Generating revenue is key to any business, including hotels. This is why is very common that in the industry most hoteliers put all their effort on transactional marketing.
NB: This is an article from Bookboost
This means the focus is mainly on short-term relations with guests, and once the transaction is done (the booking is made), the relationship ends. Can you see what this approach is lacking? A good long-term strategy, and for that hoteliers need to make the switch from transactional to relationship.
Subscribe to our weekly newsletter and stay up to date
Why transactional marketing is not enough in the hotel industry?
Transactional marketing in the hotel industry focuses on short-term, one-time interactions with guests. It aims to drive immediate sales and bookings through various promotional tactics.
This approach promotes enticing offers, discounts, and special deals to attract guests and encourage them to make a reservation. However, after the booking is done, the guest doesn’t hear back from the hotel until the moment when the reservation begins.
There is no useful exchange of information, no extra value delivered to the guest and no relationship-building.
Transactional marketing is effective in capturing the attention of price-sensitive travellers and boosting occupancy during specific periods. For example, offering a limited-time promotion for a discounted room rate during the off-season to attract budget-conscious travellers.
But the question you should ask yourself is: is this enough to bring back your guests in the future? Will they choose again to stay in your hotel?
Why should you focus on relationship marketing?
Relationship marketing can be on the opposite side of transactional marketing. It focuses on building long-term connections and loyalty with guests. It emphasises understanding individual guest preferences and delivering personalised guest interactions to improve satisfaction and create lasting relationships.
This approach involves engaging with your guests before, during, and after their stay, aiming to create emotional bonds and repeat business. Relationship marketing fosters customer loyalty, encourages positive reviews, and generates word-of-mouth referrals.
A report by Skift Research states that hotels with effective relationship marketing strategies see a 20% increase in repeat business and a 5% increase in direct bookings. This means you are investing in long-term results instead of just quick fixes.
Moreover, there are several other reasons why you should focus also on relationship marketing instead of fully doing transactional marketing.
First, relationship marketing can lead to higher customer lifetime value. This is because customers who have a positive relationship with your hotel are more likely to stay there again in the future, and they are also more likely to recommend the hotel to their friends and family.
Second, relationship marketing can help to reduce your marketing costs. This is because if your brand has a loyal customer base you don’t need to spend as much money on advertising and promotions.
Third, relationship marketing can help to improve guest satisfaction. This is because customers who feel valued and appreciated by customer service are more likely to be satisfied with their stay.