| SPENDING LESS, BUT DOING MORE: ON-LINE MARKETING KEEPS YOU VISIBLE WITHOUT BUSTING YOUR BUDGET |
| |
Caution remains the watchword for most tourism related businesses as we get ready to close the books on the first quarter of 2010. In general, it seems like the first three months of 2010 have treated us all better than the same period in 2009. Occupancy rates climbed back to closer what we should expect this time of year, and more tourists have been out and about in Provo and beyond. That’s the good news.
But with the typically slower summer and fall months looming ahead, the macro economy still not rebounding with the confidence we’d all like, and things less than settled here locally, most owners, managers, and finance people aren’t ready to return to the marketing spending levels of the glory days (seem like a distance memory, don’t they?).
In fact, maybe hotels and other tourism businesses may never return to the levels they once planned their marketing budgets around. If you look at what similar businesses are doing elsewhere in the world, there is a decided move – perhaps permanent – away from high priced and hard-to-measure marketing channels to more cost-effective and higher ROI methods that the Internet enables.
Last week, we showed some trends indicating where hotel bookings are coming from, with the general conclusion that on-line channels are producing more (and, in fact were the only growth channel in 2009) than other methods. I am sure that was not a surprise to most people in the business, but many probably wondered, “How can I take advantage of this trend – and not break my budget in the process?”
Well, more good news – online marketing, in general, is less expensive than traditional off line methods- such as print advertising, brochures, travel agent programs, and events. To be clear, on-line does not mean free, but from a spending perspective it can certainly have less impact on your expense column – and we believe a greater impact on your bottom line.
Industry survey confirms the trend
And this is not just us here at Wired Island saying it: A recent annual study of leading hotels around the world by a hospitality industry group (HeBS) confirms the following:
- Hoteliers continue to shift budgets from offline to online marketing formats. In this year’s survey, 51.1% of respondents said they were shifting a portion of their budgets to online because they believe Internet marketing produces the best results (55% vs. 10% that think traditional marketing is more effective).
- Interestingly (but not surprisingly) hotels are not planning on spending more. Thirty-nine percent of the respondents said they were not increasing their overall marketing budgets in 2010, vs. 33% last year. This again supports the argument that on-line marketing can be done without increasing your existing budget, but rather shifting tactics.
- Social media is hot. This year, 50% of respondents said they were planning on creating profiles on social networks in 2010, a dramatic increase over last year (14%).
- So is mobile: Over one fourth of respondents (25.9%) are planning a mobile-ready website this year. This is further testament to how quickly mobile is evolving as mobile ready websites were hardly in the hotelier’s arsenal in 2008 and 2009.
So what are hotels spending their budget on line?
We talk a lot about on line marketing but let’s take a more detailed look at what you can actually be doing to utilize the Internet as a marketing platform. According to this same survey by HeBS, below are the top dozen ways hotels are planning on spending money to market on line, as well as which types of activities they find the most effective (Table B).
It is interesting to note two things
- Doing things that drive traffic directly to one’s own web site and enhance conversion rates are the most important (the design of the web site itself, the optimization of the site and search engine optimization)
- The use of social media continues to grow as an important trend for hotels and tourism marketers, as indicated by the growth in percentage of on-line budgets they represent over the past five years.
Table A. Where the spending happened in 2009 (and prior)
| Of your total Internet marketing budget, where did you spend your money in 2009? |
2006 |
2007 |
2008 |
2009 |
2010 (projected) |
| Website re-design/design |
18% |
22% |
19.6%
|
16%
|
13%
|
| Website optimization |
9%
|
11.3%
|
12.8%
|
10%
|
10%
|
| Strategic links to property website from online directories, portals |
6% |
9.6%
|
7.5%
|
8%
|
11%
|
| Paid Search Engine Marketing: Pay-per-click (PPC) |
14% |
8.6%
|
17%
|
16%
|
16%
|
| Local search/Online Yellow Pages |
3% |
3.6%
|
4.2%
|
4%
|
3%
|
| Meta search (Kayak, Sidestep, etc.) (SEM) |
2%
|
2.6%
|
2.6%
|
3%
|
4%
|
| Search Engine Optimization (SEM) |
10% |
11.5% |
8.7%
|
12%
|
11%
|
| Display advertising (banners) |
6% |
6.6% |
7%
|
5%
|
4%
|
| Email marketing |
10% |
11.5%
|
8.7%
|
7%
|
8%
|
| Mobile marketing (mobile search, mobile ready websites, SMS messaging, etc.) |
N/A
|
N/A
|
N/A
|
2%
|
4%
|
| Web 2.0 Functionality/Social Media Advertising |
1% |
3.1%
|
3%
|
6%
|
8%
|
| Consulting fees |
6%
|
7%
|
5.1%
|
7%
|
4%
|
Table B: What will be the most effective on-line methods for you
| What Internet marketing formats do you believe produce the best results and the highest returns on investment (ROI)? |
2007 |
2008 |
2009 |
2010 |
| Website design/redesign |
62.9% |
70.19% |
56.3% |
61.7% |
| Website optimization |
71.9% |
68.27% |
81.6% |
70% |
| Strategic links to property website from online directories, portals |
52.7% |
41.35% |
48.3% |
48.3% |
| Paid Search Engine Marketing: Pay-per-click (PPC) |
40.7% |
39.42% |
56.3% |
38.3% |
| Search optimization – Organic search |
68.3% |
56.73% |
60.9% |
58.3% |
| Display advertising (banners) |
16.2% |
12.5% |
28.7% |
21.7% |
| Email marketing |
58.7% |
60.6% |
51.7% |
48.3% |
| Email sponsorships |
6.6% |
26% |
37.9% |
10% |
| Mobile marketing |
N/A |
N/A |
N/A |
15% |
| Web 2.0/Social Media formats (e.g. TripAdvisor, Facebook, Twitter, blogs, etc) |
16.8% |
26% |
37.9% |
41.7% |
So what can tourism related businesses in Turks and Caicos learn from their peers who responded to this survey? For one, the shift from off-line to on-line marketing continues at a significant clip. Hoteliers especially can point to the higher ROI and lower overall spend these types of activities result in.
And, marketers are continuing to embrace and adopt new Internet marketing techniques in 2010, such as Web 2.0 enhancements on their websites, social media, and mobile marketing.
The bottom line is this: production from the on-line channel is the only growth area in hospitality at the moment, and will likely to continue to expand even when the economy recovers.
Our advice is to start doing something – anything from the lists above – if you haven’t already. If you are ‘on board’ with online marketing, you should be carefully examining the results you are getting from the tactics you are using and fine tuning your strategies appropriately, perhaps shifting emphasis or trying new approaches, too. |
|
|
|
|
