Hotel marketing has become a battle or even a war for relevancy, with guest engagement at its heart. This relevancy starts from the inside and expands to groups, then segments then individuals, the sweet spot for marketing personalization. In the hospitality and tourism sector, communication is not only important between customer and staff, but also used within the staffs in the organization. The communication can be stated as transmitting information or exchanging message between two or more persons.
The communication process can be done by using the method of performing word, the tone of voice or body language from one to another person. Hence, it is important that a good communication process is carried out while corresponding. With the increase in mobile devices in the workplace and the compulsion that hotels maintain GDPR compliance, bring your own device (BYOD) policies have to reflect these GDPR compliance requirements.
Consumers require relevant marketing communications that make them react. Personal data plays an important role in the hospitality, travel, and leisure industry as larger volumes of personal data from guests are processed. This also represents a huge opportunity, showcased in this free report.
It is particularly important for the hospitality sector spreader workforce, who will gradually rely on internal communications through a mobile team application. The Beekeeper is amongst one such app, a one-stop solution that meets GDPR compliance hotels can count on, helping the hospitality business to stay on top of the trends.
When talking about guest engagement for hotel marketing, email is the most preferred communication channel. It is a much more professional medium and people expect to receive information about products and services through email. For example, according to a Campaign Monitor study, around 72% of people prefer to receive promotional content through email, as compared to 17% who prefer social media.
Managers require complete and accurate information to perform their functions efficiently and effectively. If communication is not done properly, it can hamper the management of the organization. For instance, business planning requires information on available resources, the strength of competitors, government policies, and other external factors. Such information provides very important inputs for management to be able to formulate the right objectives and strategies to achieve its goal. To achieve all the above parameters communication plays a vital role.
The most common forms of communication used in the hospitality industry by type are:
- Auditory Communication: Auditory communication includes messages that are received via hearing sense. It comprises of music, words, sounds, and noises. In the hospitality industry, auditory communication can be established through different media related to activity and objectives such as: by face-to-face communication, by a phone call and radio broadcasting.
- Visual Communication: This includes messages received through sight. Sign, gesture, and images play a major role while communicating. It also contains mediums, such as complaint forms, letters, invoices, contracts, labels, and leaflets.
- Tactile Communication: This comprises messages perceived through touch sense. Through tactile sensation, affection is conveyed. Shaking hands or tapping someone’s shoulder may show some positive or negative effects, so it is essential to be respectful in this context and be aware of cultural conventions. For example, greetings at meetings and negotiations are amongst the different mediums involved in it.
- Multichannel Communication: These messages are received through various senses at a time. Television, video, and specially personalized video, and computer are few mediums through which this is possible. In fact, take a look at this stats for hotel video marketing.
ROI of communication channels in the hospitality industry
Return on Investment (ROI) varies from company-to-company and from region-to-region. Unvaryingly, the final decision depends on the company’s gearing and the investor’s risk profile. The average IRR for hotel investments in Europe ranges from 12.4% to 16.1% with an average of 14%. The majority of marketers believe that social media communication channel as a whole has helped their businesses though they cannot quantify its exact impact.
Benefits of incorporating social media as part of a hotel marketing strategy:
- Increased exposure
- Growing website traffics
- Developing fan following
- Generating sales leads
- The rise in business partnerships
- Advancing sales
According to a survey to CMOS, businesses are spending around 12% of their marketing budgets on social efforts. This number is expected to increase by around 20% over the next five years. This is attributed to growing brands and their presence across multiple platforms.
This survey stated: around 28% of marketing agencies state, they struggle to measure social ROI, 55% marketing agencies can measure social ROI, and around 17% marketing agencies agree that they can accurately quantify the revenue impact of social media.
The major challenges related to ROI are:
- Inability to tie social to business outcomes
- Lack of analytics expertise and/or recourses
- Poor measurement tools and platforms
- Inconsistent analytical approaches
- Unreliable poor/data
Social media done right for hotel marketing can be a powerful tool to drive more direct sales. Take a look at the TripBarometer 2017/2018 below to better understand how social media can help. Take for example what they describe as Beachgoers (page 66). Half of them share on social media. We recently did a webinar with Guillermo Fernandez from Pattterns where he talked about the impact of image data science on booking reservations for hotels in Riviera Maya and how unique images that reflect the uniqueness of Riviera Maya were able to generate more conversations around the hotels and more sales.
The most used communication channels by spent in the hospitality industry
Currently, the hotel’s technology spending in particular due to the shrink in the hotel’s IT budget. Hoteliers currently are focused on spending more on technology as compared to previous years, approximately 3.5% of overall revenues were allocated to IT spending in 2016, a decrease with 6% in 2015. Hotels are now focused on enabling digital consumer engagement, with 52% aiming technology as their priority. Around 56% aims at driving more direct reservations, and 56% concentrating on improving guest analytics, as a top Business Intelligence goal.
According to a 2016-2017 Gartner Research study, companies are now spending around more than 12% of annual revenue on overall marketing. It is stated that larger companies (more than 5 billion revenue) spend 13% of revenue on marketing, while smaller companies (USD 250 million to USD 500 million revenue) spend roughly around 10% of annual revenue.
The most used communication channels by engagement in the hospitality industry
Globally, the number of mobile device subscriptions is growing exponentially over the past period. In 2016, there were around 4.8 billion unique mobile subscribers, and 65% of the world’s population. It is estimated that there will be 5.7 billion mobile subscribers, representing a mobile phone penetration rate of 73%. The increase in usage of the mobile device has transformed the travel and tourism industry, as travel bookings are majorly done through mobile devices. Guest engagement has begun to shift towards mobile platforms, and global interconnectivity of mobile devices makes them a suitable platform for commerce.
Similarly, social media usage is rising. It is observed that digital consumers are spending more time on social networks and messaging platforms than ever before. It is thus important for hotels to have a brand presence and a marketing effort on social media channels, especially since social media marketing has proven to be more effective than traditional marketing (when utilized correctly). Social media marketing allows for two-way communication between consumers and customers. This interactive element helps companies hold a long-term customer for a more robust hotel marketing strategy. Moreover, social media marketing supports the real-time promotion of new products and services, all while processing consumer data that can be further used to target, engage, and grow a base of consumers.
What communication channel delivers the best conversions in the hospitality industry?
As the travel industry is growing continually and becoming increasingly more complex, hotel marketers are focusing on more innovative ways to engage and retain their best potential guests. According to Google, the online travel customer is exposed to over 38,983 micro-moments in any 60-day timeframe, through which they visit an average of around 18 websites via multiple devices in eight sessions before booking a hotel. The major factors impacting hotel website conversion rates include market parity, rate parity, and quality of website and user experience due to growing competition between the OTAs and Hoteliers. On other hand, factors such as risk/investment, increase in choices, poor platforms, confusing offers, and ancillary services are hampering the hotel conversion rates.
The average hotel website conversion rate (bookings divided by unique monthly visitors) is typically below 2%. For example, imagine 100 people visit your hotel website. Out of which, less than two will make a booking, and more than 98 will look around before leaving to make a booking somewhere else either with your competitors or with the OTAs. In addition, hoteliers are spending dollars on SEO, online media, paid search, PR, and social media to bring users to the hotel website. Though, 98% of them are not converting. On balance, it’s easier and inexpensive to generate more revenue from the existing traffic than to get more viewers to the site. Furthermore, attaining even a slight conversion rate increase can create a huge impact on a hotel’s bottom-line.
The travel industry has below average conversion rates, according to data from Smart Insights. For travel and hospitality, the average conversion rate was 2.4% as compared to 2.6% for the retail. Though, for travel websites that depend heavily on affiliate metasearch traffic, conversion rates are a bit higher, approximately above 4%.
For example, in-house marketers who are personalizing their web experiences see on average a 19% uplift in sales, email marketing regularly sees a whopping 440% ROI when implemented effectively, or 44 dollars for every dollar spent, and personalized videos deliver a CTR that is higher than that of generic video by 164% as well as a 116% uplift in conversion. Actually, here is a great webinar about how to boost hotel sales and guest loyalty with personalized video marketing:
The factors influencing booking conversion rates include:
- Price: this is a major factor, having competitive rates and providing a better rate to book directly on the website
- Traffic Source: more appropriate the traffic, the higher is the conversion rate
- Conversion rates by devices: approximately, 11% of bookings are made from mobile for brand-site, and 61% of bookings on mobile are through OTA mobile site
- Conversion rate by location
- Conversion rate by ADR and Rate Strategy
- Website user experience
- Conversion assistants: Widgets, A 15% increase in conversion can be expected
- Trust: Reviews can help in growing the conversion rate
- Service: Better service will encourage conversions, particularly if something unique is offered on the website