November 21, 2022 · Pete DiMaio

Recession Proof Your Hotel Marketing

Hotel marketers are used to working on tight budgets and deadlines.  However, unless you have been in the business for 10 years or more, you very likely have not had to adjust to a significant recession.  The good news is that marketing in a recession is a lot like marketing in good times.  You focus on your measurable performance, minimize your ineffective marketing, and stay nimble to take advantage of fleeting opportunities.

In this article, we are going to review what you can do at your hotel, resort, or vacation rental company to make the most of your potential guests’ limited discretionary spending and your tighter marketing budgets.  To start with, unlike what the title suggests, you really can’t “recession-proof” your marketing, but you can set yourself up for success by being smarter than the competition.  These six strategies will help any hotel reduce costs, preserve its budget, and maximize RevPAR.

#1 Actually Look at Your Invoices and Tech Stack

Just like your oft-forgotten subscription to your 10th streaming service, there can be a lot of waste in your hotel’s marketing budget. For a property to truly get to a position where it can be recession-proof they need to ensure there’s practically zero waste in the current budget.

The first step in this process is reviewing every invoice that is coming through your department and seeing what is unnecessary.  This is not just your monthly invoices, but the annual ones as well.  Are there items that are not needed or are there a less expensive solution that would suffice? One thing we learned from the cost-cutting during COVID is there is far more fat in most budgets than we think and we can be just as effective while getting lean.

The second step after cleaning up budget waste is to review your current tech stack and see if there are alternatives to your current services.  Oftentimes you can find significant savings by simply shopping and sharing your concerns with your current partners.

#2 Ensure Your Analytics Systems Are Optimized

Hotel Software - Analytics Dashboard

You can only make smart decisions if you are getting the right data.  You can only survive a recession if your data can accurately show where to focus and what areas of your marketing need improvement.

Starting now, begin a thorough analytics audit of all your systems and ensure you’re getting all the data and insights you need to make decisions.  Without the data, you won’t make smart decisions. Without smart decisions, you’ll be burning money, and that’s suicide in market downturns and recessions.

Ensure you are ready for whatever comes economically with the best analytics systems possible by following these tips:

  • As a marketer, do you even know how to access and pull basic analytics reports in Google Analytics, Adobe Analytics, or your chosen platform? It’s a basic question, but if worse comes to worst, could you share your hotel’s online performance with your team?
  • What data do you need to collect today to answer the question you’ll ask tomorrow?
  • Have you implemented GA4 and will you be able to enjoy year-over-year data once Universal Analytics ends at the end of July 2023?
  • Have you fully tested your site’s conversion events on both desktop and mobile?
  • Are all of your paid campaigns tracking properly from the initial visit through to conversion?
  • Have you installed Microsoft Clarity?  It’s free and easy, do it! 
  • Have you ensured your tracking is continuous between your site and the booking engine?  Do you have linker issues that are preventing you from knowing where bookings are coming from?
  • Have you set up the right Google Data Studio reports and sharing with the right people?

#3: Maximize Your Owned Assets… NOW

In a recession, the more direct bookings you can drive the better and the best way to do that is through your owned assets.  Owned assets are anything that you can control and deploy at a time of your choosing.  Of all the owned assets you can have, a robust guest history database ranks the highest.  However, there are more tools at your disposal than just those who stayed with you in the past.  

Guest History Database

Your guest history database is the most powerful tool you have at your disposal.  There is nothing that will generate a higher return on your investment than a well-timed email or call to a past guest to invite them to visit again.  Cultivate and add value to your guest history now so that they would be crazy to ever visit another property.

Marketing Database

Your marketing database is more than that big email list you’ve got somewhere.  In reality, your CRM should be designed to engage your database as if it were a thousand little databases of just one guest.  Yes, you can have a great black Friday promotion you push out to your full list, but think more specifically about how you can tie your marketing database into your website activity and user behavior.  An ideal marketing database would identify users as their intent to travel grows and triggers messages across multiple channels.  

Keep in mind your CRM is not an “email database” it is a holistic marketing tool, designed to engage potential guests across email, SMS, display, paid, social, and other channels.  Invest the time here and the rest of your marketing efforts will be significantly more effective.

Current Guests

What can you do to create an amazing 1:1 relationship with your guests throughout the vacation cycle?  We have always said that the booking is not the end of the funnel, it’s a stage in the entire vacation journey.  Relaxed cancellation policies travel uncertainty, and the economy has created a market where over one-third of the guests on the books may cancel. You must continue the sale through the stay, which means your messaging and communication between booking and stay must be on point.  We suggest you lay out a clear communication strategy designed to maintain the travel inspiration, upsell your guests, and encourage them to share their upcoming stay with their friends and family.

Social Assets

Before anyone says anything, yes your social presence is not your owned asset. The social media platform owns it.  However, that doesn’t mean you shouldn’t have a well-developed plan for maximizing your social presence.  Paid social can work well when built around actual revenue-generating conversion events, using social audiences, and proper targeting.  Beyond your current social following, you can expand your reach with social amplification channels such as Flip.to, which provide the opportunity for your guests to share their travel experiences with the world.

With social media, along with all your other owned media assets, we strongly recommend you take the time to ensure you have a plan for success.  Spend the time here, you’ve already paid handsomely to generate your databases, and now is the time to make sure they are working as efficiently as possible.

#4: Plan For Future Strategic Cuts

You only throw out the baby with the bathwater when you don’t have time to check the water first (I think that’s an original Pete quote). The truth of the matter is, in a recession your budget may, and very likely will get cuts from time to time.  As a savvy hotel marketer, your job is to anticipate this and have a plan in advance.  This way you won’t be making knee-jerk reactions and potentially cutting your most effective efforts.

“Wargame” is how you would be able to survive with a 30% budget cut, 50%, etc. One valuable lesson we learned from the COVID pandemic is that the properties that adapted quickest were also the ones least impacted.  For instance, properties that adjusted their marketing spending, reduced on-site expenses, and strategically adjusted courses were able to retain the much-needed budget.  Far too many hoteliers were spending thousands of dollars on paid media in markets that couldn’t travel even if they wanted to do so.  

The reality is that if a cut is going to have to be made, the sooner you make it the better.  Have a plan and a procedure to roll out your marketing cuts as efficiently as possible with a minimal impact on your revenue. 

#5: Make Your Guests CRAZY Happy

Smiling girl with braids carried piggyback style by woman

Every recession, even depression, has proven that people will cut needs before wants.  Seth Godin said it best, “people rarely buy what they need. they buy what they want.” As a hotelier, your job is to ensure your property is exactly what they want.  

Your hotel or resort must invest and instill the importance of creating legendary experiences. Guests should leave your property so surprised and delighted they can’t take it anymore.  The result is lifetime guests that will amplify your marketing through amazing social and word-of-mouth marketing.

The good news is this doesn’t have to be an expensive endeavor.  Think about each step of your guest’s journey and how you can make it that much more memorable and enjoyable. Simple examples are calling your guests by name, surprising the little ones with a free stuffed animal from your property (logo and branding is important for stuffed animal selfies), or offering a complimentary beverage.  Your property is unique and you’ll know better what resonates with your guests. 

Lastly, the best way to surprise and delight your guests is to empower your staff.  Give them the leeway to spend a few minutes extra with a guest, go the extra mile to accommodate a need, or share an idea for improvement.  At the end of the day, you’re already trusting your staff with the future of your business, so give them the tools to make an amazing stay experience.

#6: Keep Some Powder Dry For Opportunity

With great adversity comes great opportunity. We may all have to pull back on our marketing efforts, but it is important to keep a quick-reaction budget ready to go for any great opportunity.  

In the old print days, advertisers could pick up “remnant space” in a magazine for pennies on the dollar if they had the budget and could move fast. The same is true today.

We always recommend allocating a certain percentage of your annual budget toward testing and new opportunities.  This budget should be earmarked for the new and exciting things that are always popping up, though it is important to reallocate that budget on a quarterly basis so that you don’t end the year with a sizable unspent budget.  Luckily for you, you have already read the second item on the list (optimize your analytics) and will be able to easily see where you are getting the highest returns and be able to reallocate your unused experimental budget toward those efforts.

In times of a recession, this opportunity budget can yield huge dividends.  Other advertisers may drop out of commitments, media may drop rates, or partnerships may arise.  If you’ve got the budget your hotel could see a fantastic ROAS and create long-lasting partnerships.

Even If You Can’t Recession-Proof Your Marketing, You Can Minimize The Impact 

In conclusion, there really is no way to eliminate the impact of a moderate or significant recession on your hotel’s business, but you can significantly minimize that impact.  Once you have ensured you are operating as efficiently as possible, spend time reviewing your individual strategies.  Find ways to improve your analytics, database management, marketing efforts, and guest satisfaction.  Beyond that, always have a contingency plan if your hotel needs to reduce its budget or take advantage of a great opportunity.The bad news is that we are very likely heading into an economic downturn. The good news is everyone is in the same boat and smart hoteliers will be able to survive and even thrive, in difficult times.  If you’re looking for more ways to reduce your budget, check out episode 58 of the Hotel Marketing Podcast on how hotels can market on a shoestring budget. As always, TravelBoom is here to help and if we can answer questions or create strategies tailored to your property, you can contact us here.

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