Are you looking to navigate the complexities of hotel digital advertising with strategies that not only drive immediate results but are also built to last? Building more durable and effective bidding strategies for hotel campaigns is essential in a landscape where guest preferences and digital practices change at a breathtaking pace. This article dives straight into actionable strategies that ensure your hotel’s bids are competitive, adaptive, and profitable, preparing you for the demands of modern travelers and the future of ad technology.
The economic downturns paint a grim picture, with a significant impact on hotel occupancy rates and revenue, reflecting deep economic uncertainty. This has hit hard on seasonal tourism areas and international tourist destinations. However, every cloud has a silver lining. In response to these economic struggles, hotels have shown resilience by adapting their strategies, including lowering room rates, seeking new revenue streams, and targeting long-term visitors due to the changing consumer behaviors.
Such resilience doesn’t come without support. The role of government in aiding the industry during recessions cannot be understated. From providing financial assistance to promoting domestic tourism, governmental support has helped maintain, and in some cases, even boost hotel industry performance.
In the face of significant challenges, hotels must place a high emphasis on:
This process proves instrumental in ensuring the effectiveness of marketing strategies.
In the face of adversity, the hotel industry has exhibited remarkable adaptability, swiftly updating their services with new digital tools to meet the rising demand for contactless, self-service, and mobile-based solutions. The integration of AI and machine learning has revolutionized the travel and hospitality sectors, leading to increased revenue streams and improved customer satisfaction. As a result, many hotels have been able to build thriving digital businesses and become thriving digital businesses themselves by implementing created solutions in this challenging landscape.
The decline in tourism has served as a wake-up call, highlighting the need for hotels to adapt to a ‘new normal’. This includes the incorporation of digitalization, sustainability, and workforce training to remain competitive. The hotel industry’s IT budget globally saw an increase to more than 4% of total revenue in 2022, up from less than 3% the previous year, indicating a robust focus on technology to aid recovery. This openness to innovative approaches in the post-pandemic recovery phase has led to a significant percentage of hoteliers considering alternative investment metrics for technology projects.
The hotel industry is witnessing a recovery since the pandemic, leading to an uptick in guest occupancy and travel demand. In response to this recovery, hoteliers are reassessing their advertising tactics, revisiting their bidding models, and recalibrating budget allocations. This is particularly important in light of changes in Google’s ad bidding policies.
Hoteliers need to adapt to changes in traveler behavior, such as evolving preferences and expectations, to adjust their bids effectively and target the right audience for their campaigns. Essentially, a deep understanding of the market dynamics is necessary for devising a successful bidding strategy.
In the realm of bid strategies, Google AI is a game-changer. The AI significantly enhances hotel bid strategies by offering optimization in Cost-per-click (CPC) Bidding and Target ROAS (tROAS) models. Using first-party guest data for more effective ad targeting, the AI-driven Ads engine, like the one used by Hotelzify, demonstrates the power of artificial intelligence in improving CPC strategy performance.
The tROAS leverages Google’s AI to assess the potential value of conversions, enabling real-time bid adjustments and optimization for searches likely to lead to valuable conversions. Utilizing tROAS in conjunction with Performance Max for travel goals, which includes Hotel Ads inventory, allows advertisers to maintain a cohesive performance strategy across various hotel campaigns.
Google Hotel Ads, a part of the larger Google Ads platform, is set to phase out commission-based models by April 30, 2024, transitioning to Target return on ad spend (tROAS) and Enhanced cost-per-click (ECPC) for new campaigns. Existing campaigns using commission-based bidding models are advised to transition to CPC models before they continue until October 31, 2024.
The Cost-per-click (CPC) bidding in Google Hotel Ads means that advertisers pay a specified amount each time a user clicks on their ad and are redirected to the hotel’s website. Enhanced cost-per-click (ECPC) is a strategy where Google automatically adjusts your bids with the objective of boosting conversions while maintaining the average CPC below the maximum set by the advertiser. During the transition period to the new CPC models, historical reporting data for existing hotel ad campaigns will remain available to advertisers.
Historical reporting data provides invaluable insights into the efficiency of past campaigns and consumer behavior patterns. Such information is indispensable for monitoring campaign performance, allowing hoteliers to spot trends and assess the results of prior bidding strategies.
Leveraging historical data, hoteliers can make data-driven decisions to enhance future campaigns and refine their bidding strategies. As hotels shift from commission-based to CPC models, the importance of historical data in fine-tuning bidding strategies grows significantly.
With the impending phase-out of commission-based bidding models for Hotel Ads by October 2024, hoteliers are directed to transition to more sustainable CPC bidding models. As advertisers shift their focus, shifting to CPC and tROAS bidding models offers more control over ad spend and the advantage of leveraging Google’s AI to set and reach specific ROI targets. Hoteliers are advised to start transitioning early, potentially seeking consultation and considering new Google features like Performance Max for a smooth change in strategy that aligns with Google’s privacy-focused direction.
For optimal performance of CPC and tROAS models, hotels can fine-tune their bids based on the probability of clicks leading to bookings and determine the most suitable maximum CPC for desired campaign results.
Smart Bidding strategies such as commission per stay or conversion enable automatic optimization for bookings and cater to fluctuating user demand, with bid activation options including fixed bid per night or a percentage of the room price. Dashboards in online marketing campaigns allow advertisers to track key performance indicators such as clicks, views, bookings, and calls, providing a clear measure of ROI and campaign success.
Refining campaign strategies in real-time based on the latest data and market trends ensures ongoing improvement and sustenance of a positive ROI. By taking into account guest experience metrics and social media engagement, hoteliers can gain a more comprehensive understanding of their marketing efforts‘ impact, extending beyond just financial metrics.
AI algorithm-based ad campaigns use guest data to capture profile types, purchasing behavior, and unique preferences, allowing hotels to target the right audience more effectively. For accurate audience targeting, hotel campaigns should leverage:
Hotel campaigns need to be flexible to anticipate industry changes such as lifting travel bans or shifting traveler preferences to adjust their strategies and capture upcoming demand. As advertisers navigate these changes, a case in point is AccorHotels’ use of geo-targeting features in Hotel Ads and Koddi’s proprietary bidding algorithms, which led to a 20% lift in traffic, a 65% lift in bookings, and an 84% lift in revenue by tailoring messages and focusing on high-intent customers.
The success of a hotel campaign largely depends on striking a balance between ad spend and returns. Assessing ad campaign performance using metrics like click-through rate (CTR), cost-per-click (CPC), and conversion rate is essential to optimize various elements of hotel campaigns on social media.
A high click-through rate (CTR) suggests that an ad is engaging the intended audience, whereas a low cost-per-click (CPC) indicates cost efficiency in attracting clicks. The conversion rate, representing the proportion of ad clickers who complete a desired action, such as booking a hotel room, indicates the ad’s direct effectiveness at generating revenue. Regular analysis of performance metrics allows for ongoing social media campaign optimization, thus maximizing returns on ad spend.
Calculating the ROI of marketing campaigns involves accounting for not only direct revenue but also indirect factors such as repeat patronage and word-of-mouth referrals.
In the backdrop of global efforts to revive the tourism sector, the United Nations World Tourism Organization (UNWTO) is committed to:
The UNWTO has established a partnership with AVIAREPS to launch the UNWTO + AVIAREPS Destination Marketing Grant, which aims to assist European countries by leveraging marketing and research services.
The UNWTO + AVIAREPS grant program encompasses destination research and analysis, PR services, and inclusion in AVIAREPS Roadshows, which connect destinations with travel industry buyers. As we eagerly await the future announcements on the eligible European Member States for the grants, there is potential for the collaborative efforts to extend to other regions worldwide.
As the saying goes, the proof of the pudding lies in the eating. Here are some success stories of hotels that have successfully maneuvered the challenging landscape of hotel campaigns using robust bidding strategies. Choice Hotels International Inc. implemented Hotel Ads’ property-level bids which led to a 75% increase in bookings, a 93% growth in incremental revenue, and a 17% rise in ad spend ROI.
Intercontinental Hotels Group (IHG) synchronized its global marketing efforts with Google Hotel Ads, resulting in a 53% rise in traffic, a 70% surge in bookings, and a 78% growth in revenue. These case studies showcase how effective bidding strategies can result in significant growth in bookings, revenue, and ROI.
In a nutshell, mastering the art of building durable and effective bidding strategies for hotel campaigns is a multifaceted process. It involves navigating significant challenges, adapting to industry changes and technological innovations, understanding Google Hotel Ads and bidding models, and crafting winning strategies. With the right approach, right targeting, and right balance between ad spend and returns, the road to building thriving digital businesses is not too far off. So, are you ready to make your mark in the hotel industry?
The best bidding strategy for display campaigns depends on your campaign goals. For focusing on impressions, consider Viewable CPM bidding and for clicks, consider Manual CPC or Maximize clicks bidding. If aiming for conversions, consider Target CPA, Maximize Conversions, or Target ROAS bidding.
The correct bidding strategy for awareness campaigns depends on your specific goals. If your goal is to increase brand awareness, consider using cost-per-thousand viewable impressions (vCPM) bidding to put your message in front of customers.
Smart Bidding includes bid strategies like Target CPA, Target ROAS, Maximize Conversions, and Maximize Conversion Value, which use Google’s AI to optimize for conversions in each auction.
The cost of Google Ads can range from $100 to $10,000 per month, with most businesses paying between $0.11 to $0.50 per click and $0.51 to $1000 per 1000 impressions, depending on factors such as industry, targeting, and ad network.
During economic downturns, the hotel industry has responded by adapting strategies such as lowering room rates, seeking new revenue streams, and targeting long-term visitors, in response to changing consumer behaviors.
The post Mastering the Art of Building More Durable and Effective Bidding Strategies for Hotel Campaigns appeared first on Ad Mockups for Client Approvals Made Easy | PPC Ad Editor.
Key Takeaways
Economic uncertainties and a decline in tourism have forced the hotel industry to adapt by lowering room rates and incorporating digital tools such as AI, emphasizing the importance of analyzing marketing ROI to navigate economic downturns and changing consumer behaviors.
The hotel industry is transitioning from commission-based to CPC and tROAS bidding models in Google Hotel Ads, with a phase-out date of October 2024, necessitating hoteliers to leverage historical campaign data for refining future strategies and adapting to Google’s privacy-focused direction.
Success with hotel campaigns hinges on using AI-driven strategies to target the right audience, analyzing performance metrics for continuous optimization, and balancing ad spend against returns, as illustrated by case studies where effectively adapting bidding strategies led to significant increases in bookings and revenue.
Navigating the Challenges in Hotel Campaigns
The economic downturns paint a grim picture, with a significant impact on hotel occupancy rates and revenue, reflecting deep economic uncertainty. This has hit hard on seasonal tourism areas and international tourist destinations. However, every cloud has a silver lining. In response to these economic struggles, hotels have shown resilience by adapting their strategies, including lowering room rates, seeking new revenue streams, and targeting long-term visitors due to the changing consumer behaviors.
Such resilience doesn’t come without support. The role of government in aiding the industry during recessions cannot be understated. From providing financial assistance to promoting domestic tourism, governmental support has helped maintain, and in some cases, even boost hotel industry performance.
In the face of significant challenges, hotels must place a high emphasis on:
Analyzing the ROI of marketing spend in the context of generated sales
Facilitating proper fund allocation
Evaluating the success of advertising campaigns
This process proves instrumental in ensuring the effectiveness of marketing strategies.
Adapting to Industry Changes and Technological Innovations
In the face of adversity, the hotel industry has exhibited remarkable adaptability, swiftly updating their services with new digital tools to meet the rising demand for contactless, self-service, and mobile-based solutions. The integration of AI and machine learning has revolutionized the travel and hospitality sectors, leading to increased revenue streams and improved customer satisfaction. As a result, many hotels have been able to build thriving digital businesses and become thriving digital businesses themselves by implementing created solutions in this challenging landscape.
The decline in tourism has served as a wake-up call, highlighting the need for hotels to adapt to a ‘new normal’. This includes the incorporation of digitalization, sustainability, and workforce training to remain competitive. The hotel industry’s IT budget globally saw an increase to more than 4% of total revenue in 2022, up from less than 3% the previous year, indicating a robust focus on technology to aid recovery. This openness to innovative approaches in the post-pandemic recovery phase has led to a significant percentage of hoteliers considering alternative investment metrics for technology projects.
Pre-pandemic levels and industry rebound
The hotel industry is witnessing a recovery since the pandemic, leading to an uptick in guest occupancy and travel demand. In response to this recovery, hoteliers are reassessing their advertising tactics, revisiting their bidding models, and recalibrating budget allocations. This is particularly important in light of changes in Google’s ad bidding policies.
Hoteliers need to adapt to changes in traveler behavior, such as evolving preferences and expectations, to adjust their bids effectively and target the right audience for their campaigns. Essentially, a deep understanding of the market dynamics is necessary for devising a successful bidding strategy.
The role of Google AI in bid strategies
In the realm of bid strategies, Google AI is a game-changer. The AI significantly enhances hotel bid strategies by offering optimization in Cost-per-click (CPC) Bidding and Target ROAS (tROAS) models. Using first-party guest data for more effective ad targeting, the AI-driven Ads engine, like the one used by Hotelzify, demonstrates the power of artificial intelligence in improving CPC strategy performance.
The tROAS leverages Google’s AI to assess the potential value of conversions, enabling real-time bid adjustments and optimization for searches likely to lead to valuable conversions. Utilizing tROAS in conjunction with Performance Max for travel goals, which includes Hotel Ads inventory, allows advertisers to maintain a cohesive performance strategy across various hotel campaigns.
Understanding Google Hotel Ads and Bidding Models
Google Hotel Ads, a part of the larger Google Ads platform, is set to phase out commission-based models by April 30, 2024, transitioning to Target return on ad spend (tROAS) and Enhanced cost-per-click (ECPC) for new campaigns. Existing campaigns using commission-based bidding models are advised to transition to CPC models before they continue until October 31, 2024.
The Cost-per-click (CPC) bidding in Google Hotel Ads means that advertisers pay a specified amount each time a user clicks on their ad and are redirected to the hotel’s website. Enhanced cost-per-click (ECPC) is a strategy where Google automatically adjusts your bids with the objective of boosting conversions while maintaining the average CPC below the maximum set by the advertiser. During the transition period to the new CPC models, historical reporting data for existing hotel ad campaigns will remain available to advertisers.
Historical reporting data and accurate determination
Historical reporting data provides invaluable insights into the efficiency of past campaigns and consumer behavior patterns. Such information is indispensable for monitoring campaign performance, allowing hoteliers to spot trends and assess the results of prior bidding strategies.
Leveraging historical data, hoteliers can make data-driven decisions to enhance future campaigns and refine their bidding strategies. As hotels shift from commission-based to CPC models, the importance of historical data in fine-tuning bidding strategies grows significantly.
Transitioning to more durable strategies
With the impending phase-out of commission-based bidding models for Hotel Ads by October 2024, hoteliers are directed to transition to more sustainable CPC bidding models. As advertisers shift their focus, shifting to CPC and tROAS bidding models offers more control over ad spend and the advantage of leveraging Google’s AI to set and reach specific ROI targets. Hoteliers are advised to start transitioning early, potentially seeking consultation and considering new Google features like Performance Max for a smooth change in strategy that aligns with Google’s privacy-focused direction.
For optimal performance of CPC and tROAS models, hotels can fine-tune their bids based on the probability of clicks leading to bookings and determine the most suitable maximum CPC for desired campaign results.
Crafting a Winning Bidding Strategy for Hotel Campaigns
Smart Bidding strategies such as commission per stay or conversion enable automatic optimization for bookings and cater to fluctuating user demand, with bid activation options including fixed bid per night or a percentage of the room price. Dashboards in online marketing campaigns allow advertisers to track key performance indicators such as clicks, views, bookings, and calls, providing a clear measure of ROI and campaign success.
Refining campaign strategies in real-time based on the latest data and market trends ensures ongoing improvement and sustenance of a positive ROI. By taking into account guest experience metrics and social media engagement, hoteliers can gain a more comprehensive understanding of their marketing efforts‘ impact, extending beyond just financial metrics.
Targeting the right audience
AI algorithm-based ad campaigns use guest data to capture profile types, purchasing behavior, and unique preferences, allowing hotels to target the right audience more effectively. For accurate audience targeting, hotel campaigns should leverage:
Demographic data
Interests
Behaviors
Consider creating lookalike audiences to engage potential guests who mirror their current customers.
Hotel campaigns need to be flexible to anticipate industry changes such as lifting travel bans or shifting traveler preferences to adjust their strategies and capture upcoming demand. As advertisers navigate these changes, a case in point is AccorHotels’ use of geo-targeting features in Hotel Ads and Koddi’s proprietary bidding algorithms, which led to a 20% lift in traffic, a 65% lift in bookings, and an 84% lift in revenue by tailoring messages and focusing on high-intent customers.
Balancing ad spend and returns
The success of a hotel campaign largely depends on striking a balance between ad spend and returns. Assessing ad campaign performance using metrics like click-through rate (CTR), cost-per-click (CPC), and conversion rate is essential to optimize various elements of hotel campaigns on social media.
A high click-through rate (CTR) suggests that an ad is engaging the intended audience, whereas a low cost-per-click (CPC) indicates cost efficiency in attracting clicks. The conversion rate, representing the proportion of ad clickers who complete a desired action, such as booking a hotel room, indicates the ad’s direct effectiveness at generating revenue. Regular analysis of performance metrics allows for ongoing social media campaign optimization, thus maximizing returns on ad spend.
Calculating the ROI of marketing campaigns involves accounting for not only direct revenue but also indirect factors such as repeat patronage and word-of-mouth referrals.
United Nations and International Tourism Support
In the backdrop of global efforts to revive the tourism sector, the United Nations World Tourism Organization (UNWTO) is committed to:
Driving innovation in the tourism sector
Supporting educational and training initiatives
Vigorously promoting destinations to stimulate recovery following the pandemic
The UNWTO has established a partnership with AVIAREPS to launch the UNWTO + AVIAREPS Destination Marketing Grant, which aims to assist European countries by leveraging marketing and research services.
The UNWTO + AVIAREPS grant program encompasses destination research and analysis, PR services, and inclusion in AVIAREPS Roadshows, which connect destinations with travel industry buyers. As we eagerly await the future announcements on the eligible European Member States for the grants, there is potential for the collaborative efforts to extend to other regions worldwide.
Case Studies: Success Stories of Hotels Using Durable Bidding Strategies
As the saying goes, the proof of the pudding lies in the eating. Here are some success stories of hotels that have successfully maneuvered the challenging landscape of hotel campaigns using robust bidding strategies. Choice Hotels International Inc. implemented Hotel Ads’ property-level bids which led to a 75% increase in bookings, a 93% growth in incremental revenue, and a 17% rise in ad spend ROI.
Intercontinental Hotels Group (IHG) synchronized its global marketing efforts with Google Hotel Ads, resulting in a 53% rise in traffic, a 70% surge in bookings, and a 78% growth in revenue. These case studies showcase how effective bidding strategies can result in significant growth in bookings, revenue, and ROI.
Summary
In a nutshell, mastering the art of building durable and effective bidding strategies for hotel campaigns is a multifaceted process. It involves navigating significant challenges, adapting to industry changes and technological innovations, understanding Google Hotel Ads and bidding models, and crafting winning strategies. With the right approach, right targeting, and right balance between ad spend and returns, the road to building thriving digital businesses is not too far off. So, are you ready to make your mark in the hotel industry?
Frequently Asked Questions
What is the best bidding strategy for display campaigns?
The best bidding strategy for display campaigns depends on your campaign goals. For focusing on impressions, consider Viewable CPM bidding and for clicks, consider Manual CPC or Maximize clicks bidding. If aiming for conversions, consider Target CPA, Maximize Conversions, or Target ROAS bidding.
What should be a correct bidding strategy for awareness campaigns?
The correct bidding strategy for awareness campaigns depends on your specific goals. If your goal is to increase brand awareness, consider using cost-per-thousand viewable impressions (vCPM) bidding to put your message in front of customers.
What are the smart bidding strategies?
Smart Bidding includes bid strategies like Target CPA, Target ROAS, Maximize Conversions, and Maximize Conversion Value, which use Google’s AI to optimize for conversions in each auction.
How much does Google Ads cost?
The cost of Google Ads can range from $100 to $10,000 per month, with most businesses paying between $0.11 to $0.50 per click and $0.51 to $1000 per 1000 impressions, depending on factors such as industry, targeting, and ad network.
How has the hotel industry responded to economic downturns affecting hotel campaigns?
During economic downturns, the hotel industry has responded by adapting strategies such as lowering room rates, seeking new revenue streams, and targeting long-term visitors, in response to changing consumer behaviors.
The post Mastering the Art of Building More Durable and Effective Bidding Strategies for Hotel Campaigns appeared first on Ad Mockups for Client Approvals Made Easy | PPC Ad Editor.