THE DECLINE
Covid-19 has had a massive negative impact on hotels all over the world. It has also had a huge impact on the effectiveness of one of the main marketing channels for hotels – search engines. The main reason hotels invest money in organic and paid search is because it is intent-driven marketing. If you are a hotel in Offaly and people are searching for “hotels in Offaly”, then you know that they are probably looking for a place to stay in Offaly. However, search engines are also a reflection of the market in the sense that if very few people are looking to book hotels, then there will be fewer people searching online for hotels.
We looked at Google Trends and our own internal data to illustrate this dramatic decline in search demand caused by Covid-19. Below is a Google Trends chart that shows interest over time in the keyword “hotels in Dublin”. You can see a massive decline in search interest in recent weeks. The interest in this keyword is currently 7 times lower than it was just 2 months ago on the week of the 16th to the 22nd of February.
We had a look at one of our campaigns as well for our own clients. The little annotations on the chart indicate when key announcements were made in Ireland. There were a whole series of events related to Covid-19 that drove this decline but on the chart below, we can see that three of the most significant events were :
SPORTS CANCELLATION
Many sporting events, including Ireland’s final two rugby Six Nations fixtures against Italy and France, Gaelic Athletic Association, and League of Ireland games, were postponed or canceled altogether.
GATHERINGS BANNED
Indoor gatherings banned outdoor gatherings banned, sports cancellation, nursery school closure, school closure, university closure – Government recommended indoor gatherings of more than 100 people and outdoor gatherings of more than 500 people to be canceled.
NON-ESSENTIAL BUSINESS
Limited nonessential business suspension, compulsory isolation, social distancing The Vintners Federation of Ireland, the Licensed Vintners Association, and the Irish government urged all bars and pubs to close from midnight 15 March until, at minimum, 29 March. Planned End Date: 29-Mar-20. The official statement cited difficulty in maintaining social distancing in bars and pubs. All pubs and nightclubs in Temple Bar, a hot-spot of Dublin’s nightlife, announced that they would comply in response. Taoiseach Leo Varadkar stated that he “may seek enforcement powers from Dáil/Seanad” in order to compel pubs and bars to close.
Planned End Date: 29-Mar-20 Sun March 15, 2020
WHEN WILL THE SITUATION IMPROVE?
The linking of the decline to the events also gives us a great insight into when the situation is likely to improve; When governments feel that the virus has moderated to a level where they can remove many restrictions and people feel safe to travel freely again. In China, there has already been a slight pick-up in bookings and occupancy due to authorities lifting some coronavirus-related travel restrictions. When travel restrictions eased during the SARS epidemic, occupancy picked up very sharply in China. Occupancy picked up even before the WHO announced that SARS had been contained.
WHICH MARKET WILL PICK UP FIRST?
In terms of what markets are likely to pick up first, it is likely to be the domestic market that will recover first. Different countries are at different stages of the pandemic and it is possible that travel from markets such as the USA will take time to recover. In relation to the Irish market, data indicates that around 70% of people are still planning to travel domestically this year.
PPC MARKETING FOR THE PICK-UP
If you haven’t stopped investing in PPC, that is great. Although demand is still extraordinarily low on Google search, meta-search channels and Bing search, the market is less competitive than ever. For most our clients, we have seen a very significant decline in cost-per-click (over 40%). However, if you have paused PPC investment because you are unsure when you are going to reopen, we advise that you immediately reinvest in PPC once you feel confident that you know when your hotel is going to reopen.
It is going to be more competitive than ever once all hotels reopen as they all fight for the same domestic market so it is likely cost-per-click will be higher in the weeks leading up to the reopening of hotels. You will need to be granular in your targeting to ensure that you don’t waste money on expensive channels such as Google search. For example, if you are a hotel in Dun Laoghaire, you will want to target keywords such as Dun Laoghaire hotels instead of keywords such as Dublin hotels which will be too broad. If you are a hotel in Dublin with a swimming pool, you could target keywords such as Dublin hotels with pools instead of Dublin hotels.
WHAT SHOULD I SPEND MY BUDGET ON?
Pre-Covid, the focus of the OWS (own website) of many hotels was on channel shifting (i.e. driving bookings from online travel agents to the official website). That still remains a very important objective for all hotels but you will also now need to increase your focus on awareness-style campaigns. As demand picks up, your brand campaigns, meta-seach campaigns and generic campaigns will get more impressions, clicks and bookings.
However, the market demand is likely to remain lower than pre-covid levels so you will need to focus more on reaching customers earlier in the funnel who are undecided about where they want to go. This can be achieved by improving your local pages on your website, by PR and by a range of digital channels such as YouTube campaigns, display campaigns, Facebook campaigns.
By running these campaigns, your cost-per-acquisition is likely to go up so you need to be open to that.
GETTING REPEAT CUSTOMERS
With this higher cost-per-click and cost-per-acquisition, getting repeat guests will be more important than ever. An article published in Harvard Business Review, pointed out that “acquiring a new customer is anywhere from five to 25 times more expensive than retaining an existing one.” You can target existing customers on channels such as Google and Facebook but many non-paid channels such as e-mail marketing and your loyalty club will be crucial here. You can create exclusive offers for loyalty club members to drive repeat bookings.
PLAN YOUR REOPENING NOW
Finally, start planning for reopening now. As we have seen from previous epidemics, when the restrictions are lifted and when people feel safe travelling again, the pickup will be dramatic and fast and you could be caught out if you are not prepared for that
