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Hotel Marketing Budgets: How Much is Actually Enough?

September 18, 2018

Hotel marketing budgets: how much is actually enough?

According to a recent study, Booking.com and Expedia return $16 for every dollar spent on marketing. This looks great on paper, but the reality is that over the last decade OTAs’ return on marketing investment decreased by 15%. 

This explains why Booking.com dramatically decreased its advertising spend. 

The same story is playing out across the hotel marketing landscape… cost-per-acquisition is soaring, and if the Goliaths of the industry had to change their strategies, it’s probably time to sit down and address the elephant-in-the-room: how much should you be spending on marketing? 

First: What’s in the Marketing Budget?

Allocations within the marketing budget vary from company to company. According to The CMO Survey sponsored by Duke University, Deloitte LLP, and the American Marketing Association, “less than half (47.9 percent) of companies include expenses for marketing employees in their marketing budgets. Most companies (61.3 percent) include direct expenses for marketing—such as advertising, trade promotions, and direct marketing—in their marketing budgets, but this varies by industry (See below):

What does your hotel or resort include in its annual marketing budget? Do you include employee or outside agency costs in your budget? How about OTA commissions or GDS fees?

This is a critical definition that will determine how much you need and how your results are perceived by ownership.

THE INVERTED U-CURVE

Hotel marketers can learn a valuable lesson from Malcolm Gladwell in his inspiring book David and Goliath. In the book, Gladwell talks about “inverted U-Curves:”

“Inverted-U curves have three parts, and each part follows a different logic. There’s the left side, where doing more or having more makes things better. There’s the flat middle, where doing more doesn’t make much of a difference. And there’s the right side, where doing more or having more makes things worse,” according to Gladwell.

The curve has been around for over a century and it has been applied to a wide range of different situations:  

Money: Scholars who research happiness suggest that more money stops making people happier after they exceed $75,000 per year

Class Size:  Contrary to popular belief, a class size decreases beyond an optimal number, learning effectiveness decreases. Apparently, the optimum number is 18-24 students per class

Punishment and Crime: Past a certain point, cracking down on crime and locking people up stops having any effect on criminals, makes crime worse and the juvenile delinquency rate increases

Similarly, hotel marketing budgets have an inverted U-curve; doing too little will result in sub-optimal results, but doing too much is often wasteful.

So how can you identify this sweet spot? 

WHERE ARE YOU ON THE CURVE?

Hotels on the left side of the curve (usually large branded properties) typically allocate little to no budget in marketing beyond their brand fees. 

They often have a lackluster brand.com web page, no outside marketing investments and their distribution relies almost entirely on third-parties. The good news is that if your flagged hotel is on that part of the curve, any additional marketing investment will help you move to the flat middle of it, where investments and return are in balance and your profitability is at its zenith. 

The majority of hotels fall between the left side and the flat middle of the curve (and need to spend more to achieve their goals. However, if you categorize OTA commissions as marketing costs, virtually every hotel immediately moves to the right side of the curve, where spending more often delivers diminishing returns. As Kalibri Labs notes in their recent report: Demystifying the Digital Marketplace: “if you’re growing top-line revenue —but you’re spending a lot to do it—then you’re ultimately less successful in contributing to overall profits. Not an optimal strategy.”

However, if profit is not your primary goal (i.e. hotels rebranding, new openings, brand awareness projects, etc.) spending MORE may be the correct strategy, but for the vast majority of hotels (if you believe Malcolm Gladwell) it is not. 

So, how much is too much when it comes to hotel marketing?

Marketing effects profitability

According to a recent Gartner Research study, companies spend an average of 12% of their annual revenue on marketing. A recent CMO Survey comes to similar conclusions, highlighting how tech companies are among the biggest spenders (14%) when it comes to marketing. The hotel industry, however, seems to pay an even higher price (up to 25%, according to Kalibri Labs).  Tom Klein, the former CEO of Sabre, recently stated in a Tnooz interview that Travel “is not 90% margin like many of the businesses that Google and Facebook and others are in.” With OTAs’ average commission at 19% and direct booking cost-per-acquisition growing year after year, industry margins are under siege. 

So while ADR and RevPAR are important metrics, you should also focus solely “ProPAR” (Profit per Available Room): the revenue generated per room minus the investments needed to acquire the guest. Here again, we strongly recommend categorizing OTA commissions as marketing costs to get a true picture of your marketing budget and its effect on profitability!

WHAT ABOUT DIRECT BOOKINGS?

Because of high 3rd party acquisition costs, there has been a lot of attention on building direct channels, just think about Hilton’s Stop Clicking Around campaign:

The unavoidable truth is that it is also very easy to overspend when it comes to direct booking investments and you can find yourself on the right side of the inverted-U curve without even realizing it. Similar to the OTA channel, direct reservations also have growing costs. 

Special discounted rates, loyalty programs, hotel digital marketing, PPC, metasearch engines and social media ads to name a few. Our advice to clients has always been: “you should have an unlimited budget for things that work…”

This philosophy requires a near-manic obsession with ROI tracking and analytics that requires serious software and some intensely nerdy data, scientists. As the CMO Survey reinforces: when respondents were broken into three groups—high, medium and low usage of ROI analytics— marketing budgets were 70 percent larger in the high group than the low group.

HOW MUCH IS TOO MUCH?

Before you can determine how much to budget for marketing, hotel execs need to answer three critical questions:

1.  What are the revenue targets by segment? (more on this here)

Without a concrete understanding of targets by segment, hotel marketers cannot quantify (or deploy) their budgets properly… leading to misalignment with ownership and missed targets.

2. Where is the property in its lifecycle?

Recently opened hotels, or properties which went through a rebranding, in fact, should be less focused on return on investment and more on building awareness. In cases like these, 20-25% of annual revenue spent on marketing is common. If, on the other hand, your hotel has matured to a more advanced stage and it’s been in business for 3+ years, then 8-15% of your annual revenue on marketing should be more than enough to guarantee you a good balance between profit and visibility. 

3.  How much revenue is marketing accountable for…?

As the CMO Survey points out: Marketing is responsible for leading revenue growth at 38.4 percent of companies. These companies have larger marketing budgets as a percentage of the overall company budget than companies that do not assign primary responsibility for revenue growth to marketing.”

Friday Freebie: Follow These Digital Breadcrumbs To Find Out What Guests Really Want

May 18, 2018

Friday Freebie: What Guests Really WantWelcome 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: Travelers are already telling us what they want, what they’re excited about and what will draw them in. Just listen closely in the right places and embrace this data to improve your hotel product and overall marketing results. 

There’s no need to conduct a survey to find out what guests want. They’ve already revealed this information online. And, it’s readily available to you. 

You can easily discover what travelers are seeking in a hotel experience by listening and monitoring the right places:

  1. Use Google’s Adwords Keyword Tool to see what keywords visitors are searching for
  2. Monitor your social media posts and comments AND your compset’s
  3. Monitor your TripAdvisor reviews AND your compset’s
  4. Study your DMO’s research on regional visitors and their habits
  5. Comb through post-stay surveys

By keeping a close tab on this readily available data, you’ll be able to see both the threats and the opportunities for improving your hotel product and service experience. For instance:

  1. Do you get frequent complaints regarding a specific aspect of your hotel?
  2. Are travelers to your destination talking about a certain new attraction?
  3. Is there a spike in keyword searches for hotels near a certain neighborhood?
  4. What are the top activities and attractions near you (and how are you partnered with them)?
  5. These priceless digital breadcrumbs and golden nuggets of information will assist you in building a customer path straight to your door.

Get More: Hotel Marketers and Accidental Narcissists 


About Tambourine

Tambourine uses technology and creativity to increase revenue for hotels and destinations worldwide. The firm, now in its 34th year, is located in New York City and Fort Lauderdale. Please visit: www.Tambourine.com

Friday Freebie: Use Content To Become A Meetings Magnet

April 6, 2018

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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: Consistently attract group/event planners with content that touts your city as a meetings-worthy destination — with you in the center of it all.

CVBs and DMOs aren’t the only ones who can produce destination content.

Hotels would be smart to create their own online destination pieces to drive traffic to their website. While many properties already create content touting leisure travel, very few hotels craft group-oriented content to cultivate traffic and awareness for group leads.

By creating helpful, “infotainment” content for meeting planners, you will establish your hotel and sales team as being the leader in your region. AND, position your hotel as being the most experienced property to host meetings and events in the area.

Creating content for the meetings industry doesn’t have to be time intensive. In fact, here’s the secret to producing several pieces in just a couple of hours:

REPURPOSE.

Take content that you’ve already written for your leisure audience and customize for a meetings audience by adding an ‘events’ spin throughout.

For example, here are repurposed titles that were originally written for the transient traveler:

Waterfront Teambuilding Activities in Chesapeake Bay

Philadelphia Group Tours for Conventioneers Who Love History

6 Venues for Corporate Dinners in Breckenridge

Best Louisville Distilleries for Group Bourbon Tastings

Post to your hotel blog, LinkedIn, or use as content for sales email newsletters. Produce meetings-inspired content often to give event planners a reason to consistently consider your property.

Get More: 6 Ways Hotel Marketing Can Generate More Leads for the Sales Team


About Tambourine

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

5 Things Modern Hotel Marketers Can Learn From Vintage Travel Posters

April 4, 2018

Hotel marketing hasn’t changed much in 100 years…

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In the Golden Age of travel in the early part of the 20th century, there were no online banner ads. Nor guest analytics, marketing technology, mobile apps, retargeting campaigns, email offers, Insta-influencers, or search engines.

Instead, airlines, CVBs, resorts and railway companies relied on one of the most powerful mediums of their time – the travel poster.

These travel posters shared common characteristics: exuberant colors, a gorgeous single graphic, and bold eye-catching lettering that all evoked a lust for travel and exploration with a single glance. In fact, these poster designers have been nailing it for more than a century. These vintage travel posters are still provoking inspiration for adventures far and wide today.

There’s a lot we can learn from these beautiful illustrations.

Decades before the creation of modern hotel marketing, poster designers inherently understood and integrated five key elements of successful hotel marketing:

1. Take time to CRAFT your story

Your hotel is different.

You may know that, but your prospective buyer doesn’t.

So, you need to make it obvious. Your hotel marketing needs to deliver relevance and intrigue immediately. A mistake many hotel properties make is ‘me too’ marketing that is cliché and already overused by many of their compset neighbors. For example, describing your hotel as ‘in the heart of New Orleans’ or ‘oceanfront hotel,’ making it difficult for travelers to differentiate your property from other central New Orleans properties and oceanfront hotels.  Ditch these overworked marketing messages and present something brilliant and provocative, instead of bland and predictable.

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This poster for a French hotel tells a unique story of mountain air and healthy activity!

2. Tell It Succinctly
The marketing concept behind travel posters is simple: combine one vibrant image and bold text to create a uniquely effective marketing medium that inspires travel.

These posters were easily understood and were perfect for capturing the attention of people on the go. Today, attention spans are at an all-time low, so every second of your hotel marketing counts. Hotel marketers need to be cognizant of the first five seconds that a visitor lands on a property website, that short span of time determines if the person will book, bounce or return. So, you need to squeeze performance out of every second for higher chances of conversion and revenue. Cut the clutter, get rid of slow-loading graphics, keep things simple.

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Is there any question where this Rio hotel is located?

3. Be Visually Arresting

Your marketing images and hotel photography should be more than just pretty pictures. Just like the eye-popping colors and a single image on a travel poster, your images should catch attention in seconds and convey your experience in a single glance.

In fact, studies show that travelers spend time scouring through hotel images before making a decision. And, that your hotel photography has the power to change a buyer’s mind, for better or for worse. Ditch the stock images or dated blurry photos. Invest in a photographer experienced in shooting interior design, real estate, architecture or other hotels. Plus, leverage your hotel’s best FREE photographers – your own social media-savvy guests. Instagram enthusiasts are producing images on par with paid professionals for their personal channels.

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Sometimes, the best image for a hotel is not the hotel at all… it’s the nearby attractions!

4. Keep messaging consistent

Back in the heyday of travel posters, hotels could not change messages very often… so they were forced into being consistent in their marketing.

Today, rate parity isn’t the only consistency your hotel should be vigilant about. Maintaining your hotel’s STORY parity is also vital to your bottom line. Smart hotel marketers know their Unique Selling Proposition (USP) has to be consistent across all touchpoints and marketing channels. If consumers see your hotel described as ‘cosmopolitan and sophisticated’ on one channel, then as ‘central and family-friendly’ on another, potential guests will be confused and leery of moving forward. Consistency builds trust and trust turns into buyer confidence.

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For many years, the Outrigger hotel in Hawaii used images of guests enjoying the surf with the locals. They were the early advocates of celebrating authentic local experiences!

5. Be Intentional with Time and Place 

The biggest boon of marketing technology is the ability to target and automate campaigns, allowing you to reach the right audience, with the right message, at the right time.

Use it.

The most popular travel posters were commissioned by airlines and railway companies and were respectively displayed in airports and train stations touting resort destinations, thrilling cities, and weekend getaways. Today, consider where and when to deliver your marketing messages. For example, consider the impact of a billboard promoting a Caribbean resort and its sunny beaches displayed in New York City during the bone-chilling months of winter.

 


About Tambourine

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

The GM Checklist for Hotel Marketing

March 20, 2018

General Manager’s (GM’s) are more involved than ever in hotel marketing.

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The cost of guest acquisition is on everyone’s mind these days, which means GM’s are feeling pressure from ownership, asset managers and their hotel management companies to maximize the ROI from their marketing investments.

GM’s have responded in two positive ways:

1. GM’s are now holding their marketing teams accountable for contributing – in a tangible, measurable way – to revenue goals and generating leads.

2. GM’s are also championing their marketing team’s efforts and investing more time than ever before in improving their understanding of the complex challenges facing their hotel marketing team

To support this effort, here’s our list of 10 significant hotel marketing elements that every GM should be familiar with:

1. The Four Marketing Pillars: Price, Product, Promotion and Placement

A smart, easy place for every GM to start is understanding the four traditional pillars of marketing that directly drive the success of your hotel:

Product 
The most important of the four, classic marketing “P’s”: How does your product differentiate you? Consider both the hotel’s physical product (rooms, restaurant, meeting space, amenities, spa, etc.), as well as the service experience. GMs need to constantly work with their marketing team to determine if their product or service experience needs improvement (and then ask ownership for the funds)!

Promotion (i.e. Advertising and Traffic Generation)

More than anything else, the GM MUST ensure that the marketing team’s promotional expenses and investments are synchronized with the hotel’s targeted business mix

Placement (Distribution Channels)

GM’s need to know where the business is expected to come from and how the property’s rates and inventory are positioned there? How many groups vs transient do you expect and how much is actually being generated? How much inventory are you allocating to OTAs? Is your team relying too heavily on OTAs to reach revenue goals? Or, are you thoughtfully optimizing your own hotel website and booking engine to attract more profitable, direct bookings?

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Your revenue management team controls pricing, but price is an unavoidably critical element of marketing. GMs need to have consistent, accurate visibility to ADR vs the compset. GM’s should also strongly encourage close cooperation between their marketing and revenue management teams.

2)  What your Marketing Team Needs from YOU to Succeed!

Your marketing team can’t survive without the GM championing their efforts and giving them the right amount of funds, tools and resources to succeed. The key is to simply, and constantly, ask them what they require from you to achieve their goals, then make it happen.

3) The Quality of Your Product 

We want to underscore the importance of your PRODUCT in the marketing mix.

No amount of clever advertising or promotion can overcome an inadequate product or me-too service experience.  Keep in mind this compelling quote by Robert Stephens, founder of Geek Squad, “Advertising is the tax you pay for an unremarkable product.”

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There are far too many hotels that continue to sink millions of marketing dollars to over-compensate for or to cover up an aging, lackluster, or grungy hotel product. The less you pay attention to improving your service and your hotel product, the higher your marketing and advertising expenses will be to make up for it.

GM’s can best serve their marketing teams by driving product improvement first!

By refusing to cut corners, investing in quality from the front desk to the back of the house, and by presenting the best guest experience that your staff can deliver, guest sentiment will go up, your number of repeat guests will go up, profits will go up and your marketing cost per booking will go down.

4) How Marketing Investments Correlate to Projections

Smart GM’s know exactly how much revenue they expect from each segment of the hotel’s business. And they expect their marketing teams to correlate their investments for leisure/transient, group, corporate and F&B.

Generic, aimless and “pretty picture” marketing won’t cut it. Every marketing activity should be done with the intention of achieving the segmented revenue goals of the overall business mix.

Check back in throughout the year to see how your marketing team is synchronizing their allocated budget and resources to align with revenue projections.

5) Your Property’s Story

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Consistently and creatively telling a meaningful, truthful story is what truly attracts travelers. However, many hoteliers don’t know what their story is, much less how to convey it. Correctly telling your story means knowing your audience, being honest about your assets and getting all stakeholders in agreement about your property’s unique identity so that you can convey it poignantly across all your marketing channels.

Travelers are no longer drawn to sterile facts, puffy promises of a wonderful stay or mentions of your recent industry awards. They want to be a part of something that intrigues them, connects with them and gives them something to brag about.

GMs should be vigilant about their marketing team’s ability to propagate a unique story across all channels.

6) Actual Costs of OTAs vs Marketing Expenses

Every good hotel marketer must know the actual costs and expenses of each channel. OTAs are particularly tricky to track, as their commissions are often hidden, yet are one of the costliest expenses to hit your bottom line (OTAs usually pay a net rate back to the hotel, so the actual cost will never show up in your financials). Lean on your marketing and revenue team to track the real expense of OTA bookings and compare that to the tangible expenses that power more direct booking channels.

7) The Ratio of Direct vs 3rd Party Revenue

This goes in tandem with #6. Many hotels are still relying disproportionately on higher cost channels for business. With rates and occupancy at an all-time high, one of the primary areas GMs can affect is COST of acquisition!

And owners are watching this closely.

GMs should check the pulse on this each month to compare how many bookings came directly through your hotel call center and website versus costly 3rd parties.

8) How to Augment the Brand’s Marketing Program

Brand affiliation offers many benefits… But custom marketing targeted to your specific audiences is not one of them.

Branded/flagged properties need to augment their brand’s core program with timely campaigns and custom direct “vanity” websites that help fill periods of need. Instead of solely relying on the brand’s standard marketing program, which is duplicated for every other sister hotel in the region. Your marketing team should be proactively differentiating your property, customizing your website, and boosting your search engine optimization (SEO) and social media efforts.

9) Marketing KPIs 

Get familiar with the KPIs your marketing team is responsible for while ensuring they are not spending too much time tracking vanity metrics. Metrics should offer insight that GMs and the property owners consider high priority (like how much your marketing team is actually contributing to the hotel’s revenue targets). Hotel marketers should be able to share vital KPIs like direct revenue ratio, leads generated for the sales team and marketing cost per booking (MCPB).

10) Why You Lose Business to the Compset

Winning is easy.

Losing requires painful introspection.

A majority of hotel sales and marketing teams fail to ponder why people chose another property. Whenever your team loses a major group deal or market share, the GM needs to ask the team: Why did we not win this business?

What went wrong… How could we have done better?

This simple follow-up could dramatically empower, alter, and inform your future sales efforts.

Also, your team should never lose track of what your comp set is doing. In fact, there are so many tactics and tools at your disposal, that a competitor’s success should never come as a surprise. Keeping tabs on your compset will give you the insight to finesse, and possibly pivot, your own marketing campaigns.


About Tambourine

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

Friday Freebie: Crush the Compset with This Group Sales Tactic

March 16, 2018

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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:

Stay ahead of new compset properties. Harvest your city’s special events to get ahead of lucrative group business opportunities

Nothing can shake up your group sales numbers more than a new hotel in your compset. Meeting and group travel planners are hungry for what’s new and will likely include the new space in their consideration set… unless you employ smart strategies to provide your hotel with a constant flow of revenue from other sources.

John Washko, VP of Expo & Convention Sales at Mohegan offers this powerful tip:

Work ahead by keeping close tabs on all the special events scheduled for your city as far in advance as possible; monitor the area’s convention centers, concert venues and CVB websites. Events, such as conventions, sporting events or concerts, almost always bring meeting and/or group opportunities with them.

Your sales team should be researching and reaching out to any related clubs or organizations that would likely travel to attend the event, then directly offer up a block of rooms at a group rate. Your hotel can offer even more value through discounted transportation to the event.

For example, consider a Bon Jovi Fan Club, says Washko. This is a group, typically ages 40 to 50, that are enthusiastic fans of Bon Jovi and travel to his performances. Other examples are car clubs for major races or car shows.

Washko says the key to staying ahead of your new comp set is by being the first to reach out to these groups. So, set up processes with your sales managers to seek out these groups several months in advance.

Get more examples: The New Supply Threat: How Hotel Sales Teams are Fighting Back


About Tambourine

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

Why Do Some Hotel Marketers Get Everything They Want?

March 13, 2018

Smart hotel marketing pros are using simple math get more budget.

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With the hotel industry enjoying a period of record performance, posting all-time highs for occupancy, ADR and RevPAR, one of the most talked-about ways to improve performance (and delight ownership) are to reduce the cost of guest acquisition.

And that begins with fully understanding a vital metric: your hotel’s CLV-to-CAC ratio.

But unlike many other industries that have already embraced the concept, too many hotel marketers are still unable to quantify their CLV-to-CAC formula.

This can be overcome with a little effort, offering a major potential boost to the bottom line and a far stronger bargaining position when asking ownership for more marketing dollars (and a raise)!

What Does It Mean?

To get started, there are some basic principles to know, beginning with terminology.

CLV stands for “Customer Lifetime Value,” meaning the revenue your hotel can expect to earn from each guest over the lifespan of that customer’s relationship with you. CAC, meanwhile, is short for “Cost to Acquire Customer,” or your total sales and marketing spend to attract each customer and obtain the aforementioned CLV. The premise behind the CLV-to-CAC formula is to maximize that ratio as much as possible.

There are multiple benefits from having a strong CLV-to-CAC ratio, including enabling hotel marketers to ask owners for more investment dollars, for example, imagine being able to tell ownership: “We spent $300,000 last year to attract 5,000 NEW guests, who represent a LIFETIME VALUE of three million dollars in revenue… in other words, for every dollar you give me, I’m giving you ten dollars back in gross revenue.”

So how do hoteliers calculate their CLV to CAC ratio?

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According to Kissmetrics, a well-known web/data analysis company, Starbucks CLV is more than $14,000.

Here are the core steps:

1. Making the Calculations

To come up with your CLV, first, consider how many times a guest typically stays at your hotel(s) over a multi-year period. Then, deduce the total value of those stays. Multiply that value by the total amount of visits per guest and that is the CLV you will use in the formula.

Next, to arrive at a value for CAC, simply divide the TOTAL amount your property spends on sales and marketing for each segment (ie: transient vs group vs corporate) by the total number of guests from that segment.

EXAMPLE:
So, if a hotel attracts 1,000 new guests this year and spends $100,000 to do it, the CAC equals $100.

2. What to include in CAC?

When calculating CAC for each demand segment, be sure to include salaries, expenses, technologies, advertising and any other investments made specifically to attract bookings for that specific segment. That may include, for example, a customer relationship management (CRM) system and trade show booth that is part of the CAC for your hotel’s sales efforts for attracting the corporate business segment.

Other costs, like Google pay-per-click (PPC) advertising, email marketing, and social media fees should be attributed primarily to transient guest CAC calculations. On the other hand,
your hotel’s website, the salary for your director of sales and marketing (DOSM) and other “shared” costs can be distributed evenly across all segments that your property targets.

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3. The Results:

Using the calculations described above, divide the CLV by the CAC to arrive at the ratio.

For example, if a hotel has a CLV of $5,000 per transient guest and the CAC for each transient guest equals $100, then the CLV-to-CAC ratio is 50x. In other words, for every dollar spent on sales and marketing to target that guest, the hotel will earn back $50.

That is the kind of return owners love!

And that is the kind of math that separates serious hotel marketers from those just focused on pretty pictures!

Now compare results to your OTA costs!

Once you know your own CLV-to-CAC ratio, you can compare it to the CLV-to-CAC of bookings derived from third-party online travel agencies (OTAs).

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You’ll most likely be pleasantly surprised by what you find: Typically, OTA-driven guests are less loyal and will have a lower CLV as a result. Also, the commissions on those bookings may be higher than the CAC you are achieving on your own.

So, in the quest to drive hotel profitability even further into the stratosphere, make it a top priority today to learn your CLV-to-CAC ratio for each customer segment you target. By offering such compelling insight, the CLV-to-CAC ratio can be an incredibly powerful stat for hotel marketers to cite to owners when requesting more marketing dollars.

You’ll be much more likely to obtain the budget you need when your owner is assured their investment will lead to a far better payoff down the road.


About Tambourine

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

Friday Freebie: Stop Obsessing Over This Hotel Marketing Metric

March 9, 2018

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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: Stop obsessing about the quantity of traffic and visitors to your hotel website…instead, focus on how many actually enter the booking environment!

It’s every hotel marketer’s reality:

We have loads of stats to track…from website stats, search rankings, to social media likes and email open rates. And we know that gathering data is instrumental to finessing our marketing campaigns and being accountable to ownership and upper management.

However, some metrics can be dangerously misleading. One of those often-deceptive metrics happens to be extremely popular in hotel marketing: Online traffic and visitors to your hotel website.

Why is it misleading?

While a gradual, sustained increase in website traffic is a great thing, don’t let the numbers mislead you into thinking your site is performing better than it really is (conversely, if it drops, don’t freak out and think the sky is falling.)

The following are just a few of the factors can cause your traffic/visitors to create a “false echo” and send you off trying to fix (or replicate) something that it is out of your control:

  1. Seasonality can affect traffic up and down.
  2. A major PR story about your property can cause traffic to spike.
  3. PPC and Promo campaigns (avoid Groupon please!) can increase traffic and cause it to drop when its over.
  4. Local/regional events nearby your property will cause it to spike & drop.
  5. Changes in the way Google displays their search engine result pages (SERPs) can actually cause LESS traffic to come to your site (because users are getting their answers right on Google’s SERPs!

Ultimately, it comes down to the quality of traffic, not quantity.

And there are three primary keys to attracting QUALITY traffic:

  1. Tell the story only your property can tell: If you want to find the right guests who will buy and return, then you have to give them a truthful, relevant reason to consider you! You must understand your ideal guest persona and communicate your UVP across every marketing touchpoint.
  2. Stop using cheap tactics: Lots of unsavory digital “publishers” sell access to cheap traffic. But what good does it do if your traffic is coming from click-robots in Kazakhstan? Your digital team (or ask your guests!) should be able to easily explain which media they actually consume on their purchase journey.  (And do we really need to talk about the poor quality traffic from flash sale providers like Groupon?)
  3. Invest in long-term organic hotel SEO content: Choose the right keywords to start building long-term content around: You will never rank on page 1 of Google for “Hotels in Boston” but you have a decent shot of ranking for “Hotels near Fenway Park” if your SEO and content team is producing content EVERY MONTH with that “long-tail” focus.  Another simple trick: your content can bring you loads of quality search traffic if it answers the questions of your potential customers… you can use this handy/cheap tool to see what questions people are actually typing in about your market and compset

REMEMBER: If you have to pick one thing to focus on to measure the performance of your website, track entrances into your hotel booking engine and calls to your reservation center. 

Get more examples: We Need to Talk About Hotel Metrics


About Tambourine

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

Why Every Flagged Hotel Should be Rethinking Instagram

March 6, 2018

Flagged hotels enjoy an established presence in the global marketplace and the trust that goes along with that. But… despite the common misconception that the brand is entirely responsible for driving every flagged property’s bookings, successful hotel marketing is a joint effort at both the brand and property level.

Remember: your brand’s marketing team is servicing hundreds of hotels (often several in the same city) and providing the same tools to all of you. Think about that… every hotel in the brand family is getting the same marketing and sales templates, the same loyalty database, the same hotel website design and hotel booking engine.

Every same-branded property receives the same marketing assets, regardless of amenities, destination, or target audience.

But every flagged hotel has its own unique story to tell and few platforms are as well equipped to convey those stories as Instagram.

Instagram represents an opportunity for flagged hotels to shift travelers’ perceptions of a boring, me-too branded property to a unique travel experience not found anywhere else. The content is universal, shareable and easily understood by a wide range of audiences.

Tambourine’s Social Media Director Elle Andress details 4 ways Instagram can help social media teams at flagged hotels differentiate their properties:

Elle Andress, Director of Social Media at Tambourine

Elle Andress, Director of Social Media at Tambourine

1. Avoiding sterility

Today, people are investing their travel dollars in authentic experiences that immerse them in the local culture and lifestyle. They’re hungry for local secrets, bold adventures and seeing parts of the city that most tourists don’t see.

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When your corporate brand team has control of your online marketing, they won’t be able to convey those local gems. First off, because they’re not even there. They don’t know what makes your destination so special.

They don’t understand the culture, the awesome mom-and-pop stores, and restaurants that give your neighborhood character or know the local secrets. Only you and your local marketing staff can tell a compelling story that will actually drive bookings.

Instagram is the ideal platform to showcase the images that make your flagged property unique in the eyes of potential guests and avoid perceived “sterility.”

2. Monitor on-property problems…

Every day, there are good and bad things posted about your hotel on Instagram.

You can be reactive and monitor people who comment or tag your hotel’s Instagram “handle” (your actual Instagram account name) in a picture. You’ll receive a notification and you can respond accordingly.

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But there are more proactive ways of monitoring guest sentiment on Instagram. By typing the generic name of your hotel (see illustration above) or property specific hashtags in the search bar, you can discover additional content that guests have posted about your prop.

If you don’t have the time or resources to monitor your hashtags and geotags, Tools like Tout allow you to find and license the content with ease.

3. Celebrate past guest experiences

By sharing past guest stories, reviews (and best of all videos) on your hotel’s social media channels, you can turn your past guests into a perpetual army of experience evangelists.

Harvest their good times!

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An example of capturing guest-generated social proof from The St Regis in San Francisco.

Over the last few years, storytelling and “user-generated content (UGC)” has become one of the most popular (and cost-effective) ways for hotel marketers to win guests’ hearts and wallets.

Why?

Because consumers no longer trust advertising… they trust each other. As this article in AdAge so aptly put it: “Your brand is defined by the interactions people have with it.”

User-generated content, especially photos, videos and posts about on-property experiences are more authentic, less sales focused… and let’s face it, usually more creative than anything hotel social media folks could ever dream up.

4. Paid Instagram stories

In addition to running an ad in the Instagram feed, hotel social media marketers now have the added option of running paid Instagram stories.

The 15 to 30-second full-screen experience can showcase still imagery or a video clip, appearing in Instagram’s story feed, alongside the stories posted by a user’s following so that the organic experience is never disrupted for the user. “With paid Instagram stories, properties can reach a much larger audience, including users who aren’t already followers,” Elle explained.

Here, properties can promote time-sensitive offers such as a new restaurant menu or a seasonal event to a broader audience than the property’s existing Instagram followers.

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An example of using highly visual Instagram stories from The St Regis in San Francisco.


About Tambourine

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

It’s Valentine’s Day: What Are Hotel Marketers Loving?

February 13, 2018

Hotel marketing folks are infatuated with these 7 things…

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Each year around Valentine’s Day, we ask clients, partners and industry insiders what they are feeling warm and fuzzy about… here are the 7 things they’re smitten with right now:

1. A Strong Economy and Positive Industry Forecasts 

The smart folks at STR, CBRE and PWC all generally agree that 2018 will be another year of steady growth for the hotel industry. (You can download STR’s detailed breakdown by market here.) Fueled by a strong global economy, relatively low gas prices and limited supply growth, the US hotel industry is once again expected to enjoy positive RevPAR and ADR growth. And since all boats rise with the tide… hotel marketers are riding the wave to happiness and career growth.

image22. Robust Career Opportunities

Speaking of career growth… hotel marketers are seeing more opportunities than ever. Industry results have expanded budgets and created new roles. While the allure of the hotel industry and the fast-tracked promotional opportunities make hotel marketing and hotel social media jobs some of the most coveted in the country.

3. Elevated Consumer Awareness of Direct Booking Benefits

Thanks to the massive media outreach by Hilton and Marriott’s direct booking campaigns, we’re seeing heightened public recognition of the benefits of booking direct. The idea is to educate travelers and chip away at the myth that OTAs save guests money. With the stage set, more and more hotels are following in Hilton and Marriott’s footsteps with their own hotel marketing campaigns enticing audiences to book direct.

Plus, hotel marketers at properties of all sizes are now armed with new digital hotel marketing tools and previously unaffordable technology that can help them drive direct room revenue, instead of settling for costly OTA bookings. The momentum of the “book direct movement” is growing and hotel marketing folks are excited to see where it’s headed.

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4. Owners’ Investment in a Remarkable Product

New hotels with bold concepts and fresh guest experiences are springing up in all directions, so hotel owners need to invest in their properties to keep up with modern expectations.

Thankfully, more and more hotel owners are realizing that the best hotel marketing investment they can make is in enhancing their property, the experience and the service.

If your property is providing a lackluster experience with frayed edges, outdated décor, and musty smells, no amount of brilliant marketing can save you from the downward spiral of lost revenue.

5. Social Evangelism

Hotel social media managers are feeling blessed to have guests who gush and brag about their stay on Facebook and post foodie pics to Instagram. Not only have they made marketing travel engagingly personal and authentic, they come at no cost to the hotelier.

Over the last few years, storytelling and “user-generated content (UGC)” has become one of the most popular (and cost-effective) ways for hotel marketers to win guests’ hearts and wallets.

Why?

Because consumers no longer trust advertising… they trust each other. As this article in AdAge so aptly put it: “Your brand is defined by the interactions people have with it.”

User-generated content, especially photos, videos and posts about on-property experiences are more authentic, less sales focused… and let’s face it, usually more creative than anything hotel social media folks could ever dream up.

6. Metasearch: An Attractive and Less Expensive Option

It’s easy to see why travelers love metasearch, such as Google and TripAdvisor: They receive all the key details needed to research and book their stays all in one place, like real-time pricing, availability, hotel information, guest reviews and location.

But, hotel marketers are loving metasearch too.

They are using these sites to boost direct bookings instead of relying on OTAs and paying high commissions. You can pay-per-click or pay booking commissions (still less expensive than traditional OTA fees) – all while getting brand exposure and access to travelers who are just entering the consideration and booking funnel.

7. Digital Personalization

Every year, new hotel website and booking engine technology allows hotels to know more about who’s looking, booking and bouncing. With this robust analytics and demographic data, hotel offers are now personalized and optimized to reap the biggest ROI.

And hotel marketers are smarter than ever about crafting hotel marketing campaigns that are tailored to the right travelers and delivered to the right place, at the right time. And, best of all – everything is measurable, which provides tremendous power to hotel marketers when it comes time for annual performance and budget reviews.


About Tambourine

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

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