By Max Starkov and Sara O’Brien
Executive Summary
For the tenth year in a row, HeBS Digital announces the launch of “The Smart Hotelier’s Guide to 2016 Digital Marketing Budget Planning,” to help hoteliers as we begin the 2016 budget planning season. Click here to download the full article whitepaper.
The article eases any concerns hoteliers may have about investing in digital and implores hoteliers to establish a strong digital presence as we enter a new era of online distribution and digital marketing. Yet, just being online isn’t enough anymore; in 2016, you will need to take your digital presence to an entirely different level in order to outsmart the competition, improve the bottom line, and enjoy a healthy direct online market share.
The continuing OTA consolidation and threat of rate parity removal in Europe erodes hotelier’s negotiating and marketing power and gives serious competitive advantage to the OTAs. While out-spending the OTAs is out of the question, hoteliers can still outsmart the OTAs. How can they do this? By utilizing their digital marketing resources in the most innovative and efficient fashion, investing in the right digital technology and best practices, and by staying laser-focused on their most lucrative market segments and feeder markets.
The article outlines how to structure your budget so that you can shift share from the OTAs to the direct online channel and generate the highest returns possible. We recommend that hoteliers frame their digital marketing plan within two main categories (see exact budget allocations line by line item in the actual whitepaper):
• Direct Response Digital Marketing Campaigns: Line items that drive high revenues for hospitality companies such as SEM, SEO, Email Marketing, Dynamic Rate Marketing, Social Media, Online Media, Dynamic Content Personalization, and Reservation Recovery are all considered direct response marketing initiatives. When taking into account the actual budget allocated to each initiative, HeBS Digital recommends taking a Year-Round and Seasonal/Business-Needs focused approach.
- Year-Round: Certain digital marketing initiatives are proven revenue generators and deserve a significant portion of the budget allocated to them year-round. This includes SEM, SEO, Email Marketing, and Dynamic Rate Marketing on the top travel networks, and more.
- Seasonal & Business-Need Focused: This portion of the budget takes into account a property’s seasonality as well as specific business-needs such as how to target specific high value segments (i.e. meeting planners, family travelers, etc.) or fill rooms after a group cancellation. The Seasonal & Business Needs focused budget should remain dynamic and flexible as the year progresses. Many initiatives in the year-round budget may overlap here; however, they will be organized into a multi-channel campaign that promotes one cohesive message throughout multiple channels.
• The Foundation: Digital Assets, Website Revenue Optimization Consulting+ Strategy & Operations: These line items provide the necessary foundation for digital marketing success. This includes a responsive website that accommodates consumer behavior on the three screens (desktop, mobile, tablet), your Content Management System, website revenue optimization consulting and strategy, web analytics, and cloud hosting.
This dual-focused approach covers all the digital marketing, technology and asset management line items that hospitality marketers need to maximize direct online revenues, address specific property business needs throughout the year, and meet all of your property’s website design, consulting and technology needs.
The article also outlines important factors impacting our industry, including:
- Mobile Isn’t a Trend; It’s Here. Take Advantage of the Disruptive Tide from Desktop to Mobile
- Real-Time Data is More Important Than Big Data for Improving Engagements and Conversions
- Dynamic Content Personalization Maximizes Website Revenue
- Website Merchandising Strategy is Needed to Sell Rooms on Every Page of the Website
- Digital Content Marketing Engages Travel Consumers and Converts Them into Bookers
To tie it all together, the article provides recommendations on what percentage of the budget should be spent for each marketing initiative, a snapshot of a 2016 Digital Marketing Budget, and case studies to support the recommendations.
