Budget season tips: How to decide if your hotel needs a new website

It’s budgeting season, which means your hotel is probably ready to start planning how, when, and where you’ll be investing during 2018. In the following two-part series, we’ll be offering expert tips to help you budget for two areas that could define how successful you are next year—your digital marketing strategy and your hotel website.

Investing in a new website can have a huge impact on your hotel’s direct bookings and profit margins. But is now the time for your hotel to make that investment? To judge, it’s worth relying on both concrete metrics and subjectivity.

For instance, if your hotel website has a conversion rate of less than 1.5 to 2%, and your direct contribution is lower than 20%, there’s a good chance your website isn’t optimized for conversion and usability. In this example, it’s likely that the website isn’t doing a great job of promoting the property and location.

In addition to relying on metrics to guide your decision, it can be helpful to ask yourself the following questions:

Does my website “transport” the user to the hotel and the location?
Quality photos, sensory-rich language, and engaging descriptions of your hotel’s star features and location highlights should create a vivid mental picture that instantly inspires travelers and keeps them on your site for longer.

Is my hotel website best in class among the local competition?
Check out the websites of competing hotels in your local area. If their websites are doing a better job of showcasing the destination or their own amenities, your own website is probably in need of an overhaul.

Does my hotel website sell the property better than OTAs or crowd-sourced content?
In the fight for direct bookings, your hotel website needs to be the best representation of your property online. Compare your OTA listing with your own website, and take a look at crowd-sourced content on social sites such as Facebook and Instagram. Be honest and consider if your website really does a better job of selling your hotel to potential guests.

Does my hotel website use all of the e-commerce tools available?
Beyond having a great design, your hotel website also needs to be built with solid e-commerce principles in mind. Displaying live rates, booking calendars, and utilizing OTA-style urgency messages are all key tools that can turn lookers into bookers.

How does your website booking experience compare with the competition?
The majority of travelers prefer booking with OTAs because their websites are easy to use. Tips to ensure your hotel website offers an equally impressive user experience include having easy navigation, a simplified checkout procedure, and splitting room options up from additional room rates and extras to reduce decision overwhelm.

Does my website work well on mobile and other devices?
The modern travel journey is defined by an omnichannel traveler who routinely switches between desktop, tablet, and mobile to plan and book trips. This makes having a responsive design an absolute must to ensure customers receive an optimal user experience on all devices.

Am I highlighting the unique value propositions on my website?
With fleeting online attention spans and a fiercely competitive marketplace, your website quickly needs to establish why people should book with you rather than the hotel across town. Make sure your key selling points are compelling, prominent, and clearly defined to inspire users and encourage them to book direct.

It’s also important to avoid a mistake made by a lot of hotel stakeholders—just because your website was built or updated recently, doesn’t mean it’s performing at its optimum.

Above all, you need to identify the right service provider that not only showcases your property in a beautiful way, but also leads the way in terms of their expertise in usability, conversion optimization, and technological innovation.

Setting a website budget

The cost of a new website is only a drop in the bucket if it results in increased direct bookings, so it’s important to view this as an investment, not just an expense.

As a guide, it’s appropriate to allocate anywhere from $5,000 to $50,000 for a website project, depending on the scale and complexity of your needs. The figure you settle on will largely depend on your hotel’s gross revenue and budget, as well as factors specific to your property such as the number of rooms, the ADR, and occupancy rates.

Also take into consideration the potential return on investment. While it’s often tempting to pick the cheapest solution, you don’t want to run into a situation where you get what your pay for. Don’t let savings get in the way of performance. What percentage increase in direct bookings do you want to see? How much of a shift do you want to see from high-commission third party bookings (i.e. OTA bookings) to direct website bookings? Be sure to run the numbers and calculate your expected return for any investment.

For larger website projects, many web agencies are also allowing hotels to mitigate design and development costs by splitting them into monthly payments. Other companies also offer a hotel website as a service—instead of building a custom design from scratch, you can customize existing layouts to create a simple website, for which you will pay a small monthly fee for as long as you utilize the site.

If you build it, will they come?

The mantra “if you build it they will come” is simply incorrect when it comes to e-commerce. Once you’ve invested in your website, consistent investment in driving traffic and lead generation are both essential ingredients in the recipe for success.

Alongside your website budget, it’s also important to allocate funds for ongoing website maintenance, SEO, inbound marketing, and other services that will drive traffic and amplify promotions. You will also need to consider a budget for digital marketing (such as search engine marketing, display advertising, and metasearch) or you may not see your website investment paying off quickly. Our article on budgeting for digital marketing can help shed insight on how to make smart investments to bring more traffic and more direct bookings to your website.

Nate Lane

Nate Lane

Nate Lane is a senior global director of business development, product development, and agency operations with 10+ years of experience driving growth and innovation as an "intrapreneur." He's an avid mountain biker, a coffee and craft beer enthusiast, and a proud family man. Contact him at nate.lane@pegs.com.

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