What is conversion rate for hotels?
One of the main objectives of your digital marketing team is to increase the number of website visitors. You constantly invest and work on Google ads, social media marketing, SEO, and paid online ads to improve your hotel’s online visibility and to encourage more people to visit your brand website.
However, increasing website traffic is not enough if that traffic doesn’t convert into bookings. Your goal is to increase the number of direct bookings on your brand website, instead of losing these bookers to the OTAs.
The percentage of website visits that result into bookings is your conversion rate. And that’s what you should be focusing on to grow direct revenue. As conversion rate grows, your digital marketing team will be encouraged to increase their efforts in attracting more customers into your hotel website. With more website visitors and an increase in conversion rate, the compound effect will be a significant grow in your direct booking revenue.
By optimizing your booking engine to improve conversion rate, you'll get a better value out of your existing traffic, thus a better return on investment of your marketing efforts.
Converting is all about sales
Before focusing on the hotel industry, let’s take a few steps back and understand the principles of selling. Essentially, converting a shopper into a booker is all about sales. The purchase decision taken by any customer is the same in any industry for any product or service.
There are 5 key elements that are taken into consideration by all shoppers that you need to keep in mind to ensure you meet their desire to buy.
1. Value for Money
Customers must feel they are getting value for money in whatever it is they are buying. Value for money is measured based on a number of factors: by checking the price of the competition; checking the quality of the product they are willing to buy; making sure the product suits their needs; buying a product that matches the context of making that purchase.
2. Emotional Leverage & Desire
A potential customer will always have an emotional desire to complete a sale, even if purchasing a commodity item. This is why brands exist. Brands create a connection with humans. Customers create brand associations in their minds which align with their values and needs. They will be more willing to buy something if they create positive associations and an emotional bond with that brand.
Another key factor that influences shoppers to make a purchase is trust. Trust happens when the customer relies on the brand. It also happens when the brand’s products and services meet the customers’ needs and they perceive the quality of what they’re buying. When their expectations are met and when the brand fulfils its promise, customers are more likely to make a purchase.
4. Peer reviews
People are more willing to buy a product if they have heard that it is good from their trusted peers. If in doubt over two competing products, the final decision will be towards a brand that have received a positive recommendation of a trusted peer.
5. FOMO – Fear of missing out
FOMO is a concept that has appeared in the 2000s to express the feeling of always wanting to be part of things, to know what’s going on, to be connected to other people. Customers want to experience the newest releases. They fear of missing the opportunity of buying a product that has a special discount, or is in limited stock, or is part of the latest fashion or latest technology. Brands need to give the right intention to their audience when formulating an approach. Using exclusivity, limited availability, special discounts to early purchasers, or showing how many people are buying at the same time are a few examples.
Going back to the context of hotels…
How to calculate hotel conversion rate?
The purpose of any ecommerce platform is to encourage people to take an action – to buy something - and the conversion rate is related to how many customers completed this action. Your conversion rate is the percentage of how many people finished the booking process, that is, how many reservations you got compared to the number of visits in your website.
Through the ‘Ecommerce Tracking’ feature on Google Analytics, you can see the number of bookings made on desktop and mobile, the amount of revenue generated, and the ecommerce conversion rate. ‘Ecommerce conversion rate’ is explained by Google as “the percentage of visits that result in an ecommerce transaction, and is a great proxy for the efficacy of your marketing and site design: is your marketing delivering an audience that is primed to buy, and is your site designed to make purchasing easy for those users?”.
What is a good conversion rate for your hotel?
In terms of defining an average conversion rate for hotels, this article from Otium Boutique states that the typical conversion rate is between 0% and 2%. Similarly, 80 days report breaks down the average numbers for website traffic, revenue, and conversion rate for hotels depending on the device, the location, and the platform the user is coming from. It shows that the highest conversion rate comes from desktop devices, with an average of 1.99% for 4-star hotels and 1,71% for 5-star hotels. PhocusWire study comes to a conclusion of 2% average conversion rate for hotels’ websites.
At p3 Hotels, we have seen a higher average for our hotels in comparison to the studies stated above. The average conversion rate of clients is 2.45%. This percentage is based on hotel groups and independent hotels working with us for at least 12 months. If you want to see examples of companies like yours, take a look at our case studies here.
How to improve conversion rate on your booking engine?
The efficiency of your booking engine is what stimulates your website visitors towards making a reservation at your hotel. In general, it needs to be mobile-optimized, user-friendly, quick, efficient, and intuitive. Consequently, you’ll offer a booking process that is simpler and easier than any other channel.
“The chances of travellers completing a direct booking are automatically higher when they can find a hotel’s brand website, get valuable info on the spot while browsing it, and are provided with an effective and user-friendly booking engine” – said Laura Badiu, from TrustYou.
Let’s take into consideration the 5 key elements of sales that we stated above and apply them into the context of your hotel ecommerce. Here are 5 components within your booking engine to optimize conversion rate:
1) Keep your users confident throughout their purchase decision
To encourage more visitors to buy a hotel room directly with you, you need to keep them confident during their buying journey. To increase your customers’ trust, offer a high quality and neat booking journey to create a positive first impression of your brand.
Confidence comes firstly from offering an online system that is tailored to your hotel brand. When customers access your website, they will interact with your brand, and if they rely on it, they will trust you. They need to maintain this trust when they interact with your reservation system, therefore they need to remain connected to your brand. If they are redirected to an external booking engine outside of your website’s URL, and that doesn’t continue your website and brand identity, their trust will break down.
Your booking engine should be customised to your hotel’s website and brand identity, and you should keep visitors in the same environment instead of redirecting them to an external site.
Also take into account if you are providing a fast and secure payment method within your booking system. Improve the reliability of your website by providing multiple methods of payment and informing that card details are transacted safely. Be loud and clear that their credit card details will be safe through the secured online payment processing integrated within your booking engine.
2) Deliver a seamless user experience
Your booking engine needs to be designed and built around the people that will use it to deliver a positive experience. That’s why it’s important to understand your brand identity, product offering and customer profile to design a software that people will feel like it was designed for them, and that serves as a guide to lead them to the right direction – making a booking.
To improve user experience, you should consider 3 things. First, the visual appeal, which means keeping a consistent identity across all your online platforms to generate brand trust and loyalty.
Second, the emotional assets. To improve user experience, introduce features that make your booking engine a joy to use.
And third, the usability. Guide your visitors into the booking process with a simple and clear path, without confusion and with as little information as possible. The platform is made for the users, so make it user-friendly, easy-to-use and intuitive.
3) Show the benefits of booking direct
Show to your visitors the benefits of booking directly with you. They will be more likely to proceed with the booking in your brand website if they can see the value for money in doing so.
For instance, Britannia Hotels have a special page on their website that highlights the benefits of booking directly at their website that users won’t find in any OTA: best price deal via loyalty program; no hidden charges; full selection of packages; faster and simpler booking process; free cancellation.
In terms of giving them a sense of urgency, you can include messages of last room availability, limited offers, number of people looking at the room, and limited time in getting the room offer. Highlight your hotel’s experiences with images and testimonials, show how amazing your hotel is, highlight the unique experience that travellers can’t miss.
4) Get greater reach with Metasearch and mobile-optimization
Most of travellers start planning their trip online, and 60% of your customers are using their mobiles and tablets to search for and book hotels.
With the new features and the user-friendly front end of Google Hotel Ads, travelers are using this platform to find their next accommodation. Metasearch channels show a list of hotels based on a given destination and on specific needs. By listing your direct rates against the price of the OTAs you have a higher chance of getting direct bookings.
When you integrate your website to Google Hotel Ads - as well as TripAdvisor and Trivago - you gain another channel to showcase your website to potential guests, increasing your chances to receive direct bookings and raise the conversion rate.
With a responsive booking engine, with all web pages optimized to any device your potential guests are using, you reach a greater number of customers.
5) Highlight the relevant features for your customers
One booking engine doesn’t fit all hotels because each hotel has its own target customer, product offering, and identity. You need to offer a system that is tailored to your context and aligned to your marketing goals.
- Create an emotional bond with your customers by showing a high-quality gallery with beautiful pictures of the areas of your hotel, especially your rooms.
- Include reviews in the booking process so visitors can read other guests' reviews and make the decision based on their positive experiences.
- Demonstrate the value for money of staying at your property through the room rates, information, facilities, and the proximities of your location. And most importantly, increase brand trust with a ecommerce platform that was designed built with quality.
These are some of the relevant strategies that you can implement within your booking engine to start seeing your conversion rate grow. In summary, your online booking system needs to display all relevant information that users need while making a reservation. Most importantly, the booking process must be simple, easy-to-use, and user-friendly. Don’t complicate your visitors’ lives. Use your online platform to guide them towards what they need: book a room at you hotel.