What is the average website conversion rate for independent hotels? How to use conversion rate to improve hotel marketing?
Conversion rate is a commonly used metric to measure and evaluate digital marketing performance. The conversion rate is the number of conversions divided by the total number of website visitors. For example, if a hotel brand website receives 100,000 visitors in a month and has 100 bookings, the conversion rate would be 100 divided by 100,000 or 0.1%. A conversion can refer to any desired action that you want the user to take.
Types of conversion rates used in hotel digital marekting
When discussing conversion rate in hospitality, specifically in a hotel digital marketing context, we most commonly refer to booking conversion rate. When analyzing the efficiency of a hotel website funnel, various other conversion rates are often monitored, such as:
“Booking engine visit” conversion rate
The percentage of people among all website visitors who made it into the website booking engine
Contact conversion rate
The percentage of people among all website visitors who initiated contact through email, website chat, or other means on the hotel website.
“Booking engine sale” conversion rate
The percentage of people among all booking engine visitors, who made a reservation using your hotel website booking engine.
Why is it recommended to monitor and analyze multiple conversion rates in the hotel marketing funnel?
Breaking down the customer journey into various steps enables us to understand which parts of the booking experience need improvement.
In case your “booking engine visit” conversion rate is low, you will want to find solutions to the website booking engine more inviting. This, in particular, can be achieved by UX (user experience) optimizations.
In case the “contact” conversion rate is low, targeted fixes to enhance the contact experience should be prioritized.
In many cases, independent hotels see a healthy booking engine visit conversion rate, followed by a low booking conversion rate. This indicates that the website is good enough to drive visitors into the booking engine, however, there might be problems with rates or the booking experience that prevent people from making reservations.
In this article, we will be discussing average booking conversion rates, also known as e-commerce conversion rates in Google Analytics.
Industry-average conversion rates for hotels and resorts
Hotel website e-commerces vary between various property types, destinations, and star ratings. In Q2 2021 we have conducted a market research experiment, analyzing the conversion rates of over 500 independent hotels and resorts across the United States, Maldives, Mexico, United Kindom (mainly London), and the Caribbean.
The data we collected from each participating hotel was the average e-commerce conversion rate between 2018 and 2021.
It is important to note that hotels with a strong brand presence had significantly higher booking conversion rates compared to properties with low brand awareness. This makes perfect sense, considering the demand generation benefits of a strong hotel brand.
The most significant deviations in e-commerce conversion rate can are present if compared by star rating. For this reason, we broke down our comparison by the star rating of participating hotels.
5-star luxury hotels
What is considered to be a good conversion rate in hotel marketing?
If your hotel brand website generates higher than average conversion rates, then it is a good sign. However, the conversion rate is only a ratio used as a performance indicator. You should not consider it as a success evaluation metric.
We always recommend optimizing hotel marketing efforts for revenue and profitability, as those are the only relevant KPIs from a business management point of view. We work with hotels and resorts with above-average online revenue and profitability, while their conversion rates are below average.
This is because our continuous brand-building efforts generate large amounts of website visits that do not convert. Considering the super low traffic acquisition and social media reach costs, high web traffic, and exceptional profitability – the setup does what it needs to do.
How to use conversion rate to optimize the overall hotel marketing performance?
Considering that the conversion rate is practically the ratio between the total number of segments of people and specific actions taken by them, it only holds information value if we ask the right questions.
To get valuable insights from a conversion rate, we recommend breaking down your group of people, or your hotel website visitors, into multiple segments.
Grouping website visitors by traffic acquisition source will show various conversion rates between marketing campaigns and web traffic sources, such as social media, search engine traffic, referrals, or direct visits. Analyzing the conversion rate of these channels one by one will provide specific insights regarding which channels are performing well, and which ones require attention.
The same practice is also applicable for segmenting by country, language, device, and other attributes. Most hotels use Google Analytics to collect access this information, but there are other alternatives, like Adobe.
How to improve hotel website conversion rates?
Once a segmented analysis highlights which funnel steps and visitor segments generate a lower than average conversion rate, you will be able to plan targeted actions to improve those.
The conversion rate is just an indication of certain actions taken – any improvement plans should be based on targeted analysis.