Eyefortravel: How should hotels invest in online marketing in 2012?

Determining the right amount of money to invest in online marketing within your hotel’s overall investment budget is more art than science. To increase direct bookings, you need to focus your investment in online marketing and other areas that will deliver the greatest ROI.

Why should we focus on investing in online marketing?

There are more channels to reach travel buyers. More and more consumers are using online channels to search and book travel. Whether it is traditional channels (such as those engaged in SEO and pay-per-click advertising) or emerging channels (like social media and mobile sites), online marketing has always been complex and diverse - a large number of hotel brands and promotions mixed with traveler reviews. Consumers are exposed to more fragmented information, and you need to allocate more resources to acquire consumers.

The travel industry is gradually recovering. According to the latest report from STR, as of August 20, the revenue per available room of the US hotel industry increased by 7.6% in 2011 compared with the same period last year. In addition, the latest research from PwC shows that the demand for hotel accommodations in 2011 is expected to increase by 4.6% year-on-year. No matter how good the prospects are, your budget is still limited, but this does not mean that you cannot seize this opportunity, especially in the field of online marketing.

Online marketing processes generate the greatest ROI. This channel easily generates the most value when it comes to hotel marketing and is currently the only growing sales channel in the hotel industry. Unlike other channels, the results generated by marketing campaigns are measurable and transparent. Savvy hoteliers are adept at using information that works in their favor, tracking and modifying it, and then confidently investing in revenue-generating projects.

The following table shows the proportion of the total budget that companies spend on online marketing, based on the latest International Econsultancy research.

What aspects of digital marketing should you focus on?

Optimized hotel website

Some may ask, why do you need your own brand website? Although brand websites are a great asset, they establish a very important position for your brand. But if you don’t do it well, you will be weakened compared to other brand websites and competing brands in your area. An optimized website can make up for this deficiency and make it easier for others to find your hotel when searching, such as "Mall of America hotels" or "Bethesda hotel weddings". An optimized website is a great help in brand marketing and may make you twice as fast as your competitors. If you are an independent hotel, building an optimized website is a must.

Certain marketing strategies are required for any website. For example, it requires strong SEO, including optimized content, links, and local search visibility. If your hotel's current standalone website is not performing well, you may want to increase your budget or consider a new supplier.

Social Media

A survey by TripAdvisor shows that most hotel owners are actively using social media channels, and 57% of hotel owners hope to increase their budget for social media. As social media becomes popular among consumers, it is natural for hotels to use social media for marketing. For consumers who view hotel information and user reviews on Facebook and Twitter, and for consumers who view hotel videos on YouTube, social media has become the favorite channel for some consumers. It is a good strategy to launch promotions and booking functions on Facebook by leveraging its huge user base.

User Reviews

The TripAdvisor survey also showed that 99% of hotel owners respond to user reviews. There are 50 million reviews on TripAdvisor that travel buyers read. Make sure your staff monitors and responds to all negative and positive reviews. It helps build customer loyalty and provides a first-class stay experience for those potential returning guests.

Mobile Strategy

According to eMarketer, 25% of leisure travelers use mobile devices to book hotels. Google also said that 19% of hotel searches come from mobile devices. With the rapid development of this channel, it is imperative for hotels to build websites suitable for mobile devices in order to reach travelers and increase bookings. This is also a channel that many consumers like, which means that in order to acquire consumers, you must ensure that they can find you on their mobile devices.

So, how much should you invest in online marketing?

How much budget should a hotel invest in online marketing depends on the specific situation of each hotel, because each hotel faces different market factors, development goals and directions. For example, if you are a conference hotel, you may need to invest more in creating or updating your optimized website and SEO. If you are an upscale independent resort hotel, you need to invest more in pay-per-click advertising.

A general rule of thumb is to invest in proportion. If your goal is for 30% of your total sales to come from the web, then roughly 30% of your budget should be spent on the web. This is by no means a one-size-fits-all approach (for example, some brand chains have a larger market share, while some independent hotels rely more on their own websites), but it is a good starting point for most hotels.

There is no doubt that online marketing is the first choice for hotel marketing strategies in 2012. The online purchasing process of travelers is far more complicated than you think, and your competitors will also firmly grasp the opportunities of online marketing.

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