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Internet Marketing For Hotels – Best Practice & ROI Study

Posted in: Marketing,Search Engine Optimisation,Usability by Richard Hearne on March 21, 2007
Internet Marketing Ireland

If you are in the hotel space A Benchmark Survey on Hotel Internet Marketing Budget Planning and Best Practices in Hospitality is probably worth a read.

Some extracts:

Main Findings

  • In 2007, a remarkable 68% of hoteliers will be shifting their budgets from offline to online marketing activities, representing a huge shift from traditional methods.
  • US properties rely more on direct to consumer bookings via their stand-alone websites compared to intermediary sites as a percentage of their overall Internet business (20.7% and 16.6%, respectively) than do their international counterparts (15.3% and 17%, respectively) who are still receiving, on average, more of their Internet bookings from intermediaries.
  • The top three Internet marketing formats hoteliers believe produce the highest ROIs are website optimization, Search Optimization + Organic Search, and website re-design.
  • Interestingly enough, more hoteliers believe new media formats as consumer generated media and blogs will generate better ROIs than traditional banner advertising.
  • An average of 16.2% of Internet transactions occur through intermediary websites.
  • US hotels rely more heavily on keyword search marketing (PPC) and search engine optimization (SEO) that their international counterparts who favor website re-design and optimization, and strategic linking.
  • Franchised hotels seem to rely more heavily on the chain websites.

Being one of the toughest online niches, I’m often amazed at the poor quality of many hotel websites. The 16.2% figure for intermediary websites seems a bit low – I would have expected this to be far higher. Some interesting figures and worth the read.

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  1. I did in-house SEO for a hotel booking company and 95% of the hotel websites were very low quality, no wonder why people prefer to use the larger booking companies.

    Just an FYI – booking companies cannot undersell a hotel for rooms even though many people believe they do.

    Need a room? Go directly to the hotel, even if their website is poor. ;-)

    Comment by Gavin — March 21, 2007 @ 8:57 pm

  2. Hi Gavin

    Funny that. I know that the Thai hotels all charge more on their own sites than they do through booking sites or last-minute/distressed inventory sites. I presume that the prices on hotel sites are simply the ‘published price’ and there is always room for negotiation?

    Jury’s Doyle presented at the SMW2007 conference. Interesting bits and bobs in terms of dis-intermediation and how much revenue they push through their online properties – 12% of gross group revenue goes through their websites. The girl didn’t heap praise on affiliates at all.


    Comment by Richard Hearne — March 22, 2007 @ 7:06 am

  3. The published price really depends on the hotel and if they actually use a booking form created by an affiliate. If they do use a 3rd party booking form then usually the prices are agreed on with the affiliate and in most cases their is no discount available.

    If you do find an affiliate offering cheaper prices on rooms and contact the hotel you could end up with a nice discount.

    Although, I am talking about the Irish market here. As you probably know it is a very competitive market in Ireland.

    Comment by Gavin — March 22, 2007 @ 7:16 pm

  4. I work for the same company Gavin worked for. And I was the person in charge for hotel updates and rates changes I am now in charge of development. When 3 party websites are selling hotel rooms the best they can hope for is the same rates the hotel is selling themselfs at. Companys like Expedia add upto 25% on top of all submitted rates for a room type. All hotels will have seprate internet rates.

    And a lot of the time those internet rates change based on the website that is asking for rates. For example we have 20 or so Dublin hotels they we have a great partnership with them and sometimes they will give us cheaper rates then they are quoting. When one local 3rd party website each year is putting millions of euro into you, you will go that extra mile out of fear of loosing that money.

    Another problem with 3rd party websites is that the price they display isnt what will be charged always. For example there is one English company that shows the price less the credit card charges and booking fee. So it looks cheaper.

    Many hotel bookings online arent booking, they are requests. Just because they gave you a booking ref number, doesnt mean you have a booking at the hotel. It is only an id for a record in a database and is waiting approval from the hotel.

    Many hotels havent put money into their own websites because they are advised that there is no point. There is so may 3rd part websites out there they wouldnt even rank for there own name.

    Now the latest is that hotels will go to the 3rd party sites and say make us a website and intergrate it into your system and we will host our online avail with you. $$$$$$ When that happens you have struck gold. 99% of the time you cant be undercut. Because you are selling at the same price as the hotel.

    Over the next couple of years you will see the quaility of hotel websites and systems jump because of this. And you will see a larger increase in sales through there sites.

    Comment by David Rooney — March 24, 2007 @ 1:55 pm

  5. Hi Dave

    Interesting points you make. The hotel industry is a real strange one. What surprises me is that some of the hotels don’t invest to dis-intermediate? Surely if they are handing over a large percentage of their bookings they could re-channel that into SEO for a higher return?

    I might drop you a mail at some time in the future – I’m interested in a certain hotel niche for a pet project and wouldn’t mind an insiders views.

    Thanks for the comment, best rgds

    Comment by Richard Hearne — March 25, 2007 @ 9:10 am

  6. Hey Richard,
    You would think that if the redirected funds towards IT and development of there internet presence, they would be better off. But that isnt the case. Hotels.com / Travelnow put alot into Adsence and targeted paid adverts and Bookings.org put alot into SEO and I mean a large % of there income. They cant go up aginst that. The company I work for the IT & development bill about 80% of that goes to Google and Overture for paid adverts.

    Hotels have allowed the huge increase in 3rd party websites because they didnt fill the hole that was there. And they all think the same “lets stick to what we know, rooms”.

    I have 7 years in the hotel and web development business, so when ever you like you can pick my brain. :D

    Comment by David Rooney — March 25, 2007 @ 10:49 am

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