Leave Hotel Marketing Agency Management Fees at the Door with our Performance-Based Commission Model

The Problem

Independent hotels face a growing challenge to drive more direct bookings with limited resources. The customer journey has become nonlinear and dynamic. Consumers have an ever-growing number of resources to research, plan and book their travel. Rob Torres, Managing Director of Google Travel, recently stated at the Direct Booking Summit leisure travelers will have 45 different touch-points prior to making a purchase decision, up from an average of 28 just 5 years ago.

Independent hotels must be ever-present along this customer journey to gain awareness and differentiate themselves to capture more direct bookings and win market share over their competition. The cost to do so continues to rise each year, with media costs rising 10-15% and stiff competition from the OTAs.  At the same time, hotel marketing budgets remain relatively flat, or if you are one of the lucky ones, maybe you were able to get a 5-10% increase approved. This leaves hoteliers challenged with driving more direct bookings and increasing their market share with relatively fewer resources each year.

Hotel digital marketing agencies have long offered a solution to keep hoteliers at the forefront of the dynamic customer journey, presenting new marketing opportunities and strategies to be ever-present along the customer journey to capture more direct bookings.  The challenge has been that hotels have limited marketing budgets to pursue these opportunities.  Hotel marketing agencies typically charge hotels a flat monthly management fee to provide these services and support, further limiting hotels to properly fund their existing marketing efforts, let alone pursue new marketing opportunities.

At the same time, hotels often have an uncapped amount of commissions they can pay to acquire new business.  Have you ever thought to yourself or heard a hotelier say, “We have reached $100,000 in travel agent commissions for the year, so we need to shut off all travel agent bookings for the remainder of the year”? No, of course not. It is easy to defend to ownership or your management company a reasonable commission for a booking if it is not displacing bookings that can be acquired at a lower cost per acquisition.

GCommerce and our hotel clients are faced with this challenge all the time. Hoteliers often reach out to us asking for help with their digital marketing efforts and will say that they have a limited amount of budget for these services, which impacts both the hotel’s overall performance and our ability to effectively market the property.

The Solution

We have created an alternative to solve this problem.  We want to open our full suite of hotel marketing services and support to allow hotels to pursue all viable marketing opportunities and free up precious marketing dollars to properly fund their online media. Rather than charging a flat management fee each month, GCommerce is offering a performance-based marketing fee model creating a true partnership in success. Independent hotels can now choose to pay a small commission for direct website bookings that is substantially less than a travel agent commission in replacement of a monthly management fee.

How Does A Performance Based Fee Model Benefit Your Hotel?

  1. Increase your ability to fund your hotel’s marketing campaigns by removing the cost of management from your hotel marketing budget
  2. Increase your share of voice across the web with an increased hotel marketing budget
  3. Pursue new marketing opportunities like metasearch or video advertising, or a host of new marketing avenues with your new-found marketing dollars
  4. Create a true partnership with a hotel digital marketing agency focused on driving more direct bookings, rather than working with another agency that is focused on delivering shallow ROAS by only going after the bottom-of-the-funnel to defend their value, while not actually increasing your visibility and driving incremental revenue.
  5. Compete more effectively against your comp set who still face marketing budget limitations and the well-funded OTA’s

For more information, please contact us today!

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