When it comes to driving hotel performance, marketing and revenue teams should be working toward the same goal: more heads in beds at the right rate. But, too often, these teams speak different languages, especially when it comes to measuring success.
NB: This is an article from TCRM, one of our Expert Partners
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While marketers love to highlight engagement and brand awareness, revenue managers are laser-focused on occupancy, ADR, and RevPAR. So, how can both sides align on what really matters?
We believe that a successful revenue strategy requires a strong understanding of marketing metrics that directly tie to demand, conversion, and revenue impact. Here’s a breakdown of the digital marketing KPIs that revenue managers should keep an eye on and why.
1. Conversion Rate (CR)
Why it matters: Direct bookings are more than just a revenue win, and your direct booking conversion rate shows how well your website turns visitors into paying guests.
If your site has traffic but no conversions, that’s a red flag for revenue. Is pricing unclear? Are packages misaligned with guest intent? Are high bounce rates due to a confusing user experience? Complete website audits regularly to make every click count.
Benchmark: A healthy hotel website should convert at around 1.5-3%.
2. Return on Ad Spend (ROAS)
Why it matters: ROAS = revenue generated ÷ ad spend. It’s a direct view into how efficiently your marketing dollars are converting into bookings.
Revenue managers should align with marketers on when and where to allocate their budget, particularly during periods of soft pacing or low demand.
Pro tip: Don’t just look at ROAS as a whole. If your dashboards provide it, dig into it by segment (geo-targeting, channel, campaign type) to uncover high-performing opportunities.
3. Cost Per Acquisition (CPA)
Why it matters: CPA tracks how much you’re spending to acquire one booking via paid media or email campaigns.
If your CPA is creeping up and RevPAR isn’t keeping pace, it’s time to reassess targeting, messaging, or rate strategy. Revenue managers can help guide this by overlaying campaign performance with actual pacing data.
