The Road Ahead for Hotels Is Localized Targeting

You could say that the hotel industry faces a long road ahead, which is a statement with double meaning. Of course, one interpretation reflects the historic downturn in the industry due to COVD-19, with bookings falling dramatically Y/Y in pretty much every corner of the world, including the US.

Another way of interpreting that, though, is that, in the near term, the best opportunity for hotels to generate demand probably comes from consumers located within driving distance of hotel properties. Call them staycations if you want, but we believe that hotel marketers who execute localized targeting well will benefit greatly as these trips will be lifelines amid the desperate search for guests.

First, let’s look at some trend data that gives us a glimpse into the psyches of potential travelers. According to Morning Consult, there was a short spike in consumer confidence for taking vacations a few weeks ago. However, that confidence has since flatlined thanks to surging cases of COVID-19 infections. The upside is that confidence levels seem to have flattened and not plunged, so those who were open to traveling, while in the minority, are still open to it. 

However, more than half of those surveyed said they have no plans to travel or wouldn’t do so until more than six months later.

Source: Koddi

The leveling off of consumer confidence is also reflected in US hotel searches, according to Koddi. The most recent weeks have seen slight increases and decreases in demand, as evident from search queries (+/- 2%). Moreover, the average booking window has decreased as of late, with travelers booking their stays within the same or next day more often, coinciding with the increase in coronavirus cases. That behavior reflects declining confidence among consumers.

More data points to the importance of staycations as a focus for hotel marketers. A Harris Poll survey found that 59% of respondents will opt to travel by car in order to avoid air travel, and according to eMarketer, digital travel sales aren’t expected to recover to 2019 levels until 2022. 

Source: eMarketer

So what are some things hotel marketers can do to be top of mind with travelers who are open (or even desperate) to get out of their shelter-in-place routine? One option is to leverage radii targeting bid modifiers on Google to cost-effectively reach consumers who live within a few hours’ drive of their properties and present them with compelling ad copy as to why the nearby hotel or resort is a safe place to get away during these stressful times.

The key to this strategy is to properly set base bids for non-brand keywords at levels that ensure profitability while creating multiple layers of bid modifiers based on drive time. The end goal is to have strongly competitive bids based on consumers’ likelihood of making the trip. PMG teams have implemented this strategy for its clients to strong success during the pandemic. While this alone isn’t enough to help hotels fully recover demand, it could and should be a key pillar in any hotelier’s plan, resulting in lower-traffic costs, higher conversion, and a strong return on ad investment.