Digital marketing in the hotel and hospitality industry is now crucial in order to get your hotel noticed by both new and existing customers. This then begs the question, what is hotel digital marketing?
NB: This is an article from Arise
Simply put, it’s a term used to cover a number of marketing channels and methods utilised to promote your hotel online. This includes channels such as social media, pay-per-click marketing, and email marketing, amongst others.
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How much does digital marketing for hotels cost?
Like all businesses, you want your hotel to get the best return on its investment and ensure every penny of the hard-earned marketing budget is being spent well. It’s therefore imperative to understand what channels and services will help you to achieve this, and how much it’s going to cost.
Obviously, all of these marketing channels come with a cost, whether that’s dipping into your marketing budget for advertising, or paying experts, such as a hotel marketing agency to undertake the digital marketing services for you.
In this post, we’ll explain the many factors that can influence the price of hotel digital marketing, the average costs of marketing services and what you should be considering when deciding your budget.
Average prices by service
It’s likely that you’re going to be looking to outsource the majority of your hotel’s digital marketing efforts to an agency.
However, if you’re planning to keep this in-house and tackle this within your team, skip to the next section.
If you’re undecided about whether to take on your digital marketing yourself or to outsource, don’t worry we’ve got a couple of posts to help you – In-House vs. Outsourcing Digital Marketing & Should I Hire A Digital Marketing Agency?
So if you’re thinking of outsourcing your marketing, in a recent post, we explored the average cost of marketing services charged by agencies alongside different pricing models that agencies use. But as we mentioned there, you’ll need to take these figures with a pinch of salt.
The cost of digital marketing for hotels can fluctuate considerably based on a variety of different factors including an agency’s rate and pricing model, your desired timeline, what services you require or the complexity of the project.
Taking all of these factors into account, and based on some research, hospitality industry knowledge and past projects of ours, we’ve outlined some rough estimates below to give you a vague idea of what you can expect to pay.
Website
The cost of your hotel’s website completely depends on its current state and condition. For example, whether you’re looking at building an entirely new website, or simply redesigning/ tweaking the one you currently have?
For a small redesign and reworking, you can estimate between £500 – £1,000.
For a fully bespoke hotel-specific website built from scratch, then depending on the size and complexity, you’re probably going to pay anywhere between £5,000 – £10,000.
Check out this post How Much Does A Website Cost for some more information about the cost of a website.
SEO
Once again, as with most digital marketing services, this price will fluctuate depending on the amount of work you require, the current state of your SEO and the rate the agency charges.
However, you can expect to pay anywhere between £500 – £2,000 per month for regular ongoing SEO work.
Check out this post How Much Does SEO Cost for some more information about the cost of SEO.
PPC
PPC is an extremely effective channel for hotels to reach lots of new customers, and encourage direct bookings. However, the cost of PPC services for hotels will completely depend on the way your chosen agency works and how they price their services.
A bunch of agencies charge a percentage of a hotel’s total ad spend and work out their fees that way. Others, charge for time spent creating and managing the campaigns.
However, taking this into account, we’d recommend budgeting between £200 – £1,000 per month for PPC.
Check out this post How Much Does PPC Management Cost for some more information about the cost of PPC.
Social Media Management
Social media for hotels can encompass a variety of different tasks, so similarly to SEO, the price here will depend on the amount of work you require. For example, basic organic posting or community management will require a lot less work than full-blown advertising campaigns.
However, you can expect to spend between £500 – £2,000 per month.
How a digital marketing agency prices
Most digital marketing agencies have set pricing models they use for their services. This usually includes hourly rates, flat fees, retainers, and results-based or custom pricing models.
The pricing model used by the specific agency you approach will have an impact on the overall price you pay.
It’s a great idea to do some research before approaching an agency, just so that you understand the current state of your digital marketing and what you want to achieve by partnering up with an agency. This way, you’ll have a clearer understanding of what exactly it is you require.
Recommended ad budgets for hotels
We’re often asked to advise on budgets and recommended spending for online marketing for hotels, but it’s not as straightforward as it may seem.
With certain digital marketing channels such as paid search and metasearch, hotels need enough budget to compete with online travel agents (OTAs) and competitors in order for a campaign to be successful. This is the very least required.
But we like to think about paid budgets a little differently…
As there are lots of factors that can impact the price paid for advertising, we’d usually recommend a flexible budget wherever possible focusing on the returns as a target, rather than the budget itself.
Diving deeper into some numbers and assuming that realistically, the main goal of digital marketing is to encourage direct bookings, a budget based on ROI seems a better way to go.
To give you an example, OTAs tend to charge around 20% commission, so having a flexible budget with a 10-15% CPA target is a great starting point. This way, the cost per acquisition is below what it is for OTA bookings. And if we assume some of these bookings are being ‘stolen’ from the OTAs, it’s a win-win. After all, all hotels want to boost bookings without relying on OTAs.
What’s great about this flexible approach, is that if the campaign(s) are spending their budgets, due to high demand, and can be increased whilst maintaining a good CPA, the hotel makes more direct bookings. And, if the campaigns aren’t quite spending the allocated budget, perhaps due to demand, but the CPA is still reasonable, there’s nothing lost.
A test-and-measure approach like this can be extremely beneficial and produce fantastic returns, so if you’re able to flex your budget a little, it could be worth it in the long run.
