Online travel agencies (OTAs) like Expedia, Booking.com and Hotels.com, can be vital to your hotel — especially if you are an independent hotel. But at what cost? Typically, it’s a 15 to 30% commission per room booked, but can go higher depending on your agreement with the OTA.
To minimize these costs, the ultimate goal is to have a guest book directly with your hotel. This alleviates commission fees and allows you to market to the guest in the future.
Securing reservations through your own advertising also builds brand loyalty, increases your database, and saves you money. It also helps further develop the relationship with your best customers, returning guests, allowing for future revenue that costs you zero dollars.
We know all this because we’ve done it. DAE & Company has worked hard to establish strong digital campaigns that allow hotels, resorts, and short-term rentals to book more customers directly on their websites and establish a database for future low-cost marketing.
Goal
Create campaigns that maximize your return on investment and create opportunities for future marketing campaigns, loyalty programs, and revenue.
Execution
The marketing plans we develop for our resort properties typically feature fully integrated campaigns that utilize both digital and traditional marketing strategies and mediums. A well-rounded marketing plan ensures that you will be seen no matter where your customer is in the booking process — dreaming, searching, or ready to book.
For this case study, however, we will analyze and compare digital advertising spend only, as digital is easily tracked, and we can attribute revenue to each ad.
Our digital campaigns are carefully researched and designed to invest in targeting and key phrases that drive bookings, not just clicks. We develop copy andcreative that maintain brand integrity by utilizing a strong call to action. We carefully monitor results and shift our spending to maximize revenue throughout the campaign, reporting stats to our clients along the way.
Digital Results
Based on a 10-month campaign, our average Return On Ad Spend (ROAS) is 8:1, which means for every $1 spent in advertising, we generate $8 in revenue.
Cost for media per reservation is approximately 12 to 14% of revenue, a savings of 7 to 16% over OTA commission.
Real Numbers Results
Revenue earned: $800,000
Cost for DAE advertising: $96,000 in media and agency management fees
Cost for OTA commission: $160,000-$240,000 in commission (20%-30%)
DAE & Co. just saved you $64,000 to $128,000.
Want to see how our team can help your hotel or hospitality business? Let’s talk.
