Last week, in “Hotel Marketing in a Down Economy,” we shared some important hotel booking pattern signals, what history has taught us about navigating a challenging economy, and how properties can come out stronger on the other side.
NB: This is an article from gcommerce
This week, let’s dig into the specific marketing channels every hotel should leverage in an economic downturn. But first, a really important reminder. Do not lose sight of what makes your hotel special!
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In challenging times, it’s natural to want to promote special offers to your hotel’s audience. There certainly is a time and a place for that, but the audience your hotel has been nurturing for years (oftentimes decades) isn’t following you for discounts. There is something about your hotel’s brand, your identity, that resonates with them. Make sure your digital messaging stays true to your brand platform.
Metasearch (Google Hotel Ads, TripAdvisor, Kayak, Trivago, etc.)
We continue to see metasearch adoption growing amongst hotels and resorts. Online Travel Agent sites (OTAs) compete heavily on these channels to steal market share. With the current economic climate, we have seen significant increases in the average cost-per-click (CPC) on hotel metasearch channels. In January 2023, the average CPC for hotel metasearch campaigns increased 12% versus January 2022. While we are seeing decreases in CPCs on other channels (more on that later), metasearch is holding strong for a couple of key reasons:
1. The demand for this type of media has not decreased. In fact, the competition has only grown. Google, specifically, launched their Free Booking Links back in 2021 to get more properties to participate and ultimately get them to spend on media.
2. OTAs are pushing hard to regain their footing. In 2020 and 2021, most properties were able to surpass OTA bookings with direct bookings. In these uncertain economic times, OTAs are going to be fiercely seeking ways to make up for their losses.
“But if the cost of media is going up, why would I put my money here?”
This is a fantastic question! The answer is not about “why” but about “how”. There are ways to lower your financial risk while participating on hotel metasearch channels. Look for a partner who offers a pay-on-performance or pay-per-stay model, so you only pay for bookings that actualize. This type of model covers the up-front media required to run campaigns and you pay a commission net revenue (after cancellations).
For the last 2 decades, paid search has been the leading digital marketing channel for hotels and resorts and over that time Cost-Per-Clicks (CPCs) have had peaks and valleys. Right now, we are in a valley with CPCs at a 22.5% decrease YoY. That decrease is not reflective of the impact this channel can have on overall hotel revenue production. In fact, paid search remains an essential and profitable element to a successful digital footprint. As some hotels pull back their budgets on paid search, there is a real opportunity to win market share. Work with your internal team or digital marketing agency to refine your target markets, keywords, and messaging to get the biggest bang for your buck.
In 2020, GCommerce worked with a southern California property to keep their paid search campaigns running while most of the world shut down their digital marketing and the results were staggering. The property achieved a 180X ROAS during one of the most challenging times in the history of travel.