Tracking your referral sources gives you a lot of insight into what is driving traffic and which of your marketing efforts are drawing visitors to the website.  I recently reviewed data for a hotel in San Diego that increased its marketing efforts on a local directory.  In the month of April, they had over 900 visitor referrals to the website and the directory was #3 in referrals to the site.  That is an average of 30 visitors per day, which seems like a great number.  In comparison, a directory geared towards the “pet friendly” niche drove fewer visitors to the site.

While the number of referred visitors is a great first step, it is important to review and determine how many of these referrals actually convert.  To get a more complete picture, you can cross referrence referral sources  with the visitors who actually went to the property’s booking engine to check rates.

The numbers were very interesting.  Google was the top referring source and had a 36% conversion rate.  Over one third of the visitors who came to the site from Google converted and checked rates.  SanDiego.com on the other hand, only had 20 visitors from the referring traffic funnel go to the booking engine… a mere 2.2% of total visitor traffic from that directory.  On the flip side, although dogfriendly.com had just 20 referrals that month, 9 people clicked through to the booking engine to check rates. That’s a 45% conversion rate!   This indicates that visitors from the niche site were more targeted to the site’s offerings.

Each hotel can use this data to match up average conversions and make some calculations of total revenue based on their ADR (average daily rate) and ALOS (average length of stay).  Even if one source has a lower conversion rate, it does not necessarily mean it is not the right strategy.  Having as many facts as possible will help the hotel make the best determination as to which of their efforts are working best.

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Contributed by: Tammie Carlisle, Regional Business Development Manager (West Coast), Milestone Internet Marketing, Inc.

Google Adwords is one of the largest pay per click marketing channels for businesses where website owners can create and run ads for their company quickly and simply. However, running an effective PPC (pay-per-click) campaign involves many aspects including constant monitoring and modification, testing, and analysis of the PPC campaign and its results. As a Google Adwords Qualified / Certified Company, Milestone has proven that it has the knowledge, experience, and expertise to achieve results for its clients.

Google Analytics is a web analytics tool that allows website owners to track how visitors found their website, how they explored it, and how they can enhance their visitors’ experience. With this tool, website owners can create a more effective website, track and analyze search marketing campaigns, improve website performance, increase conversion, and drive online revenue. As a Google Analytics Certified company, Milestone demonstrates top-to-bottom expertise of Google Analytics and the ability to apply analytics data and make improvements to ongoing marketing campaigns for their travel and lodging industry clientele.

The Challenge of Measuring ROI

It is very challenging to measure the true ROI generated from your SEM efforts. In many cases, visitors leave your website and go to a branded booking engine or stand-alone booking engine to complete the purchase rather than booking directly on the hotel site. Most of the time, the purchasing cycle is closed on a different server and not on the server where your hotel website is hosted. While you can find out the total revenue booked through your site, it’s quite difficult to do sophisticated tracking, such as key word conversions, organic and paid conversions, unless you embed tracking codes in the back-end on booking engine pages.

Figure 1 below illustrates the typical marketing and booking scenarios for the lodging industry. Specifically, any search engine marketing campaign can result in bookings on any of the following channels:

• Internet Booking Engine – Most easily measured
• Phone Reservations – Not measured in most hotels (in our experience)
• Group Bookings – Harder to measure
• Secondary Channels – Bookings on 3rd party channels such as Expedia, Travelocity, Orbitz, etc.

In order to get a complete picture of your return on investment for an online marketing campaign, our recommendation is to track each of the above channels. In the following sections of this article, we will discuss how each of these channels can be measured effectively.

Figure 1 Channels Impacted by Online Marketing Efforts

Internet Booking Engines

Internet booking engines are a direct channel for your online marketing efforts, and are one of the easiest channels to measure the return on investment and sources. The internet booking engine may or may not be hosted on the same server as the website which is being marketed. In either case, most booking engine reports will be able to show the actual bookings received via the website that is being marketed. Make sure that you assign a special code in your booking engine for all reservations coming from your website and for any online marketing campaigns that you may conduct such as banner ads, email marketing, etc.

We have segmented the key performance indicators (KPIs) for tracking online marketing efforts into different categories depending on the goals and the level of sophistication of the user.

1. Simple Conversion Tracking

The KPIs for the simplest form of tracking can give an overall snapshot of whether your SEM efforts are working or not. This tracking is ideal for senior management and non-technical front-line/management staff. Simple conversion tracking provides an overall idea about the return on investment from the marketing activity without going into a lot of detail about the search engines or keywords used to find the hotels. Figure 2 illustrates the concepts behind simple conversion tracking.

Indicators For Simple Conversion Tracking:

1. Visitors: Is my search marketing working? Is my site traffic continuing to increase taking into account seasonality. Look at a year-on-year comparison.

2. Page Views: Is my site attracting the right kind of visitors? Is the site sticky?

3. Click-Throughs to Booking Engine: How many people went into my booking page to check rates? Several marketing sources, both internal at the hotel and external agencies will regard this as the true measure of the success of their campaigns. Once you have gotten the consumer to check out your rates, the marketing campaign has been successful. At this point, the responsibility for conversion shifts from Marketing into Revenue Management and has a strong bearing on whether the hotel has rooms, if the rates are competitive with the market, and if the booking engine is easy to use.

4. Actual Revenue Generated – the bottom line. This may be available from your website analytics software if the pixels from the tracking software are embedded in your booking engine. Or, the same report should be available from the booking engine reports and can be tracked for most brands and booking engines in the market.

Figure 2: Conversion Tracking

2. Advanced Conversion Tracking

The next level of detail in analyzing the website analytics report involves understanding the source of visitors coming to your website. This will enable you to determine the effectiveness of different search engines and referral directories as well as the keywords that are being targeted. The main KPIs to review are:

1. Search Terms – What people type in the search engines to get to your website

2. Referring Search Engines and Directories – Which search engines and directories are most effective in driving visitors to your site

3. Feeder Market – What are your feeder markets where visitors are coming from

4. Visitors by Campaigns: SEO, PPC, Banners, Emails – Which campaigns are most effective in driving visitors to your website

Advanced tracking should be done at two levels on your website – one for the total visitor traffic to your website and then for the visits that result in confirmed reservations. If the tracking software pixels are not embedded in the booking engine, the next best thing to analyzing confirmed reservations is to understand these KPIs for the visitors going into your booking engine. Analyzing visitors going into your booking engine, although not as ideal as tracking actual confirmed reservations behavior, gives you a very good measure of the effectiveness of your online marketing campaigns.

3. Sophisticated Conversion Tracking

The next level of sophistication in analyzing your website analytics report comes from understanding the click-through path of the visitors to your site and gaining a better understanding of which pages on your website are most effective and which pages result in consumers getting turned off. The main goal of tracking these metrics is to understand how to improve the content and navigation flow on your website to maximize conversion.

Some main KPIs to monitor include:

• Click through path for confirmed reservations or click-through to booking engine
• Exit pages of your website
• Entrance pages of the website

4. Phone Tracking

In our experience with over 500 lodging industry clients, a significant amount of conversion for your online marketing efforts happens offline – on the phone. The ratio between online to offline conversion varies, but we have observed that for every one reservation generated online, there are between 2X to 7X the reservations generated on the phone. The actual ratio depends on the brand of the hotel and the market segment that the hotel operates in. In general, the conversion ratio is close to 2X for branded upscale segment hotels and closer to 7X for luxury, high ADR independent resorts. The online to offline conversion also varies if the hotel is pushing a lot of marketing packages which typically generate more questions. One rational explanation for such high offline conversion vs. other industries is that we are in the services business and guests still want to talk to a live person before they book accommodations. Of course, repeat clients are more likely to book online.

There are several technologies available to track phone call conversions. At the simplest level, you can assign a unique number for your marketing campaigns and your website so that all calls on the unique numbers can be traced back to the campaigns. Make sure that those numbers do not end up in your marketing collateral. More sophisticated tools, such as the one shown below, will not only track calls from different campaigns, but can track by keywords and search engines. In addition, these tools provide the capability to record phone calls and measure actual conversion.

The main KPIs for offline phone tracking conversion are:

1. Campaign Tracking
2. Search Engine Tracking
3. Keyword Tracking
4. Actual Conversion – audio recording

Depending on your aggressiveness and your marketing budget, you may choose to operate at the simplest level where there is a unique number assigned to your website or at the most sophisticated level where you understand the source of the call as well as determine the conversion. Typically, we have observed a 30-50% conversion rate on the phone leads generated by online marketing campaigns.

5. Group Bookings

Group bookings apply only to hotels that promote group business specifically targeted at weddings, meeting planners, etc. We have found that hotels will generate significant amount of group business through online marketing efforts. Most group business leads will either call or fill out an information request (RFP) online. We recommend that all hotels targeting group business should create a form online on their website that visitors can fill out. You can track group business requests by monitoring how many group business requests you get from the website. There are tracking tools that will allow you to determine the total requests received online as well as categorize the leads by weddings, meeting planners, etc. Figure 3 shows a sample website form to be filled out by visitors interested in group business and a sample tracking report for group bookings received through the website.

Figure 3 Group RFP Tracking Tools

6. Tracking Secondary Conversion

Consumers tend to compare hotel rates while searching online. On average, a consumer will search four online websites prior to making a reservation. We have found in our experience that online marketing campaigns will have a secondary impact on the reservations received from other channels such as 3rd party websites – Expedia, Travelocity, etc. This effect is significantly magnified if the hotel does not maintain rate parity or offers better value on other online channels.

One case study for a 4-star independent hotel in Silicon Valley clearly illustrates the impact of online marketing efforts on secondary channels. Even though the website traffic had doubled in the first 3 months of being marketed, the online reservations stayed flat. When looking at other channel reports, the hotel observed that the reservations from a major 3rd party website had increased 1.5X during the same period. When we looked at the rates, we found the rates on the 3rd party channel to be about $20 lower than the rates on their own website. Our hypothesis was that more consumers found the hotel’s website after their marketing efforts began, but actually booked the hotel on the 3rd party website since the rates were lower. The analysis was confirmed after the hotel created rate parity between different channels. There was a drop in the 3rd party channel reservations back to the previous level and the website’s online reservations showed a corresponding increase reflecting the increased online marketing activity and increased visitor traffic to the website.

This is a great example of where the impact was measurable because of rate disconnect between channels. However, it is generally complicated to measure secondary conversions. Our recommendation to hoteliers is to look at online reservations as a whole to measure the overall impact of marketing programs.

Final Insights

In summary, measuring the true return on investment of your online marketing programs can be very complex. The measurement of ROI is complicated because consumers end up using multiple channels to close sales.

Here are the top 10 recommendations for tracking the effectiveness of your marketing campaigns:

1. Review and monitor all channels – online and offline – for complete tracking, including the hotel website booking engine, phone reservations, group bookings, and secondary conversion on 3rd party channels.
2. Define what KPIs work for your product/ service while measuring success of your SEM efforts
3. Track website analytics at the simplest level by Visitors, Page Views, Click-Throughs to Booking Engine, and Actual Revenue Generated
4. More advanced users should track the effectiveness of their marketing campaigns by tracking the Search Terms, Referring Search Engines and Directories, Feeder Market, and Visitors by Campaigns – SEO, PPC, Banners, Emails
5. For sophisticated users, our recommendation is to track the conversion paths, entrance pages and website exit pages
6. Track offline conversion by placing unique phone numbers, codes and trackable phone numbers
7. For group booking, use RFP tracking and phone tracking systems to track complete conversion
8. Train your front desk and sales force to ask callers how they heard about the hotel when answering phone calls
9. Make sure to assign rate codes in your front desk management system for every offer and campaign promoted online
10. Monitor secondary channels and overall changes in reservations as a result of online marketing campaigns and not just the booking engine revenue

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Article contributed by Anil and Benu Aggarwal, Milestone Internet Marketing

Frequently, hoteliers measure the size and importance of the internet as a booking channel by the number of reservations flowing through their online booking engines. An alternate way to measure the importance of their internet presence is to determine how many people were influenced by the hotel’s website, online ads, customer reviews, etc. While the hotel industry has seen a significant increase in online reservations, the true testament of growth is how many people use the internet as a research tool and take action based on your online presence.

Hoteliers should be mindful of their Official Hotel Websites, over which they have the most control. Consider providing information about local attractions, specials, packages, etc. It’s also critical that hoteliers monitor their online presence on the third party sites and look to uphold inventory and rate integrity. Lastly, sites that facilitate consumer generated content, such as TripAdvisor, are of utmost importance as the search engines consider the content to be highly credible.

In a study completed by Burst Media in February 2007, they surveyed the types of travel research conducted online by US travelers that use the internet solely as a research tool. They found that 50.1% of those polled searched for hotel accommodations and prices on the internet . These types of statistics remind us that regardless of how we measure the impact of the internet, the reality is that the channel is hugely important. With this increasing shift in “lookers” to the internet, it’s imperative for hoteliers to position themselves advantageously on this popular channel.
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Article contributed by Kimberly Ehrlich, Milestone Internet Marketing.