Hotelier’s Last Untapped Potential for Profitability in 2022: Improving Website Conversions
Background: As the digital customer journey continues to become increasingly more complex, hoteliers need to be looking for more impactful ways to engage, convert and retain their best potential guests. Today’s typical online travel consumer is exposed to over 250,000 micro-moments a year and undertake a complicated journey of 45 touchpoints (websites, apps, content) via multiple devices before making a hotel booking (Google).
Hotels are not just competing with OTAs, their competitive set, and short-term rental accommodations on platforms like Airbnb, Vrbo, Booking, 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 consumers’ attention, making it even more important to engage and convert potential guests while they are visiting the property website.
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%. Out of 100 people who visit your hotel website, two or less will book, and 98 or more will abandon your website and make a booking elsewhere - either with your competitors or with the OTAs.
The situation is even worse with independent hotels, where conversion rates are even lower and range between 0.5% -1.5%. Most hoteliers do not even know what the conversion rates on their property websites are.
The recent privacy moves by Google and Apple have elevated the crucial importance of first- and zero-party data, without which hoteliers cannot effectively manage their marketing, CRM and guest appreciation programs, personalized revenue management, operations, etc. nor engage, acquire and retain today’s digitally savvy travelers. Website bookings are one of the main sources of first- and zero-party data for any hotelier today.
What are the reasons for these exceptionally low conversion rates?
Mobile-last property websites, poor user experience (UX), sub-standard CMS and CRS technologies, poor visual and textual content, lack of merchandising strategy and technology, lack of reward or guest appreciation program in place, market and rate disparity, lack of enticing offers and compelling reasons to even enter the booking engine process - less than 1/3 of website visitors do so, etc. are only some of the reasons for these poor results.
Hoteliers are spending their limited marketing dollars on SEO, paid search, metasearch, online media, PR, and social media in order to bring users to the hotel website and allowing 98%-99.5% of them not to book. Complete waste of precious resources!
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 $450,000 per year. A 33% increase will bring an additional $600,000 per year. Just imagine what any hotelier can do with these additional direct revenues. Hire much needed staff members, implement new much-needed technologies like cloud PMS, mobile check-in, guest resolution and messaging, etc.
In the following real-life case study (hotel name intentionally altered), within the first 6 months, we were able to increase the conversion rates on the website by 75% thus “gifting” the hotel group with $3,187,120 additional website revenue. A year later, we doubled their conversion rate.
What are the main factors determining hotel website conversion rates?
These factors fall into the business, revenue management, marketing, and technology categories:
Business Factors
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?
Who is in charge of the property website?
Who “owns” the property website? Who is held accountable for the results and production of the property website: bookings, referrals, RFPs and group bookings, social events leads, etc.? Whose compensation is directly affected by the website revenues? Very few hotels have tied their website to concrete responsibilities, compensation, and bonuses, and this is the main reason why most property websites linger in a mostly abandoned state.
Revenue Management Factors
Market parity
How do the property rates compare to the compset in the destination? Are your rates comparable to your competition? 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.
Marketing Factors
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.
Credible content
The website content - both textual and visual - should be credible, in addition to being mobile-friendly, engaging, and unique, and of editorial-level quality. Travel consumers always judge the credibility of messaging coming from any hotel website through the prism of three criteria: a) User-Generated Content: What did fellow travelers had to say about your hotel via reviews, social media posts? b) Professional Content: How does the professional travel media - travel writers, bloggers, TV, etc. - describe your hotel, and finally c) The property website “official content” - your own textual and visual content.
The bigger the gap between the “official content” on the property website and the user-generated content, the less credible is the official content - travelers trust user-generated content more compared to any hotel's official content.
Technology Factors
Quality of website design, technology 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. The hotel website is 50% art and 50% science.
Many hoteliers are obsessed with how beautiful their website is, completely ignoring the website UX, technology, functionality, and content. Only a website conceptualized and developed using equal parts art and science can engage and convert users and generate meaningful revenues.
Mobile-first website design and architecture
With over 65%-70% of website visitors now visiting the hotel website via mobile devices, a mobile-first website is a must. How old is the hotel website? If it is older than two years, it’s already 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.
Case Study: Luxury Island Resort Increases Revenue with a new mobile-first website.
With their previous website, website bounce rates were exceeding 60%, and less than 4% of room revenue was coming from the online channel. Despite its unique location, beauty and luxury, the property was heavily dependent on the OTAs, wholesalers and tour operators. To increase direct online revenue and conversion rates, the property invested in a new mobile-first website and CMS technology platform, new mobile-friendly textual and visual content. After a few months, the new mobile-first 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 2.5 seconds to load. A mobile-first 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?
Reservation abandonment technology
Acquiring a new website visitor is 5-15 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.
Case Study: A Central California Hotel Increase Conversion Rates by 25% With Reservation Abandonment Tools. With a collection of four hotels, this resort needed increasing their website conversion rates and getting website users back to the booking engine. After implementing Reservation Abandonment Application, the resort saw a 30% increase in their conversion rate year-over-year and a 3,520% return on their investment.
Website 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?
Case Study: Cendyn CDP-powered website personalization.
Powered by Cendyn Starling CDP (Customer Data Platform), Cendyn’s Cloud CMS (Content Management System) allows hoteliers to drive more direct bookings by serving personalized content, offers, and imagery to their website visitors by leveraging the power of their first-party data. The seamless integration between the CMS and CDP enables Cendyn hotel clients to leverage data from the master guest profile to recognize returning visitors and deliver the most targeted personalization available on the market.
Conclusion
Developing a robust website conversion strategy should become the top priority for hoteliers in 2022-2023. This is a crucial step for improving direct bookings and lowering distribution costs. Any investment in your website conversion strategy will not only pay for itself but will reward the hotel generously by improving the bottom line.
