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It is time for hotel marketers to evolve past ROI

14 April 2021 by Stephanie Smith, eHotelier

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If you are measuring your marketing success today the same way you did last year, you are not providing the value that your external stakeholders and ownership expect and that your internal business partners, like sales and revenue strategy, deserve.  It is not enough anymore to measure how many guest rooms are booked per dollar spent on your paid marketing.  Instead, focus your attention on two specific areas:

  1. Are my marketing plays moving the needle relative to the competition in the channels of business that are actually booking right now?
  2. Are the dollars invested really changing the overall revenue picture of the hotel?

Change in hotel marketing mindset

To truly evolve to a comprehensive commercial strategy approach where sales, marketing, and revenue management are on the same page, we must align towards shared goals and KPIs.

You can run a marketing campaign with stellar awareness, traffic or return, but the hotel as a whole could still be underperforming.  Work with your sales and revenue management team to identify the gaps in market segments that the hotel needs exposure from and what the competition is getting. Once you are able to pinpoint holes in your conversion funnel or flywheel, you can supplement where there are gaps.

It is time for hotel marketers to think about more than just ROI (Return on Investment). Challenge yourself or your hotel marketing person or agency to look more holistically at where the marketing is making an impact.  This mindset change will force you to analyze other factors outside of money spent:

  • How your competitors position themselves
  • Your content and imagery
  • Conversion and cancellation metrics
  • Overall visibility

Granted, there is no “silver bullet” and it is likely multiple marketing strategies are needed to move the needle. The point is you need to be looking comprehensively at your performance.

KPIs to consider to determine hotel marketing performance

While a strong Book Direct strategy is still key to reducing your reliance on OTAs, the percentage of business you get from your Brand website as part of your channel mix alone is irrelevant.  That percentage is neither good nor bad until you can:

1) Compare your brand.com production against yourself

2) Compare your brand.com production against your competitors

In the current days where the RevPAR on your STR report may not be something you can hang your hat on, you can/should be focused on outperforming your competitive set based on who is actually traveling.

Hotel marketers traditionally have a more direct impact on transient travelers, thus should be reviewing the performance of the following channels: Brand.com, Expedia, and Booking.com.  A hotel marketer’s efforts should be seen in gaining ground on the competitors in these three channels.

Best systems to measure new hotel marketing KPIs

While each hotel has its own programs and data points, we recommend Demand360 by TravelClick.  Specifically, within Demand360, you can analyze your performance against your competitors by channel, both historically and forward-looking.

Another great place to get this data is Kalibri Labs’ HummingbirdPXM platform. They have great segmentation by rate category and channel (but not specifically Expedia versus Booking), plus competitor comparisons.  And, if you’re looking to improve brand.com performance, you can easily break it down by rate category (i.e. AAA, Advance Purchase, Packages, Promotion, Government, etc.) to target those travelers and support your spend with data. You can also work backwards and see what channel your AAA or Government is coming from. Their forward looking data is based on proprietary predictive modeling based on rate changes and historical performance to project performance. With shortened booking windows, this is a more effective view of future performance.

If you have neither Demand360 or Kalibri, you are left with the STR data. While it does break out transient versus contract and group, the transient bucket is a catch-all. “Transient” on the STR report also encompasses sales efforts like local negotiated and wholesale accounts which have a substantial impact on this category.

Pre-pandemic we covered the top digital marketing KPIs for hotels.  How many of these still matter if you don’t have the cash to pay the bank and salaries?

How are you calculating ROI?

The other tricky part of only using ROI as a marketing metric is that it is based on booked data, not consumed data.  You need to consider your cancellation rate as a factor because it only matters if that revenue made it into the hotel’s pocket.

For branded hotels, this data is sometimes hard to match up, but your OTAs give you benchmarks for what your cancellation rate is versus the competitors.  If your cancellation rate is higher than the compset’s, you need to be asking yourself why?  Is it a communication issue or a misrepresentation of your product or amenities? Is your rate strategy encouraging trade down?

On MetaSearch, was 100% of the revenue booked truly incremental?

By no means should you STOP quoting your hotel campaign ROI.  Just know that this is only part of the story.  Align your goals with total hotel goals, and you will get much stronger buy-in from all of the team members setting strategy.

This report was contributed by knowledge partner:

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