Hotels and Destination Firms Increasing Their Online Marketing Budgets

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Earlier this year, I posted a blog referencing a Cornell University study that predicted an increase in the use of mobile marketing by hotel operators.  Researchers at Cornell’s Center for Hospitality Research just released new data that gives great insight into how destination and accommodation firms are allocating their online marketing budgets, include details on mobile. The report also includes data on marketing plans for 2011 and the news is generally positive.

Top level findings show that the average destination company spent $80,000 on online marketing last year and on a percentage basis, here’s how the expenditures break out:

  • Marketing and promotion 48%
  • Commerce/conversion 26%
  • Loyalty/reputation 16%
  • Analytics/research 10%

Accommodation firms spent an average of $60,000 on online marketing with an allocation profile as follows:

  • Marketing and promotion 45%
  • Commerce/conversion 30%
  • Loyalty/reputation 15%
  • Analytics/research 10%

Currently, these operators tend to manage Twitter campaigns, online video distribution and social influence programs internally. When they use search engines, link building and pay per click management, they turn to specialized outsourcing firms.

Cornell researchers indicated that the amount of advertising devoted to online channels by these operators was lower than they expected, especially with respect to new formats. For example, the average operator spent less than $10,000 on mobile campaigns last year and only about 1/3rd spent more than $10,000 on social media. Verma and McGill believe that destination and accommodation firms are attempting to develop a comprehensive and effective plan for online marketing instead of funding various platforms through piecemeal requests. Regardless of strategy, a sizeable majority, 60% of accommodation marketers and 71% of destination marketers, are planning to increase their 2011 e‑commerce budgets.

[Source: Verma, Rohit and McGill, Ken. 2011 Travel Industry Benchmarking. Cornell Hospitality Report. April 2011. Web. 18 May 2011]
Kathy Crosett
Kathy is the Vice President of Research for SalesFuel. She holds a Masters in Business Administration from the University of Vermont and oversees a staff of researchers, writers and content providers for SalesFuel. Previously, she was co-owner of several small businesses in the health care services sector.