Every year more owners and operators of all-inclusive lodges and ranches ask if online booking and digital marketing strategies make better sense for their business. It can be a somewhat polarizing topic, and depending on your view, you’ll find yourself in one of three groups: the early adopters, who are all-in, the opposed, who staunchly swear against it, and the “undecided”. The first two groups are on the fringe, and those on the fence represent the majority many times over.
Whatever your take, lodges and ranches can thank hotels for creating the massive economy of booking travel online in the first place. Were it not for the hotel industry’s enormous capital investments in hospitality tech, the development costs would be extraordinarily prohibitive for a small business, and thus the relatively affordable tech options now available to lodges and ranches wouldn’t even exist.
Indeed, a profitable online booking and digital marketing strategy is not a choice for a hotel, but a mandate, and revenue generated from online bookings is the primary metric by which the performance of a hotel is measured. The metrics by which the performance of a lodge or ranch is measured will always be different. Seeing online booking is essentially new to the all-inclusive lodge and ranch space, owners and operators continue to look at hotel industry trends in order to better inform their own business decisions.
With this idea in mind, we turned our attention to Online Travel Tech Consultant & Strategist and Adjunct Professor of Hospitality Technology at NYU, Max Starkov. In a recent Linkedin post he shared his take.
The Hotel Industry’s Top Digital Marketing Trends for 2023
“Hoteliers are beginning to understand that increasing direct bookings and repeat business could happen ONLY by increasing investments in a) digital marketing and b) CRM technology.
Did anyone notice that Expedia spent nearly 50% and Booking nearly 40% of their net revenue on Sales & Marketing in 2021? Compare this to 2.5% of net room revenue that hoteliers usually spend on marketing in “normal” years like 2019. Even worse, marketing spend in U.S. hospitality during the pandemic shrank significantly compared to 2019, dropping to as low as 50% in 2020 and rebounding slightly to 54% in 2021 of the pre-pandemic level (STR).
Implementing CRM technology and program is a crucial approach to significantly increase direct bookings. In the post-pandemic era, success in bringing repeat business will make or break the property. You cannot have a meaningful repeat business (5-15 times cheaper than acquiring new guests) without a CRM technology and program in place. Only a meaningful CRM technology application – as part of your hotel tech stack – can ensure deep engagement with your past and future guests.
CRM tech not only provides automated pre-, during- and post-stay communications, guest satisfaction surveys, guest retention marketing automation and drip marketing campaigns, but takes it a step further via guest recognition program management and loyalty marketing. All of these fully automated CRM initiatives keep “the conversation going” with your upcoming and past guests, keeps them engaged and steers them in the right direction: to book your hotel when it’s time for them to visit your destination again. In addition, you can use your CRM first-party data about your best guests to launch similar audiences marketing on Google, Facebook, Instagram, etc., to target potential customers with similar characteristics as your best guests… CRM technology has become widely available and reasonably priced…., yet less than 10% of independent hotels have implemented CRM programs in place.“
Depending on how you run your ranch or lodge, Mr. Markov’s opinions will likely strike a different chord, so let’s look it from the perspective of our three aforementioned groups, and size up a few probable takeaways:
The Opposed
A good number of well-established (and very successful) lodges and ranches believe there is no place for online booking and there never will be. Their priority is to provide highly personalized all-inclusive vacations in the same way they have for generations. To put it bluntly, the notion of introducing technology into their reservation experience runs anathema to their brand of hospitality. While this is true, these seasoned owners and operators also recognize the hotel industry as an indirect competitor, and therefore like to keep a watchful eye on how they work. In light of the trends, and as a hedge to protect against the hotel industry’s focus on CRM and building repeat business, savvy owners and operators with an anti-tech view might double down on the tried and true marketing initiatives upon which they have relied for years. These may include, but not limited to, social events, trade shows, direct mail, and targeted email campaigns.
The Undecided
Mr. Starkov’s analysis might be the most meaningful for owners and operators intrigued by the hospitality technology conversation, but not yet confident in how and where it fits in with their lodge or ranch. From the data, clearly online booking is very popular with the traveling public and here to stay. So, when thinking about making a move into the online booking arena, lodges and ranches should write a business plan. Scale and scope is critical, and the size of your investment needs to support the desired returns. Include start-up and implementation costs in your budget, along with dollars earmarked for CRM and digital marketing designed to drive traffic to your website. Combine it all with reasonable forecasts for the anticipated revenue online booking will generate in year 1, 2, and 3 of your plan. Once the revenue and expense model is fully mapped out, owners and operators can make an educated decision as to whether it’s an investment that carries too much risk, or a profitable tech tool that will help drive their P&L into the black.
The Early Adopters
Technology naturally speaks to some owners and operators, especially those looking for an edge. For early adopters of online booking in the lodge and ranch space, it was never a question of “if” but always “how”. The recent trends in the hotel industry have a lot to say about that, because while online booking on its own might not be as singularly effective as it has been in previous years, hoteliers see a growth opportunity when online booking strategies are bolstered by CRM. This raises very important questions for technology forward ranches and lodges. Seeing as how “less than 10% of independent hotels have CRM systems in place”, it is a safe bet that an even smaller percentage of lodges and ranches have relevant and CRM specific experience. This puts a sharper focus on the challenges an early-adopter must face, because while they might be ready, there is a good chance the technology isn’t quite there yet. Thankfully the cavalier spirit that these owners and operators possess is an essential quality that fuels them as they navigate the trials and tribulations of continuing to adopt and refine new technologies with the intent of putting them to work for their lodge or ranch. After all, for an early adopter, if there is any technology that can potentially bring their business a competitive advantage, their inclination is usually to give it a shot, and figure out the rest as they move forward.
Photo courtesy Justin Casey Follow on IG: @justinscasey
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