we ended up talking about brand protection in order to generate direct sales. Another very effective method that can be used, is PPC advertising in search engines, also called SEM or Search Engine Marketing.
SEM generates high ROI thanks to brand protection
Most of you probably know that you can bid on keyword searches in Google, Yahoo, Bing and other search engines. Ads appear at the top of natural search results, as well as below. The top and bottom positions of the search engine pages have premium visibility on which you can bid by a PPC model (pay per click).
Of course, this type of digital marketing is very competitive and therefore expensive. So where is the cherry on the cakewhen it comes to SEM?
In fact, right next door. Bidding on your own brand is considered to be a very effective brand protection, generating a maximum of RSI.
Protection by denouncing trademark offenses works on the European continent, but unfortunately the laws on trade protection in the United Kingdom, the United States and the rest of the world are not the same. There, it is carte blanche for the OTA. Thus, as part of your agreement , you must ensure that they are not authorized on your trademarks (or any deviation from it).
All the same, the OTA does not seem to respect this … Therefore, you should also advertise on the brand … your own brand …
You should bid on your own trademark via Google Adwords, Yahoo and Bing platforms, just like the OTA . The price is much cheaper than using short keywords, and offers a very good return on investment.
With our customers, we get 35 to 15 times the RSI, which corresponds to a cost between 2.8% and 6.7%. This is much more attractive than 15% to 25% of OTA commission.
Below, some practical tips that will get you started:
- Target languages in general rather than countries
- Target as many languages as possible, each with a specific ad in that particular language. It does not matter if your site is not translated into this language, simply redirect users to the English version of the site. Having ads in specific languages will help CTR (click ratio).
- When defining keywords, use keyword modifiers. Broad match is sometimes too broad and selects generic keywords for the destination, which usually do not convert. With the modifier, ads can appear in searches containing the modified term (or close variations, but not synonyms) in any order: + El Moulí
- Watch for the selected keywords and add negative keywords if you do not want your ad to be associated with a particular word.
- In some cases, you may have a name already used by other hotels, eg ‘Ambassador’. In this case, we recommend you take a look at your target markets and possibly exclude inapplicable locations (in order to control your costs). Also, be sure to include a specific rental so we know it is your hotel.
- Include an interaction button in all your ads such as “book now”.
- Add sitelink extensions to your ads, as well as location and phone extensions to get the most space on the page.
Re-marketing to generate more conversion
If you have visited our website before, I am sure you know what I am talking about. You can see our logo and banners all over the internet to remind you that we do more than just write blogs. In fact, we sell technology related to revenue management, as well as consulting services.
And if it’s your first time, you’ll find out very soon 😉 …
This form of marketing is called re-marketing. It allows hotels to bring back people who have not yet booked on their website. For example, your ads appear on news or community sites, as a friendly reminder of your hotel while travelers search.
The most fun part is that the RSI is much higher compared to the travel agency fees on the internet. This is obviously logical, since we focus on people who have already visited our site, so the chances of conversion are naturally greater .
That’s about what re-marketing means, increased your conversion, an easy way to generate direct sales.
Below are some easy steps to implement:
- Create segments in Google Analytics, based on users who visited the first step of the reservation system but did not convert. Segments can be language-oriented, or based on promotional pages or specific packages that visitors to your website view.
- In Google Analytics, go to the admin – audience – audiences – new audience section – import segments and select the segment you just created. When you create a re-marketing audience in Google Analytics, it’s available in the Google Adwords account you’ve selected.
- Now go to Google Adwords (note: your Google Adwords and Analytics accounts must be properly linked) and create a new campaign only on the Display Network – choose how to target your ads: interest and re-marketing – select a category: re-marketing – choose your audience.
To give you an idea, here’s a screenshot of Google Adwords from one of our customers in the first half of 2016:
As I already mentioned, the returns are very high, for example with our English campaign ‘Branded Adwords’, we generate revenues of 179,985 € with an investment of only 1,772 €. So it would be ridiculous not to do that .
As you can see, we try in many languages to see which ones can generate the most traffic, and which ones can do better. It also helps us better understand the languages in which we need to translate the site …
Research-Meta Marketing gives you direct visibility to consumers
A year ago, I was much more enthusiastic about meta search than today, when I see what it’s like.
The RSI was 10 times more efficient , keeping distribution costs below 10%. It was still a big discount on OTA commissions. Unfortunately, it appears that costs in this area are steadily increasing and that the benefits, which meta-research has brought us at the beginning, are eroding slowly. Their cost has reached the same levels as the OTA commissions. This is not a very attractive prospect.
I’m afraid hotels are starting to spend their marketing budget in other areas … It’s probably time for a new disruptor to come in … to shake things up …
Oh yes, before I forget, what is meta-research? These are websites that compare the prices of different hotels . The big players are: Kayak, Trivago, HotelsCombined, Hipmunk, SkyScanner and of course TripAdvisor (yes, today they are more than just a review site). And let’s not forget Google’s HPA or HotelFinder. Consumers know where to find the best prices.
With the arrival of price comparison sites, hovering over the OTA, it has become sassy for hotels to have strong control over their rates. Unfortunately, too many FIT rates (for packages) are offered online on proxy-OTA or affiliate models.
With the advent of mega-price comparison sites, hovering over the OTA, it has become sassy for hotels to gain strong control over their wholesale rates. This can seriously damage your hotel’s public price strategy (BAR) .
So, do not give too much reduction to the FIT. Or as we do, we add an extra 10% to 15% in our channel manager, to prevent these proxy-OTAs from reducing BAR rates. Of course, you could sue your partners, but who has time for this dog and cat game? It is better to keep this energy and invest it elsewhere in order to reach even more …
So now that you have realigned your rate, it’s interesting to see that you can confront the OTA face-to-face on meta-search . You can enter your prize next to the OTA and enter a competition.
As we mentioned, the RSI is still optimal for some hotels. But this is not uniform. For most of our best hotels, we generate 8 to 12 times their ROI (12.5% to 8.3% of costs). Going under it becomes really difficult depending on the average booking value of your hotel.
Below, a screenshot of the RSI reached for one of our hotels in Spain.
But we find that the cost of these channels is constantly increasing. And if it continues like this, we will soon consider them as another OTA channel , and no longer as an alternative to attracting direct sales to hotels.
Play with price strategy and packages
Regarding prices, there are some easy ways to book the traveler directly on your hotel’s website.
EXTRA DISCOUNTS HELP CONVINCE THOSE WHO DOUBT
You could offer membership discounts for example. OTAs do it actively, and you should do it too.
- A code containing 5% discount for people who sign up for your newsletter
- 10% discount for regular customers
- A page optimized with a code containing 5% discount for people seeking discounts for your hotel via Google.
As long as it’s going to be a membership fee, there’s nothing the OTA can say . They do exactly the same thing. People sign up and become a member, and in return you provide discount codes.
In addition to a membership reduction, you could also advertise a reduction through your re-marketing campaign to people who have visited your website, but not yet book. So if they watched the 5% discount page and entered the booking system, but did not finalize it, you could serve them a 10% discount banner a few days later.
It helps those who have not yet made a choice.
It makes sense, right? If you tell people they will get the best price on the market, if they join your club. And be sure to include ‘calls for action’ in your message to get the best effect.
However, I give you some advice: When juggling discounts, try to avoid using ‘Subscribe’ fields. Today’s travelers are looking for instant value. During their reservation, they make fun of future discounts. They want answers NOW. For this reason, it is better to send them to a hidden page containing current offers. Prepare a link that sends the visitor directly to the reservation system, with the discount code already integrated. In this way, your discounts are neither public nor findable and you can surpass the tariff restrictions.
In case the discounts are instant, it can really work well for your hotel. In most of our hotels, we generate around 40% of sales using discount codes .
EXPERIENCES ARE SELLING, ASSEMBLE PACKAGES
In online travel agencies, hotels are marginalized to a commodity . They sell rooms and rates. No more no less. So it is very important to demonstrate the uniqueness of your hotel on your own website . When potential customers visit your website, they must feel that they know your hotel .
You should create niche products that cater to different customer or market segments. In the hospitality industry, we often refer to products such as packages. I’m sure you know that.
To give you a clearer idea of what I mean by reaching different targets, I will take as an example a website of a hotel for which we are currently working: Hotel Grums in Barcelona . For this hotel, we target different types of travelers and assemble packages that meet their personal needs.
- Weekend trip
- Summer holidays
- Spa offer
- Romantic getaway
- Pre-cruise offer
- Cruise & parking offer
- Barcelona with family / children
As you can see, we are clearly targeting different consumer niches by offering these custom packages.
Note: This is related to the SEO section of our marketing plan discussed in the first part .
STIMULATE OCCUPATION IN TIMES OF LOW DEMAND BY USING CAMPAIGNS
Create an interesting concept, as well as an offer not to refuse. You could create a sense of urgency, such as a limited supply that quickly catches the eye. Use technology, images and messages, as well as good content that motivates readers to book.
Find innovative ways to catch the attention of your targets. Identify what is relevant to them. What are their passions? What do they have to say about your destination? Find a way to incorporate this message into your campaign.
By using the emergency message, which is intended to push the reservation before a certain date to qualify for a special offer, this will help you increase the booking time of your hotel.
Example: In one of our hotels, we are launching a Christmas promotion to invite people to do their Christmas shopping at our destination. The promotion includes a bottle of champagne at the bar, as well as small gifts in the room and a local souvenir to take home. We have set a deadline of October 31 to create a sense of urgency , which is only available on the hotel’s website.
The offer will not only be visible on the site, we also create an email campaign for our database, as well as a pay-per-click (PPC) campaign and distribution via various social media platforms . As you can see, it’s an inter-channel marketing campaign to generate more live sales.
Currently, we are thinking of a way to incorporate some kind of competition, such as the best photo published by one of the customers by mentioning a #hashtag to generate greater brand awareness of our hotels. Of course with a prize to win, like a free weekend …
ENCOURAGE DIRECT BOOKINGS BY DOING GOOD
Take a philanthropic approach for immediate bookings and instead of offering discounts (eg in case you do not want to look cheap because you are profiling yourself as a luxury hotel) engage the guest to contribute. For every stay booked from your website, a donation for a good cause can be made. By ‘feeding the hungry’ you feed your image and ‘Saving the world’ you save your addiction hotel to the OTA!
I think it will work during the Christmas season, when people are in a generous mood and they seem to make more donations than in other seasons. Donate 1% of your income from immediate bookings to the Red Cross or a local association for example.
Push customers to conversion
Keep in mind that guests often need to be ‘pushed’ in order to book . There is nothing wrong with sending small signals to get their attention and to remind them of your original property! You can use different tools to convince them to book immediately on your website.
What can be the hook to increase your conversion rate?
A very useful and effective tool are pop-up messages . OTAs use them frequently on their site, have a look and learn how you can use them on your own site. Include smart notifications that appear at the ‘right time’ based on visitors’ algorithm and behavior. Send a relevant notification, which will appear on the screen.
For example, during a search session by a potential customer on your website, capture his attention and increase the urgency of booking at the moment by sending him a message that this room is the most available, that there is a lot of people who consult her right now, that he will receive a discount or a voucher for this reservation, etc.
You can then send him a promotional code by e-mail or send it to a hidden page with private discounts. Use this opportunity to ask which month the customer prefers to stay. In this way, you will be exactly when it will send your direct marketing emails containing the discounts.
You should also draw attention to the output of your website. Convince the starters with one last message. A message will appear when travelers try to leave your website. Here again, you can not only encourage him to book, but also ask him the month of the preferred stay (to send him future discount codes). You can use this tool in the booking engine!
The “waste basket” is also a popular technique. Essentially, you follow all users who have started a reservation process but have not finalized it. Send them a reminder to bring them back to your website and complete the reservation. Encourage them with a discount or upgrade.
You can integrate a specific element to attract your targets by customizing your messages and making them more relevant. Targeting can be used not only for users who leave the site but also “filtered” by geographic segmentation, visitors from specific sites, time spent on your site or ghosts.
We are currently doing extensive testing in this area. The first results seem promising. We will inform you about the results in the first quarter of 2017.
Update of December 15, 2016: The first results of our A / B tests show a 14% to 20% increase in income over a period of 3 weeks.
Why pay so much in commissions?
INVESTING IN DIRECT MARKETING OFFERS HIGHER GROSS OPERATING PROFIT
Let’s take a look at numbers, key performance indicators and commissions …
It seems that hoteliers do not realize that immediate bookings are more profitable than OTA distribution. Creating various marketing campaigns to generate direct bookings may seem more expensive at first glance and perceived as “luxury” spending. The “spending side” of the budget is often discussed, spending is reviewed and marketing budgets are often reduced .
OTA commissions are reported as “travel agent commissions” in hotel financial statements.
The cost of distribution is not fully accounted for in many hotels, but is deducted from gross room revenue. In particular, the distribution costs of market models are not transparent and there is no budget limit. It’s almost as if “they have the right to exist” and are not restricted in any way by the property budget … and therefore can grow exponentially!
Many hoteliers also fear investing heavily in marketing as it is a tangible expense that must be spent in advance . OTA commissions are not noticed until the financial data is reconciled with the invoice. But that’s after the facts.
OTA commissions and their transparency are often misunderstood , or even ignored. It’s interesting !
But what if you could reduce distribution costs by investing in marketing rather than paying commissions to OTA? Who would not want to invest in digital marketing to get better results for their business ?
Yes, a hotel is a business and must strive for optimal results . So please remember that we can also sell our own products successfully . Because in the end, the rooms belong to hotels.
OTAs are simply one of the channels to use, but not the only goal. If you give them too much responsibility, you will simply increase their commissions over time. Strategically investing in digital marketing will help keep the market in balance and control the OTA.
A tip, do not put all your eggs in the basket …
Speaking of distribution cost …
When evaluating and analyzing financial aspects and KPIs , hoteliers should not just pay attention to RevPAR. We use the following two key performance indicators to keep a constant view of our hotel distribution cost.
NRevPAR, similar to RevPAR and goes even further by subtracting distribution costs (transaction costs, travel agency fees, marketing expenses, etc.) which is absolutely necessary for an effective measurement of revenue management strategies of a good. Charging the cost of the distribution in its calculation gives you a more transparent indication of performance .
ProfPAR indicates the benefits of each room available in the hotel. It takes into account both income and expenses. It reveals economic phenomena that RevPAR can not provide. (See also CPOR – Cost per room occupied)
Therefore, it is absolutely essential to compare RevPAR with these other two CRIs and especially to see the difference between RevPAR and NRevPAR, to see the impact of OTA commissions and direct marketing expenses on overall profit. Seeing this “black on white” comparison in front of you, you’ll probably want to start pushing your direct sales !
To summarize, I would like to finish on this sentence:
DEAR HOTELIERS, PLEASE START INVESTING (MORE) IN ONLINE MARKETING! IT WILL TAKE TIME AND EFFORT TO BUILD YOUR ONLINE PRESENCE, BUT YOU WILL BUILD YOUR BRAND INSTEAD OF JUST BEING A “DEAL OF THE DAY”. YOU WILL GET A HEALTHY RSI AND AMAZINGLY HAPPY, LOYAL AND ESPECIALLY DIRECT CUSTOMERS!
Hoping that our hotel marketing plan has been helpful to you!
John @ firstname.lastname@example.org