Developing business online is the best possible investment for hotel brands
In the past two decades, the internet became a mainstream medium for companies to connect with new customers, and for people to buy or book almost anything they want. Almost all global and around 75% of all well established businesses have online sales and online distribution operations. Today, the internet is not only for advertising but a platform where companies can make money and grow.
This is especially true for hotel and travel businesses. Today’s Gen Z and Millennial travelers are fully online literate and won’t bother to read tour guides and handbooks to find their next destination. They want to find travel inspiration online, do their research online and book their entire trip on the internet. Numbers back this up. Over 80% of travel planning is happening online.
With booking trends and demands shifted almost entirely online, modern and progressive hotel brands have grown exponentially, most old fashioned independent hotels have failed miserably to take this route, and they still don’t understand why they don’t get quality business by spending $350 on Facebook ads monthly.
Developing online business is not just marketing and advertising. It’s about actually taking your business online, developing customer acquisition, conversion and retention strategies. It’s about developing a tone of voice for your brand and mastering your very own brand communication practices. Only one pillar of the 3 is about advertising - and without the two other your online business development will not work.
The 3 pillars of a successful online business implementation
You don’t need a consultant to understand that running successful online operations mean more than just advertising. There are three elements of any profitable digital setup and these all have to work well together.
Conversion, retention and customer experience
Assuming that you already know what the above are, I will demonstrate some very typical scenarios where one or more elements are not present or not working in sync. In the past 10 years of my digital marketing consulting practice I have seen the below very often.
Typical problematic digital marketing setups
Typical problem 1: advertising without a conversion and retention strategy
This is the most common problematic setup in the hotel business. When hotels advertise without having a strategy to engage, convert and retain customers then it is very likely that their advertising will not return optimal results. Furthermore, they are likely to alienate and drive away potential guests.
This usually happens when a hotel website has confusing navigation, a poorly set up booking engine or incorrect pricing. An increasingly common issue is the misuse of promotional pop-ups and banners that are more annoying than useful to customers.
Typical problem 2: advertising without a brand communication strategy
Probably the most harmful setup of all, that not only a waste of money but can cause irreversible damage to a hotel brand.
Establishing your brand communication guidelines might not seem like a priority for hotel sales and marketing teams but actually this is the first and most important thing to do before engaging in further online marketing activities. It starts with understanding your target audience and developing messages, an attractive visual appearance and further communication practices to answer their requirements and expectations.
Without brand communication guidelines, your messages sent out via Google Ads, social media or any other media will be inconsistent and irrelevant - and make potential guests ignore your brand.
Typical problem 3: insufficient advertising budget
Some hotel managers still consider advertising as a cost rather than an investment - and most of them have their reasons. Perhaps they tried to spend invest in digital advertising before but their investment did not return due to lack of brand communication and conversion strategies.
Such a bad “it did not work” experience can definitely leave a bad idea about digital marketing, however, making it work somehow is necessary.
As a general thumb of rule, a hotel should be spending around 3x average transaction value on advertising. It can definitely vary from case to case, depending on the advertising of competitors or nature of business - this is just a general indication.
If their average booking value is $1,000, then spending 3x $1,000 = $3,000 is a reasonable amount to start with. Why? Because it is very likely that in case branding and conversion strategies are right, at least 10x return can be expected.
Take a look on this calculation:
Average booking value: $1,000
Monthly ad spend: $3,000 (3x avg booking value)
Expected ROI: 10x
Additional revenue: $30,000 which is around 30 additional bookings in this case
It sounds like a much better business compared to wasting $350 on Facebook without any thought put into conversion and communication strategies, then crying about the bad results.
Our online business development program
We have a tested framework to develop the online business of hotel brands in a highly flexible way. This program is not suitable for management teams who are not open to rethink their current strategy or afraid to invest more in their own development.
Our online development program starts with a comprehensive analysis where we assess your current situation, to identify issues and opportunities. Then first we will help you to get your brand communication in shape by helping you to understand your audience and craft appealing, relevant messages. Then we move on to develop a solid conversion-retention system so you will be converting more visitors into paying guests. When this is all done, we will help to implement advertising campaigns that will get the attention of the right people.
Most of our clients have improved a lot with our assistance. We have helped to open and re-brand hotels and helped dozens of brands to improve their business online.
We are convinced that growing a business is the easiest online and we provide all the support and assistance for management teams to make it happen.
Short and long term investment
Investing in online business development is not cheap. For companies with a development strategy it can be an excellent investment, meanwhile for teams without a plan it will be just cost. Regarding what one expect form such an investment, we need to distinguish between short and long term gains.
Short term benefits will be obviously the additional revenue, increased brand exposure and improved market penetration. Long term benefits will be increased brand value, overall higher guest satisfaction and increased profit.