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hotel marketing budget

An April Fools Guide to Hotel Marketing

March 30, 2015 • By
Tambourine: hotel marketing technology Every year, on April 1st right around 10am, my wife will call to tell me we won the lottery! Or that she is pregnant. Or that the neighbors have opened a drug rehab facility next door. After nine years, I’m ready for her April Fools’ Day antics! April 1st can be fun, but it can also serve as a serious reminder that we can’t afford to be foolish in our jobs as hotel marketers. We’re bombarded all year with squishy data, fancy technology and bold promises… it’s important we’re able to separate fact from fiction and focus on things that drive real revenue. So, in honor of April Fools’ Day, here are some tried and true ways to avoid being foolish:

1. Know how much budget you need… and ask for it!

When ownership asks you for your budget request, take time to carefully think about your answer. This may be the first and last time you get to ask for the things you really need to achieve the goals they have set for you. It’s impossible to determine the proper hotel marketing budget without knowing the overall revenue targets AND how each sub-segment is expected to contribute to the total revenue pie. Once you know the actual revenue targets, you can carefully consider the resources you need to “climb the hill” that’s been put in front of you. Surprisingly, many senior hotel marketing execs think they are restricted to simply asking for advertising money. If you need more people on your staff to achieve the revenue target, then you need to ask and be prepared to make a simple business case for the added overhead. Same goes for changes to the product; if your physical product or service experience requires additional investment, now is the time to ask! And last but not least, if someone else’s department is inhibiting your results, ask for control of it…. Or forewarn ownership that results may be hampered by folks you have no ability to manage and improve.

 2. Monitor Your Comp Set

Never lose track of your competition. There’s no shortage of tools at your disposal, such as STR reports, Google Alerts and hotel reader boards…. And don’t forget to sign up for their email offers list!

3. Monitor Guest Sentiment & Reviews

Your guests and meeting attendees are the direct window to your hotel experience and your future success. So, pay attention to what they say, what they experienced and how they felt at your property. Reviewing guest sentiment and online reviews doesn’t take a lot of time. And don’t lock yourself in your office and in meetings all day. Reserve some time to have conversations with your overnight guests and people attending a meeting. Mingle with them. Ask them about their stay and their meeting experience and if there is anything that could make it even better. These opinions matter most to meeting planners, so jot down notes and use the intel to improve your hotel product and secure future group business.

 4. Review Your 4P's Every Day

Think back to your first marketing class in college when you were introduced to the four “P’s” of marketing: Price, Product, Promotion and Placement (distribution). Take a mental inventory of these traditional marketing pillars each day to determine what activities need attention and which ones are already performing at their best.

5. Keep Your Top 20 Sales Opportunities Top-of-Mind

Where do you stand on your sales team’s top meeting and conference prospects? Sit down with each salesperson and review their top sales opportunities. Go over each prospective meeting planner’s hot buttons and pain points, the competing properties and determine what else can be done to push the decision toward your property.

6. Set metrics-based goals

GMs and property owners no longer want to hear about “branding initiatives” or logo colors… they expect their senior marketing leaders to contribute to revenue in a measurable way, communicate in number-speak and be accountable for tangible results. So it’s important to have complete fluency in the KPIs that affect the bottom line Successful DOSMs know where they are in relation to their sales goals, on any given day. By tracking your daily progress towards your target numbers, you’ll know whether you’re behind or ahead. How close is each member of your team to their projected room nights?

 7. Love Revenue Management

Statement of the obvious… in a price-sensitive category like hotel rooms, expert revenue management is vital to success. A visit to your revenue management leaders should be on the list of your daily appointments, not weekly. Just like with your sales goals, you need to stay on top of your latest numbers, including your REVPAR & ADR index vs your comp set, upcoming low periods and your property’s pace reports.

8. Fix Your Website

Travel bookings begin with potential guests researching your property online. As your hotel’s digital front door, your website influences your guests’ impression more than any other marketing asset. Even as social media and guest reviews guide decision-making, your hotel website should be flawless and make every prospective guest want to skip the OTAs and book directly with you. The most successful hotel websites feature a combo of relevant content, rich visual assets that tell your hotel’s unique story and a user-friendly interface that makes it easy for guests to book a room. (For a deeper dive on the ways hotel websites can negatively impact revenue click here.

9. Measure Marketing ROI

Even if business is good, and ‘something’ is working, your marketing ROI should be measured regularly. Make sure you are equipped to measure the six most critical statistics in hotel marketing: 1) MCPB (marketing cost per booking) 2) Revenue variance from target: reflects your ability to achieve revenue goals set in your S&M Plan 3) Sentiment score on TripAdvisor: reflects product acceptance and guest satisfaction 4) DRR (direct revenue ratio): measures % of revenue coming direct vs expensive third-party 5) RevPar Index vs compset 6) Website conversion rate (from unique visitor to converted bookings)  

How much should your hotel marketing budget be? Part 2

January 24, 2014 • By
 

Tambourine Hotel Marketing BlogPART 2: The Right Way

Last week we covered the wrong ways to answer the question: how much should our marketing budget be…?” Now, let’s focus on better ways to answer the question that will determine your success and quite possibly your career longevity!
  1. “The budget needs to be aligned to sales/revenue projections… what are the sales & revenue projections?” It’s always a bit awkward to answer your boss’ question with a question of your own, but it’s impossible to determine the proper hotel marketing budget without knowing the overall revenue targets AND how each sub-segment is expected to contribute to the total revenue pie. Once you know the actual revenue targets, you can carefully consider the resources you need to “climb the hill” that’s been put in front of you. And then, even after you know how “high” the hill is… you need time to put your plan and ultimate budget request together.
  2. “I need $____ in funding. ____ new people. _____ product changes to be made. And _____ department to report to me.” Whoa. Does that sound bold and frightening?We understand if it does, but budgeting time means it's time to put on your big boys and girls pants and tell ownership EVERYTHING you need to deliver the results they are mandating! Surprisingly, many senior tourism and hotel marketing folks think they are restricted to simply asking for advertising money. If you need more people on your staff to achieve the revenue target, then you need to ask and be prepared to make a simple business case for the added overhead. Same goes for changes to the product; if your physical product or service experience requires additional investment, now is the time to ask! And last but not least, if someone else’s department is inhibiting your results, ask for control of it…. Or forewarn ownership that results may be hampered by folks you have no ability to manage and improve.
  3. Last year, we achieved a marketing CPS of X. To achieve next year’s budget, I need $_______ .” CEOs and property owners no longer want to hear about “branding initiatives” or logo colors… they expect their senior marketing leaders to contribute to revenue in a measurable way, communicate in number-speak and be accountable for tangible results. So it's important to have complete fluency in the KPIs that affect the bottom line. As an example, if you know last year’s marketing cost-per-sale (CPS), you should be able to extrapolate that against future revenue targets to determine the budget required. But remember, you will also be expected to reduce your CPS over time as you learn and tweak your programs.

Think it through!

Remember, when ownership asks you for your budget request, take time to carefully think about your answer. This may be the first and last time you get to ask for the things you really need to achieve the goals they have set for you.

About Tambourine

Tambourine drives revenue for hotels and destinations worldwide using advanced marketing technology. The firm is celebrating its 30-year anniversary. For more information, visit Tambourine.com.

How Much Should Your Hotel Marketing Budget Be? Part 1

January 15, 2014 • By
Tambourine: Hotel Marketing Blog

Here’s the right and wrong ways to answer…

One of the most vexing questions posed to marketing managers in any industry is: “how much should our budget be? Whether you are being asked to submit next year’s budget or a funding request for your next campaign, knowing how to answer your management or ownership’s budgetary questions is vital to your success (and job security)! Hotel sales and marketing leaders face this question at least once a year. As an external vendor, we get asked this question all the time. After 30 years in the hotel marketing profession, here’s our thoughts on the right and wrong ways to answer the property owner when you face this thorny question:

PART 1

The wrong way:

  1. “Whatever you can give me, I’ll do the best I can.” On the surface, this happy answer would appear to position you as an easygoing team player, but it’s actually the most dangerous answer of all! Essentially, you are allowing ownership/senior management to unilaterally control the resources you have to achieve revenue targets that only you know how to achieve. If you fall short and are held accountable for missed targets, you will deeply regret not having asked for the proper amount before you accepted responsibility.
  2. “I didn’t spend all of last year’s budget, so I don’t need as much next year.” This answer only works if you exceeded revenue targets while under-spending the budget… which doesn’t happen very often. Unfortunately, if you are good enough to pull off that amazing feat, be prepared to be asked to do it again every year!
  3. “Our sales goals are 20% more than last year, so I need 20% more budget” It’s not that easy. Revenue rarely correlates in an exact linear fashion with marketing budgets. Instead, think about where the expected revenue increases are expected to come from and what kind of budget you need to achieve it? Perhaps the increased target is from meetings and groups, which takes less budget to generate leadflow than transient/leisure. Conversely, if the targeted revenue increases are expected to come from channels that cost more to penetrate, be ready to ask for more budget to attack those channels.
Next week: the right ways to answer the question: “how much should our hotel marketing budget be…?”

About Tambourine

Tambourine drives revenue for hotels and destinations worldwide using advanced marketing technology. The firm is celebrating its 30-year anniversary. For more information, visit Tambourine.com.