By Claire Sawier, with Dr Des O’Mahony and Samantha Salazar.
What is conversion and why does it matter?
Your conversion rate is typically defined as the percentage of how many bookings you received compared to the number of sessions to your website, and is a key metric often used to measure marketing efficiency.
For booking engines using Google Analytics, the e-commerce tracking feature displays the number of bookings made and the amount of revenue generated, as well as the e-commerce conversion rate for both mobile and desktop.
According to this traditional outlook a conversion is a booking. But at Bookassist we are challenging this simplistic metric.
Misconceptions about conversion
Certainly the goal for most hotel marketeers is to secure a booking and that’s where most conversion metrics end, at the point of booking. It’s a simple ‘lookers to bookers’ ratio. But what about cancellations? If you are only measuring your success in terms of bookings made, then you are masking the reality of what happens after the booking is made. Do you even know how many of your bookings go on to be cancelled?
In our recent article on cancellations we found that the most successful hotels are those that take a combined view of conversions and cancellations and manage both carefully. High conversion rates might look good, but they may simply be delivering high cancellation rates unless a robust cancellation strategy has been implemented.
Net conversion rate
Conversion Rate Optimisation (CRO) is a marketing strategy aimed at increasing the percentage of website visitors that convert into customers and is crucial to your hotel’s online success. Your CRO strategy needs to focus on;
- Getting the right traffic to your website in the first place
- Converting those visits to bookings
- And making sure they stick around to actually end up staying at your hotel
Conversion rates therefore need to be considered alongside cancellation rates to give a true picture of success and marketing effectiveness, i.e. we need to be looking at a Net Conversion Rate. You therefore need to start tracking cancellation rates, both direct and OTA, for a more realistic conversion metric for your distribution channels and an assessment of their true effectiveness.
The real challenge for CRO is to tackle the full booking journey right through to the point of stay. The industry as a whole needs to switch mindset to reporting on net conversion rates and not just conversion from the point of view of bookings. And marketers also need to focus on their post booking strategy to minimise cancellations and increase net conversion rates. This is particularly important with the clear rise in online booking cancellation rates that we’ve been seeing throughout the industry in recent years.
Limitations of website conversion metrics
It is often quoted in the industry that the average website conversion rate for hotels is 2% or thereabouts. This 2% is based on the bookings made relative to the ‘total’ number of sessions to your website. Many hotel website visitors of course have no booking intent and are simply browsing the showcase aspect of your site which often includes spa facilities, restaurant, wedding and corporate pages. We’ve all done it.
So your website conversion figure is a useful benchmark but it doesn’t really tell you a lot. For example, the 2.93% conversion rate shown in figure 1 tells us simply that the website in question is performing above the industry average, but it doesn’t give you any insight into the steps that you need to take in order to improve your direct booking capability.
Because hotel websites are traditionally a cross between a showcase and an e-commerce site, a more relevant conversion metric is the booking engine conversion rate. Unlike your overall website conversion rate which is skewed and therefore lowered by your overall general-purpose traffic, your booking engine conversion rate focuses exclusively on the booking e-commerce aspect of your business and is likely a truer and more insightful measure of what your are trying to achieve.
Your booking engine conversion rate and conversion goal funnel provide so much more additional information, especially where your booking engine employs Enhanced E-commerce with Google Analytics, as is available from Bookassist. Essential insights into your visitors’ paths to purchase tell us how many people enter the booking engine funnel, what room types or packages they are engaging with, where you’re losing bookers along the way, and at which stages we can improve their experience.
In our opinion at Bookassist, hotels should focus on their booking engine conversion rate as a priority over the overall website conversion rate. Furthermore they should not settle for the industry average and should not be complacent around average figures. In terms of website conversion there is a lot that separates hotels who achieve figures much higher than the industry average and there are a number of factors that can cause this number to fluctuate wildly. Equally, good-performing hotels report website conversion rates lower than the industry average and that may be okay too, depending on their overall website goals and type of visitors that they want to attract. Hotels simply differ too much across the industry for industry averages to be relevant in many cases.
Strong conversion strategy = strong conversion rate
Strong conversion rates are only possible when underpinned by a strong conversion strategy. This takes time, cost and attention but is absolutely worth the effort in terms of the resulting increase in revenue. Once a hotel’s booking conversion funnel has been optimised for an engaging and frictionless booking experience, the increase in booking and conversion opportunities will inevitably follow.
If your website and booking process are not optimised to convert then you are just wasting your money investing in activities to increase traffic to your website. As a result of this incorrect focus, many hotels are surprised when their increase in PPC or meta search advertising spend does not result in a significant bookings uplift. Sure, the more you throw at something the more likely some of it will stick, but if the conversion issues are not addressed before you invest in bringing more people to your site you’ll find that you may only manage to increase revenue slightly, and to a degree where it is not worth the additional spend and effort.
You’d be better off spending your time and money first on making sure that your site, booking engine and booking engine setup are converting your current visitors before turning to visitor growth.
Try taking that journey yourself to understand first-hand the would-be booker experience when booking a room online for your hotel. We’ve yet to come across anyone who enjoys the experience of a slow site, inaccurate information, broken links, or being forced to sift through volumes of information trying to find what they are looking for, all against a background of dubious data security. In many cases you’ve already lost your potential booking even before they check availability.
CRO before SEM
By improving your website’s current conversion rate, you’ll also get better value out of your existing traffic as it’s more cost effective to generate increased revenue from your existing traffic than it is to drive more viewers to your site. Better still, if you improve your conversion rate before investing in paid online advertising, you’ll get a better return on investment on all future marketing efforts. A healthier conversion rate together with an increase in the number of visitors to your site will result in increased direct booking revenue.
Frictionless booking experience
Consumer expectations are the same the world over - a booking experience that is speedy, seamless and secure. Friction will not be tolerated and hotels that continue to add friction to the booker’s journey will pay in terms of lower conversion and ultimately lower revenue.
Your website, booking engine and digital marketing all need to work in perfect harmony. In this holistic scenario, (a) your digital marketing effort generates traffic with high purchase intent that (b) goes on to visit your mobile-ready and fully-optimised landing page showing the best available rate and clear direct booking benefits, thereby (c) drawing that traffic into the booking engine which (d) has clarity of content and presentation that makes it simple for customers to complete their reservation with ease.
Bookassist tightly integrates booking engine with website and digital marketing for a truly frictionless direct booking experience. This holistic approach is far more effective than using separate providers for each solution where that tight integration is much harder to achieve.
How to increase your conversion rates
There are a number of actions that you can take to increase both your overall website and booking engine conversion rate for desktop and for mobile. We’ll dive into the detail of successful conversion rate optimisation and share some really great success stories with you in our next article, so stay tuned!
Conversion is a key measure of marketing success, but there are many misconceptions about conversion and hotels need to focus on the metrics that matter. A strong conversion strategy is needed to affect strong conversion rates. Hotels that adopt a holistic approach to remove booking friction will be rewarded in higher conversion and increased direct booking revenue.
Dr Des O’Mahony is CEO & Founder, Claire Sawier is Head of Marketing and Samantha Salazar is Digital Marketing Specialist at Bookassist, (bookassist.com), the multi-award-winning technology and digital strategy partner for hotels worldwide.