Why Targeted Marketing is Critical for Hospitality

By Kenny Lee Vice President of Marketing, Revinate | September 06, 2015

OTAs may be an inescapable part of the hotel business – and they can be an excellent way to attract new customers. But those OTA fees take a big bite out of revenue. Hoteliers may need OTAs, but they can work to reduce their reliance on them – and the amount they pay them. The key to doing this is earning repeat business from guests who book directly. And the key to earning that repeat business is targeted marketing.

Hoteliers understand this: in the March 2015 edition of TripAdvisor's TripBarometer, 80 percent of those surveyed agreed that increasing repeat business was "very important" to the future of their hotels. The second most-important item was increasing the number of direct bookings, at 77 percent.

A quick exercise shows why getting guests to book again directly through you instead of through an OTA is so valuable. Let's do the math on just 10 rooms, at average OTA booking commissions vs average booking engine commissions:

10 rooms x 365 nights x $149/night = $543,850
If booked via OTA, average commission of 20% = $108,770
If booked direct, average commission of 4% = $21,754

Incremental revenue if 10 rooms are converted to direct bookings: $87,016

That's right. If a hotel could win back just 10 rooms from OTA bookings, it could increase revenue by 16 percent.

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Coming up in June 2019...

Sales & Marketing: Selling Experiences

There are innumerable strategies that Hotel Sales and Marketing Directors employ to find, engage and entice guests to their property, and those strategies are constantly evolving. A breakthrough technology, pioneering platform, or even a simple algorithm update can cause new trends to emerge and upend the best laid plans. Sales and marketing departments must remain agile so they can adapt to the ever changing digital landscape. As an example, the popularity of virtual reality is on the rise, as 360 interactive technologies become more mainstream. Chatbots and artificial intelligence are also poised to become the next big things, as they take guest personalization to a whole new level. But one sales and marketing trend that is currently resulting in major benefits for hotels is experiential marketing - the effort to deliver an experience to potential guests. Mainly this is accomplished through the creative use of video and images, and by utilizing what has become known as User Generated Content. By sharing actual personal content (videos and pictures) from satisfied guests who have experienced the delights of a property, prospective guests can more easily imagine themselves having the same experience. Similarly, Hotel Generated Content is equally important. Hotels are more than beds and effective video presentations can tell a compelling story - a story about what makes the hotel appealing and unique. A video walk-through of rooms is essential, as are video tours in different areas of a hotel. The goal is to highlight what makes the property exceptional, but also to show real people having real fun - an experience that prospective guests can have too. The June Hotel Business Review will report on some of these issues and strategies, and examine how some sales and marketing professionals are integrating them into their operations.