According to Morgan Stanley Research, the OTAs are about to collect over $16 billion in commissions this year. OTA revenues are projected to surpass hotel website revenue even for the top hotel brands, unlike the other main travel sectors airlines, car rental and cruise lines, where OTAs are losing market share to direct bookings (PhoCusWright).
How are we letting this happen in our industry? Hoteliers who are under-investing in digital technology and marketing and not optimizing their distribution channel mix are increasingly over dependent on the OTAs.
The Smart Hotelier’s Guide to 2017 Digital Marketing Budget Planning provides hoteliers with a concrete roadmap to jumpstart the property’s direct bookings and guide its digital marketing and distribution strategy throughout the year. With so many moving pieces in a hotel’s digital budget: from enhancing the property website, to revenue-generating technology, to smart data marketing, it’s important to create a strong plan of action that is realistic and aligned with your business goals.
For the 11th year in a row, HeBS Digital is helping to guide hoteliers in this process by outlining how they should structure their budget in the whitepaper: “The Smart Hotelier’s Guide to 2017 Digital Marketing Budget Planning.”
The whitepaper offers a step-by-step guide on how to structure your budget in ways that will boost direct bookings, lower distribution costs and generate the highest returns possible for your property website and digital marketing initiatives.
Here’s a sneak peek into the actual whitepaper:
Hoteliers should spend a minimum of 4-6% of their total room revenue on advertising/marketing efforts, of which at least 75% should be spent on digital marketing. As an example, independent hotels in the HeBS Digital portfolio spent, on average, $500-$650/ room/this year on their digital marketing budget. The formula works: the average direct distribution cost (cost of sale) for these properties is 4.5% and ROI on digital marketing initiatives is 2200%.
We recommend organizing your overall budget into these three categories:
- Year-Round Direct Response Marketing: this section of the budget is comprised of evergreen, high revenue-generating initiatives that increase direct room bookings such as SEM, SEO, GDN (Google Display Network), Smart Data Marketing, including programmatic and dynamic rate marketing initiatives, email marketing, online media and retargeting, and website conversion enhancements such as Reservation Abandonment Applications and personalization on the hotel website.
- Seasonal & Targeted Marketing Campaigns: with one cohesive theme, these campaigns are focused on seasonal and occupancy needs, filling rooms around when the property needs it most, as well as special events/holidays, and reaching key customer segments like leisure travelers, family travelers, business travelers, meeting, wedding and event planners, etc.
- Technology Assets, Strategy & Operations: this part of the budget is the backbone of any hotelier’s digital technology and digital marketing strategy; without properly investing in these line items, any marketing initiative launched will not succeed. This includes Website Revenue Optimization Consulting, a responsive website, Content Management System technology, analytics, and cloud hosting/CDN.
Included in the whitepaper is a snapshot of the ideal digital marketing budget (with an exact recommended breakdown of spend for each digital technology and marketing initiative), the 2017 hospitality industry forecast, top industry trends, case studies and more. Click here to download “The Smart Hotelier’s Guide to 2017 Digital Marketing Budget Planning.”
After downloading the whitepaper join HeBS Digital, Google and NAVIS for The Smart Hotelier’s Guide to 2017 Digital Marketing Budget Planning webinar on Thursday, September 15th, at 2pm EST / 11am PST.
About the Authors
Max Starkov is President and CEO and Mariana Mechoso Safer is SVP, Marketing at HeBS Digital. Founded in 2001, HeBS Digital helps hoteliers drastically increase direct bookings and lower overall distribution costs by deploying industry best-of-breed digital technology, consulting and marketing (www.hebsdigital.com).
The firm has won more than 350 prestigious industry awards for its digital technology, website design and marketing services, including numerous Adrian Awards, Stevie Award in the American Business Awards, W3 Awards, WebAwards, Magellan Awards, Summit International Awards, Interactive Media Awards, and IAC Awards.
A diverse client portfolio of top-tier major luxury and boutique hotel chains, independent hotels, resorts and casinos, franchised properties and hotel management companies, convention centers, spas, restaurants and bars, DMO and CVBs are all benefiting from HeBS Digital’s direct online channel strategy and digital marketing expertise. Contact HeBS Digital’s consultants at (212) 752-8186 or [email protected]