Hotel Online Marketing Budget Disconnect: A Perpetual Case of Bringing a Knife to a Gunfight.

Hotel Online Marketing Budget Disconnect: A Perpetual Case of Bringing a Knife to a Gunfight.

posted in: Budgeting | 0

“Nice try kid, but it looks like you brought a knife to a gunfight.” This line from Indiana Jones and the Kingdom of the Crystal Skull pretty much sums up the hotel industry’s current state of perpetual online defeat.

It’s 2013. Pretty much everyone — even folks living under rocks — have had some sort of exposure to online marketing. Enter hotels, still wildly under-spending on what is going to bring them the best outcome.

Here is a typical hotel marketing budget:

  • Branding: $5,000
  • Print: “Could we please spend a several thousand dollars on print…I know you saw the video on YouTube about paper. OMG, it was so awesome!”
  • Time wasted on branding “discussions”: $50,000
  • Website: $5,000
  • Time wasted on website “discussions”: $100,000
  • “Social Media”: $1,000
  • Online Marketing: $500/month

trexTo really put it into perspective for you, here is an amazing fact. In a recent conversation with a “Brand” looking to break into the European market, they assigned $800 (not a typo), yes 800 US Dollars as their online marketing budget! Which is like a 100 pounds! (Ok…I might be exaggerating just a bit about the exchange rate… but not the other part.)

Think about how short your arms are going to be when you have a pathetic monthly online marketing investment and then start competing for online market share in high-volume traffic cities like London and Paris, NYC and Miami, Hong Kong and Singapore, etc.

When you venture for market share online, you have to do more than buy your own brand name terms. You are also competing with these guys:

  1. OTA’s (AKA, we put our marketing dollars where revenue is.)
  2. Competitor hotels – Other hotels in your  location(s)
  3. Online Review Websites – Tripadvisor, etc., who are not diversifying their  advertising revenues and also actively selling rooms.

Every evil can be traced down to its root cause. In my industry experience, working for hotels and managing a marketing agency, I have located the hotel’s source of conflict, misery and defeat. It is the budget.

What’s the right budget then? It differs from city to city. Here is a top-level guideline.

Minimum Media Buy and Online Marketing Budgets

  1. Major Metropolitan Cities (NYC, London, Singapore): 18K/month
  2. Secondary Cities (Austin, Edinburg, Nice): 10K/month
  3. If your hotel is located in a smaller town. that brings the budget into the 1-5K range, because you are mostly focusing on brand name searches and low-volume, location-based keywords.

Hotels must reevaluate their budgeting philosophies. Bringing a low-budget knife to a high-tech online marketing gunfight is going to severely hurt your revenue.