Here at Fuel, we work with a lot of great clients who run the gamut between large 500+ room resorts to small bed and breakfast properties in quaint locations. They’re all striving for the best possible return on their marketing dollars. And, as marketing dollars become tighter and tighter, a great return is more important than ever. Our job as hotel marketing experts is to help spend their marketing dollars as effectively as possible. However, sometimes even the most effective marketing can fail and not because of the marketing itself, but something deeper down the conversion funnel. Something that oft times seems not marketing related at all even though it plays the most critical part of the entire mix.
Today we ask the question, “Is your PMS and booking engine the cause of your hotel marketing woes?”
Typically, the marketing performance methodology looks a bit like this:
Campaign Tracked Revenue / (Marketing Investment + Management Costs) = ROI or ROAS
Then we look at the ROI or ROAS like this:
- Great ROAS = Whoo! Fantastic job marketing, boy we’re the cat’s meow!
- Poor ROAS = The sky is falling, the marketing is failing, I have low self-esteem and everything is wrong!
First, we’re going to assume in this article that we are targeting the right audience at the right time with the right message. If we’re doing this we should see a great return, cats should be meowing like crazy, and we should be looking at a fantastic RevPAR. But what if it’s not…
When it seems that the marketing is on point, your rates are on par with the OTAs, and your site is in good shape but your marketing is still not delivering, it’s time to look deeper down the conversion funnel. Today, we are going to focus specifically on the booking engine.
The booking engine, and in many cases the associated PMS, can be the single biggest detriment to your online success with today’s modern hotel guests. We have first-hand experience where the best marketing in the world can fall flat when the visitor is not able to effectively shop and book, be it on a desktop, tablet, or mobile device.
Unfortunately, the booking engine and possibly the PMS are the most difficult part of the conversion process to change. Changing the PMS often requires hours upon hours of creating room types, adding rates, setting up systems and training staff. This can be a non-starter for many hotels. However, if you find your marketing efforts are not performing as you would expect then it’s time to consider making the big move.
Today we are going to look at an evaluation process you and your hotel must take to see if your PMS and booking engine are truly right for you. We’ll dive into three specific categories: distribution, mobile usage, and general usage. Yes, there are more criteria, but for the sake of simplicity, we are focusing on just three.
The tried and true email marketing; it’s been the reigning king of hotel marketing for quite some time and, while it is losing points to other channels, it’s still the #1 thing all hotels should be doing and doing well. This means you have to have a seamless integration between your PMS and your email systems. Are you sending out the right messages to your previous and potential guests based on their booking behavior? Does your email speak to your guest by name, reference their previous stays, and connect with them on a personal level? If not, start by listening to Episode 59 of the Fuel Hotel Marketing Podcast where we cover email personalization.
If you have found that your technology can’t utilize the personalization expected from today’s guests, then you need to take a long hard look at your booking platforms. Ask yourself this, “If personalized emails result in a 30% increase in open rates and a 10% increase in click rates, how will this impact my revenue? Will this increase offset my cost and time of making a PMS or booking engine change?”
You’re probably already running various paid search campaigns on Google, Bing, and other platforms. But, have you considered how a booking engine impacts your ROAS? Did you know that if your specials or rates are on a different domain, such as bookingengine.com/propertyID/booking you’re going to run into issues sending customers to the ideal landing page from your existing campaigns? While Google does allow you to send traffic to any domain, all traffic from one campaign must go to one URL and your display URL must always match your target URL. This means that while your ad to your booking engine will very likely not have your property name in the link. Using the example below you can see what a potential guest would see, which would you prefer?
This is why having a booking engine that stays entirely on your site is so important. It is a fact that the more clicks required, the lower the conversion rate. How many clicks in the process are you willing to give up?
Fuel recently consulted with a client that was struggling with TripAdvisor. Neither the Instant Book nor TripConnect programs were working at all. We typically see an ROAS of 500+%, but this client was struggling to even break even. After digging in, we found that, while their PMS/booking engine was integrated with Trip Advisor, it was integrated through a 3rd party that was charging an additional percentage on all bookings. They had been paying both a 12% commission rate to TripAdvisor AND an 8% commission rate to the 3rd party. Well yeah, you’re not going to have a great ROAS when you’re dropping 20% in commissions!
The solution? Find a booking engine and PMS partner that has integrations with TripAdvisor. Again, ask yourself in the example above, “Will saving 8% on every booking from the world’s #1 travel site help offset the cost of switching PMS/booking engines?”
Like TripAdvisor, Google’s GHA has been a goldmine as of late. We’ve talked extensively how in 2016 GHA (at the time HPA) was a marketing dog, but all throughout 2017 we have seen record returns, several clients seeing 1000+% returns! If your PMS/booking engine is preventing you from sharing rates and participating in GHA, here’s your wake up call… You have GOT to be on GHA, guests are booking and if you’re not there you are giving the OTAs an easy shot at your guests.
Social marketing, primarily Facebook, has been performing very well and consistently turns out solid return numbers that often rival email marketing. Yes, regardless of your PMS or booking engine, you can take advantage of social. However, the best systems will allow you to fully integrate your booking engine experience within Facebook and work well to allow your booking guests to share their reservation with all their friends.
What does this mean? If you are still using a booking engine that does not employ a mobile-first design strategy you are absolutely missing out. Not might be missing out, you are missing out. For a case study, look no farther than our recent article dedicated to mobile booking revenue where we look at several resorts that have switched to a mobile-first booking engine and seen massive revenue growth. In just one example a resort upgraded their booking engine at the end of June and over the next three months generated 370 more bookings and over $300,000 in revenue.
So ask yourself another question, “Is $300,000 in additional revenue over three months worth the time and hassle to switch booking engines?”
General Ease of Use
We would suggest you review your engine using the checklist below and make sure it up to the task to convert today’s guests:
- Intuitive filtering and sorting
- Ability to login to save profiles as well as modify and alter bookings
- Big pictures and stunning photography
- Multiple ways to view rates (daily, length of stay, by room, etc)
- The ability to enhance a stay with added options or extended stays
- An easy, trustworthy checkout process.
- Meets the expectations of a guest who is used to booking on Amazon and the other great online retailers they interact with on a daily basis.
Test your booking engine from a customer’s perspective on a variety of devices and compare your experience to that of other hotels and resorts. If you find the process is not seamless, enjoyable, and intuitive, there is a good probability that your booking technology is costing you revenue.
Yes, changing a booking engine or even your PMS can be a giant pain, both in time and financial investment. However, like all things, you must look at the cost of NOT making a change as well. What you will find is if your currently booking technology is not up to speed you will be far better making a dramatic change.
So, one last question, “Are you comfortable leaving potentially hundreds of thousands of dollars on the table because you are avoiding keeping up with the times and adopting the latest hotel booking technology?”