4 Ways to Save Big Cash on Hotel Marketing
Sometimes, you need to stop for a moment and rethink the basics. Since there’s no time better than the present, let’s talk unnecessary expenditure on your hotel’s digital marketing. There are always ways to improve, and almost everyone is spending on something they don’t need.
These are four basic ways hotels are spending way too much on their marketing:
- OTA Commissions
Too many hotels have chalked up those hefty commissions to Online Travel Agencies (OTAs) as operational costs. Here’s a newsflash: they’re not. OTAs are a great way to find new customers, but for hotels, they also have some of the highest customer acquisition costs (CAC). Comparably, direct bookings have a much lower CAC. You probably already know what the difference is: those commissions. First, rethink these commissions not as operational costs, but marketing expenditures. This means they’re not essential and can be trimmed. The best way to do this is to refocus on hunting how direct bookings. Also, consider whether you’ve overstocked your OTA inventory. OTA dependence is a long-term problem, Like any problem, the first step is admitting there’s a problem (those commissions), and acknowledging there’s a better way.
- Reassess Overpriced PPC Keywords
The best pay per click (PPC) keywords aren’t broad generic terms, but targeted phrases. Think of it this way, a glitzy PPC like “Hong Kong hotels” could cost as much as $8 per click. However, as few as 3% of clickers will actually book anything. These outcomes are so low because you’re casting such a wide net. Plus, the net is ridiculously expensive to maintain. The solution is simple: pivot away from generic PPC keywords and looks for alternatives that fit your niche. Less used, more nuanced phrases will cost less while delivering more clients per click. It’s a bit of a no-brainer, but so many hotels opt for big, glamorous keywords, and forget just how expensive they really are.
- Trim Unnecessary Freebies
Here’s a challenge: try searching for travel hacks on subjects like “how to get a free upgrade”, or “how to get a comped room”. You’ll be surprised just how cunning travel hackers have got in recent years. You may not even know it, but there’s a good chance you’re giving away far too many freebies, and not getting any real return. A good way to rethink this problem is to look at how casinos give out upgrades and comps. High rollers score the most freebies, providing incentives to other guests to play more. Nobody gets a free lunch just by walking in the door. The same rule should apply to your hotel. Reward loyalty, and don’t provide an incentive for people to do things they were going to do anyway.
- Rethink Vendor Contracts
If you really want to trim the fat, have a look at any old vendor contracts lying around. We’re talking your channel manager, social media, email, advertising, PMS – all of them. If you’re not getting everything you need from any of these vendors, then it’s worth considering renegotiating contracts. Who knows how much money you’re quietly losing.