Industry Update
Opinion Article29 September 2017

The Downward Spiral of SEO and SEM

By Larry Mogelonsky, Managing Director Hotel Mogel Consulting Limited

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Want to hold the top spot on Google for everyone searching an accommodation in your area?


I am sure that this is the dream of every hotelier on earth. Somehow, there would be a magic potion or genius company that could drive us to the top of the listings for both the lower funnel (branded terms) as well the top of funnel (broader travel terms). Deep down, though, we all know that this is pretty much impossible all the while Google (traded under its parent company's name, Alphabet) is showing record profits and commensurate share prices.

But does this all make sense? Why is it that our budgets for this activity are constantly growing yet we don't seem to be making any real progress in this regard? Our industry spends billions of dollars, not just on these so-called ads but we also employ a cadre of internal experts both and outside consultants to help us properly spend our money. Will it ever stop?

Let's back up and circle in on some basics. For those managing branded hotels, we rely on the folks in HQ to develop brand standards as well as to ideally promote the brand through the collective website and loyalty programs. After all, isn't that why there are fees for marketing? Through the sheer size of the brand's website, it should naturally be at or near the top of the Google search for hotels in a unique geography, then followed by the OTAs and other third-party aggregators.

For independents, the SEO/SEM game is far more challenging. You're always going to be second (or third) fiddle behind the big players. Spending anything on generic keywords can be throwing money away when not set up correctly. More prudent would be an extreme focus on only those terms that are performing.

Taken at a macro-scale, the more that is spent on keywords, the higher the price for everyone competing in the market. One property increases its bid-per-click and gets outstripped by the other wile OTAs can afford to usurp your bids continuously because they have a much larger budget to play with. It's a death spiral for your operating statement.

In some instances, I've seen ad conversions increase from 5-7% of rooms revenue to over 30%. At this point, you might as well throw all your inventory onto the OTAs and close your marketing department because clearly you aren't effective in utilizing any other channels to raise your property's awareness so that they know how to find your website without first searching for a top-of-funnel keyword.

This said, it's time to rethink the entire SEO/SEM model, so here are some thoughts:

  • Build a great website and focus on those items that you believe can differentiate your property from any other.
  • All the measures of SEO ranking are certainly not fictitious, but not entirely meaningful benchmarks either. Worry less about your ranking and more about delivery of the best product that you can afford.
  • Insofar as SEM, move to a strictly pay-for-performance model, defining on a maximum percentage basis how much you will pay for a booking. There are several companies offering this and merit your investigation.
  • Make every guest a disciple. Cultivate your customer base, and give them reasons to recommend you personally to their friends and family. Loyalty pays. Invest here for far greater future dividends.
  • Rekindle traditional marketing efforts. Take the promotion, advertising, public relations and sponsorship tools out of the storage room and utilize them to your advantage. It's all about having a good channel mix and too much emphasis on SEM will through the entire campaign out of balance.

(Article by Larry Mogelonsky, originally published in HotelsMag on June 27, 2017)


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