Creating a strategic hotel marketing budget can help you drive more bookings. But where do you start?
Forge Apollo’s video and digital marketing efforts have driven millions of dollars in revenue for brands like Hyatt, Hilton, and ICONA Resorts. Today, our travel marketing experts in Philadelphia share insider tips to make your next budget more effective.
1. Goals and Audience
The first step in creating a hotel marketing budget is to establish your goals and clarify your audience.
Keep your goals SMART, which stands for Specific, Measurable, Achievable, Relevant, and Time-bound.
Develop buyer personas for your audience. You should aim to have between three and five personas based on your ideal target audiences. Each persona should answer questions like:
- What gender(s) are they?
- How old are they?
- How much income do they make?
- Do they travel alone, as a couple, or with a family?
- Are they travelling for business or pleasure?
- What are their goals and motivators?
- What are their pain points?
- Where do they look for hotels?
- What alternative hotels or accommodation options may they consider?
2. Analyze Past Performance and Trends
Analyze existing marketing data and industry trends to inform your hotel marketing strategy. If you’re launching a new hotel, focus on competitive analysis and industry trends.
For existing hotels, perform a marketing audit to understand what’s working and what’s not.
Then, check in with the hospitality industry to understand how current trends might impact your strategy, including:
- Current market demand
- The competitive landscape
- Consumer behavior
3. Create Your Marketing Strategy
Create a hotel marketing strategy that follows each stage of the guest’s buying journey: awareness, consideration, decision, retention, and advocacy. Or, update your existing strategy.
Expert Tip: Balancing efforts across each buying journey stage is the key to a hotel marketing budget that drives bookings, not just focusing on conversion efforts.
Foundational Efforts
Several foundational efforts support a marketing strategy. These include your website and high-quality visuals from video production, photography, and graphic design. Include these as part of your marketing strategy.
Attribution
Configuring proper attribution should be part of your marketing strategy. Ensure that you have visibility into each marketing effort’s performance to help you analyze it later.
4. Allocate Funds
After establishing your hotel’s goals, audience, performance, and strategy, you can start building out your budget.
Total Budget Recommendations
Industry best practices say that your marketing budget should be between 5% and 20% of your annual revenue. New hotels or those looking to grow should be between 11% and 20%. Established hotels can maintain revenue in the 5% to 10% range.
Expert Tip: Work with agencies that will amortize larger projects, like a new website, over a multi-year retainer so you can reduce their impact on your annual budget.
How to Break it Down
Start high-level, allocating the largest portions of your budget to the marketing efforts that support your current goals. If you have historical data, put the most on what’s working in your current strategy.
Research each part of your marketing strategy to understand what recommended minimum budgets are to help you get started.
After you have your high-level buckets, break down the granular costs.
Expert Tip: Marketing is ever-evolving. Allocate 10% of your marketing budget towards experimenting with new channels or tactics.
Consider All Costs
Factor in every cost when establishing your budget. This may include:
- Agency or Freelance Services
- Software and Tools
- Ad Campaign Budgets
- Content Creation
- Website Development, Hosting, and Maintenance
Expert Tip: Working with an agency can minimize these costs. Since agencies serve multiple clients, they have economies of scale to utilize software, tools, subscriptions, and expertise at a lower rate. Agencies also offer discounts when they include multiple services in one retainer.
5. Defending Your Budget
There are several strategies to help defend your marketing budget if you need to get approval.
First, come prepared with multiple options. Then, instead of “yes” or “no,” you’re offering proactive alternatives.
Second, come prepared with data. If you have your own data, that’s best. For example, share the ROI or conversion rates of previous efforts to justify why you should put more budget behind them. Alternatively, you can present industry benchmarks or competitive analysis as evidence of what works.
6. Monitor and Adapt
After you get budget approval, monitor the performance of your strategy and adapt as needed. Identify which key performance indicators (KPIs) align with your goals. Based on the performance of these KPIs, you can make adjustments over time.
Drive Results With Your Budget
You know what results you want. Now, you just need a budget to get you there. After reading this guide, you should be able to walk step by step through the budget creation process. For more help strategizing, budgeting, or executing your hotel marketing efforts, contact Forge Apollo today.
