How Independent Hotels Can Win the Search Engine Game

This is an excerpt from our FREE Skift trend report, Online Marketing and Distribution Strategies for Independent Hotels, brought to you in partnership with SiteMinder!Download the Report, Free!

"Our hotel ran promotional packages in January and February (2015) including a discount package and a romance package for Valentine's Day," said Marje Bennetts, general manager of the Beach House Hotel HermosaBeach, California, a luxury 96-suite boutique hotel, speaking to Boston Hospitality Review. "The paid placement on TripAdvisor led the program to fill … We were able to immediately shut off the paid search promotion as soon as this occurred."

The impact of paid search spend on the budgets of independent hotels can have an impact on this scenario, however.

Cost-per-click (CPC) in the paid space can exceed $6 (per click), notes the Boston Hospitality Review article cited above.

While smart use of keywords can help suppress rising CPC, relying on paid search to beat out bigger competitors can be an uphill battle.

In some cases, major chains are devoting 25%–35% of their digital marketing spend to paid search.

Directly competing at such a level is not an affordable online marketing solution for many independent hoteliers, especially for the long term. And that is just one part of the equation.

"One of the biggest challenges I think independent hotels have faced in recent years is allowing their OTA partners to bid on their search terms, as far as their hotel name goes," says Cakar, at SiteMinder. "That's a really important factor to negotiate with OTAs, each time a contract review comes up. It's quite important, in that [allowing the OTAs to bid on the keywords in question] can dramatically drive up the CPC through the search engines."

News of Google's entry into the indirect booking space suggests the search engine giant wants to capture revenue by allowing travelers to book a hotel directly from within the Google interface when they find a desirable hotel rate. The move represents another way that third-party platforms stand to complicate the push for direct bookings.

Considering another angle on the subject, Cakar notes that independent hotels can leverage an organic search advantage by simply having a presence across the OTA landscape. For every indirect booking a property might receive from an OTA, he suggests, it's possible that the seeds of three eventual direct conversions are planted. This is because the traveler becomes aware of the independent hotel in question, seeing its name and rates while searching for a hotel in the OTA ecosystem.

Moves such as these may well help hotel leaders who are willing to offer the discounts, but they won't necessarily encourage independent hoteliers already struggling with the impact of rate cuts on revenue.

A potential answer almost certainly lies in the realm of one-to-one marketing, where independent hotels turn to their own guest profile data.

Under this approach, based on the number of nights guests spend at a given property, the independent hotel can offer its top returning guests the highest preferential rates, and then scale discounts accordingly as the number of annual stays decreases across consumer segments.

Recently we launched a FREE Skift Travel Trends Report, Online Marketing and Distribution Strategies for Independent Hotels, brought to you in partnership with SiteMinder! 

This is just an excerpt from the trend report, which you can download below for free.Download the Report, Free!

Source: How Independent Hotels Can Win the Search Engine Game