Hotel Marketing Strategies – How are You Feeding Your OTA Addiction?
By: Lori Metze and By: David Metze Cartoon by: Michael Marks
If you’re like many in hotel management, your looking for new and improved hotel marketing strategies. The cost of doing business with online travel agencies is beginning to make you a bit nervous. Way back when, a 10% commission on bookings paid to a travel agent was handed over through gritted teeth. Who would have thought those would be relived fondly as the good ole days? 15 years later, we are back in the same boat with a couple of differences – the boat is smaller and we’re all running out of rations.
For years, guest acquisition costs have been difficult to define since they tend to hide in various lines of profit and loss sheets. These costs generally fall into the 15-20% range. In some cases pay-per-click is struggling to deliver a cost of sale below 15%! Faced with this reality, properties have been reducing their marketing budgets to pay for the rising cost of acquiring guests through the OTAs. What’s next? Pay the bills with the credit card? Pawn the TVs?
But Everything’s Fine, Right?
A recent study conducted by by Frank Camacho of the Hospitality Asset Managers Association has shown that guest acquisition costs are escalating at the same pace as room revenue growth. If other industry costs begin to rise, the industry will experience significant profit erosion. Everything is not fine.
Stage an OTA Intervention
Think long-term! Hotels focusing on acquiring guests through effective web marketing and pay-per-click campaigns have seen their results eroded away by OTAs buying up key positions. The lowest hanging fruit is in converting these guests to buyers on the direct channel, turning the OTAs into what we wanted them to be in the first place, a source of new regular customers.
Hotel Marketing Strategies – Help is Here
There are dozens of low and no cost ways to convert even the most loyal OTA customer into a repeat guest who books directly with you. It’s time to dust off the marketing 101 playbook and implement the basics that were so very effective for decades.
1. Get that email address: Sounds simple but it isn’t. Without it, you have nothing.
2. In-house promotion of perks: From upgrades to free breakfast, you can show guests the benefits of booking direct while they are with you.
3. Direct mail: This is a long-abandoned method of reconnecting with guests that is proven to work. If it didn’t work for you in the past, then something went wrong with the execution.
4. Best rate guarantee: This is a good start, but just matching the OTA rate falls short of compelling. You have to be willing to offer a premium value that the OTAs can’t match.