THE SMART HOTELIER'S GUIDE TO 2012 DIGITAL MARKETING BUDGET PLANNING
September 15th 2011.
2012 is quickly approaching and budget-planning season is upon us. Whether you are just starting to think about where you are going to allocate your dollars, or are moving towards finalizing your budget for next year, this is the perfect time to take a step back, review the state of the industry as well as your property's successes and failures in 2011, and prepare for a year of driving the most revenue ever through your most cost-efficient channel - the hotel website.
In an industry as dynamic as ours, it is important to stay on top of quickly moving trends, prioritize initiatives that generate direct online bookings, and be flexible enough to continuously adjust your hotel digital marketing campaigns for optimal results.
Recapping 2011 and Preparing for 2012
So what are the main criteria hoteliers should use when determining their 2012 digital marketing budgets?
The 2012 hotel digital marketing budget cannot be developed in isolation from the dynamics of the marketplace. It should be a direct reflection of the sources of business:
- What are your main distribution channels?
- What are your property's main feeder markets?
- What are your property's main customer segments: transient corporate or leisure, corporate group, meetings, social events, family travelers, etc.?
Here are the main distribution channels in hospitality in the U.S.
- Rapidly Growing Online Channel (+25% in 4 years)
- Decreasing GDS Travel Agent Channel (-25% in 4 years)
- Decreasing/Flat Voice Channel (-11.1% in 4 years)
What do these distribution trends mean for hoteliers? The hotelier's 2012 marketing budget needs to focus on the online channel, the only growth channel in hospitality.
What do these distribution trends mean for hoteliers? The 2012 digital marketing budget needs to focus on the Direct Online Channel to allow hoteliers to "Own the customer", stay competitive and reverse the troubling trend of the OTA's growing market share.
Of all hotel digital marketing initiatives in the HeBS Digital 5th Annual Benchmark Survey on Hotel Digital Marketing Budget Planning and Best Practices survey, hoteliers believe that website optimization produces the highest ROI. Social media however, introduced as its own category this year, was not far behind at 43%. This shows a dramatic change in the perception over the past few years of how much revenue Facebook, Twitter, etc. really generate. While social media is not a distribution channel, it is increasingly becoming an important customer engagement channel. Whereas in the past hoteliers were skeptical as to whether social media should even play a role in their Internet marketing strategy, today it is one of the fundamentals.
**In 2011 Social media was separated from Interactive/Web 2.0 for the first time. All years prior these initiatives were combined in this question. Most respondents (34.5%) expect to achieve 11-15 times ROI from their Internet marketing campaigns in 2011, as they should if they are following best practices.