Independent hotels are certainly up for a challenge when competing with international brands, such as Hilton, IHG, or Marriott. This has been the case for almost a decade since hotel marketing moved online. Soft brands of international hotel chains dilute the market further, leaving less space for independently managed hotels to operate.
Marketing teams of independent hotels are under increasing pressure to find digital reliable strategies that can deliver a healthy return on ad spend (ROI) consistently.
As a consulting group supporting independent hotels and small hotel groups for nearly a decade, we have some insights to share.
What marketing opportunities do independent hotels have over international hotel brands?
Before getting into the details, let’s break down the advantages and disadvantages of both chain and independent hotels.
Marketing advantages of international hotel brands
- High digital marketing budget
- Access to the best hotel digital marketing experts
- Access to cutting-edge marketing tools
- Access to market insights and business intelligence
- Strong marketing SOPs
Marketing disadvantages of international hotel brands
- Long approval procedures
- Website updates take a long time
- Strong brand guidelines that limit creativity
- Major updates need to be approved by the corporate office
Marketing advantages of independent hotel brands
- Flexible management workflow
- Short approval times
- Fast updates by the in-house team
- Ability to change brand guidelines if necessary
- Flexibility in creative advertorial design
- Website updates can be actioned instantly
Marketing disadvantages of independent hotels
- Limited financial resources
- Limited talent and expertise
- Ambivalent support from the management
Evaluating the digital marketing management-related strengths and weaknesses of independent hotels versus chain hotel brands, it seems that the sluggishness and lack of flexibility of chain hotels can be used to gain an advantage.
What is hotel marketing ROI, and how to improve it?
Return on investment or return on costs is a ratio between net income and investment. A high ROI means the investment’s gains compare favorably to its cost. As a performance measure, ROI is used to evaluate the efficiency of an investment or to compare the efficiencies of several different investments.
ROI in a hotel marketing context means the return on ad spends. Strictly speaking, all marketing-related expenses and costs should be taken into consideration when calculating ROI. This includes not only the ad costs but also labor, software tools, cost of consultants, and anything else that contributed to generate revenue.
The two variables that determine ROI are cost and revenue. To optimize for better ROI, a strategy is required to maximize revenue and profitability by cutting unnecessary marketing expenses.
According to a recent survey we did with 100+ independent hotel marketing teams, reducing cost is preferred by most independent hotels. This approach is fundamentally counterproductive. Instead of cost reductions, utilizing the available resources more effectively is a more productive approach.
Successful independent hotels are looking for ways to scale up their digital marketing investment because they have reliable and profitable setups that deliver excellent financial results consistently.
Common mistakes when trying to improve hotel ROI
During consulting and reviewing digital marketing for over 100 independent hotels, we have observed that most teams commit very similar mistakes.
The most common mistake is trying to fix issues bit by bit, without seeing the bigger picture. Brand-focused people will try to fix branding, advertising guys will attempt to solve complex problems by optimizing ad delivery – DOSMs try to achieve improvements by allocating more budgets and resources to digital marketing.
While these are all helpful bits and pieces, the solution to improve hotel marketing efficiency is to take a holistic approach and try to fix everything as a whole.
The best independent hotel marketing strategy to increase ROI, revenue, and profitability
Assessing marketing inefficiencies
The first step of a hotel marketing strategy should be always an audit. To avoid subjective opinions and cover-ups, a hotel marketing audit is better concluded by a 3rd party.
The purpose of auditing hotel marketing performance is to understand the strengths and weaknesses of budget allocations, marketing effectiveness, advertising efficiency, marketing communications, branding, product presentation – and a lot more.
Based on the revealed inefficiencies, it is possible to address critical issues – and by fixing those, ROI will improve significantly.
Fixing critical marketing and conversion issues
Addressing critical issues is the second step in a hotel marketing strategy. In the case of independent hotels, the most common issues are:
- Poor website user experience
- Poor brand experience
- Poor marketing communications
- Poor budget allocation
- Poorly managed advertising campaigns
- Poor product presentation
These items are all part of the core hotel brand experience. Each of these is important on its own, but even more important to work together seamlessly to provide an enjoyable, attractive, and seamless experience for potential guests.
Reallocating marketing expenses
Another significant problem we see when consulting independent hotels is a weak budget allocation and inefficient utilization of marketing expenses.
It is understood that most independent hotel marketing teams are careful and conservative when it comes to investing in digital marketing. Today, it is nearly impossible to generate hotel revenue online without investing.
While international hotel brands are comfortable spending up to $15,000-$20,000 monthly to advertise a single hotel property, independent hotels are hesitant to spend 10% of it. Regardless of the destination, independent hotel marketing teams often spend less than $2,000 per month on advertising. In Vietnam, the Philippines, and even in the Maldives, we have met hotels that were hesitant to budget $1,000 to advertise online.
Spending more does not guarantee a better hotel marketing ROI. The hotel management should review the spending on software tools, booking engine costs, website maintenance-related expenses, commissions, and other costs associated with digital marketing.
In an ideal scenario, hotel digital marketing-related overheads like monthly fees and software subscription costs should are kept at a necessary minimum. Resources are better allocated on advertising, brand building, and expertise that drives bookings, revenue generation, and brand growth.
Developing a beautiful hotel product presentation
The whole purpose of marketing and advertising a hotel is to make people want to stay there. Generating demand with online advertising campaigns is not possible without a beautiful presentation of your hotel.
As a quick fix, a new website and a gallery of professional hotel photos can do the job. But crafting a hotel brand presence that seems irresistible and super-attractive to your target guests needs more thought.
Before developing a tailor-made and purposeful product presentation, we recommend collecting reliable consumer perception insights regarding what qualities and features guests expect from a hotel like yours.
As an independent hotel, it is easy to be flexible and to do a slight brand refresh in order to adjust to consumer needs periodically.
Knowing what will make your target guests like your hotel brand, it is a lot easier to craft a purposeful and meaningful product presentation.
A better product-market fit will have a significant impact on hotel marketing effectiveness, as well as the overall ROI.
Developing better hotel marketing communications
Hotel marketing communication practices should always support the core brand strategy and should be in sync with the product presentation.
Irrelevant and cluttered hotel marketing communication is a problem we need to address with most of our consulting clients – especially city hotels and resorts that did not yet find their brand identity.
The best way to develop better marketing communications for hotels is concluding a market research-based hotel brand audit – which will highlight what potential guests like and dislike about your hotel.
Having these consumer insights will enable to craft hotel marketing messages that resonate well with the target audience.
Your new hotel marketing communication guidelines should be reflected on all channels, including social media, advertising, videos, e-mail marketing, and even in face-to-face communications.
Improving brand, website, and booking experience
The final step of the strategy is to bring it all together and merging marketing communications and product presentation into a beautiful crafter hotel brand experience.
The brand experience starts with the first ad a potential guest sees from your hotel. It continues on your brand website and ideally finishes in the website booking engine.
In order to convert viewers to paying guests and guide future guests through the entire customer journey, offering a seamless and enjoyable brand experience is required. Like that, it will feel easy and effortless for someone to make a purchase decision and book your hotel.
Crafting a seamless hotel brand experience means eliminating any distractions and annoyances. This requires fixing all design mistakes, making all marketing messages and factual information crystal clear, and having a product presentation that leaves viewers with a sense of desire.
Make sure that your website booking engine follows the same design language and experience the brand website, and do not try to overwhelm your potential guest with bogus discounts or gimmicky direct booking benefits. Keep your pricing, taxes, and service charges easy to understand, and always show the final price instead of a pre-tax price in your booking engine.
Conclusion
To achieve significant improvements in your hotel marketing ROI as an independent hotel brand, you will need to re-evaluate your marketing strategy and activities as a whole.
There are no quick fixes and addressing partial issues will have little to no results. Prioritizing a beautiful product presentation, relevant marketing communications, and a seamless brand experience is the solution to achieve spectacular ROI improvements.
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Daniel Diosi & Partners 