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Social media for hotels - Is it worth it?

04/28/2021| 2:37:18 PM| 中文

If you apply the OTA commission model, this means you actually paid 50% in commission for reservations generated from social media.

We all know the social media hype and have read plenty of articles about how important it is. And the truth is that your hotel needs to be where your guests are right? But the question here is, at what cost?

Maybe you are considering working with an agency to help run your social media accounts. Perhaps you want to appoint someone as a community manager. Maybe you think that the time you spend managing these channels internally is enough.

But how can you determine what is the right option for you and whether your efforts are generating a return on investment?

To recap, your hotel website had 5,000 website visits from your Facebook page, and your website conversion rate was 40%. This means approximately 2,000 users went to your hotel's booking engine.

Once users reached your booking engine, the conversion rate was 2%. This means that potentially 40 online visitors booked a room with you. If your average reservation value is $1,000 and multiplied by 40, the reservations equal $40,000 in total.

So your hotel invested $20,000 toward social media and generated a $40,000 return. If you apply the OTA commission model, this means you actually paid 50% in commission for reservations generated from social media.

Consider the commission fees your hotel pays to OTAs, typically in the 15% to 30% range according to Hotel Price Reporter. This is already significantly more costly than reservations generated through your hotel website - the channel with the lowest cost of acquisition. Are you willing to potentially pay more than double this amount for your social media strategy?

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TAGS: social media | Facebook | conversion rate
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