Increase conversion rates to boost revenue
Increase conversion rates to boost revenue
30 JULY 2013 6:34 AM

The single easiest way to increase your online revenue is by focusing on conversions.

As hoteliers know, the most profitable business is direct business. Online travel agencies take as much as 25% of your online revenues. So at a $100 rate, hoteliers will only receive $75. With such a heavy discount, an over-reliance on these OTAs will certainly tear your rate apart.

With the vast array of companies that contact your marketing department, it can be confusing to understand what it is that would make the greatest impact in your Internet bookings today. If you analyze the math though, the quickest way to increase revenues isn't another ad campaign, email blast, partner program or other marketing program; it's your conversion rate.

Sam Trotter

Let's run the math:

  • 100,000 visits
  • 0.5% conversion rate
  • $250 average purchase
  • $125,000 total Internet booking engine revenues

Goal: Increase revenues by $25,000 in the same period. Here are the three ways to do it:

  • Increase your number of visits by 20,000 visits, using search engine optimization, system management mode and pay-per-click.
  • Increase average purchase by $50 through packages, upgrades, tours, etc.
  • Increase conversion rate by only 0.1%

Which one would take the least amount of effort to achieve out of these three? It is your conversion rate. Convincing just one extra person out of every 1,000 nets you the same amount as attracting an additional 20,000 visits.

A lot of hoteliers I meet are truly baffled by this concept. They talk about the innovative marketing programs they are participating in and their fantastic return on investment for their ad campaigns, but at the end of the day, a 20:1 ROI only exists within remarketing campaigns; there are simply not enough clicks available to replace the need to focus on conversions.

For those who don't know what I mean by conversion rate, the equation is simple. Conversions equal the number of reservations divided by visits to the website. The higher the percentage, the better you are performing. In order to be able to find this number you should have some sort of analytics code embedded in your website. The most popular and free program is provided by Google Analytics. Ask your web developer to embed the code in your site and within your booking engine. Once the code is embedded, you will also need to update your website's privacy policy to reflect the code that you have placed on your site.

With your new analytics code in place, you will now have access to the number of visits that come to your site. With your Internet booking provider or through your newly embedded code, take a look at your conversion rate. If it is south of 1%, it is time to start looking hard at your website and your online presence in general.

There are a large host of factors that could be bringing your conversions down.

Review rate strategy and parity
Some of your partners might be offering a wholesale rate on another site without your knowledge. It happens all of the time on sites you have never heard of. Navigate to Kayak and shop various dates. Make a note of all of your parity issues, dates and sites and review with your revenue management team.

Analyze your website
Ask yourself the following questions:

  • Are all of your links working in good order?
  • How are photos communicating your hotel?
  • When was the last time you redesigned your website? What does your old site communicate to potential guests?
  • How fast do pages load? If it’s slow, then more visitors will abandon your site. 
  • Are the calls to action well placed on your Web pages? A calendar booking widget where dates can be selected immediately on your home page will increase your conversions.
  • What is the quality of your online booking engine? Does it communicate trust?
  • Is the Web design clean and easy to navigate?
  • Can you effectively book your hotel on your mobile device?
  • What is the mobile booking experience like? Have you ever done it?
  • Is there a good reason to book on your Internet booking engine over an OTA?
  • Is a promo code at the last minute causing exits from your booking engine?
  • How is the user experience? How can you improve?
  • How is the website performing across the common browsers?
  • What is the quality of the traffic that is coming into your site?
  • How are certain links performing?
  • What are your top unbranded search queries? Are you capitalizing on those search terms?
  • What is your exit rate? Is it high?

Other factors to consider:

  • Poor reviews will reduce your credibility to handle a guest's credit-card information;
  • spelling errors or poor sales copy; and
  • external marketing campaigns such as LivingSocial will temporarily reduce your conversion rates due to an influx of traffic that is incentivized to book elsewhere. Make note of campaign start and end dates as you track your performance.

There is a certain amount of art and science that go into increasing conversion on your hotel's website. Fortunately, there is no longer a need to guess since everything is now being tracked. Make notes, review your conversion rates, get feedback and remember that the single easiest way to increase your online revenues is by focusing on conversions.

Sam Trotter is portfolio eCommerce Manager at Boutique Hospitality Management. Besides focusing on website revenues, Sam dives into how technology can positively influence a hotel's business. A self-confessed data junky, Sam Trotter provides news and analysis on website design, applications, marketing programs and other digital trends that are or will affect a hotel's business. To continue the dialogue or for the latest technology news that impacts your hotel, follow him on or at

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