Vizergy’s Guide to Resort and Hotel Budget Planning Season. – Avoid the headache and optimize your digital marketing budget this year. Part One – In this part of our Guide Resort and Hotel Budget Planning Season, we will help you familiarize yourself with the current state of digital marketing and trends looking forward to 2018. We shed light on key issues that you must consider in planning your marketing budget for 2018.
Looking forward to part two, we will delve into important topics and online channels which you should focus your hotel budget on in 2018 to set your property up for further success in the future. Part three will recommend dollar percentage allocations for important marketing channels.
It’s almost budget planning season – (Yeah, I cringed a little when typing that, as I am sure you did reading it…)
We know it’s not your favorite thing to talk about this early in the year, but it’s coming, and quickly. You can avoid the headache during hotel budget planning season by planning ahead.
One of the most important components of your hotel budget planning process will be gathering honest reviews of what is currently working and not working. Start gathering insight from your hotel owners, colleagues, sales staff, guests and even your comp set to properly evaluate the performance of your current budget and identify areas for improvement. Having this understanding ahead of time will allow you to plan your budget for the following year without making the process an agonizing one.
As budgeting season approaches, we are here to help you confidently—maybe even happily—create a more accurate and effective digital marketing budget for 2018.
In this 3-part series we will provide you and your team with a valuable roadmap for planning your budget for 2018, laying out important considerations you should make and channels which you should focus on. We will also give you budgeting tools, recommendations for budget allocations and much more!
It’s just around the corner, are you prepared?
For many hotels and resorts, 2018 budgeting season starts now; for those procrastinators out there, it might be November. Whatever the case, it’s time to at least start thinking about your budget, particularly your digital marketing budget.
It’s better to be ahead of the game, instead of scrambling to finalize your numbers and get approval later. You don’t want to sacrifice daily operations and other priorities while you’re stressing over a budget, last minute.
Trends and predictions for 2018
Analysts from STR and Tourism Economics’ expect that The U.S. hotel industry will see slower but steady growth through 2018.
Early prognosticators predict that U.S. hotel industry’s supply will continue to outpace demand through the rest of 2017 and into 2018, leading to a slight decline in occupancy. In 2018, STR and Tourism Economics expect the hotel industry to see a decrease of 0.2% in occupancy to around 65.2% but an increases in ADR of +2.8% and RevPAR of +2.6%.
General Rules of Thumb
There are a few “old school” strategies that are still frequently practiced today. These aren’t mandatory, but can be an excellent starting point for most properties:
- Independent Properties: Total marketing budget is typically 10-12% of total annual revenue. So, $20,000,000 of revenue calls for a $2,000,000 marketing budget.
- Branded Properties:Total marketing budget, aside from your corporate marketing support and spend, is often 2-3% of total annual revenue. This way, you’re supplementing corporate efforts with your own localized efforts, in order to outperform your comp set.
- Both Property Types:The percentage of total marketing budget devoted to digital channels should trend toward the percentage of total annual revenue earned from digital channels. To capture more than your fair share of revenue, spend a bit more!
- Both Property Types:Group business is undoubtedly an important part of your revenue mix and should be considered when developing your digital marketing budget. It is difficult to recommend a percentage or spend, as properties’ revenue mixes vary greatly. But consider groups as some of your most sophisticated digital buyers.
Using data in planning process
- Does your staff use an analytics program?
- Do you store and track website performance and marketing attribution metrics?
- Or what about total website conversions to click path performance?
Planning future marketing initiatives on your own data—historical performance and consumer behavior within channels—is a must. So considering performance data in future budget planning initiatives is logical.
Your team, both on property and vendor level, should regularly analyze your performance and determine where your guests come from.
Segment your guests by intent/behavior, distribution channel and marketing channel. You should also study your STAR Reports regularly and diligently. Something so simple can pay big dividends when determining where to allocate money.
Now what? Well, you obviously want to spend money where you are getting the best returns.
Vizergy’s digital marketing system aggregates website performance and marketing attribution data from thousands of independent websites and suggests the best returns in the following channels:
- Direct (direct traffic to website)
- Natural Search (SEO)
- Paid search (PPC)
- Ad Campaigns (email marketing, meta search, display remarketing, paid links, etc.)
- Referral Traffic (traffic from links on other sites)
- Social (Facebook, Twitter, Google+, Linkedin, Instagram, Pinterest, etc.)
Does your property’s data show high returns from said channels?
Have you allocated marketing funds for campaigns on emerging channels like meta search and display remarketing?
When was the last time you updated your website?
Are you outranking your comp set in natural search?
Even though the domestic outlook (and global outlook in most cases) is on the upswing, your local market undoubtedly plays a role in your property’s performance. So do your homework on the local area, whether it’s a major city with countless demand generators, or a picturesque destination with heavy leisure travel.
- Is tourism up or down?
- Are large local businesses investing in infrastructure?
- Will businesses, families and other local groups be more inclined to use the restaurants, spas and meeting space at your hotel?
- Is supply exceeding demand, and vice versa?
All factors to consider when determining where to allocate dollars.
Outsource or In-house?
This is a constant debate for most companies in most industries. And the hospitality industry is no exception. Online marketing is complex, and seems to evolve at the speed of light, from online media buying strategies, to search engine optimization (SEO) changes, to building websites for new screens.
Google makes changes to their search algorithms daily, which can have a direct impact on your websites natural search rank. That alone makes a strong case for outsourcing to experts.
Throw in the fact that you can often outsource for the same or less than it would cost you to hire and train an in-house team (do the math if you haven’t already), and it makes even more sense.
However, there are some items, especially tactical in nature, which should be handled at the property level. For instance, social media postings and review responses become more accurate and genuine when handled by staff.
Remember, “Reputation management is revenue management!” And some large, global hotel companies have the manpower and resources to perform more of their marketing for corporate and franchise properties in-house.
All in all, outsourcing is historically the popular choice for strategic hotel Internet marketing for some branded properties and most independent properties and hotel management companies. There are a plethora of talented hotel Internet marketing companies that produce high and deliver the revenue you need, but do your homework… not all are created equal!
This is just the tip of the iceberg
You have plenty to consider before you start formulating your budget – even a considerable number of concerns outside what is mentioned in this article. However, hopefully considering each of the aforementioned items early on, will help put you on a path toward reduced stress during budget planning season.
Be sure to visit the Vizergy Blog for more content that will help you plan for budget season.
Coming soon! – Parts two and three will provide dollar percentage allocations, digital marketing budget template and more.
Need Help with Today’s Challenges in Hotel Search Marketing? Rely on Vizergy to position your property ahead of the curve. We’re the hotel industry’s most practical solutions provider of website design and digital marketing, driving search results worldwide.“Hey Google, call Vizergy for me!”Contact us at 1.800.201.1949 or email@example.com to learn more about how we can help you to outperform your competition and drive more direct bookings.
Logos, product and company names mentioned are the property of their respective owners.