Nowadays, every hotelier is faced with the decision to market their hotel online. The desire for more bookings, building up a network of regular customers, more conferences and individual packages drives them to the Internet. Whatever a hotelier wants to achieve, there are many ways to do it online.
Since there is often no time to take everything into your own hands, it is possible to commission external agencies to do this.
What options are available online for hoteliers?
For hotels, as for other companies, regardless of whether they are B2C or B2B models, there are numerous strategic options to create a successful online presence.
Potential channels include:
- Google Ads
- SEO
- Facebook and Facebook ads
- Instagram and Instagram ads
- and many more
Hoteliers often hire an external marketing agency to maintain and prepare these channels. Then the hotelier doesn't have to sacrifice his time and leaves the success of his hotel to the professionals.
Furthermore, many hoteliers resort to so-called OTAs (Online Travel Agencies = Online Travel Agency), such as booking.com, hrs.de, hotel.de.
The big drawback When using OTAs, the lack of customer loyalty. The aim should be to obtain bookings through self-marketing. The guest should find the hotel and therefore book directly with the hotel.
Which marketing effort is really worthwhile?
The problem with most online marketing attempts in the hotel industry is often lack of transparency for hoteliers. Regardless of whether it is an agency or OTA, the hotelier can only budget Determine and receive an evaluation of bookings and other key figures at the end of the month. In doing so, No consideration is givenHow and when the guest originally became aware of the hotel. The graphic uses an example to illustrate the Customer journey. This means that the guest has already had individual points of contact with the hotel on various channels. How many, when and how often each took place is unfortunately considered far too rarely and is not included in the analysis by an agency. This makes it very difficult to see which channel is the most important.
How much should a hotelier invest?
Even the first step of budget naming has a major impact on marketing success. Before starting a marketing campaign, the hotelier should be aware How much money per booking wants to spend. The agency then calculates the maximum CPA. A conversion can be a booking, reservation, or request. We recommend the value here booking and therefore speak of CPB (Cost per Book).
Most agencies do not work with real bookings, but with inquiries, telephone calls or other destinations on the website.
Companies or hotels that offer expensive products may well accept a higher CPB value. Smaller margins, on the other hand, have lower CPB values.
As a rule, the hotelier should Invest 5-10% of your profit. However, the investment can also be increased, but this should also increase income in relation to this.
Are my numbers good and am I successful?
When the hotelier receives his evaluation from the agency at the end of the month, he usually also receives an assessment of the success of the month. The agency usually only looks at one sales channel, such as Google Ads. The hotelier receives the CPA (cost per acquisition = cost of acquisition) and other key figures, such as traffic, click-through rate or clicks.
CPA considerations are usually inadequate
The CPA that the agency gives as a measurement value is incorrect and only very superficial. Because the problem with this is that the agency only Expenses spent per kanal considered and Not all bookings and costs are comprehensive contrasts. This value could then be referred to as CPB.
Comparability is also difficult because measurements are carried out irregularly and the CPA Not uniformly defined as a measurement value is. Sometimes an agency only counts bookings and not inquiries or reservations. Cancellations are also not taken into account. Another agency, on the other hand, counts bookings, inquiries and reservations and rates them all equally.
However, as most hoteliers only rely on the agency's statement, the figures from other channels are forgotten, which also contribute to the company's success. For example, evaluation of OTAs, social media contributions, offline marketing activities, newsletter costs, etc.
CPB provides greater significance
It's important to look at marketing costs holistically and not just look at one channel. Therefore, our recommendation for the hotel industry is: Calculate a CPB with ALL marketing costs.
In fact, all marketing costs that have accrued per month are added up. Regardless of whether the costs were generated by yourself, come from an agency, both offline and online.
On the other hand, there is the total number of bookings. Here will all bookings added up that came about per month. It doesn't matter where these bookings come from, i.e. whether they took place offline or online.
The CPB prevents excessive advertising spending in relation to bookings. In general, the goal is to keep the CPB value low. This means that the investment costs were low in relation to each booking.
And this is how you calculate your CPB:
Example calculation for CPB
All marketing costs compared to all bookings. The monthly evaluation results in:
5,000€/1,000 = 5€ CPB
6.25% is invested in marketing.
All marketing costs versus all bookings. The monthly evaluation shows:
Of course, you shouldn't confuse occupancy with receipt of booking. The bookings received are not only valid in the current month, but can also take place in subsequent months. Which, of course, also has an effect on sales.
Further key figures for measuring success
In addition to the CPB, which only takes marketing costs into account, the hotelier can also Gross margin, also gross operating profit called, calculate. This is the gross profit. Compared to CPB, this includes not only marketing costs, but also Use of goods and materials considered.
Here, the hotel is measured purely in terms of operating profit.
Regular customers guarantee success
Another key figure that makes a statement about the success of a hotel is the number of regular customers. When a guest annually visits the hotel at least once a year, he counts as a regular customer.
From experience, we can say that Guests 3.5 times a hotel visit.
A long-term commitment is important, so the investment can initially be “higher” and commitment is paramount. This creates for the Rebooking lower marketing costs and the initial high costs can be calculated on a pro rata basis per stay.
Die Increase in regular customers is a very important success indicator, as well as the rate of guests who don't come back. Die Churn rate gives more information about this.
How high is dependency on OTAs?
Since the commissions and costs that a hotelier pays to OTAs can be attributed to marketing costs, they too have a high impact on the online marketing budget.
For the costs of OTAs, the hotelier can pay approx. 12-20% of booking volume Plan for commission.
However, since the costs for Google Ads can be significantly lower, this also results in a low CPB that takes into account both Google Ads and all OTAs.
Conclusion
All in all, I think it is very important to know the CPB. I have managed online marketing for over 200 hotels in the 4-5 star range and have often come across very low CPBs.
Don't underestimate the power of online marketing and remember that a customer usually comes into contact with many channels until they finally book. Attribution is currently a problem that poses challenges for the world's largest companies and only rarely come up with solutions.
