By Max Starkov
Background As the travel planning journey continues to become increasingly more complex, hoteliers need to be looking for more impactful ways to engage and retain their best potential guests. Today’s typical online travel consumer is exposed to over 38,983 micro-moments in any 60-day timeframe, during which time they visit an average of 18 websites via multiple devices in eight sessions before making a hotel booking (Google).
Hotels are not just competing with OTAs, their competitive set, and Airbnb—they are also competing with every micro-moment that distracts the travel planner, such as emails, text messages, video, and social media feeds. There is some serious competition out there for the travel consumer’s attention, making it all the more important to engage and convert them while they are visiting the property website. A key imperative for hoteliers in 2018 is preventing these travel planners from becoming distracted by digital noise and serving them content at the correct time in order to convert them into bookers.
Why is it important to improve website conversion rates?
The average hotel website conversion rate (bookings divided by unique monthly visitors) is typically below 2%. For example, imagine 100 people visit your hotel website. Out of those people, less than two will complete a booking, and more than 98 will look around before leaving to make a booking elsewhere—either with your competitors or with the OTAs. Hoteliers are spending precious advertising dollars on SEO, paid search, online media, PR, and social media in order to bring users to the hotel website. However, 98% of them are not converting.
Now imagine the monetary benefit from improving the conversion rate from a property with an ADR of $200, a website with 25,000 unique monthly visitors, and 1.5% conversion rate. If conversion rate increases by 25%, this will result in additional website revenue of $37,500 per month. A 33% increase will bring an additional $50,000 per month.
What Are the Main Factors Impacting Hotel Website Conversion Rates?
- Market parity: How do the property rates compare to the compset in the destination? Are your rates comparable to your competition? In order to increase revenues for the hotel website, hoteliers need to ensure that their rates are competitive with the compset, as well as the properties that review sites (such as TripAdvisor) are listing as “similar properties.”
- Rate parity: Are the property rates in parity across all distribution channels, including OTAs? As mentioned, today’s traveler is shopping like crazy and will find a lower rate for the hotel if it exists. Does the hotel website have a Best Rate Guarantee that is visible throughout the site and the booking engine? Is there a “Book with Confidence” message to reinforce the rate guarantee and security messaging at point of sale on the reservation screens? Maintaining strict rate parity will not only help re-train the traveler to look on the hotel website to find the best rates, but it will also ensure maximum profitability to the hotel’s bottom line.
- Quality of website and user experience (UX): It is staggering how hoteliers often fail to understand the crucial role the hotel website and its UX plays in the overall health of the property and its bottom line. With over 50% of website visitors now viewing on mobile devices, a fully responsive mobile-first website design is a must. How old is the hotel website? If it is older than two years, it’s due for a re-design. Websites older than two years often have not implemented the latest best practices in technology, design, and UX, such as a mobile-first design, reservation abandonment applications, merchandising applications, Google AMP (Accelerated Mobile Pages), Schema.org, technical SEO, and more. An outdated website leads to lower conversions.
o Case Study: Luxury Island Resort Increases Revenue with a New Responsive Website With their previous website, only 4% of total room revenue was coming from their online channel. Despite the beauty and luxury of the hotel, the property was losing money each year due to their website. In order to increase online revenue and conversion rates, the entire website was re-vamped with new copy and images all controlled by an advanced CMS.
After one month the website paid for itself, with year-over-year revenue increasing by 203%. The total return on their investment was 2,168%.
- Website Download Speeds: The website download speeds across various devices inevitably affects conversion rates on the hotel website. Fast download speeds drastically improve the user experience and increase the user’s desire to transact on the site. According to Google, 53% of visits are abandoned if a mobile site takes longer than three seconds to load. A mobile-first responsive website with cloud hosting and CDN (Content Delivery Network) provides far better server response times and faster download speeds across geographies.
- Quality of the booking engine: This is another key feature some hoteliers underestimate which can harm their website revenue. A weak booking engine with slow download speeds, and a lack of good product presentation and UX, hurts conversions and revenues.
- The website merchandising platform: Does the hotel website CMS technology enable the property to sell rooms and generate leads on every page of the website via a complete ecosystem of modules, functionality, and capabilities? Does the technology offer special banners and live rates that dynamically change anytime they are updated in your CRS? Does the technology enable the hotel to "sell on value," as opposed to "sell on rate," and maximize revenues on the hotel website?
- Enticing promotions: How enticing are the property special offers, packages, and promotions? Are promotions unique, seasonal, and outshining the competition? Whether it’s a discounted room rate or a special partnership that gives guests an experiential activity outside the hotel, special offers can be a quick and easy way to convert lookers into bookers, while capturing more direct bookings on the hotel website.
- Reservation abandonment technology: Acquiring a new website visitor is ten times more expensive than retaining an existing one. As mentioned, typically less than two out of 100 visitors to the hotel website complete a booking. Does your website feature reservation abandonment technology to win back users who start the booking process without completing it? Your website should be the final touchpoint to convert the visitor into a hotel guest.
o Case Study: A Central California Hotel Increase Conversion Rates by 25% With Reservation Abandonment Tools With a collection of four hotels, this resort was in need of increasing their website conversion rate and getting website users back to the booking engine. After implementing Reservation Abandonment Emailers and Reservation Abandonment Lightbox Displays, the resort saw a 25.9% increase in their conversion rate year-over-year and a 3,520% return on their investment.
- Dynamic personalization: In today’s digital landscape, consumers demand personalization. The hotel website typically has eight seconds to capture a visitor’s attention. One out of five visitors will deflect within 10 seconds of landing on the website. Does the hotel website deliver personalized promotional, textual, and visual content dynamically tailored to each visitor? Does it allow real-time tracking of behavior and data to serve personalized dynamic content based on geographic location, demographic information, loyalty status, pathing, and booking behavior?
o Case Study: An NYC Boutique Hotel Increased Their Conversion Rate by 55% with Smart Personalization As more consumers expect a personalized experience, this NYC hotel was looking for a strategy that would improve the user experience on their website while increasing conversion rates. With messages targeted to visitors depending on their location and behavior, the hotel was able to see an increase of 55% year-over-year in the website conversion rate and a 44% increase in revenue after just three months.
- Guest Recognition/Reward Program: Travel consumers demand online experiences that make them feel special. Your website should recognize who they are and reward them for being loyal customers. You do not have to be a major hotel brand to recognize and reward your frequent guests or members of a reward program. Seventy-nine percent of bookings on hotel websites are made by travelers that belong to a hotel loyalty program or guest recognition program, i.e., travelers with loyalty status (Phocuswright). Does your property website feature any kind of guest recognition, instant rewards, or a membership program? Does it provide gated, member-only rates?
Conclusion: Developing a robust website conversion strategy should become the top priority for hoteliers in 2018. This is a crucial step for improving direct bookings and lowering distribution costs. Any investment in website conversions will not only pay for itself, but will reward the hotel generously by improving the bottom line. Start by evaluating your current website conversion rates, the quality of your website technology, and the overall design.