Everything You Need to Know About the Hotel Marketing Mix

Understanding the fundamentals of marketing within the hotel industry is a solid starting point, but to truly excel, you need to apply these principles through the modern marketing mix framework.

This guide provides an updated perspective, designed to help you make the most of contemporary marketing strategies to enhance your property’s business performance.

In an era where rapid innovation has become the norm, it’s crucial to stay ahead of the curve. This guide serves as not only a refresher but also a roadmap to the evolving landscape of hotel marketing, ensuring your strategies remain relevant, effective, and aligned with the latest trends.

What is a hotel marketing mix?

Your hotel’s market mix is the sum of distribution channels that you sell your rooms through, ideally selected strategically with the goal of driving the most revenue in the long run.

Developing the right mix of hotel distribution channels – and doing so strategically – is key to your ability to maximize revenue as part of your wider revenue management activities and general hotel management.

Otherwise, you would be leaving the profit margin of your hotel up to chance. This is because each distribution channel comes with different types of guests, and varying costs in terms of commissions.

Your specific mix should be unique to your hotel, depending on how it is placed in the market relative to competitors in terms of location, reputation, and service offering. It also depends on factors like your target market (and the channels they’re most likely to buy through), and how strong your existing database is (and the amount of repeat business you can generate from it).

But setting your distribution channel mix is never a ‘set and forget’ activity. In fact, you should adapt it to changes in supply and demand, dialing certain channels up and down according to periods of high and low occupancy.

The four Ps of marketing: Product, price, place, promotion

Whatever your industry, marketers will always talk about the four Ps of marketing, which can be summarized thus:

• Product: The product (or service) is what you’re marketing. For hotels, it refers to rooms and other amenities, including hotel products like food at your restaurant or the service of valet parking.

  Potential guests will base their decision on whether to book with you on how well they understand your product and whether they believe it will provide the best guest experience – and this is a thought process you can influence through your marketing efforts.

• Price: The price is what customers pay for your product or service, and in our space, this varies considerably, based on the type of room, demand, length of stay and a whole range of factors that you’ll be familiar with as a hotel revenue manager.

  The job of revenue managers and marketers working together is to present the price in the best light so that potential guests understand it and believe it to be justified.

• Place: The place isn’t where your hotel is located (although this is obviously something that potential customers need to know!); it’s the places – platforms, media – wherever your hotel services are promoted.

  With a range of off- and online possibilities, some of which you directly control and some of which are controlled by third parties, there are far more possibilities than there were a generation ago, and you need to be on top of your options.

• Promotion: The promotion – or set of promotions – is what brings it all together. It’s what the public is exposed to and sees. You need to get noticed and move prospects to the next stage in the marketing funnel through any or all of the elements we highlight in the next section.

In some marketing circles, this list is expanded to seven with the addition of people, packing or physical evidence, and process. These are worth a quick mention:

• People: In a nutshell, people are your staff and anyone else who comes into professional contact with your guests.

  Marketers set the tone and do the work but they should also establish the culture that everyone else follows, one that will promote sales and improve the guest experience, from check-in to check-out, and in comms either side.

• Physical evidence: Hotels aren’t packaged but you do have a visual brand to maintain, something that will appear in your collateral and at your properties. Your initiatives should reflect and embody your hotel brand and vice versa.

• Process: Where possible, design your operational and marketing processes so that they mirror your guest experience before, during and after their stay.

What makes a marketing mix successful?

We now move to what a successful marketing mix looks like, including the promotional strategies it includes and how those strategies work together to support your overarching hotel marketing goals.

Long gone are the days when hotels had fixed high and low seasons with fixed list prices. And, in the same way that pricing these days should be dynamic, so too do hoteliers need a modern hospitality marketing mix that’s dynamic – agility and the ability to adapt based on measuring what’s working and what isn’t are what will keep you ahead in a competitive market.

Properties with at least one photo on their hotel’s website saw a 138% increase in engagement and were 225% more likely to receive a booking inquiry, according to a recent report that demonstrated the effectiveness of a raft of marketing tactics, this being just one stat of many.

Let’s take a look at some of the common elements of the marketing mix:

• Marketing activity that promotes Brand.com and walk-in bookings, such as good content and search engine optimization (SEO) on your hotel’s website, paid digital marketing, content on various social media platforms, email marketing, direct mail and public relations (PR), with some of this activity applying to external channels – see below

• Working with external distribution channels like online travel agencies (OTAs) and wholesalers, which take a cut

• Adjusting levels of inventory on external distribution channels

• Offering discounts on direct channels

• Collaborating on promotions on external channels

It’s all in the execution, of course, and the success of your activities must also be guided and refined by a sophisticated view and understanding of forward-looking hotel revenue management metrics and the market segments on which you’re focused.

After all, the emphasis you place on each element of the mix, and in what combination, depends on levels of demand and therefore on occupancy – see the section below on adjusting the mix for high and low occupancy.

3 strategies to include in your marketing mix

As you’ll appreciate, there are many paths to follow, each with subpaths. Rather than write about them all, let’s focus on three of the most significant strands of any marketing plan, the latter being two that are most directly controlled by you as a hotel revenue or distribution manager.

1) Social media marketing

Social media is a hugely important channel to focus on for promotions. Supporting the overall hospitality marketing mix and tying in with content marketing, it also allows hotels to respond quickly to sudden change.

Think of your hotel as a publisher, one that creates blog posts and videos that you can push on your social channels along with other messages. Try to pique your guests’ interest by visualizing your hotel’s USPs. Show them the unique amenities, experiences and room types your accommodation offers.

Such activity provides valuable content to guests, some of which can be turned into conversations. It’s all about driving trust and brand loyalty, not just direct sales.

KPIs to measure the success of social media efforts can range from engagement through to bookings, and include the number of followers, likes, reposts, views, comments and, perhaps most importantly, your social media channels being referral sites to Brand.com.

2. Managing OTA relationships

The cost of working with online travel agencies (OTAs) in the form of fees can be compensated for by a significant volume of bookings that you’d otherwise not have made – assuming the relationships are well managed.

That relationship can be boosted by working hand-in-glove with OTAs on joint promotions, or in sanctioning your involvement in their promotions, some of them price-based.

These efforts will drive bookings when you need to generate demand and can be supported by other elements of the marketing mix.

KPIs to monitor include all the usual suspects: occupancy, average daily rate (ADR) and revenue per available room (RevPAR), all viewed through the lens of OTA-specific bookings.

But way these up against same-time-last-year metrics and the like and other comparators to make sure that you are actually getting sufficiently more sales to justify the fee. You could also consider negotiating a lower fee following big sales successes.

3. Dynamic pricing strategy

Dynamic pricing provides the most optimal hotel room prices for any given time, resulting in the best balance between ADR and occupancy. It is also an increasingly popular strategy due its flexibility in an industry which is incredibly fast-moving.

Such pricing is an important part of a successful marketing mix in the hotel business – after all, pricing is one of the four Ps.

As well as being weighed up against the other Ps by customers when making purchasing decisions, it can also generate demand, with dynamic pricing being the most scientific and controlled way you can do this.

One of the most significant KPIs is your price positioning vs competitors on public segments and channels for future dates, which you can view using a rate shopper.

Look for whether your advertised BAR prices are above, below or on a par with the median price of your compset, then drill down for more data on specific competitors.

With this knowledge, you can adjust your strategy, marketing offers and – if necessary – prices (up or down). But you should also weigh this up against actual sales.

Adjusting your marketing mix for high and low occupancy

Empty rooms are the blight of hotel revenue managers. Let’s look at the biggest factor that determines occupancy – seasonality – and the marketing tactics you can deploy to drive it up and get the best price for your rooms.

What to do during peak demand periods

How do you adjust your hotel’s marketing mix to maximize revenue for peak market conditions?

Periods of high occupancy (or ‘high season’) are the best times to make strategic changes to your distribution channel mix in order to maximize revenue. These are times when you can:

• Reduce availability for high-commission channels like OTAs, while prioritizing direct bookings and walk-ins because there is increased demand in your local area. This could be due to the time of year or a specific event in town.

• When MICE travelers (meetings, incentives, conferencing and exhibitions) may be creating a period of high demand, create packages for groups for large events, conferences, or seminars, and use the distribution channels best suited to these travelers (e.g., Egencia).

It’s also important to prioritize your profitable guests during this period. For example, business travelers tend to book last minute, while leisure travelers book further ahead of time.

However, you know that business travelers tend to spend more when they stay with you, and are therefore more profitable. So, in high season, you can adjust your market mix by holding rooms for corporate bookings while reducing inventory for leisure travelers.

What to do during low occupancy periods

Let’s now turn to optimizing your hotel’s marketing mix for low-demand periods.

Low-season guests tend to be different from high-season guests, and so you should adjust your strategy accordingly.

• Budget-conscious travelers are more likely to take advantage of low-season deals and use last-minute or discount OTAs. Make sure you run targeted promotions on those channels to drive up your occupancy rate.

• Increase inventory on your OTAs to fill the rooms, while also running extra-rewarding discounts through your direct channel.

  You can then use OTAs as a way to increase awareness of your hotel, while encouraging direct bookings from those price-savvy travelers who compare your website and online presence to OTA listings, thereby increasing your profit margin for each booking.

• Increase inventory through wholesalers and tour operators, which tend to provide a steady influx of reservations, keeping your hotel at capacity. Margins are low, but these bookings tend to require minimum effort.

Hotel software: The key to optimizing your hotel marketing mix

We’ve established that the marketing mix should be dynamic, and this is something that’s dependent on a combination of the right software and real-time, accurate data.

The modern hotel marketer won’t succeed without them, especially when it comes to responding quickly to things like out-of-season rises in demand and large-scale events landing in your market, an example being Formula One races. Below are a few tools to consider:

• A predictive market intelligence solution like Market Insight will help you optimize your market mix by leveraging forward-looking flight and hotel searches to identify which markets are driving most demand for your property.

• Whereas solutions like Lighthouse’s Business Intelligence solution will guide you in optimizing your market mix by providing insight into your hotel’s marketing performance. It can answer vital questions such as, “Which of my promotions are generating the most revenue?”

• Last but not least, rate intelligence software can help you optimize your marketing mix by supporting the correct pricing strategy for your property so you never miss out on a revenue opportunity.

As developments in AI accelerate, don’t take your eye off the ball – technology will evolve to aid you and your colleagues in marrying together revenue management and marketing to optimize your mix.

Adjust your marketing mix with insights from our predictive demand solution

We’ve already discussed some of our product portfolio above. Now we’re going to zoom in on Market Insight, a first-of-its-kind, predictive demand solution, Market Insight.

Market Insight aggregates real-time forward-looking search data from various sources including OTAs, meta searches, GDS searches, online reviews, and more. Utilizing AI technology, it transforms this vast data into actionable insights on demand levels by location, stay pattern, and hotel type.

Its lightning-fast data streaming generates immediate alerts on-demand changes, empowering you to swiftly grasp pre-booking market demand and capitalize on revenue opportunities by implementing laser-focused marketing strategies and the right pricing.

In fact, hotels using Market Insight saw a 2.3% higher RevPAR and 4.7%higher occupancy than similar hotels not using Market Insight. Ready to transform your marketing mix and boost revenue? Start a free trial today.

About Lighthouse

Lighthouse (formerly OTA Insight) is the leading commercial platform for the travel & hospitality industry. We transform complexity into confidence by providing actionable market insights, business intelligence, and pricing tools that maximize revenue growth. We continually innovate to deliver the best platform for hospitality professionals to price more effectively, measure performance more efficiently, and understand the market in new ways.

Trusted by over 65,000 hotels in 185 countries, Lighthouse is the only solution that provides real-time hotel and short-term rental data in a single platform. We strive to deliver the best possible experience with unmatched customer service. We consider our clients as true partners – their success is our success.