Digital hotel marketing heats up as major brands compete with each other and online travel agencies (OTAs) while seeking better customer loyalty.
Through data-backed insights, hotel marketing helps make bucket-list trips a reality while also improving experiences for regular travelers.
Most people rely on various forms of online research to make their travel plans. Due to the way consumers encounter travel content and offers online, many hotel brands have turned to data to enhance their online presence through strategic messaging and promotions delivered at the perfect time and place. They also rely more heavily on data-backed marketing techniques that aim to make customers more loyal to their brand.
Therefore, whether looking to book new guests or encourage former ones to return, data-driven insights and digital marketing have come to redefine the way hotels approach their business.
Hotels Brands Use Data to Boost Direct Bookings on Brand Websites
Websites that aggregate available lodging options for travelers – known as online travel agencies (OTAs) – have become a go-to for many consumers because they offer a quick way to compare hotel room rates and ratings. Some 52% of U.S. travelers between ages 18 and 34 say they prefer booking hotels through these services rather than use the hotel brand’s website.
While this arrangement can certainly benefit hotels, it also motivates hotel brands to become more successful at reaching and encouraging direct clicks on their website. Otherwise, the hotel must pay a referral commission that can be as high as 15%.
To win back this share of revenue and improve their online appeal to consumers, hotel brands turn to data. For instance, datasets that reveal past booking behaviors allow hotels to optimize the way they price their rooms. Measuring both past consumer actions as well as the behaviors of the current browser can help hotels set a “Goldilocks” price point that is low enough to compete with rates seen on OTA sites without outbidding themselves and discounting deeper than needed.
Data also helps marketers optimize their messaging placement to be at the right time and place. For example, one major hotel brand discovered that guests typically book airline tickets first and then hunt for lodging about 30 minutes later. By retargeting people who recently purchased a plane ticket, the hotel brand can increase conversions by being there at the moment of need.
In this way, data-derived insights help hotel brands optimize their marketing message content and placement to maximize digital ad spend and minimize waste on activations that fail to convert.
Loyalty Data Shows How to Enhance the Guest Experience
To compete more effectively and deliver positive guest experiences, many hotel brands look to factors that improve brand loyalty. Giving discounts to recurring guests is one of the most popular methods, and the cost of these discounts can be offset by predicting the customer lifetime value (CLTV) and taking steps to maximize that potential value.
Observing customer behaviors over time enables hotel brands to accurately assess this value, which can turn up in unexpected places. For instance, a “high roller” guest who intends to spend money on extras like room service during their “holiday of a lifetime” may seem like an ideal person to target. Yet, a more moderate spender like a quiet business guest can offer greater CLTV through consistent repeat stays, even if each trip generates only average revenues.
Only by observing data can this hidden revelation become clear. A combination of owned data from loyalty programs and direct transactions, third-party demographic data, and a dash of customer feedback help hotel brands optimize their loyalty perks and other offerings. By predicting customer behavior, hotel brands can create an optimized offer such as free meals and movie tickets or whatever is most “likely to persuade a high lifetime-value customer to make a booking.”
Through these data-backed insights, hotels can identify audiences with high CLTV and create targeted offerings to encourage repeat stays. They can also discover ways to compete with OTAs and other hotels to prompt direct bookings using a combination of the right offer at the right time.
In this way, one of the oldest industries is evolving as an entire online ecosystem grows around it. By following trends in user tendencies and conversations, these hotels can modernize while still offering the timeless products of comfort and hospitality.