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Social Media Doesn’t Generate (Much) Direct Online Revenue for Hotels

Social Media Doesn’t Generate (Much) Direct Online Revenue for Hotels

Brian Fitzgerald
Brian Fitzgerald April 29, 2014
Social Media Doesn’t Generate (Much) Direct Online Revenue for Hotels

Social media exploded onto the scene a few years ago, and it soon transformed into an opportunity for advertisers to gain visibility, generate leads and achieve other marketing goals. For hotels, it became a way to interact with guests beyond the property and encourage new bookings, but some hotel marketers have experienced disappointment with this channel.

This disappointment is certainly understandable. Hotel marketers have limited budgets, and they at least expect some decent returns on their time and money investments. Let’s face it, social media isn’t a set it and forget it type of marketing. It’s 24/7 and requires a lot of time to properly execute, causing even more frustration when hotels see no direct benefit. Some marketers also dabble in purchasing ad space on social channels (we’re big fans of Facebook Newsfeed advertising), which also has an actual ad spend attached to the time investment.

Despite the allure that’s created by social media, the opportunity to reach millions and millions of potential guests, we have not found it to be a channel that creates a lot of direct online revenue; keyword being “direct”. That is, it isn’t something where somebody clicks through to your website from your Facebook page and then decides to book a room; there’s not that one-to-one connection.

But that’s OK because that’s what we should expect. Disappointment stems from experiencing something other than what was expected, and some hotel marketers might have expected the hefty time and money investment in social media to yield much greater direct online revenue. What we’re saying is that it was incorrect to expect that in the first place.

Social media can be a great marketing channel for hotels, but we have to understand its place in the marketing mix; more specifically within the consumer buying process. We talked about marketing channels and the consumer buying process in a previous post. Social media lies at the beginning of this process, signifying that it’s more of an awareness or interest generation tool.

We can see a real-life example of this when we look at assisted vs. direct revenue, which we also discussed in a previous blog post on direct and assisted online revenue for hotels. One of our clients saw $19,994 in direct online revenue from social media.

This client, in the same timeframe, saw $69,574 in assisted revenue from social media; that’s a little over three and a half times as much. We take this as a clear example of what the expectation should be for social media. That is, it’s a powerful awareness tool.


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