How to tell if your hotel marketing strategies are driving incremental revenues

PRABHASH BHATNAGAR -

One of the biggest dilemmas for any hotel, but especially for a small and mid-sized hotel is to decide how much should be allocated to their marketing campaigns. The conflict actually starts from deciding whether or not to allocate any funds to a marketing campaign at all.

With the budget already being stretched out, the main contention is in justifying marketing expenditure? How can hotels know if their marketing is driving any revenues for their property?

An hoteliers marketing campaign may not always have the luxury of first being tested against a ‘control’ group to have some sort of comparisons on the impact of the campaign. So then what do they do? Hotels should have a baseline of key performance indicators (KPIs).

A KPI is a business metric used to measure factors that are important to the success of a business. Each industry and business would have different KPI’s. The hotel should first identify what their KPI’s are.

KPI’s for a hotel could be:

  • Online Rating
  • Occupancy Rate
  • Average Daily Rate
  • Revenue per available Room
  • Customer Satisfaction
  • Revenue at their other Points of sales

The KPI’s can give an indicator whether the marketing campaigns are working or not. Hotels can do comparative before and after studies based on their KPI’s to see whether a marketing campaign worked or not. This can give a clear indicator on whether the business increased or decreased post the campaign.

For example if a leisure hotel initiates an advertising campaign for a special ‘family package’ during the summer holidays, the variation in the occupancy rate and ADR of the hotel can indicate the success of the campaign.

Smart Marketing and marketing campaigns can truly help hotels drive their sales; they are an opportunity that can be used to up sell rather than discount the various points of sales at the hotel resulting in incremental revenues.

Don’t underestimate the power of marketing but be smart about it, always analyze and measure the effects of any marketing initiatives and see how they can be used to increase the revenue of a property.

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