December 18, 2008

Online hotel marketing tips for a recession


In the current economic climate, the temptation is to cut back on marketing and promotion. While this may seem like a sensible course of action, it has the potential to harm your business in the long term.

by Mark Forrester

The UK Hotel industry is currently witnessing the signs of a recession and this is likely to last throughout 2009 and even into 2010. To understand how this might influence your business, let's looks back to the recession of 1990.

- Accommodation spend in the UK shifted from rapid pre-recessionary growth to a real decline of 3 per cent from Q4 1990 to Q2 1992
- Occupancy rates declined first, followed soon after by average room rates.
- RevPAR declined by 7.7 per cent between 1990 and 1992
- The recession widened the market opportunity for budget hotels, resulting in continued growth in UK budget hotel turnover during the recession
- As demand fell, the number of hotels and bed spaces declined as many small independent hotels were forced out of the market. Registered hotel numbers reduced by 1,562 between 1990 and 1993
- The consumer started putting more pressure on room rates and started expecting more 'value for money' from the hotel industry.
- It took five years for average room rates to reach pre-recession levels.

Source: PricewaterhouseCoopers November 2008.

In the current economic climate, the temptation is to cut back on marketing and promotion. While this may seem like a sensible course of action, it has the potential to harm your business in the long term. Occupancy Marketing, the Edinburgh based Internet Marketing Services Company specialising in the hotel and leisure sector, provide the 'top 10' online marketing tips for surviving the recession.

1. Focus on Campaigns

Be specific with your marketing activities, making them value based and targeting specific events or seasons. Some examples that have worked well for our clients include:

- Running paid search campaigns supporting seasonal offers
- Submitting campaigns to offer based websites like Money Saving Expert
- Actively managing a late deals page on your website, with the best available rate promoted
- Offering late deals for meetings / private dining and office parties

2. Flex your Rates Online

Recognising that some days of the week or periods of the year will be slower, it is advantageous to flex your rates on your online booking engine and with Online Travel Agents (OTA's) to suit these periods. For example creating different rate groups, Rack Rate, Rack Rate less 10%, etc, etc It is important to understand your competitor set's rate policy and respond accordingly.

3. Consider Channel Management Products

Channel Management Products such as Rate Tiger offer the ability to instantaneously manage your rates with OTA's (Expedia and Late Rooms etc). The benefit of these systems, aside from the time saved, is the control you have over your rates. Occupancy Marketing advise that you should offer the lowest or rates online via your own online booking system or at worst have rate parity, meaning you sell at the same rates via OTA's. If you do ensure that your rates are the lowest direct, make sure that you advertise this clearly on your web site. See related article - increasing your online bookings.

4. Invest in your Website

Your website is your shop window to leisure customers and some corporate customer segments. It should be an accurate reflection of your product; if you hear guests saying the hotel is "so much nicer than on the website", you need to invest in your site. Your site should include an image gallery which feature the rooms and bathrooms. It should be 100% up-to-date and include useful information on events, local attractions, what to see and do. Remember in most cases, you are selling the experience not the room.

5. Optimise your Web Site

Your website should be optimised for brand and location searches at a minimum. This means when someone Google's your hotel name, it appears first in Google. Your site would also ideally appear in the top 5 results for "hotel plus location" based searches. In very popular cities this might not be possible due to competition. If your site does not appear for these searches, talk to your web design or search engine Optimisation Company. This will be the best investment you can make in terms of online return on investment.

A full blown optimisation programme will look to optimise all important business segments (weddings, functions, conferences, meetings, restaurant, bar, short breaks etc). If you can't afford to spend money on search engine optimisation, identify if you can be listed on travel portals specific to your region that do appear in the top 5 search results for your region.

6. eMail Marketing

e-mail marketing is one of the most cost effective methods to communicate with your customers. Two elements are really important here; growing the database and the message you deliver.

Make sure your business has the processes in place to capture e-mail addresses. This would include exports from your guest history database or Property Management System, visitors sign ups via your website, visitors who have inquired and opted in to receive more information. By gathering data from the above sources, even the smallest businesses should be able to add 200 e-mail addresses to your database every month. This is before running competitions etc.

Having a system in place to capture these valuable leads, you then need to send a regular programme of events and offers. Many off the shelf, cost effective programmes are available to allow you to send professional looking HTML e-mails.

Remember using e-mail is a good way to reward customers and offer lower rates that do not need to feature on your website.

7. Protect your Brand Online

It is important you monitor and take steps to protect your brand online. When working with OTA's for example, you can restrict many of them from using your brand name in sponsored advertising. This protects other websites from advertising your hotel with messages like "lowest rates" when this is likely not to be the case. Google has unfortunately relaxed their trademark guidelines but it is still possible to stop anyone using your brand name in the copy of a sponsored advert in Google AdWords.

8. Monitor Online User Reviews

Consumers are likely to check user reviews online in TripAdvisor and other review sites before committing to a booking. It is important that you continually monitor reviews posted on popular travel sites. Hotel owners can also post management responses to reviews on Trip Advisor.

Managerial responses provide Hotel owners with the opportunity to respond positively to 'bad press'. See related Article on Managing TripAdvisor

9. Use a good Analytics package

Running a good analytics package on your site is akin to running your business with good management accounts. You wouldn't consider running your business without knowing your cost and profit and the same should be the case for your website.

Not only will a good Analytics package record visitor sources; if integrated with your online booking engine it will tell you how much money your campaigns have generated. This would include return on investment from paid search, paid listings on travel sites and importantly what terms users are using to find and book your business.

10. Respond to Market Conditions

The credit crunch need not all be doom and gloom for your business. It is likely the UK short break market will be active next year as less expensive long haul flights are taken.

The pound has never been cheaper against the Euro. Capitalise on favourable Euro conversion rates in 2009 by having landing pages translated and optimised with your rates and packages. Look at marketing opportunities in Europe with your Tourist Board (VisitScotland / Enjoy England etc).

Similarly, the pound has fallen 25% against the Dollar in the last 2 months. It is important that you consider targeting the US market with a focussed online marketing campaign.

Closing Comments? In summary, challenging times lay ahead for the hospitality industry, but if your website and online presence are in order, the internet sales channel can be an area of revenue growth for your business in 2009-10.

Occupancy Marketing, the Edinburgh based Internet Marketing Services Company specialising in the hotel and leisure sector, provide the ?top 10? online marketing tips for surviving the recession.

Mark Forrester is the founder and Managing Director of Occupancy Marketing, an Internet Marketing services company focussed on the hotel and tourism sector. The company specialises in driving direct, non commissionable bookings via the World Wide Web. http://www.occupancymarketing.com