4 Biggest Challenges in Digital Marketing

4 Biggest Challenges in Digital Marketing

Welcome to January of 2021, the perfect time to analyze your digital marketing strategies and tactics. There might have been a few curve balls handed out in 2020, but four things that continue to stay the same are the biggest challenges in hospitality digital marketing. Warning, this article might open up your mind to statistics and challenges you didn’t even know existed in your vacation rental management companies marketing department. So buckle up as we dive deep in the complexities of digital marketing, the cost of human resources, guest acquisition costs, and the domination of OTA’s in the vacation rental industry. 

More Complex Than Ever

Think back to 2000, or even as recent as 2010 and what marketing tactics sufficed as above average and return on investment generators. It was as simple as banner advertisements on a local website, basic search engine optimization (SEO), and a manually sent email blast once a month. Your phones also were ringing consistently with inbound phone reservations and you did not rely heavily on website bookings. Isn’t it crazy to think your website didn’t need to be mobile optimized, let alone mobile friendly?! 

Utilizing marketing campaigns and website structure on mobile devices is one of the hundreds of marketing strategies your vacation rental management company should be utilizing and that is just the beginning. Moving past 2010 to most currently, 2021, there are hundreds of hospitality marketing tools created for a variety of goals such as brand awareness, direct bookings,  guest retention, employee experience, increased revenue, and more. A few examples include conversion optimization, automated email marketing, advanced SEO, cart abandonment, retargeting, paid social media, organic social media, and paid search.. Your vacation rental management company might be wondering where to begin? That is where hospitality digital marketing services come into play. Your marketing department does not need to know the Cost Per Click (CPC) on the Google Advertisements or the top keyword in your region. What your marketing team, revenue team, and management needs to know is that your website is getting increased traffic, reduced guest acquisition costs, and increased revenue. (We don’t mean to scare you here, we just want you to be aware of the real life scenarios.) 

Did you know that the industry average of a traveler putting their email into a pop up on your website is between 1 to 3 percent? If you didn’t know that or know what your conversion optimization rate on your website pop up is, that is okay. Different metrics matter to different companies, some vacation rental management companies would find more value in a statistic in the last 30 days their website pop up captured 637 guest emails. The benefit of a website pop up capturing guest data means it is putting the guests email into the CRM where your vacation rental management company will be able to stay top of mind with brand awareness and discount offers straight to the guests email to entice them to book. 

Here is the last example we want your property management company to think about, how are you re-engaging travelers who research your company, are looking for a vacation, but decide to abandon your website and not book? Did you even know that was an option to track? This marketing tool is called cart abandonment. Before deciding where to book, the average traveler will view 21 websites before making a decision. If they got all the way to the last step of putting their information into your website to book but did not pull the trigger, these are the lowest hanging fruit for your marketing campaigns next to repeat guests. In a year over year case study conducted on a TravelNet Solutions customer, TNS Cart Abandonment was able to recover 579 bookings for a 168 unit resort located in Hill Country Texas. This customer committed a $900 investment to see a 36:1 Return on Investment with $362,000 in direct bookings. Take it from the experts at TNS, we really hope you are using cart abandonment strategies in your current marketing plan. 

Cost of Human Resources

Today it is crucial to have a strong and strategic digital marketing strategy. Hiring a marketing team for a VRMC can be time consuming and expensive without even mentioning training and employee turnover. The average employee turnover for the hospitality industry is 73.8 %. This means that roughly 6% of employees leave their job each month.  

How does this affect your VRMC?  It means that you are spending a ton of time and resources training new employees on multiple systems like your PMS, CRM, and Digital Marketing tools but they are not sticking around long term. One of the most important investments you can make is in new people. The cost of hiring and training an employee is arguably one of the most expensive parts of running a business (roughly $4,000), so you’ve got to make sure that you get the best people for the job, everytime.

If it isn’t practical to hire in-house where should you go? Let’s discuss a couple reasons why you should consider hiring a Digital Marketing agency for your properties digital marketing strategy.

  1. Human Resources are Hard to Find and Costs are Increasing

If you hire cheap you may have someone with little digital marketing or industry experience, but if you hire expensive you may not have a large enough return on investment to justify the costs. Sure, large companies can easily carry the costs of a marketing team while having positive ROI, but what about smaller or independent properties?

To have a successful in-house, specialized marketing team at your property, it is necessary to spend hundreds of thousands of dollars per year on wages. This isn’t practical for independent properties and as you can see, the costs quickly add up:

(Here is a breakdown of what the costs are for the average 6 person marketing team in the United States according to payscale)

TOTAL COST: $314,000

With a digital marketing agency it is possible to have all of that for the price of one employee. For example with TravelNet Solutions (TNS), depending on products and company size, a full funnel strategy can cost about the same as one employee that makes $11.25-$25.62 per hour. 

  1. The Demand on Marketers are Unrealistic

To succeed in today’s complex digital landscape, it requires a team of experts focused around an integrated marketing and technology strategy. Gone are the days where you have basic SEO, banners, email blasts etc. Now you have PPC, SEO, Segmented Email Marketing, CRM, Social Media Marketing, Retargeting, Reputation Management, Ecommerce and Meta Search to deliver on. If you take a look at your current strategies, how are they organized? Who is in charge of implementation? Do you have an employee that is specialized and knowledgeable within each area listed above? 

If the answer is no, it could be affecting your success.

Making the jump to hire some outside help is a big decision, and it shouldn’t be taken lightly. There are thousands of Digital Marketing agencies around so we want to recommend a few tips on choosing the right one.  We recommend you choose a leading agency that is experienced in the hospitality industry. This will go hand and hand with how knowledgeable they are and specialized in each specific area of digital marketing. 

You should also do your research and see how their agencies perform. Are they getting their customers results? And not only that, do they have case studies that prove they can do what you need? What does their reporting look like? 

These are all important questions to ask when searching for a digital marketing agency. They will act as another member of your team so you should feel comfortable and confident in them as a partner.

Cost of Guest Acquisition 

No one likes to hear this, but the cost of acquiring a new guest and retaining them is more challenging in 2020 than ever before. Reasons such as a global pandemic have shifted the mind of the traveler in more ways than one. Let’s discuss a few of them here.

Repeat guests are harder to come by because travelers are realizing they can have more experiences if they stay somewhere new. People are not always traveling to a place because they feel comfortable and it is a known place, the fact is, people are traveling to experience new things with adrenaline and excitement. This means it costs more to acquire and retina and also drive up costs of maintaining revenue growth due to the constant need to introduce your brand to a new guest and convert them.

OTA’s continue to dominate the market share. Booking.com, Vrbo, and Airbnb doubled down on their budgets in advertising which makes it near impossible to compete. When a traveler opens up Google and searches a location for a vacation rental it is much harder to get your brand in the top three paid search spots due to higher bids coming from these larger distribution channels. 

Lastly, due to a global pandemic, the booking window between research and booking has decreased. Many people are traveling more spur of the moment due to low travel costs and feeling cooped up for months at a time. The spontaneous decisions are driving travelers to book at new places in a shorter period of time. This does not allow you to market to them over an 80 day booking period, causing you to do more brand touchpoints in a shorter period of time to effectively convert them. 

Domination of OTA’s

We are not saying you should not use OTA’s for part of your bookings, but they should not exceed your direct bookings. Direct Bookings are your ultimate source of revenue you want to grow because that does not take a commission fee out of each booking. Did you know that distribution channels take anywhere from 5 to 20% out of your bookings? This can result in hundreds of thousands lost annually to OTA’s who are already dominating the market. 

When you drive traffic to your website for direct bookings, this gives you the opportunity to remarket to them through social media and paid ads, as well.

About TNS

TNS has over 20 years of hospitality industry experience and knowledge. We focus on enterprise technology and digital marketing solutions to 1400+ hospitality customers, and 200+ software customers. We have a proven track record of growing your website traffic and revenue for our customers, and have done this to our own listing site resortsandlodges.com. We started with 0 and now have over 7 million travelers annually visiting our site. If you would like help with your Digital Marketing Strategy, we would love to schedule a meeting with you.