Welcome to the Friday Freebie!
Each week we share one impactful hotel marketing tactic that you can implement immediately to drive more conversions and more revenue.
This Week’s Freebie: Start smart in 2018. Examine and document how much your hotel pays for each OTA booking versus other marketing channels.
Even if you were to scour each line of your P&L statement, it’s unlikely you’ll find your biggest marketing cost – OTA commissions. With fees of 15-30%, the cost of working with third-party websites surpasses all other marketing channels. But most hoteliers don’t acknowledge this expense, simply because it doesn’t show up as an expense!
OTA commissions are opaque. Hotels generally receive a net rate, only AFTER the OTA collects their commission.
Here’s the Danger:
Because these high marketing costs are invisible, they remain undetected. Even when they cost your hotel significantly more than direct bookings. They’re a threat to your other marketing expenses, too. When owners cut back on your marketing budget, they’ll start chipping away at the legit marketing costs (that do show up on the P&L) even when they are responsible for driving more lucrative direct bookings.
This includes hotel social media, SEO, PPC campaigns and your hotel website.
This year, pull these OTA commissions out of their hiding place and get clear on exactly how much you’re spending on those lower value OTA bookings. Calculate the marketing cost per booking (MCPB) for all of your marketing channels and stack these costs up to actual conversions.
Start tracking and documenting these costs now. By turning the tide on what marketing channels your hotel invests in, you’ll considerably increase profitability. Plus, come budget time, hotel owners will see how much more lucrative it is to invest in channels other than third parties.
Tambourine uses technology and creativity to increase revenue for hotels and destinations worldwide. The firm, now in its 33rd year, is located in New York City and Fort Lauderdale. Please visit: www.Tambourine.com