THE 2016 BUDGET SEASON GUIDE FOR HOTELS & RESORTS

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1 THE 2016 BUDGET SEASON GUIDE FOR HOTELS & RESORTS

2 A MULTI-CHANNEL PATH TO REVENUE With all of the familiar and emerging new channels to choose from, figuring out where to allocate your marketing dollars can be a confusing task for hotel and resort marketers. Shifting share from the OTAs, driving direct bookings, and increasing your property s revenue requires a smart and deliberate marketing strategy. This budget season guide is here to help you understand different marketing channels and how you can use each of them to increase brand awareness, boost customer loyalty, and generate ROI for your property..

3 THE STATE OF HOTEL MARKETING Obstacles & Opportunities in 2016

4 HOTEL INDUSTRY FORECAST Increasing ADR & Occupancy Rates SUPPLY Does this sound familiar? Hotels have been experiencing record levels of growth in ADR and occupancy rates since 2011 and reaping the rewards. Going into 2016, hotels can expect to see rates continue to grow with a 6.5% gain forecast in RevPAR. However, that doesn t mean that hoteliers should expect extended gains. Already ADR and RevPar have slowed significantly, and historically, growth like this isn t sustainable. We recommend that hoteliers capitalize on growth while they can and also prepare for an inevitable dip in occupancy and revenue. DEMAND OCCUPANCY ADR RevRAR 0% 2% 4% 6% 8% Source: STR 2016 Forecast via Hotel News Now

5 The Growing Influence of OTAs With one-in-three travelers booking lodging through OTAs, hoteliers have a big cause for concern. Following the Expedia-Orbitz merger, the travel industry is reeling as hotel owners brace for increasing commission fees in a relationship that is already crippled by rate-parity contracts. The time is now for marketing and revenue stakeholders to take back control and focusing on direct bookings or risk being strong armed into agreements that ultimately hurt hotels. Properties that can provide the best value and a superior on-site user experience for website visitors have the best opportunity to steal share back from the OTAs.

6 MOBILE FIRST MINDSET Between Google s mobile friendly algorithm update and statistics that show Americans spending over 4 hours a day on their smartphones, it is clear that mobile s mounting impact is colossal. As marketing dollars move away from television and print media to online channels, hoteliers must adapt in an industry that historically eschewed technology in favor of person-to-person interaction. However, hoteliers must change their tune towards tech if they want to survive in this brave, new, mobile-centric world. The number of travel bookings that take place on smartphones and tablets are set to grow 60 percent in 2014, according to a new emarketer report. Looking further into the future, mobile travel sales are forecasted to grow from $16.4 billion in 2013 to $64.7 billion in In order to guarantee themselves a slice of the revenue pie, hotels must optimize for mobile bookings and utilize mobile paid search products to reach an audience that is migrating away from desktop and onto their phones. According to research released by Google, mobile is essential in all phases of the booking process so optimizing your site and marketing efforts for mobile is not long optional, but imperative.

7 WHO EXACTLY ARE YOU TRYING TO IMPRESS? When you are working on your hotel marketing plan, this is the first question you should ask. It seems like it should be a no-brainer, but you would be surprised how many brands are unclear about who their audience really is. Maybe it is lack of data, maybe it is ignorance, but while we all might want wealthy, affluent, and influential consumers to flock to our products, that simply isn t always the case. If you don t know who your customer is, then simply look back over your records. Now that you ve got those in front of you, let s examine your data. Your marketing strategy can and should change based on your buyer personas. 1. What are the ages of your guests? 2. What is their family dynamic? Are they traveling alone, with a partner, or with their entire family? 3. Where are they traveling from? In-state or overseas? 4. How much are they spending? 5. What kinds of things are they purchasing when they are on property? 6. What services and other lines of business are they utilizing? 7. Where are guests interacting with your brand on social media?

8 PUTTING YOUR BEST FOOT FORWARD You know that old saying about only having one chance to make a first impression? Well, the same is true for your website. In the past, hoteliers have viewed their website as a place they can save money instead of an investment in future revenue. 50% of bookings in 2015 were made online, and that number will only keep rising into Consumers today expect a user experience that is seamless between their devices, easily navigable, and visually beautiful. If your website is skimping on any of the above, then you could be losing business. Key Factors for Website Success: Responsive design Content optimized for SEO Superior user experience Easy to use booking engine Dynamic Content Personalization Visually stimulating creative Expert storytelling

9 BUILDING YOUR STRATEGY & REACHING YOUR AUDIENCE SHARPEN YOUR FOCUS How can your budget help you reach your goals this year? 2016 is the year for hoteliers to sharpen their marketing focus, hone in on reaching specific buyer personas, and convert them into buyers. Hotel and resort owners are often hesitant to spend the minimum 4% of total revenue on advertising and marketing, but promoting your brand has never been more vital in the current industry environment. Over half of all hotel rooms will be booked online, which is why 75% of your marketing budget needs to go to digital. Customers are moving online, and hotels must follow. Creating a multi-channel marketing strategy that touches customers at every point along their path to purchase is essential for beating the competition and driving direct bookings. Hotel and resort marketers need to tackle their 2016 strategies on two fronts by not only creating the right mix of digital campaigns, but also investing in their digital assets. More effectively reach target segments Improve user experience conversisions on webiste Engage buyer personas across the web Increase direct conversions & bookings

10 REACHING GUESTS AT EVERY STEP OF THEIR PATH TO PURCHASE

11 AWARENESS When travelers begin searching for a hotel for their next trip, it is unlikely that they are aware of your brand. During the awareness phase, your marketing strategy should help your buyers understand what it is about your product that suits their needs. At this point, your advertising efforts should be focused on your buyer and their desires rather than talking about yourself. CONSIDERATION During this phase, travelers likely have their choices narrowed down to a few hotels and resorts. Buyers will begin comparing their options, often re-visiting brand websites and reading guest reviews to learn more about what they can expect from their experience. At this point, travelers a familiar with you, but still getting to know your brand. PURCHASE At this point your customer is thinking about completing their booking. Make their path to purchase as seemless as possible with an easy to use booking process and include measures to combat cart abandonment. Copy and creative that creates a sense of urgency also nudge buyers further down the purchase funnel. KEY TOOLS Organic generic search: 75% of searchers never click past the first page of search results. Optimizing your site structure and content is the only way to make sure your brand shows up in generic keyword searches. Paid search/display advertising: 50-70% of hotel website bookings are made as a result of paid search. Increase direct bookings and drive brand awareness with PPC ads. Social media: Travellers are increasingly turning to social media for inspiration and research before trip planning. Almost 83% of travellers rely on social networking sites for trip planning inspiration. KEY TOOLS Display Remarketing: Reach out to visitors who have already shown interest in your product, where they already are, and when they are ready to buy. Marketing: With the rise of segmentation & personalized content, businesses are reporting that 20% of their sales can be attributed to their marketing strategy. Metasearch Referral: Metasearch advertising acts as a billboard for hotels, showcasing your property on the most popular travel sites in the world and driving direct revenue. Brand Paid Search: Don't let OTAs steal your business. Bid on your own branded terms to ensure you show up instead of them. KEY TOOLS Booking Engine: Make sure that your booking engine is easy to use and navigate. The longer a visitor wastes filling in their information and navigating a confusing booking engine, the more likely they are to abandon their booking. Personalization: The benefits of website personalization are vast; visitors remain on websites longer, bounce less, download more offers, and ultimately spend more money. Cart Abandonment Counter Measures Brand Reputation Management

12 Multi-Channel Marketing Throughout the Customer Path to Purchase Average length before purchase: 24 days Average site visits before purchase: 21.6 Display Ad Social Unbranded PPC Organic Search Referral, , Brand PPC Direct Creating an adaptable and dynamic marketing strategy requires understanding your buyer personas, where they are interacting with your brand, and reaching them at different points in the sales funnel. During the traveler s path to purchase, hoteliers can take advantage of marketing strategies designed to introduce your brand (awareness phase), start conversation and build loyalty (consideration phase), and ultimately convince them to choose you (decision phase). AWARENESS CONSIDERATION PURCHASE Source: Google's Traveler Path to Purchase

13 BUDGET RECOMMENDATIONS 55% of hotel rooms will be booked online in 2016 (Google Research). Investing in digital marketing is a crucial initiative for your property s success. Hotels typically should invest 10-12% of their revenue back into marketing efforts. Here are our budget allocations designed to cover all of the digital marketing fundamentals. MARKETING ITEM % OF BUDGET Direct Response Marketing Initiatives Annual Efforts SEO 10-12% SEM/Paid Search 20-25% Metasearch Marketing 10-12% Online Media & Retargeting 10-12% Cart Abandonment Solutions 5-6% Marketing 4-5% Social Media 2-4% Brand Repuation 2-4% Personalization (SPSI) 2-4% Seasonal Marketing Needs Multichannel Initiatives for Seasonal or Occupany Needs 10-15% Digital Assest Initiatives Property Website Responsive Redesign 10-15% Content Management System 4-6% Tracking & Analytics 2-3% Hosting 2-3% Website Consulting 5-6%

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