Hotel owners and asset managers are frustrated.
They no longer want to hear about “branding initiatives” or fuzzy math from their management teams… they expect their sales and marketing leaders to contribute to revenue in a measurable way, communicate in number-speak and be accountable for tangible results.
So it’s important to have complete fluency in the KPIs that affect the bottom line.
Imagine opening a bank account without knowing what your rate of interest will be. Or sending your kids to private school and never seeing a report card… Nobody does that. And yet some people in the hospitality business have no way to measure the return they are getting on the money they invest in sales and marketing.
Even if business is good, and ‘something’ is working, your ROI should be measured regularly. Especially when ROI has never been easier to measure. Many of today’s digital/analytical tools provide near instantaneous information. In fact, the world of e-marketing has put a whole new generation of measurement mechanisms at our fingertips.
The six key metrics every owner wants to hear about:
There are many opinions on the key metrics for hotel S&M teams. And they can vary depending on your property type, location and business mix, but here are the six we recommend monitoring:
1. MCPB (marketing cost per booking): tracks actual production vs the cost of each S&M channel
2. Revenue variance from target: this metric reflects your actual results vs the revenue goals (by segment) memorialized in your annual S&M Plan.
3. Sentiment score on TripAdvisor: using a reputation/social media monitoring tool allows you to measure guest satisfaction/sentiment, this reflects product acceptance or alerts you to product deficiencies. A sub-optimal product will outweigh all your other S&M activities.
4. DRR (direct revenue ratio): measure your percentage of online revenue coming in directly vs expensive third-party sources like OTAs. If you’re not getting 40%+ of your hotel revenues directly from your website, you have work to do!
5. RevPar Index vs compset: This traditional benchmark is still a key indicator of your team’s performance vs the compset
6. Website conversion rate (from unique visitor to converted bookings): Revenue originates from potential guests researching your property online. As your hotel’s digital front door, your website influences your guests’ impression more than any other marketing asset. Converting a higher percentage of visitors is critical to reducing your cost of revenue and MCPB (For a deeper dive on the ways hotel websites can negatively impact revenue click here.)
Why is tracking marketing metrics so difficult?
Tracking your metrics is easy, but doing it consistently… now that’s hard!
Many of you are hitting your busy season. The hotel is booked at top rates. Hallelujah! You’re so busy you don’t need to watch your numbers, right?
Well, no. Your sales and marketing metrics drive performance at the hotel. It’s easy to let them slide when you’re busy, but when the season ends, you’ll be stuck playing catch up.
Which S&M metrics do you monitor?
Let us know in the comment section below!
Tambourine drives revenue for hotels and destinations worldwide using advanced marketing technology. The firm is celebrating its 30-year anniversary. For more information, visit Tambourine.com.
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