Driving revenue growth and enhancing profitability are the ultimate goals for every hotel marketer. What does it take to reach these goals?
We asked Flo Lugli, a highly-regarded leader in eCommerce and online distribution for the travel industry and Principal of Navesink Advisory Group, to share her vast experience and expertise to guide hotel marketers in the right direction.
Read this article to learn:
✔ How to stay updated on digital marketing
✔ Where to look for website optimization best practices
✔ How to understand what your optimal channel mix should be
John McAuliffe: What would I want to focus on if I were new to hotel digital marketing?
Flo: Digital marketing is constantly evolving. Google is frequently changing their algorithms and Facebook is regularly changing what they’re offering, so you need to stay up on what’s going on by focusing on continuous education.
You can do this by subscribing to hotel industry publications as well as non-industry publications about digital marketing and consumer trends for some of your insights. It’s also a good idea to build up a network of folks to interact with, compare notes and share best practices, bounce things off of, and basically debate what’s going on.
By networking and educating yourself throughout your career, you’ll always be learning more about digital marketing and finding ways to apply trends and initiatives in retail and other industries to your marketing strategy.
John McAuliffe: You mentioned retail. Is the retail industry particularly valuable for hotel marketers to watch?
Flo: As you know, the hospitality industry is not known for being the most innovative or forward thinking. We tend to be followers and not fast followers at that, that’s why I suggest staying current on what other, faster moving industries (like retail) are doing. The retail industry does a lot of testing on their websites and there’s no sense in reinventing the wheel in our own industry.
The retail industry does a lot of testing on their websites and there’s no sense in reinventing the wheel.
John McAuliffe: Are there any segments within the hospitality industry that I would want to watch closely?
Flo: I always tell people to look at what the OTAs are doing and what they’ve done in the past. The OTAs were the first to come out with strikethrough pricing. They were the first to come out with things like ‘three rooms left at this price’ or ‘14 people have looked at this hotel today.’ Just like retailers, they’re doing thousands of tests every year so there’s no sense in trying to figure out the best way to optimize your hotel website for conversions. If you see it on an OTA, you can be quite sure they’ve done the tests to show that it drives higher conversions.
John McAuliffe: In regard to my hotel website, where would I want to start in terms of optimizing it for better conversion?
Flo: The only way you’re going to know what’s happening on your website is by having a good understanding of your website analytics tool. You also need to be able to understand what the analytics are telling you. If you don’t, I would look to engaging with a third party to do a website assessment for you.
Once you’ve completed a website analysis and can see the areas that need improvement, do some very simple A/B testing to see how the results change. You would be surprised how simply changing the color of the book now button can impact performance.
John McAuliffe: What if I go through this exercise and my website traffic and conversions are still minimal?
Flo: Just because you have a website doesn’t necessarily mean people will visit it. I always say if you don’t have budget to market your hotel, then having a website probably isn’t going to generate a big return. One of the reasons for this is because Google is pushing organic search results further down the page and sometimes onto the second page (the entire first page is typically ads and paid search). Even if you have a really great fully optimized website, it may never make it to the top of the page. Plus, there’s no way an independent hotel (or a hotel brand for that matter) can compete with the marketing dollars that an OTA is spending.
If you don’t have budget to market your hotel, then having a website probably isn’t going to generate a big return.
John McAuliffe: Are you suggesting that I should focus on generating more business through OTAs then?
Flo: I don’t subscribe to the theory that OTAs are enemies. Quite frankly, there’s a lot of rhetoric out there from the major brands about the OTAs, but I know for a fact that every single one of them has commercial agreements with OTAs. In fact, they have relatively cordial discussions on a day-to-day working basis.
In your specific case, if you’re paying an OTA commission of 18% (it’s probably higher for most independents) and your effective commission rate on your digital marketing is 30%, it may make more sense to allow that booking to come through the OTA. Regardless, I’m a firm believer that having a strong, positive relationship with the OTAs is in your best interest.
John McAuliffe: Do you have any recommendations on how to work with OTAs?
Flo: Yes. You need to think of OTAs as channels to be managed just as you manage wholesale business, corporate contracts, and so on. You want to think about what your optimal RevPAR is relative to occupancy and rate and determine how OTAs can contribute to that mix. That said, I don’t think it’s wise to base your entire distribution strategy on OTAs and have them deliver 60% of your business all the time. It’s all about determining your optimal business mix, perhaps making OTAs a bigger part of the mix in low periods and smaller in stronger periods.
Ultimately, you have to understand your cost of sale and the ROI on your digital marketing. Only then can you understand better what your optimal channel mix should be. Work with your local OTA representative to help you identify opportunities that can drive more business for your hotel.