Many hotels are seeing a huge bounce-back in demand and occupancy this summer as travelers take advantage of openings from restrictions and take those long-awaited trips.
NB: This is an article from gcommerce
If you are a fortunate hotel that currently is at full occupancy, what should you be doing with your marketing? Should you decrease your budgets? What type of messaging should you be focusing on? In this article we will talk about some relevant examples from the past and provide some suggestions on how your hotel can best market at times with full occupancy.
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Examples From Seasonally Closed Hotels
In thinking about this, it seems very similar to the seasonal properties that we have worked with nearly since our existence. Many destination properties in the northeast, mountain locations, near the arctic circle, etc. generally close down for up to half the year. During this time, they do not accept guests and therefore they have some similarities to when guests are unable to book at a hotel that does not have capacity. Traditionally, many hotels would discontinue marketing their properties during these times, but we always strongly recommend against that. The reason is that many of those destinations have a long booking window where people do a lot of research prior to booking. This is another similarity if your hotel is at capacity. Due to increased demand and limited availability as the hospitality sector continues to recover, people are increasing their booking windows and doing more research prior to booking with some experts recommending any travel from now to 2022 should start to be planned now.
Hotels Get More Revenue When They Market With No Availability
Over the course of time, we’ve done a lot of research to see if hotels perform better when they market when they are closed. Should we be running marketing when hotels have no availability? The results below are from our clients in the years preceding the pandemic and any impacts on demand that may have caused and show years in which we marketed while they were closed compared to the previous years when they did not.
With this particular hotel, they only reduced their budget by about 30% from their high season to their completely closed season leading up to 2019. In 2018, they ran no marketing at all while they were closed. You can see the huge jump in produced revenue and how quickly they got a start to the year as people were booking early.
This hotel ran no marketing in 2017 but reduced their budget 50% from their high season to their completely closed season leading up to 2018. Again, we see a large jump in produced revenue at the start of the year before the hotel is even accepting guests and their consumed revenue was able to outpace the previous year.
How To Interpret This Data For Marketing While Hotels Are At Full Occupancy
Both of these hotels had something in common in that they didn’t start accepting guests until it got warm enough for people to travel to those locations. Hotels at full capacity should have a similar idea for when they have openings. If your hotel is completely booked through the summer, but you’re in need of mid-week bookings in the fall, that is something you can start targeting with your media. If we are still 3-4 months out from the need period, your hotel guests are probably still in the awareness or interest phase. Understanding that you should be targeting that part of the marketing funnel allows you to utilize the right platform and proper messaging to try and target that audience.
Target Hotel Guests For Future Reservations
With the example hotels above, we started our off-season marketing in November and December the year before focusing the majority of our budget on display and Facebook ads geared towards attractions in May when the hotels typically started accepting guests. As we moved through the winter, we shifted more of our budget down the funnel to paid search marketing campaigns, and remarketing campaigns to target users who had been to the website with intent and did not end up booking. With such a large start in produced revenue, the hotel quickly had most of their major weekends and the summer booked by February or March. This allowed us to completely shift our marketing back towards Display and Facebook targeting the need periods later in the fall.
By increasing our budgets year-over-year with marketing during closed periods, both of these hotels were able to completely transform their targeting and bring in substantially more direct revenue, rather than relying on Online Travel Agencies. They also didn’t have to play “catch-up” through the year by spending more during the high-demand summer months to try and fill in those demand areas later in the fall and shoulder-season.
Hotels at full occupancy are in a similar position, they have the opportunity now to either:
- Shut down marketing due not being able to accept reservations
- Shift their marketing efforts to target need periods in the future
Which one will you choose? If you picked option 2, congrats, you’re going to position your hotel for success in advanced bookings which not only help you get reservations on the books for future months but also help you achieve the goal of a lower cost per acquisition like we prove in this recent blog post on fighting OTAs for direct hotel bookings. Now, here’s where we break down a few suggested methods to helping to drive advanced purchase bookings and fill up your future need periods:
- Set up custom audiences targeting website visitors looking for stays during your future need periods/specific advance dates
- Shift more budget towards top of funnel awareness campaigns across Facebook, Display and Paid Search
- Promote packaging, offers and messaging geared towards travelling during seasonal or future need periods
- Evaluate target audiences that travel during those need periods, if you’re looking to target during the school year you might have to shift your targeting, messaging and packaging away from families and towards couples and empty nesters for example. Dive into your 1st party data to identify common themes among travelers during those need periods from previous years
- Utilize audience tools such as Adara to target specific in-market audiences looking for travel to your market 60 to 90+ in advance of travel dates
- Set up lifecycle email campaigns through Navis or Revinate to target guests that stayed during those months in previous years
- Launch metasearch advertising on channels such as Google Hotel Ads and Tripadvisor, where the majority of bookings are for stays 30+ days in advance
Still thinking about cutting back on media spend? If you still decide your business needs to cut down on media spend in the short term, consider shifting some of that budget towards the production of video and image assets for use in future marketing campaigns. Video continues to drive enhanced performance across channels including Display, YouTube, Facebook and many hotels still lack quality video assets.
No matter how your hotel is performing in the short term, it is always important to consider long term goals with your marketing campaigns and budget.