February 15th, 2015
In November 2014, Chris McGuire (our Operations Director) had the great privilege to be asked to speak at an event at World Travel Market in London, looking at how hotels typically spend their marketing budgets and how they can ensure that they’re properly measuring the results. Here we have condensed elements from the talk to focus in particular on your analytics setup and making sure this is working correctly.
But first, a quick look at budgets…
Earlier this year one of our strategic partners – H2C – conducted a study with over 4,000 hotels throughout Europe to look at what marketing activities they were undertaking. One of the most interesting findings – as far as Occupancy Marketing is concerned – was a look at how digital marketing spend typically breaks down across the industry:
From this we can see that almost a third of a hotel’s digital marketing spend goes towards the build and upkeep of their website, and just over half the budget is spent on advertising (be that Search advertising, Remarketing, Metasearch, etc.).
What really stands out though, is how little is spent on measuring the results – just 1% of the typical budget.
One factor that may explain this is access to some great free analytics tools – Google Analytics being the prime example. However, this may also possibly indicate that little time is really spent on making sure that hotels have accurate tracking for their website, and even less time studying the results in order to get an understanding of how customers are finding and then interacting with their websites.
Perhaps Analytics is often overlooked because it is – let’s face it – a little bit like the accounting-side of marketing (that might be a little unfair to accountants!), but we cannot stress the importance of good data strongly enough.
With this in mind, here are some key considerations to make in order to ensure your analytics is giving you the information you need to make informed decisions.
1. Know your goals
Hotels, understandably, tend to think the main aim of the website is to generate room bookings. Whilst this is certainly true, most hotels also have other areas of their business that the website is built to support – F&B, Meetings, Events, Spa, Gift Vouchers, and so on.
It’s really important to be clear on all the potential “goals” (i.e. an action you want website visitors to take) and to make sure you have the ability to track when these do take place.
2. Accurate Ecommerce Tracking
Even though Ecommerce bookings are the most important goal of a hotel website, even this can often be badly set up.
Many hotels will use a 3rd party booking engine (such as SynXis, Trust, iHotelier, etc.) and one of the most common issues we encounter is that the visitor tracking can break as the person moves from the hotel’s website to its booking engine – Google Analytics sees a person leaving the website, and another arriving on the booking engine, but without our help it sometimes may not recognise that this is the same person. This leads to your number of website visitors being artificially inflated, and you also lose the ability to see how people who booked through the website got there in the first place.
3. The value of non-ecommerce goals
For non-ecommerce goals on a website, it is also important to be able to measure these in terms of value / revenue generation. To do this, we would typically use a formula like so:
With Analytics we can easily measure the number of goals being completed, but we need to work with the hotel’s sales teams in order to work out how many of these actions result in business, and what an average transaction might be worth. Doing this though, we can then give an estimate of the value, and use this to measure the Return on Investment (ROI) of the marketing activities that drive goal completions.
Imagine your hotel website has an online table booking form – we can use Analytics to track how many times this is used by website visitors. From speaking to the team at the hotel, we can then work out how often these bookings go ahead, and what an average spend might be for restaurant customers. In this example, our formula shows that this activity has generated an estimated £9,000 – without this formula, we may have had no results to show the value of the marketing spend.
Similarly, the above example imagines that the hotel has an enquiry form for conferences, and that we can track people using this to contact the hotel. In this case, the conversion rate might be extremely low but the value of a sale is very high – so in this example, we see an estimated £10,000 of value that could be traced back to people using the website.
4. Looking beyond the last click (attribution modelling)
Typically, visitor tracking software for your website will use the visitor’s last click to attribute any purchases and/or goal completions. Whilst this is definitely useful to see, it is often not the full picture as a customer may have interacted with your website & online marketing several times before making a booking or getting in touch.
This is where Attribution Modelling comes in – we can use this to look at the customer’s previous visits to the website and split the revenue across these different visits. If you use Google Analytics, then its Attribution report includes a number of different models:
Whilst there is no one right answer, it is worth looking at how different marketing activity stacks up under different models (e.g. Display advertising will likely have a very poor ROI under “Last click”, but may show much better results under “First click” and “Position based” – this is because this form of activity is about raising awareness rather than converting to a booking straightaway).
There is an old adage that “What gets measured, gets managed”. Having a clear understanding of the results of your actions, allows you to better review what is working and what is not. Armed with this information, you can then make better informed decisions and be clear on where your focus needs to lie.
Within the hotel industry, we often observe that the marketing teams that truly understand their impact on revenue generation are also the ones that have the best relationships with their Financial Controllers – if hotel marketers can learn to speak in the same language as their numbers-driven Finance teams, then there is likely to be more marketing budget made available to them. Without being able to show (and forecast – but that’s a whole other article) the value of marketing, the Finance teams are likely to clamp down on spending, and rightly so.
Occupancy Marketing has a wealth of experience in working with hotels to understand the performance of their website. Our team include several Google Analytics Qualified Individuals, trained in the set up and use of Google’s free visitor tracking solution, as well as having experience with other tracking solutions such as Omniture, Piwik, CrazyEgg, and so on.
If you need support with setting up visitor tracking on your hotel’s website, or if you would benefit from some training in using Analytics to measure your website’s performance, get in touch.