Internet Marketing for Hotels… Bottom-line Budgeting

How Much Should You Spend for a Strong Online Presence?

Ask 10 different experts this question and you are bound to get 10 different answers.  Even though you can find various surveys on what hotels are spending for their Internet marketing efforts, and it may be helpful to see how others are spending their money, these findings are usually not relevant to most properties.  A common sense approach to budgeting usually works best and applies here as well.

Plain and simple – successful Internet marketing starts with an optimized proprietary Web site design accompanied by efficient search engine marketing (SEM).  After all, Internet marketing for hotels centers on sites that are easily found in searches.  But sites should also do everything possible to generate reservations, with simple navigation, persuasive copy and striking photography.  And don’t forget to include Pay-per-click ads, e-mail blasts, hosting and maintenance in your budget.

There’s no doubt that the Internet offers the best value in hotel marketing.  No other marketing method offers anything close to the same advantages of a strong online presence.  But while most hotels have a Web site by now, they are too often ineffective in today’s e-commerce environment.  Properties need to set their budget and spend it as efficiently as possible to make sure their site is in the limelight.

Of course, a hotel’s Internet marketing budget has the boundaries set by its overall marketing budget.  So back to the original question – how much should a hotel spend on Internet marketing?  A good starting place would focus on proportional spending.  For example, if you have set a goal for 20 percent of your total sales to be Internet generated, you should plan on investing 20 percent of your marketing budget to hit that goal.  The more competitive the market, the more aggressive you may need to budget.  Also, say groups and weddings are a large portion of your property’s business.  It may be worth deploying an online ad campaign focused specifically on generating group and wedding leads.  That alone could make or break your month.  Check out the graph below, which shows that 38% of marketers are allocating 5%-10% of their media budget to the Internet.  However, an increasing number of marketers are using 11%-30% of their budget for online messaging.

A major problem is that hoteliers don’t know how much business their sites generate, or for that matter, how much their sites should be generating.  Usually, franchise properties produce reports indicative of Internet productivity to help determine what elements are most successful and cost effective.  Online booking engines provide independent hotels with production reports, which often offer even greater detail about reservations.  Web site analytics reports allow properties to evaluate the number of site visitors, page views and more.  All in all, convenient and accurate measurability is another plus of hotel Internet marketing.

So what is a strong online presence worth to you?  Granted, there are many factors that affect the exact dollar amount you should spend – what your hotel offers, your market area, your total budget, etc.  But forward thinking would benefit you – be prepared to spend whatever it takes to get your fair share of Internet reservations.  This is another example of “you get what you pay for.”  Trying to cut costs by using a site designer with no marketing results to show for his work will most likely backfire on you.

An effective Web site involves so much more than just looking good.  Understanding what potential customers search for, how an Internet search works, how to make your site easy to find via SEM, how they choose hotels and how to motivate consumers to make reservations are extremely important to the development of a successful hotel site.  Your site should be created keeping the bottom line of reservations first and foremost in mind.

A Web site’s cost is based on the time involved in doing research and developing it.  Beyond creating an attractive design, there are many steps in the process – researching keywords and phrases, copywriters incorporating those keywords and phrases, conducting a competitive analysis, obtaining high quality images, developing functional site navigation and search engine-friendly design, building link strategy for improved search rankings and evaluating site traffic to determine overall site competency.  After a properly developed site is created, it is then ready for ongoing SEM and other techniques to help you outperform your competition.

The Internet has been an amazing gift to the hotel industry, the “great equalizer.”  A well developed Web site has a lifespan of years.  Compare that to hotel marketing of a few years back that consisted only of print materials and short-lived advertising.  In the past, pre-Internet days, hotels spent large amounts on marketing with no guarantees or methods to monitor results.  We now can obtain detailed information to effectively measure the results of our Internet investments.