For a hotel chain, PPC is one of the best channels for driving direct customer acquisition. This means that having the right strategy is key to success in reducing your reliance on online travel agencies (OTAs).
This article will cover four areas that marketers at hotel chains can focus on to drive more direct bookings and reduce reliance on OTAs.
The first area that this article will cover is the purchasing journey that a user will take for making a hotel booking, and how an understanding of this purchasing journey can help you align your offer to the different stages of the buying cycle.
It will then cover 8 advanced PPC tactics that you can directly implement into your Google Ads account to provide quick wins.
The third area that this article will cover is how hotels can embrace PPC automation to drive direct sales; through advanced strategies such as buying media based on hotel occupancy, and triggering ads for hotels near airports where there are long flight delays.
Finally, it will look at two tactics that you can implement around brand protection, such as ensuring that OTAs are not stealing your brand traffic and selling it back to you at a higher rate, and using remarketing to reach people at each stage of the buying cycle.
A. Understanding the different stages of a hotel booking
There are 4 main stages of a hotel sales cycle:
1) Research & Recognition
Potential customers learn about your brand during their research. The more prominent your brand’s positioning on relevant search engines, the better. Research is sometimes further segmented into the specific stages of research, such as vacation ideas, locations, facilities, etc.
For example, a research cycle could start with the keyword “holidays in London” being typed into a search engine, followed by “hotels near Buckingham Palace”, “hotels with a pool near Buckingham Palace”, “The Hyatt Regency”, “Hyatt Regency Buckingham Palace reviews”, and so on.
Understanding the process that your customers use to research will help you to identify paid media opportunities and increase conversion rates.
2) Comparison of your hotel to others
Your customers are comparing your business to your competitors, based on your ability to satisfy criteria such as their demands on price, service, reviews, location, convenience, facilities, room quality, fun-factor, food and beverage options, and many more.
The next stage of the process is ‘booking’ – the point of transaction, where you must convince the customer that you can offer the best price, the highest convenience, the correct availability, the best perceived value, and best overall deal for them at the time of their booking.
4) Post-booking – how you communicate and build your relationship with the customer from this point forward to maximise your customer’s lifetime value
Having a coherent understanding of your perfect customer’s journey, from research to booking, means that you can effectively target them and communicate the right message at the right time.
The different stages of the buying cycle require different paid media strategies to effectively reach and positively influence the customer’s purchase decision.
For potential customers in the early stages of research, you’ll need to start by increasing their awareness of your brand, and the benefits that your brand offers when compared to your competitors. First impressions count.
Paid search (appearing in Google search results when users search for hotels in your area, for example) and display advertising (banner ads on websites relevant to hotels and travel) work effectively to create demand and interest in your offering when the customer is researching.
In the ‘comparison and booking’ stage, remarketing and brand protection campaigns work effectively.
Remarketing allows you to keep your brand top-of-mind by displaying ads to users who have recently visited your website.
Brand protection ads ensure that, when these users next search for your brand with the intention of making a booking, you appear in the number 1 spot. This means you won’t be losing out to your competitors, or to the OTAs that will be advertising for searches on the back of your brand’s name.
Another area to consider within the ‘comparison and booking’ stage is your brand’s presence on review websites and price comparison website. You’ll want to have a direct presence on these sites, which can be achieved through paid media options (which are available on almost all of the major review & price comparison websites).
Although ad performance on these type of sites can vary, remarketing and email remarketing are the most effective way to target users in the final stage (after they’ve made a purchase). These allow you to display ads to previous customers as they browse online. They also allow you to serve ads online to customers who are on your email lists, which will complement your email marketing efforts.
Finally, data that you acquire from your paid media efforts can be used to improve your targeting, relevance, and return-on-investment, and provide you with valuable insights about your customer-base and business, especially when combined with review metrics and other relevant data.
B. Effective ways of driving low-cost direct bookings
1) Create your ideal customer persona
Understanding the customer, customer demographics, current behaviour, past messaging, and geographical location is fundamental to achieving an effective paid media campaign and identifying where and when to display advertising.
If you want to capitalise on low-cost bookings that are not being aggressively pursued by your competitors and OTAs, an intimate working knowledge of your ‘ideal customer’ is critical.
Investing the time up-front to really consider, research, test and communicate with your customer-base will pay back significant returns in a paid media campaign, both in reducing the time to value your investment, as well as increasing overall campaign profitability.
Planning these media campaigns in a way that also generates long-lasting media and data assets will help to expand your overall marketing reach and generate you consistent revenues.
2) Focus on travel intent & behaviour
When combined with data, advertising and targeting technology has such a powerful capability to (intrusively or subtly) reach your target audience that it can often be looked upon as an unfair advantage.
To give you an understanding of just how targeted it can be, we have defined a few examples. Say you run a hotel based in Leeds, and you want to target customers who are likely to book your rooms.
Attendees of local business meetings can be acquired by you at great rates of return by understanding your local business environment. Based on that research, you may want to display ads to people searching for the names of large businesses in your area.
For example, if the main employer in Leeds is KPMG, you may want to display ads to people who search “KPMG Leeds map” and are located over 200 miles away. This is because these users are likely to be attending a meeting at KPMG, and as they’re travelling 200 miles one-way for the meeting, they’re also likely to need a hotel room.
Using the latest technology you can even refine this targeting further. For example, here at Clicteq, we use data intelligence combined with the latest advertising technology to match potential clients with the most relevant message.
For example, say that you want to target people searching for “KPMG Leeds”, earning over £100,000 a year, working in the technology industry, and over 45 years of age. You can use this information on their demographic to configure your ads appropriately.
Hotels will often spend hundreds of thousands on facilities and amenities, and then completely overlook them when it comes to using them to acquire new customers. And yet they’re an effective way to attract low-cost bookings, as there will be less competition for very specific search terms.
For example, if you own a business hotel in London which an excellent pool and sauna, you may want to be advertising this fact to Scandinavian and Russian guests.
Incidentally, the cost to bid on the search term keyword “business hotel in London” is £11.05, whilst the cost to bid on the keyword “London hotels with pool and sauna” is only £4.33. By focusing on matching your facilities and offerings to your target market, you will be advertising to users much more likely to book at your hotel, at less than half of the cost of a broader search term.
3) Location-based searches
Location can also be used to target users, and is especially effective when combined with intent indicators.
Going back to our imaginary London-based hotel with a pool and sauna – we suggested the idea of targeting Scandinavian or Russian individuals who might be interested in these facilities. This gives you a few different options – for example, you may want to narrow your target audience by only displaying ads to users searching from Scandinavia or Russia. Alternatively, you might want to display these ads to individuals searching from within the UK, but in Swedish or Russian language (suggesting that they’re currently travelling in the UK).
Did we mention that targeting could become very granular?
4) Where your clients congregate online
Back to our imaginary hotel in Leeds. Let’s say that the majority of its customers are businessmen and women visiting KPMG. Now we can ask the question of where do our potential clients congregate online, and is there an opportunity to reach them there?
We might decide that the professional social media platform LinkedIn is be the most likely place for consultant types to hang out. We could use LinkedIn Advertising to identify the right people through targeting, and send them an introductory message; offering a complementary bottle of wine on their first stay, or a free pint of John Smiths.
LinkedIn is of course just one place we may be able to reach corporate customers – targeting is also available through Facebook, Twitter, job portals, forums; in fact, you’ll find a range of different online congregation sites for most industry types.
5) Consolidating targeting
Of course, you can also reach your customers through paid media, and Google Search is probably the best place to start – thanks to it being the world’s largest search engine, and providing the tools to make your search targeting extremely relevant.
Google Adwords is a fast and easy way to test out paid search in your business, and by advertising on Adwords you can make rapid improvements to your business bottom line. It may not represent the extent of the industry leaders’ toolbox, but Google Adwords can be extremely powerful in bringing a great volume of potential customers to your website very rapidly. Take one of our recent success stories at Clicteq as an example – we helped a hotel wedding venue grow their business from £60k to £1.2mil in under 12 months, just through using Google Ads alone.
Once you bring those potential customers to your site, you can then re-target them for future business. You can also target their friends, colleagues and social circles, going further than this you can even create a digital persona for your ideal customer from previous booking data and use that persona to match you to new potential customers.
6) Competitive Intelligence & Data Insights
Another huge aspect of delivering a large-scale paid-media campaign that needs mentioning is competitive intelligence. There are a wealth of tools available that provide granular-level reports to great detail.
With such reports available, and some statistical data analyst skills, you can identify advertising opportunities that your competitors might have missed. For example, let’s say that your competitors get most of their online bookings via advertising between 7 AM and 10 PM on a Thursday, and it’s clear they’re not aware of this, as their prices don’t increase on Thursdays.
It’s entirely possible for you to modify your room rates whilst increasing your advertising between 7 AM – 10 PM to outsell your competitor; filling all 80 of your rooms, and doubling your food & beverage sales for the entire weekend, all thanks to one little piece of competitive intelligence.
At scale, in larger, global hotel groups, there is significant interest in omni-channel advertising, programmatic advertising, and data. Of course, by ‘data’ we mean customer data records, but also a huge amount of what is called ‘enrichment data’.
Enrichment data is acquired from other data sources and external advertising campaigns. This data is then added to your profile for downstream analysis.
Let’s imagine you’re a keen golfer. A hotel you stayed in last week sends you an email offering a discounted golfing weekend, with a weekend stay and free children’s activities included. You’ve recently been looking for something to do with the kids, so you book it.
Now let’s break down the data journey that led to that booking.
The hotel has your customer data record, but you’ve never told them you liked golf – they extracted that by checking your social profile and pulling your ‘likes’ data on Facebook into their database. From similar methods, they also know you have kids, and on top of this, they know that you’ve been searching for something to do this weekend. They also know that your customer Net Promoter Score was 5, meaning you really enjoyed your stay at their hotel.
All of that data, taken from different sources and pulled together at the same time, triggered the email that dropped into your inbox and resulted in you spending £3,000 on a long weekend with the family. This entire process was automated, with no humans involved – except from you.
The level of insight that you can obtain about your business and the external market is incredible, and the amount of insight you can gain from different sources is potentially limitless.
7) Omni-channel advertising
With this ability to easily obtain data insight now readily available on their desktops, hotel chains are able to reach you on all types of advertising media, not limited to traditional media but also including social, mobile, web, email, and Messenger. What’s more, they can even track you across different media channels, and drop highly-relevant messages that resonate with you because of their ability to operate automatically across channels.
Understanding customer buyer behaviour and geographical location is fundamental to an effective paid-media campaign and identifying where to display ads. This is critical if you want to capitalise on low-cost booking that are not being aggressively competed for by your competitors and OTAs, which would significantly drive up the cost of the booking.
8) Event and leisure targeting
Targeting users who are looking to do activities or go to events locally can be an effective method to target users. I’ll give you an example for how to do this for both leisure activities and for specific local events.
If you own a hotel in the Pennines that would be a perfect choice for hikers and hill-walkers, you may want to consider using Google’s Display Network to place banner ads on relevant sites, such as www.hillwalkingbritan/north-pennine-walking-guide, which will be used by such hikers as they research and plan different walking routes.
You might also want to display Google Search ads for relevant searches such as “walking in the Pennines”, as people who are in the early stages of planning a walking trip in the Pennines are also likely to need a hotel to stay in. These terms will have less competition, and therefore drive cheaper bookings.
A second way that you can use event targeting is to bid on the names of local events. For example, back in 2015, when England hosted the Rugby World Cup. If you owned a hotel near Twickenham, you’d have wanted to bid on terms such as “rugby world cup”, and display ads to searchers who were geographically 100+ miles away from Twickenham, and were therefore likely to need a hotel to stay in. These ‘smart’ searches should be done in parallel with your classic core terms, such as “hotels Twickenham”.
C. Use automation to drive low-cost direct bookings
Automation can allow you to capitalise on direct booking opportunities and increase your yield, for example, by automatically driving more traffic and bookings to fill your empty rooms which would have otherwise generated no revenue.
By incorporating data from real-time events, such as flights being delayed that would create demand for hotel rooms near airports, it is possible to automate the advertising process to display ads only when there are delayed flights.
Increase occupancy and RevPAR with inventory-based bidding
Hotels have a fixed number of rooms, with 18% of rooms in London remaining unfilled on average (according to data from PwC), providing a huge opportunity to unlock lost profit.
Inventory-based bidding allows you to purchase more conversions when occupancy rates are lower, allowing you to fill empty rooms and increase RevPAR (Revenue Per Available Room) and GOPPAR (Gross Operating Profit Per Available Room). In turn, this further increases profitability through higher occupancy rates and increased customer spend on food & beverage and services, with the added advantage of reduced wastage and a better utilisation of resources.
D. Brand Protection for generating low-cost direct bookings
1) Stop OTAs stealing your bookings
The quickest and easiest way to reduce OTA (online travel agency) fees is to consider outbidding OTAs when people search directly for the name of your hotel, for example, “Dorchester hotel”.
One of the main ways that OTAs are able to generate more business is through advertising on the brand names and locations of hotels in their inventory.
For example, OTAs can place a Google Search advert on the results page for when people are specifically searching for the name of your hotel, meaning that the OTAs’ advertising appears in a higher position on Google than your website’s organic result. So, when a potential customer searches for your brand, there’s a high chance they’ll click on the OTA ads and book through the OTA rather than through your website. This results in you paying a 15-30% commission fee, when if the customer had just gone to your website first, there would be no commission to pay.
Worse still, they might navigate to the OTA website and end up booking a different hotel!
Why not take back all of your ‘branded searches’ by showing ads to people who are searching specifically for your brand. Since there will only be a little competition from OTAs, you should be able to book rooms for less than 10% of revenue generated.
Incidentally, this is another reason why you shouldn’t be spreading yourself over too many Online Travel Agencies, a fact we will cover in later e-books.
[Source: Bing Ads]
2) Use Retargeting and Customer Match to drive low-cost bookings
Retargeting allows you to target users who have previously visited your website and display ads to them. This allows you to target people who have visited your website in the past, but have not yet booked, and encourage them to make a booking.
You can also use it to generate repeat business by targeting people who have previously booked with you. Customer Match is also an effective way to generate new bookings, as you can target people whose emails you have and display your ads to them. This will allow you to target past customers who have provided an email when they booked either online or offline.