September 18, 2020 · Pete DiMaio
How To Increase Hotel Occupancy When Demand Is Down
The leisure travel market has seen wholesale shifts in behavior, technology, expectations, the economy, and more. As a result, hoteliers need to reinvent their marketing strategies to find and attract guests to fill rooms. In the past hotel marketers have had a relatively easy job due to the huge demand for travel resulting in strategies revolving around “harvesting intent.” Now, hoteliers have to take a much more aggressive strategy in wooing interested travelers as well as finding entirely new guests.
How can an independent hotel, small management group, or any hotelier thrive in a changing market when hotel demand is down? Using the analogy of a hunter in the field, the answer lies in two steps. First, you must create an environment for your hunt to be successful. Second, you actually get out in the field and start hunting.
Step #1: Creating a Target-Rich Environment
Hoteliers who decide to get away from the gatherer strategies of the past, which are becoming less and less effective, and move toward the hunter mindset will do well to learn from our orange-vest and plaid-hat friends. They will begin by cultivating their hunting grounds by putting these fundamentals in place. Only then, once they have created an environment where potential guests will want to spend time, will they start the actual hunt. We won’t go into great detail on creating that environment here, but you can find more by browsing the rest of our hotel marketing news and tips here.
Before you go into the field, you will want to make sure you have created an ideal environment for your guests (aka prey) to learn about your property and decide to visit. Just because you’ve adopted a hunter mindset, you should not give up on the tried and true ways of being a gatherer. You’ll want to make sure you are still set up to do a bit of “gathering” while hunting for more elusive guests.
Before your hunt, answer these questions so you can be sure you’re ready… when you find your trophy guests.
- Is your website an amazing, mobile-first, experience that will give your guests the information they need to overcome any objection?
- Is your conversion funnel and booking engine as efficient as possible?
- Have you created great content that your guests can enjoy after you’ve brought them to the site?
- Is your hotel’s search engine campaign running well and driving people to your site?
- Are your local listings designed to engage your guests?
- Are you running effective paid search campaigns on your brand?
- Have you adopted an aggressive metasearch strategy to always be present?
- Do you have your analytics systems in place to help you understand where you should be hunting and how you can improve your strategies?
Answering these questions will make finding new guests much easier because when you become a hunter hotelier your goal is to first create an environment that answers all of a traveler’s questions and fulfills their needs.
Step #2: Strategies To Transition To A Hunter Hotelier
Your transition from a guest gatherer to a guest hunter is happening. You have created a great environment that spurs engagement & conversion while you are also working on your existing “gathering” avenues. Now, it’s time to begin getting in the field and taking proactive steps to drive guest engagement.
Proactively driving guests can be more expensive, because you are both creating and fulfilling the demand. This means you will want to ensure your analytics systems are working well, you are tracking, and most importantly… testing. All five of these strategies can work in tandem to help you multiply your success.
Hunting Strategy #1
Work Your Owned Assets: Working your existing, owned assets, is the most effective way to hunt for new guests. You have already invested countless dollars in developing your marketing databases and these customers have already shown some interest (either now or in the past). Failing to make full and exhaustive use of your owned assets is a huge mistake you can ill-afford to make.
Your owned assets extend beyond just your email database and include your social media following, direct mail list, phone list, and more. Create tactics under this strategy that will help drive your guests’ desire to travel and alleviate any of their concerns that might prevent them from pulling out the credit card. Examples include:
- Create personalized re-engagement email to anyone who has stayed last year, but yet booked this year.
- Consider good old-fashioned direct mail. However, make it hyper-personalized with a guest’s previous room information, photos, and unique calls to action. Segmenting your list to a small specific audience (such as guests who had a COVID cancellation) will keep your costs down and conversion rates up.
- Make the most of your phone list with a personalized call to invite the guest back for another stay.
- Create contests and other engagement tools for your social followers to persuade them (and their friends) that a trip may be worthwhile.
- Build your AI-powered remarketing lists based on website and online behavior to help identify and target travelers early in the shopping process.
- Create content you can drive these guests to that alleviates their concerns. If you don’t know why your guests are traveling, the answers are in our 2023 Leisure Travel Trends Study.
Hunting Strategy #2
Proactive Social Campaigns: You’re a successful hotelier (you’re reading this right) and have a great social following. You are also most likely using your social channels to share information, engage with potential guests, and perhaps even run a few ads. When you make the decision to become a hunter hotelier you are going to want to take your social marketing to the next, proactive, level.
Our first party data has shown that social media does a horrible job inspiring the initial decision to take a vacation. This doesn’t mean that social is not effective, it just means that blindly running display campaigns is not effective. What is effective is:
- Proactively engage guests on your channels
- Create amazing content and engage in your communities. Find the travel groups in your area and become the most helpful member you can be, even if someone is not staying at your property.
- Create an effective paid campaign to target the right audiences who are already looking to travel via retargeting lists, lookalike audiences, and more.
- Your guests are unique to your property so we recommend testing which platforms are most used by guests. Do your guests engage on Instagram more than Facebook? Is TikTok an effective platform to drive engagement? The answer lies in testing.
Hunting Strategy #3
Expanded Paid Campaigns: Your hotel’s paid search campaign is more effective the further down a customer is in the conversion funnel. Your hotel’s brand name is going to have a phenomenal conversion rate (harvesting specific intent). Your amenities campaign, such as “hotels with an indoor waterpark,” also likely perform very well (harvesting specific intent). However your broader campaigns typically will have a lower ROAS.
This is where PPC for hotels begins to become a hunter strategy, but can still retain a positive return. There are four primary tactics we recommend to turn a portion of your PPC budget into something that can drive intent:
- Top of funnel campaigns such as “hotels near (your location)” or “hotels near (specific venue)” can be very effective at driving your visibility for someone who is not necessarily interested in your property, just a property near where they want to be.
- Getaway & staycation campaigns are a great way to create demand for your location or brand, though it is very early in the decision process. Keyword related to “weekend getaway” can work very well if you carefully set your geotargeting to a close in drive radius.
- Refining your overall targeting is also an incredibly effective way at improving your overall performance and reducing your costs. Are you targeting the right customers at the right time? Are you targeting the right geographic areas with the right messages? Are you a luxury property but accidentally running on terms such as “cheap hotels near me?” Are there days or hours that don’t convert and you can simply pause your campaign?
- Competitor campaigns where you are actively targeting someone else’s keywords. This might be bidding on your competitor’s brand name and creating a persuasive headline/text to have the user consider your property instead. This would also be used for broader competitors such as “1 bedroom Airbnb.”
- One word of caution, about competitor campaigns. They can absolutely help drive new guests, but to use a hunting term it’s like “hunting over someone else’s feed.” You may draw the ire of your in-market competitors and they may return the favor and bid on your brand.
Fully Embrace Metasearch: Approximately 95% of leisure travelers are exposed to metasearch rates when searching for hotels online thorugh platforms such as Google Hotel Ads, TripAdvisor, Microsoft Hotel Ads, and others.
We have found that an aggressive hotel metasearch strategy can rival that of a brand PPC campaign, with one example (shown here) generated 3,775% ROAS for a client.
Most importantly, metasearch requires your property to have the best possible rate showing and ensuring that a property is always in parity with or beating the OTAs. Consumers are eager to book direct, but if a property rate is higher than an OTA, even the best run metasearch campaign can fail. So carefully monitoring your rate parity is of utmost importance.
Hunting Strategy #4
Creating Partnerships: Animals don’t hunt alone, and neither should you. Building strong partnerships can go a long way in helping drive business as well as improve the overall community. Obviously you should have a great partnership with your local chamber of commerce and destination marketing sites, but you also want to expand your partnership reach beyond just the obvious.
- Venue partnerships: All venues that draw a crowd such as concert venues, attractions, golf courses and so on. In many cases if you make an agreement to send them business they will return the favor. A small investment to promote to their guests (preferably pre-arrival) can very likely offer a phenomenal return.
- Business partnerships: Unfortunately business travel is on the decline and the forecast is for corporate travel to have a permanent shift. You can still create great partnerships by reaching out to the larger companies in your area and negotiating competitive rates for your property.
- Competitor partnerships: Consider creating programs with non-competitive hotels in your area. For instance, if you are a budget pricepoint property you may be able to partner with luxury property to share leads that may not be relevant to your respective properties.
- Out-of-market partnerships: One partnership that may be very effective, particularly if you are in a vacation destination, is to work with companies that can send visitors to stay at your property. This could be in the form of a contest for the partner where you give them a free vacation for their employees while promoting your property or a simple paid promotion for your property.
Hunting Strategy #5
Finding New Opportunities Whether in the office or out on the hunt, being able to adapt to changing opportunities can mean a world of difference in being successful. The best part about finding a new opportunity is your competitors are not there yet. This means you enjoy a first-mover advantage and the revenue that goes along with it.
Unfortunately with all “new opportunities” we don’t know exactly what they will be, or when they will arise. This means to find and take advantage of new opportunities you need to always be on the lookout. The good news is most new opportunities are telegraphed pretty clearly, if you are paying attention. Here’s a few ways you can spot that yet-to-be-found opportunity.
- Watch retail, the technology born here eventually trickles down to many other industries. What’s Amazon up to and what can you take from it?
- Follow the industry news, new technology, and ways of marketing are rarely a secret. In fact, sometimes it’s headline news. The question is who sees it first for the opportunity that it represents.
- Listen to your vendors, they may have a technology that is a huge opportunity. If you are worried your vendor is just trying to sell you something and doesn’t have your best interest in mind, then maybe it’s time to find a new vendor.
- Lastly, look for problems. As Henry J. Kaiser said, “Problems are only opportunities in work clothes.” If you find the problems and solve them, you’ll have more opportunities than you can handle.
Step #3: Continually Refine Your Hunting Strategies
Every successful hunter or fisherman knows that you take the knowledge you learned this year and apply it to make next year better. As a hunter hotelier you should be doing the same on at least an annual basis. Taking stock of what works, and doesn’t, is incredibly important to continually improve your marketing efforts. We recommend every hotelier complete the following on at least an annual basis:
- Test your analytics and ensure tracking is actually working. This should include all your KPIs as well as cross-checking what your GA4 data says with what your actual bookings say. We have found countless cases with clients where the data in GA4 “seems” correct until you dig down and compare the data to bookings.
- Test your website conversion funnel with actual user testing. Several platforms exist and the team at TravelBoom are experts at creating scenarios and running user tests of actual customers browsing your website. The insights gained by watching a user struggle through your site and booking engine can lead to huge returns in site optimization.
- Push your paid campaigns to their limit and keep a very close eye on your ROAS. If you have a campaign that doesn’t have a great return or a return you can’t measure, should be cut in favor of what’s actually working.
- Pay close attention to your reviews and online engagement with guests. This is the single most effective way to quickly find potential issues or customer service hurdles that need to be addressed.
- Set clear goals and measure against them throughout the year.
Hunting For Opportunity Is The Best Way To Increase Hotel Occupancy When Demand Is Down
What has worked in the past, when people were knocking your doors down to check in, still works. However you have to be much more nimble, much more scrappy, and most of all you need to be much more of a hunter. If you can become a great hunter hotelier you’ll be able to survive what may very likely be a market downturn. Even if the market resumes the strength of 2019, having a hunter mindset will make your future even brighter.
If you’re in need of help, or looking for a great “hotelier hunting guide” reach out to us right here.