Chain hotel group
Determine the optimal channel mix
All too often, hotels concentrate on the lowest funnel marketing channels, like metasearch, brand SEM, and retargeting, seeking higher-converting, direct response traffic. However, these channels are highly competitive and more expensive, and they drive lower numbers of repeat bookers compared to higher funnel channels. While the low funnel channels remain a critical part of any traffic mix, relying solely on metasearch sites can cause hotels to neglect developing a healthy mix of mid and upper funnel traffic. Our client, a global hotel chain, approached the Koddi Private Markets team with the challenge of creating an optimal multi-channel acquisition strategy.
To gauge the effectiveness of the hotel chain’s channel mix, we looked at a year’s worth of data for 1,700+ hotels that were running media campaigns on at least 6 digital channels. These hotels were then bucketed into 3 categories based on their spend distribution and reliance on metasearch spend:
1) High Metasearch Mix: 75-100%
2) Balanced Metasearch Mix: 40-74%
3) Low Metasearch Mix: 0-39%
Our investigation found that the hotels with the balanced metasearch mix outperformed both those focused largely on metasearch and those driving a higher share of middle and upper funnel traffic. On average, ROAS was 11% higher for hotels in the balanced channel mix group compared to the other groups. This finding validates the multi-channel digital marketing approach, which hotels should be taking when investing online. Because shoppers use multiple channels to find hotels, being present in those channels increases the likelihood of a booking while also improving overall performance metrics.
higher return on ad spend
ideal metasearch spend
ideal number of digital marketing channels