2014 is almost upon us, and marketing budgets are being finalized. How did your hotel determine its monthly marketing initiative expenditures? Did you look at the previous year’s budget and increase or decrease by a certain percentage? Or work off of some industry standards? If you followed any of these paths, there is a good chance your property is leaving money on the table.
In my experience, the hotels that thrive online are those that invest in digital marketing programs that provide a solid return on investment. They resist limiting their exposure based on an arbitrary budget set once a year. Instead, they continuously monitor the ROI of every marketing initiative and “find the money” to keep spending on programs that are working.
Tracking ROI online has become easier and more accurate in recent years. It takes programming and software investment, but it now is possible to know the exact revenue your marketing dollars are generating. One exciting new tool is Adobe Media Optimizer. Media Optimizer not only provides ROI tracking, it also uses predictive modeling to provide estimated revenue with increased or decreased spending levels. Finally, there is a tool that can answer the question, “If I spent $2,000 more on paid search, how would that affect my bookings?”
Ultimately, we know from industry reports that it is very difficult to generate new demand in a market. That means you are in competition with other hotels for a limited number of travelers. As tracking abilities continue to improve, I believe more and more hotels will utilize a fluid marketing budget. It just makes sense. If you make $10 for every $1 you spend online, why slow down? Eventually, the hotel will start running out of availability or the marketing will become too saturated, but the tracking clearly will signal when those points are reached.
Hotels that pursue this approach will steal market share from hotels that live on set marketing budgets, performance be damned.