Friday, 05 February 2021

Building A 2021 Budget Strategy For Luxury 5-star Hotels


Devising your 5-star 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. 

With the COVID-19 pandemic, the 5-star luxury hotel industry has become one of the hardest hit, making the role of hotel digital marketing more crucial than ever before. 

How are you supposed to plan for 2021 with so much uncertainty? Where should you focus your marketing budget when you’re unsure if people still can travel to your destination? 

A roadmap is essential to ensure your 5-star hotel marketing budget isn’t wasted and the correct channels are used to satisfy your marketing plan’s goals. 

All hotels are different and a one-size-fits-all approach won't work – your plan needs to be bespoke.
5-star hotel strategy for 2021

Why is digital marketing important for your business?

Many of your guests' journeys begin online - researching the location, getting a sense of the accommodation available and the fun things to do on their trip. They are likely to discover your hotel on meta search engines, organic search results, social channels, paid campaigns such as Google search or display advertising and many more web-based platforms. Being visible on these channels is more important than ever. As one study showed the 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 hotels and resorts business should be responsive to their guests' 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 optimized special offers page to capture organic researchers; creating videos for Facebook and Instagram highlighting your rooms' luxury and comfort.

Digital marketing strategies for the hotel business should encompass search engine optimization 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 will depend on numerous factors including the hotel marketing objectives, how well established the hotel is, resources available and revenue generated (return on investment). 

Effective digital marketing channels you should consider within your hotel marketing budget include: 

  • Your hotel website 
  • SEO 
  • Brand search pay-per-click advertising 
  • Brand awareness advertising and remarketing 
  • Google Hotel Ads
  • Email marketing
  • Professional photography
  • Video production 
  • Paid listings on partner websites 
  • Software and tools 

How do you create a 5-star luxury hotel marketing plan in 2021?

The hospitality marketing plan should consider the current situation, the profile of the hotel, the hotel marketing objectives, and your current online status (how well-optimised is your digital strategy). 

Some questions you might consider when developing a plan are:
What are your hotel's marketing objectives? To get more bookings back from OTAs? To promote new aspects of your business? To increase profitability of your online bookings? To generate customer loyalty? To increase visibility on social media? 

A hotel marketing plan’s objective can be far reaching but it's good to collect them all and prioritise them. 

If you want to reach your goal, invest in data collection opportunities and a marketing automation platform which will allow your hotel to begin tracking when target guests are booking. 

What are your 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 are the revenue projections for 2021?

Research how each area of the business contributes to the overall revenue of the hotel. This should help prioritize the areas that need budget and avoid overspending on an area that contributes less revenue than others. 

  • The major hotel digital marketing areas available today are:
  • social media marketing: Facebook, Instagram, Twitter, and LinkedIn 
  • Email marketing: phone and search databases 
  • search engine marketing: Google AdWords and display networks 
  • Advertising campaigns 
  • review websites 

Also, look at how spends need to respond to seasonal demand and how seasonality is accounted for in the revenue projections.

What key elements of data need to be included? 

By investing in data collection technology synced with your website (such as available from Aró), you will quickly gain a distinct advantage over your competitors. Look at the:

  • average daily rate 
  • cost per acquisition 
  • per session value
  • occupancy rate 
  • availability rate
  • return on ad spend 

over the last year. Knowing what was achieved in the previous year is a solid starting point for planning the next. 

Are brand name searches at a healthy level? 

If you see that searches for your hotel’s name have reduced, you should consider investing in brand awareness campaigns to bring new traffic to your website and help potential guests discovere your property. 

Have new aspects of the business been added? Have new amenities and services been added to your property? 

Similar to a new brand, it's well worth using your hotel marketing budget to create awareness of this and boost bookings for the new services.

What cost-effective tools are currently being used? 

Analyze 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 returns. 

Should you be investing more in organic website marketing? 

Investing in the optimization of your website and local SEO is a solid start to any hotel digital marketing strategy and can support many paid advertising strategies. 

Backlinks can give these efforts an extra boost by accruing links from other quality, relevant websites. 

It significantly influences your hotel's ability to rank well in search engine results pages and should accompany any issue strategy. 

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 your audience to combat increased competition. 

How can offline efforts support online marketing strategies for the hotel business? 

The more you increase the reach of a marketing campaign, the more bookings you will get. 

Digital marketing is key here and will transform the business. 

But what happens offline can have an influence online too. For instance, if you promote your hotel at shows or in luxury magazines you should coordinate getting links on your digital assets too. You will then see an uplift in searches for your property online. 

By mixing offline and online marketing strategies, not only can you increase the efficiency of your 5-star luxury hotel marketing plan but you can also measure your hotel marketing efforts. 

A holistic and flexible mix is best. 


How much should your budget be for marketing in 2021?

Ask your marketing partner to recommend the best type of campaign to match each area. Goals for each type of campaign should be put in place. 

For example, 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 will not deliver direct online revenue. 

Aró can advise on the optimum budget to spend for different types of campaigns. 

What is the recommended percentage of sales for a marketing budget for 5-star luxury hotels? 

In general, the higher the volume of sales, the lower the percentage. 

The hotel marketing budget percentage depends greatly on the profile of the hotel and its objectives. We would advise considering an investment of 5-10% of overall revenue. 

This percentage is likely to be at the higher end of the range for 5-star luxury hotels. 

The hotel marketing budget should cover all online expenses and be spread across a variety of advertising and organic techniques to build a solid strategy. 

Conclusion

The digital landscape is continuously evolving and your hotel can benefit by experimenting with new techniques if it has the financial scope to do so. 

Contact us for tailored advice on the best 2021 marketing strategies for your five-star luxury hotel business.