How to know if your hotel is getting the optimum number of direct bookings?
This is a question that a lot of sales and marketing managers ask themselves.
It is also a question that is “very simple” to answer.
TLDR: All you need to know is that you should get 1-2% of direct booking for the traffic coming on to your website. (depending on where you are in the world it can be 4-5%)
So if you are getting 1000 visits in a month, you should get a minimum of 10 bookings. If you are getting 2% or more, then great. If not, we explain below how to diagnose and find potential issues.
When it comes to marketing your hotel on the internet, it’s natural to assume “the more people who see our website, the better”. As a general rule, this is could be a good thing.
However, we need to know what the exact conversion rate is per channel is, only then we can decide if it is traffic worth spending time and money on.
With so many traffic generation strategies out there: Hotel content marketing, Google search ads, metasearch, organic social media marketing, paid social media marketing and search engine optimization you need to be able to pick out what is generating the most bookings at the lowest cost.
In this post, I’ll run you through an explanation of what a hotel conversion rate is, how it can be calculated, and some benchmark numbers/industry averages.
Conversion rate is simple, you take the number of bookings and you divide by the number of visits to the website then multiply by 100.
For example, if you had 50 bookings from 1,000 visits, your conversion rate would be 5%, since (50 ÷ 1,000) x 100 = 5%.
So, let’s say your website is visited by 1000 prospects in a month and the conversion rate is 1% . (10 bookings)
Would you prefer:
- Doubling the users to 2000 visitors per month, or
- Increasing your conversion rate to 2%?
Remember that doubling the traffic usually means increasing the cost…so we are better off making sure we increase our conversion rate first.
Looking at this graph, we can see that:
- Organic search is quite low in terms of conversion and that there is room for improvement.
- The Google ads are ok-ish.
- Direct and social media are also a little low.
Also, in this case, social media is solely remarketing. [Remarketing (also known as retargeting) is the tactic of serving targeted ads to people who have already visited or taken action on your website]
This should be easily above 2% because remarketing = warm traffic.
In this instance, there could be a couple of problems here:
- If the rates are not on parity with the OTAs, the prospects could come organically but leave for a better price. (way to counter that would be to fix pricing parity and have a pricing widget to show that we are indeed the cheapest option) this seems to be the case because of the same behavior on the remarketing audience.
- The website could be not doing a proper job of converting visitors.
- The booking engine could be preventing the prospects from converting because of no availability issues.
These are the 3 places where I would start to look in this instance
What is your hotel conversion rate? Let me know in the comment section below 😉