Budgets Are Coming: 7 Lessons from Game of Thrones
Hotel marketers are sharpening their pencils for battle
By Dave Spector, Partner at Tambourine
Just as winter (and a terrifying army of the dead) descends on Westeros in Game of Thrones, budget season is looming in the real world and hotel marketers all across the kingdom are arming themselves for battle.
1. GoT QUOTE: "When you play the game of thrones, you live or die"
LESSON: Your budget is your armory. Ask for everything you need to survive
Hoteliers usually only think dollar amounts when working on their budget. How much will this marketing technology cost? How much should we dedicate to advertising spend? How much will our hotel website design cost?
But, here's the surprise: you are not restricted to only asking for marketing funds during budget time! If you need more marketing staff or outsourced vendors to help you achieve your hotel's revenue goals, then ask for them!
If your hotel is in dire need of upgrades and updates in order to effectively compete with newer properties and win market share, then ask for them. If you depend on another department's performance to help you reach your targets, then ask to oversee them.
Here's an example of what that request could look like:
"For me to achieve the revenue targets set forth by ownership… I need $_______ in funding, specific hotel upgrades to be made, and _______ new staff (contractors). Plus, I would like ________ department to report to me."
The road to achieving your property's revenue goals begins with your ability to ask for what you need. Show your management team that without these items, you won't be able to deliver the results they're looking for.
2. GoT THEME: Three Dragons versus Everyone Else
LESSON: Focus on Quality, Not Quantity
Forget the mass of Lannister soldiers that Queen Cersei has under her belt or the thousands of eerie wights brought back to life by the White Walkers. All it takes are three massive, fire-breathing dragons to wipe them out completely.
This year, vow to keep your budget uncluttered and uncomplicated. Your 2018 hotel marketing plan should be built on a few powerful initiatives, not on a mess of disjointed marketing tactics that just produce small bursts of wins and revenue. Build a strong budget that includes only marketing tactics that will have a measurable impact on your audience and the bottom line.
3. GoT QUOTE: "Words are wind, my friend…"
LESSON: Getting what you want takes proof
Asset managers, hotel management firms and GMs are under more pressure than ever to deliver real bottom line results. However, many hotel marketers still shy away from being accountable for any revenue responsibilities. Instead, they lavishly tout their "rebranding initiatives," number of social media followers or new hotel photography. This continued disregard for numerical evaluation will put you in a difficult position next year, when you attempt to request a larger marketing budget. Without measuring your success, owners and managers will be more apt to cut back on marketing expenses and staff, believing that your intangible branding results can be achieved with less.
So it's important to have complete fluency in the KPIs that affect the bottom line. As an example, if you know last year's marketing cost-per-sale (CPS), you should be able to extrapolate that against future revenue targets to determine the budget required and make statements like this:
"Last year, we achieved a marketing CPS of X. To achieve next year's budget, I need $_______ ."
But remember, you will also be expected to reduce your CPS over time as you learn and tweak your programs.
4. GoT QUOTE:"You Know Nothing, Jon Snow."
LESSON: You Have Data. Use It.
This catchphrase, originally spoken by the red-haired Wildling Ygritte as she aggressively flirted with Jon Snow, has become one of the show's most popular. But, don't let it become your catchphrase. You should know everything about your marketing program results and not be guided by assumptions or gut feelings.
You should rely on data culled from the right sources to guide all future hotel marketing decisions.
And again, data is your ally when you need to ask for more marketing funds! Some data that you should always have on hand include key performance indicators, like DRR (direct revenue ratio), MCPB (marketing cost per booking) and your STR index vs the comp set. All of these numbers will show you, and your hotel's executive team, how much your marketing team is actually contributing to your hotel's revenue.
5. GoT QUOTE: "Winter is Coming."
LESSON: Apathy about 3rd party costs is dangerous
For a while, it seemed like winter would never come to GoT, despite numerous warnings with this ominous phrase. Yet, it was still on everyone's minds. In hotel marketing, this means: Don't ever be too comfortable in the here and now. For example, if more than 15-20% of your revenue is coming from OTAs, you need to prepare for the eventual downturn and start investing in programs, campaigns and assets that will deliver higher margin bookings.
When "winter comes" to the hotel industry and AOR goes from 75% to 50%, you don't want to have the majority of your bookings incurring a 20% OTA commission!
6. GoT Quote: "A Lannister always pays his debts."
Lesson: Ask Hotel Owners Exactly What They Expect From You
Before you determine what marketing resources you'll need for 2018, you need to find out the exact amount your hotel owner (or hotel management company) expects your marketing team to contribute to the hotel's revenue.
Don't move forward on a budget without knowing exactly what goals your team is beholden to. Get as much clarification as you can, including how many room nights, booked meetings, corporate bookings, etc. should be attributed to your marketing efforts. Ask management/ownership early on in the budget process, because this one question will give you clarity and insight to build out any other projected expenses.
Don't waste time or make costly guesses, nor should you allow your hotel owner to determine how much they want to give you. Don't place your hotel marketing in a dangerous position of always being underfunded, but tasked with lofty goals. Instead, use your hotel owner's revenue goals to correlate the assets you need achieve them.
7. GoT QUOTE: "I may be small, but I won't be knitting by the fire while others fight for me."
LESSON: Don't surrender your property's destiny to 3rd parties
Spoken by everyone's favorite young spitfire, Lady Lyanna Mormont of Bear Island, this empowering quote hits at the heart of every hotelier. OTAs have had their moment, but now it's time to take back control of your booking destiny. So, stop depending on third-party sites to fill the house. Instead of paying commission fees of 15-30 percent, invest in the right tools and technology for your hotel to pull in your own reservations. One place where hotels will see big ROI is by investing in their hotel's mobile experience. Offer a mobile-compatible booking engine. Have a responsive website and hotel marketing emails. Offer immediate online chat. Investing in mobile is paramount to your success in 2018.
Dave Spector is a Partner in Tambourine, a 34-year old marketing technology firm specializing in driving demand, revenue and direct website bookings for tourism and hospitality clients around the world. The firm has offices in Fort Lauderdale, New York City and Bogota. Prior to Tambourine, Dave was chief marketing officer for a global software company, managing an annual marketing budget of $15 million dollars across 17 countries.More from Dave Spector
Tambourine is transforming hotel e-commerce. The Firm has become an instrumental partner for elite hoteliers, hotel management and asset management firms seeking to outperform their compset, improve bottom line profitability and decrease OTA-dependence.
We deliver targeted managed service programs that ensure maximum traffic and conversions across all digital channels. Our team utilizes our own best-in-class technology to empower your property… giving you the confidence and ability to achieve your ownership's revenue goals.
The firm is celebrating its 35th year in business. For more information about Tambourine, visit www.Tambourine.com