Why Conversion is Important for Luxury Hotels and How to Improve Yours

Why Conversion is Important for Luxury Hotels and How to Improve Yours

What is a hotel conversion rate?

Conversion rates are used to measure or calculate your marketing performance. Rates of conversion are calculated by adding the number of converts, then dividing that number by the number of total ad-related interactions that could be tracked towards an actual conversion within the same time frame.

Conversion rates of different types are used in digital hotel marketing.

When discussing conversion rates within the hospitality sector, specifically when it comes to a luxury hotel's online marketing perspective, this is often referred to as the rate of conversion for bookings.

‘Booking engine visit’ conversion rate

The proportion of individuals among all visitors to the website who made it to the booking engine for the site.

Contact conversion rate

The contact conversion rate is the proportion of people (in total) who have made contact with the hotel via chat, email or any other method on the luxury hotel's website.

‘Booking engine sale’ conversion rate

The percentage of visitors from all visitors to your booking engine that made a booking through your luxury hotel's booking engine.

Why is it necessary to analyse and monitor multiple conversion rates within the luxury hotel's marketing funnel?

Breaking down a customer's journey into various steps helps us to understand what aspects of the customer experience require improvements.

If you find that your ‘booking engine visit’ conversion rate isn't high enough, it’s important to determine ways to make your site's booking engine more attractive. This, specifically, can be accomplished through UX (user experience) optimizations.

If the conversion rate for the contact page is poor, specific fixes to improve the user experience must be given priority.

In many instances, independent luxury hotels have an impressive booking engine conversion rate, followed by the lowest conversion rate to booking. This suggests that the website can draw guests to the booking engine. However, issues regarding rates or the reservation experience may stop individuals from making reservations.

Conversion rates for resorts and luxury hotels

In the second quarter of 2021, one market study showed the conversion rates of more than 500 luxury hotels and resorts that are independent across the United States, Mexico, Maldives, the United Kingdom (mainly London) and the Caribbean.

The study found that luxury hotels with a strong brand image were significantly more likely to convert booking rates when compared with luxury hotels with a weak brand. This is logical when considering the demand generation benefits of having a solid hotel brand.

What is an effective conversion rate for hotel marketing?

If your hotel's website has greater than average conversion rates, this is a positive indicator. However, it is just a ratio to use to measure performance. It should not be used as a measure of success.

It is suggested that hotel marketing strategies increase profit and revenue as they are the only relevant metrics from a business management perspective. Resorts and hotels with higher-than-average online revenue and profit have lower conversion ratios than average.

How can you use the conversion rate to improve the hotel's overall marketing performance?

Since this conversion ratio is the ratio between the total number of individuals and specific actions they take, it can only hold worthwhile information if we ask the right questions.

To gain valuable insights from a conversion rate, it is suggested to break down the people you refer to or your hotel's site visitors into multiple segments.

Sorting visitors to websites into segments will reveal various conversion rates among marketing campaigns and other web traffic sources, including social media traffic, search engine traffic, direct visits, and referrals. Examining the conversion rates of these channels individually will provide specific information about which channels are doing well and which need to be monitored.

This same method is suitable for segmenting data by language, country, device, and other characteristics. The majority of hotels utilize Google Analytics to gather access to the data. However, there are alternatives available, including Adobe.

How can hotels improve their website conversion rates?

When a segmented analysis has revealed what funnel stages and segments of visitors have less than the average conversion rate, you'll be able to take targeted steps to improve these.

Alternatively, reach out to EWM to discover how we can support your luxury hotel in increasing conversions and improving revenues.




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