As hoteliers know, the most profitable business is direct business. Online travel agencies take as much as 25% of your online revenues. So at a $100 rate, hoteliers will only receive $75. With such a heavy discount, an over-reliance on these OTAs will certainly tear your rate apart.
With the vast array of companies that contact your marketing department, it can be confusing to understand what it is that would make the greatest impact in your Internet bookings today. If you analyze the math though, the quickest way to increase revenues isn't another ad campaign, email blast, partner program or other marketing program; it's your conversion rate.
Let's run the math:
Goal: Increase revenues by $25,000 in the same period. Here are the three ways to do it:
Which one would take the least amount of effort to achieve out of these three? It is your conversion rate. Convincing just one extra person out of every 1,000 nets you the same amount as attracting an additional 20,000 visits.
A lot of hoteliers I meet are truly baffled by this concept. They talk about the innovative marketing programs they are participating in and their fantastic return on investment for their ad campaigns, but at the end of the day, a 20:1 ROI only exists within remarketing campaigns; there are simply not enough clicks available to replace the need to focus on conversions.
With your new analytics code in place, you will now have access to the number of visits that come to your site. With your Internet booking provider or through your newly embedded code, take a look at your conversion rate. If it is south of 1%, it is time to start looking hard at your website and your online presence in general.
There are a large host of factors that could be bringing your conversions down.
Review rate strategy and parity
Some of your partners might be offering a wholesale rate on another site without your knowledge. It happens all of the time on sites you have never heard of. Navigate to Kayak and shop various dates. Make a note of all of your parity issues, dates and sites and review with your revenue management team.
Analyze your website
Ask yourself the following questions:
Other factors to consider:
There is a certain amount of art and science that go into increasing conversion on your hotel's website. Fortunately, there is no longer a need to guess since everything is now being tracked. Make notes, review your conversion rates, get feedback and remember that the single easiest way to increase your online revenues is by focusing on conversions.