Being visible on these channels is more important than ever. As one study showed: an average journey to booking a single hotel room took 36 days with 45 touchpoints and involved search engines, third party sites and multiple devices. Marketing strategies for the hotel and resorts business should be responsive to these user habits.

Hotel content marketing is important across these channels to ensure you can capture the imagination and attention of potential guests. Content marketing for your hotel could include writing blogs about things to do in the area; establishing highly optimised special offers page to capture organic searches; creating videos for Facebook and Instagram highlighting rooms’ luxury and comfort.   

Digital marketing strategies for the hotel business should encompass Search Engine Optimisation (SEO) and numerous paid and organic channels to give your hotel visibility throughout the research, consideration and final booking phase.  

What are the most effective ways to promote a hotel online?   

To what extent you invest in marketing strategies for your hotel can depend on numerous factors including the hotel’s marketing objectives, how well established the hotel is, resources and revenue generated. Effective digital marketing channels to consider for your hotel marketing budget could include SEO, email marketing, brand search pay-per-click advertising, Google Hotel Ads, brand awareness advertising and remarketing. 


How do you create a hotel marketing plan?

A hospitality marketing plan should consider the situation and profile of the hotel, the hotel marketing objectives and the current online status. Some questions you might consider when developing a plan are:

What key elements of data need to be included? 
Look at the Average Daily Rate, Cost Per Acquisition, occupancy and availability rates, Return On Ad Spend and any other key data over the last year. Knowing what was achieved in the previous year is a solid starting point for planning the next. 

What are the revenue projections for 2020?
Research how each area of the business contributes to the overall revenue of the hotel. This should help prioritise the areas that need budget and avoid overspending on an area that contributes less revenue than others. Also look at how spends need to respond to seasonal demand and how seasonality is accounted for in the revenue projections.

What are the hotel’s marketing objectives? 
To get more bookings back from OTAs? To generate more wedding enquiries? To promote new aspects of the business? To increase profitability of online bookings? To generate customer loyalty? To increase visibility on social media? Hospitality marketing plans’ objectives can be far reaching, but it’s good to collect them all and prioritise them.  

Is the hotel new or well established? 
A new hotel requires more investment in brand awareness campaigns, while a hotel that has been established for more than 3 years could pull back on this type of campaign and invest in more conversion driven campaigns such as brand PPC and Google Hotel Ads. 

Are brand name searches at a healthy level?
If the hotel is well-established, look at is the brand search volume. If you see that searches for the hotel’s name have fallen back, you should consider investing in brand awareness campaigns to bring new traffic to your website and help potential guests discover the hotel. 

Have new aspects of the business been added? 
Has self-catering accommodation been added to your property, for example? Similar to a new brand, it’s well worth adding to your hotel marketing budget to create awareness of this and boost bookings for the new accommodation type.

Should you be investing more in organic online reach?
Investing in the optimisation of your website and local SEO is a solid start to any hotel digital marketing plan and can support many paid advertising strategies. Many hotels have this in place, but did you know that you can give those efforts an extra boost with backlinks? Backlinks refer to hyperlinks in the text of other websites that bring users to your own website. It significantly influences the hotel’s ability to rank well in search engine results pages and should accompany any SEO strategy. The benefit of a backlink is long-lasting: up to 2 years. So, consider that the cost or effort of this is once-off and will continue to bear fruit, while paid campaigns’ affect quickly fades once campaigns are stopped. 

Is there more competition in the location? 
Look at where budgets need to be allocated to maintain your hotel’s positioning, promote a new package or target a new audience to combat increased competition.

What are the hotel’s measures of success?
Think about what results you would like to achieve from the range of channels. Digital marketing and online advertising campaigns are very measurable in terms of Return on Ad Spend, enquiries, bookings, website visits, reach and even phone calls. Consider KPIs as you are selecting the channels that you will use to achieve your broader goals.

What cost-effective tools are currently being used?
Analyse what worked in the last year and what didn’t. Consider adding more budgets to the methods that have worked for you in the past to increase sales and return. 

How can offline efforts support online marketing strategies for the hotel business?
What happens offline can have an influence online. If you promote your hotel at shows, in magazines, on the radio, etc, you could see an uplift in searches for your hotel online. Reflect on whether offline efforts have helped with your website or whether budgets should be moved from offline advertising into digital marketing. A holistic and flexible mix is best. 

How much should you budget for marketing in 2020?

Once these kinds of questions around the hotel marketing objectives are answered, ask your hotel marketing partner to recommend the best type of campaign to match them. Goals for each type of campaign should be put in place. Campaigns with a focus on room bookings will deliver a direct Return On Ad Spend (ROAS), while a brand awareness campaign for weddings should focus on generating enquiries and would not deliver direct online revenue. They can advise on the optimum budget to spend on the types of campaigns. 

The recommended percentage of sales for a marketing budget

Across all industries, the average percentage of revenue spent on marketing is 15%. In general, the higher the volume of sales, the lower the percentage; so, the likes of worldwide companies like Coca Cola might only spend 1%, but that could equate to millions.

The hotel marketing budget percentage depends greatly on the profile of the hotel and its objectives, but we recommend considering an investment of 5-10% of overall revenue. This percentage is likely to be on the higher end of the range for independent hotels. The hotel marketing budget should cover offline and online expenses and be spread across a variety of advertising and organic techniques to build a solid strategy.

It is beneficial to have an additional allowance factored in so that if new opportunities arise or seasonal increases in search volumes occur, that you are ready to invest and get an even larger return. Similarly, the digital landscape is continuously evolving, and your hotel can benefit by experimenting with new techniques if it has the monetary scope to do so.  

Contact us for tailored advice on the best 2020 marketing strategies for your hotel business.