Top Digital Marketing KPIs for Hotels and How To Track Them

Digital marketing can be a highly effective tool for hoteliers looking to rev up their bookings and revenues. It works because modern consumers are spending more and more time online searching for, researching and booking their travel accommodations — and digital marketing offers opportunities to meet them where they’re already looking. For your hotel’s digital marketing efforts to be their most effective, you must know which tactics are working and which are not.

This is where digital KPIs come in. These metrics deliver measurable data that your hotel can use to assess the effectiveness of its digital marketing efforts. By tracking the right hotel marketing KPIs, you can identify areas for improvement, then optimize your ad targeting and messaging to drive better ROI.

While many metrics can be helpful in assessing the performance of your digital campaigns, some are particularly worth your attention. Here are some of the most important hotel marketing KPIs you should be tracking:

1. Site Conversion Rate

This metric measures the percentage of visitors to your hotel’s website who take a desired action — in most cases, completing a booking. By improving conversion rates, your hotel can boost other important hotel KPIs, including occupancy rates and revenues (and in turn, RevPAR and ProPAR).

To calculate your hotel site’s conversion rate, divide the total number of conversions during a set time period by the total number of visitors to your site during that time, then multiply the resulting figure by 100 to get a percentage.

For hoteliers, it can be helpful to break your site conversion rate calculations into two parts to gain insights on the effectiveness of your website and your booking engine separately:

• Calculating the conversion rate to the booking engine lets you know how successful your website is at getting visitors to the point where they’re ready to book.
• Calculating the conversion rate through booking provides insights into how effective your hotel’s booking engine is at generating completed reservations.

Benchmark Guidance

If your conversion rate is below 1%, it may indicate that you have poor traffic quality or UX issues.

Ways To Improve Site Conversion Rate

Top tactics for increasing your site’s conversion rate include:

• Mobile optimization
• Improving your CTAs
• Highlighting positive reviews and testimonials
• Making the online booking process as smooth and hassle free as possible
• Incentivizing bookings with exclusive offers and packages

Top Tools for Tracking Conversion Rate

Some of the leading tools for tracking and improving your hotel website’s conversion rates include:

• Google Analytics, which offers actionable insights into your website’s traffic and where it came from, visitors’ behavior on your site, and users’ conversion paths
• A/B testing platforms such as Visual Website Optimizer and Optimizely, which enable you to test various versions of your web pages to determine which deliver the most conversions
• Heatmapping tools such as Crazy Egg and Hotjar, which offer data on where visitors to your website most often click or scroll and where they spend the most time

2. Booking Source Mix

This hotel marketing KPI lets hoteliers know the percentage of their bookings being brought in by each of their distribution channels, including direct website bookings, direct bookings by phone, online travel agencies (OTAs), metasearch sites and global distribution systems (GDS). The source mix is calculated by dividing the total number of bookings from any particular channel by the total number of reservations for the time period being monitored, then multiplying the resulting figure by 100 to get a percentage.

Because direct bookings deliver a range of advantages — including higher, commission-free revenues and more first-party consumer data — achieving a high booking source mix for direct booking channels should be a priority for every property. This metric is especially useful because it shines a light on how successful a hotel brand’s marketing efforts have been in steering bookings toward direct channels rather than less-profitable alternatives. 

Benchmark Guidance

According to a recent Skift survey of hoteliers, an ideal booking source mix for indirect channels would total 34%, with direct channels accounting for the remaining 66%.

Ways To Improve Booking Source Mix

Some of the most powerful ways to optimize your hotel’s source mix and boost its direct bookings include:

• Purchase journey optimization
• Offering exclusive deals and promotions available only via direct booking channels
• Increasing organic website traffic via SEO

Top Tools for Tracking Booking Source Mix

Leading tools for tracking your hotel’s booking source mix include:

• Property management systems, such as OPERA PMS, Cloudbeds and RoomRaccoon
• Channel managers, such as SiteMinder and RateTiger
• Customer relationship management (CRM) systems, such as Revinate, Cendyn and Salesforce Hospitality Cloud

3. Click-Through Rate (CTR)

The click-through rate is a heavily followed metric that tells you the percentage of people who click on your hotel’s ad or link after encountering it in an email or online. It provides a measurable indication of how engaging your marketing assets are and whether they resonate with the target audience. 

Use CTR to gauge the effectiveness of your hotel’s website, email campaigns, display advertising, landing pages, and social and paid search campaigns. By following click-through rates, you can: 

• Ascertain the needs and preferences of your target audience.
• Identify marketing assets that may need optimization, such as ad copy, headlines and design elements.
• Improve your search engine rankings and lower the cost per click of your ads for PPC advertising, as search engines want to serve content that is relevant to consumers.

Ultimately, achieving higher click-through rates will drive more hotel bookings and increase revenue.

To calculate your link or ad’s click-through rate, divide the number of clicks it generates by the total number of times it was presented to consumers (via ad impressions, page visits or email opens), then multiply by 100 to get a percentage.

Benchmark Guidance

For search ads and links on hotel websites, a click-through rate of 2% to 5% is typically considered good. For display ads, in most cases a 0.5% to 1% or higher click-through rate indicates success.

Ways To Improve CTR

Top tactics for improving click-through rates include:

• Improving ad headlines and copy to make them more attention-grabbing
• Optimizing your website’s metadata to make your search ad listings and organic search results more relevant to consumers and their search queries
• Making your calls-to-action (CTAs) clearer and more compelling
• A/B testing your ad elements to enhance their performance
• Personalizing your marketing efforts with tailored offers and customized content

Top Tools for Tracking CTR

Some of the leading tools for tracking your click-through rates include:

• Google Analytics, Google Search Console, Hotjar and Microsoft Clarity for website and organic search traffic
• Google Ads, Bing Ads and AdEspresso for paid search
• Mailchimp, Revinate and Campaign Monitor for email marketing campaigns
• Meta Business Suite, Hootsuite and Sprout Social for social media platforms
• Criteo and Sojern for display advertising and retargeting
• Impact.com and Refersion for affiliate marketing and influencer campaigns

4. Return on Ad Spend (ROAS)

One of the most commonly used KPIs across all kinds of marketing campaigns, ROAS lets you know how much revenue your hotel collects for every dollar it spends on advertising. The figure can be calculated for entire campaigns or for individual channels, including paid search; metasearch, display and social media advertising; email marketing; and video ads. 

Tracking the ROAS of your marketing efforts can help you more effectively invest your advertising budget and optimize your advertising approach. By improving the ROAS of any of its marketing efforts, your hotel can boost its profitability — and ultimately its bottom line.

To determine your ROAS, divide the total revenue generated by an ad or campaign by the amount spent on advertising placement(s). The resulting figure is typically expressed as a ratio (3:1, for example), or it can be multiplied by 100 to get a percentage (300%).

Benchmark Guidance

A standard ROAS of 3:1 or higher is generally indicative of a successful ad campaign.

Ways To Improve ROAS

Leading ways to boost the ROAS of your hotel’s digital marketing efforts include:

• Optimizing the targeting of your ad campaigns to reach the audiences who are most likely to convert
• A/B testing different ad formats and messaging approaches to identify what resonates most with your target audience
• Leveraging AI tools to automate and optimize your ad campaigns for improved performance

Top tools for tracking

The best tools for tracking ROAS vary by channel. Some of the leading options include:

• Google Ads, Google Analytics 4, Marin Software and Skai to track SEM and PPC campaigns
• Meta Ads Manager, Sprinklr and AdEspresso to track social media marketing campaigns
• Mailchimp, HubSpot and Campaign Monitor to track email marketing campaigns
• SEMrush and Ahrefs for tracking organic and paid content marketing efforts

5. Cost Per Acquisition (CPA)

Cost per acquisition (CPA) tells you how much your hotel is paying for each confirmed booking generated by its marketing efforts. This metric can indicate the effectiveness of a variety of campaigns and channels, including:

• PPC campaigns
• Search engine marketing (SEM) campaigns
• Social media advertising
• Content marketing
• Email marketing
• Loyalty programs

To calculate the CPA for any particular campaign or channel, divide the total cost for the campaign/channel by the number of confirmed bookings it delivers. For example, if a particular email marketing campaign costs $5,000 and results in a total of 200 confirmed bookings, the CPA of the email campaign would be $25. 

By calculating the CPA of your marketing efforts, you can learn which approach is putting guests in rooms at the lowest cost, providing valuable insights into performance and profitability. This data can also help you optimize your overall marketing strategy and budget allotment for better results. (By putting an increased investment in the campaigns and channels that are delivering you the lowest CPAs, for example, your hotel can increase its ROAS. Alternatively, investing in campaigns and channels with high CPAs can negatively impact metrics such as your ROAS, RevPAR and ProPAR.)

Benchmark Guidance

To determine whether a campaign or channel’s CPA is good, it must be evaluated in conjunction with customer lifetime value (CLV) or average order value (AOV). When the CLV or AOV is at least three times the CPA — representing a relatively low CPA spend to deliver high value for your hotel — the campaign or channel is typically considered a profitable investment.

Ways To Improve Hotel CPA

To improve the CPA of its marketing campaigns, your hotel should strive to drive more direct bookings through:

• Customer journey optimization
• Investing in SEO to drive more organic traffic to your website

You can also optimize your digital marketing campaigns to achieve lower CPAs by:

• Better identifying your most profitable target audiences
• Using data analytics to identify high-performing campaigns, then investing more in them
• Performing keyword research to improve the performance of paid search campaigns

Top Tools for Tracking Hotel CPA

Some of the foremost tools for tracking the CPAs of your hotel’s marketing efforts include:

• Meta Ads Manager, Sprinklr and Hootsuite Ads to track social media marketing campaigns
• Google Ads, Google Analytics 4 and Adobe Analytics for tracking SEM and PPC campaigns
• Mailchimp, HubSpot and Campaign Monitor to track email marketing campaigns
• SEMrush and Ahrefs for tracking organic and paid content marketing efforts

Make Tracking KPIs Easier With an Interactive Dashboard

Your hotel should consider creating an interactive dashboard using Google Data Studio to consolidate and ease its tracking efforts. This helpful tool allows you to track multiple digital marketing campaigns and KPIs across various sources, all in one place.

At TravelBoom, we’ve been tracking and optimizing digital KPIs for hotels for years. With our expert guidance, clients have consistently seen their digital marketing campaigns deliver better results, more bookings and increased revenue. Ready to partner with a hotel marketing agency that can boost the effectiveness of your efforts? Connect with our team. 

About TravelBoom Hotel Marketing

TravelBoom specializes in developing and executing customized data-driven marketing solutions that drive direct bookings and growth for its clients. With over 25 years of experience in digital marketing for travel and hotels, TravelBoom leverages advanced data science and analytics to uncover insights and develop strategies that greatly enhance results for our clients and reduce reliance on third-party channels. TravelBoom is also host of the world’s #1 ranked Hotel Marketing Podcast and its quarterly Traveler Sentiment Study both of which can be found at www.travelboommarketing.com.