Conversion rate in the hotel

Explanation — What is a conversion rate?

By definition, a conversion in marketing the transformation of a status from a target person to a new status. This can be the conversion of a prospect into a customer or the conversion of an enquiry into a booking. The rate is expressed as a percentage.

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Not every rate is the same!

A conversion doesn't always have to be a booking or a purchase in the strict sense of the word. Any defined goal can be a conversion! This would include, for example, signing up for a newsletter or buying a voucher. It should therefore be clarified first which conversion exactly we are talking about.

In the hotel industry, we talk about converting a website visitor into a reservation.
You should not only consider the reservations that are made via the website, but all of them! Here is our definition:

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You can see the number of reservations made from your PMS remove. You can find out the number of website visitors through Google Analytics.
The decisive factor is not how you define the conversion rate, but that you always calculate it the same way. This ensures that you don't compare apples with oranges.

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What is a good conversion rate?

It's important to understand that the rate represents the ratio between traffic (number of visits to your website) and reservations. Hotels with a wide range of services, such as F&B, wellness, meetings & events, etc. often have significantly more traffic on the website, but this does not lead to conversions. These sessions can be excluded in Google Analytics.

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According to a study by hotelariadigital.de, the average CR of hotel sites is 2.2%, with the top 20% of hotels having an average conversion rate of 5.6% and the bottom 20% a conversion rate of 0.3%.
Attention, these are just averages and you shouldn't be fooled by them. Instead, you should continuously monitor and analyze the conversion, which can improve your own conversion rate. It is suitable for this to document them and to see what influence marketing measures have on the conversion rate.

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The myth “the higher the better”

Many think that a CR is only good if it is as high as possible.
This idea most likely results from the general goal of optimizing its rate. However, you should always keep in mind that you place your value in the relationship between traffic and conversions.
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Let's take a look at an example:
A marketing campaign increases traffic to your website by 20%. However, your CR drops by 0.2%.

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It's clear that you've been able to increase both traffic to your site and your target conversion with your campaign. Even though your rate has now dropped by 0.2%, you can speak of a complete success with your marketing campaign.

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Key KPI for Revenue Management

In revenue management, CR is regarded as an indicator of price acceptance.

The higher the price acceptance, the higher the conversions and vice versa.

To do this, you can see how many of your guests who start a booking process in the booking engine also finish it.

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