Hotels Allocate More Budget for Digital Marketing and Social

Goal is to boost awareness amid threats from Airbnb, Priceline and Expedia

In the brutally competitive hotel business, staying top of mind with consumers is a difficult challenge. The realities of the sector are leading more hotel professionals to increase their 2017 budgets for digital marketing and social media strategy in a bid to grow consumer awareness and attract more guests, according to a January 2017 survey.

When hospitality marketing platform SiteMinder asked hotel professionals worldwide about their projected budget allocations for the next 12 months, 48% of respondents said they planned high spending to go toward digital marketing, while 44% said they intended to designate high investment in social media strategy.

Areas in Which Hotel Professionals Worldwide Expect to Allocate Their Budget, by Level of Spending, Jan 2017 (% of respondents)

The response rate in these two areas was higher than any other category with the exception of revenue-generating strategy management.

One reason hotel professionals are doubling down on digital marketing and social is the growing market power of accommodations upstart Airbnb. Hotel operators must also compete with the deep pockets of online travel agencies Priceline and Expedia, both of which spend considerable sums each year on consumer marketing campaigns while simultaneously cutting into hotel profits by charging commissions for customer referrals.

An examination of the top 10 US accommodation websites ranked by total visits by SimilarWeb illustrates the awareness challenge facing hotels.

Airbnb ranked as the most visited accommodation website in Q4 2016, receiving nearly 88 million visits, up 42% from Q4 2015. Priceline Group’s Booking.com came in second, with more than 82 million visits and a 24% growth rate, while Expedia-owned Hotels.com was fourth, with more than 65 million visits, up 25% year on year.

Top 10 US Accommodation Websites, Ranked by Total Visits, Q4 2015 & Q4 2016 (millions and % change)

Only two hotel chains, Marriott and Hilton, cracked the top five.

The competitive threat posed by industry players like Expedia, Priceline, Airbnb and others is also leading more hotels to invest in marketing campaigns that encourage customers to “book direct.”

Holiday Inn is just the latest to launch such a campaign, though Hilton, IHG and Marriott have all created similar efforts in the past year.

Jeremy Kressmann

Reproduced from eMarketer

 

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