Occupancy White Paper

The Low Occupancy
Conundrum
How Digital Marketing Can Solve The
Hospitality Industry’s Biggest Riddle

THE LOW OCCUPANCY CONUNDRUM
2 Copyright 2014 Booking.com. All rights reserved.
Introduction
Low occupancy’s a big concern. But did you know that even a small increase in your
property’s average occupancy rate can dramatically increase profits? Also, thanks to
digital marketing, these increases are more attainable than ever.
In this whitepaper, we’ll discuss the options you have when building your hotel’s online
presence—including who should run your website and which digital marketing
strategies work best to grow your online business.

(Data Source: Smith Travel Research, Courtesy of HotelNewsNow.com)
Why Occupancy
Rates Matter
First, let’s examine why it’s important to pay attention to occupancy rates. The average
US property’s occupancy rate varies by about 33 percent1
between its highest and
lowest seasons. Even during a recession, this margin holds steady.
Clearly, seasonality is a fact of life. But what about low occupancy rates? Should you
accept that because some months are bound to be slower than others, it’s not
important to fret too much about occupancy rates? Absolutely not! Okay, so what’s
better—dramatically raising your occupancy rates during just one season or
strategizing to make small increases over the entire year?

Month
Occupied Room
Nights
Occupancy Rate
Room Rate
Per Night
Gross Income
January 217 70% $90 $19,530
February 210 75% $115 $24,150
March 239 77% $115 $27,485
Smarch 239 77% $115 $27,485
April 180 60% $115 $20,700
May 155 50% $90 $13,950
June 138 46% $90 $12,420
July 143 46% $90 $12,870
August 133 43% $90 $11,970
September 126 42% $90 $11,340
October 133 43% $90 $11,970
November 132 44% $90 $11,880
December 220 71% $115 $25,300
13-Month Year
Averages
174 57% $100 $231,050
12-Month Year
(without Smarch)
169 56% $98 $203,565
Let’s consider the hypothetical example of The Mole Mountain Lodge, a 10-room ski
resort located in Duluth, Minnesota. Last year, the spacetime continuum got a little
goofy up there in Northern Minnesota and, gosh, all of the sudden there was an extra
31 days in the year. The local folks didn’t want to make a fuss, so they just went ahead
and stuck a new month, Smarch, right there between March and April because it didn’t
really put them out, anyway. Here’s what the year looked like for Mole Mountain:
This temporal hiccup turned out to be quite the boon for the Mole Mountain Lodge.
The Smarch occupancy rate matched that of March, which is historically the lodge’s
best month, and brought in an extra $27,485!

But take a closer look at the occupancy rates. Had the year stayed at its normal 12
months, The Lodge would have only had to grow its average yearly occupancy rates
by one percent to earn the same smarchy revenue increase. An additional best month
of revenue in just one percent.
The takeaway? A small increase in occupancy goes a long way. In order to make more
money, you don’t need to go looking for a black hole, a way to bend time, or any other
dramatic way to extend your busy season. Instead, use digital marketing to nudge up
your occupancy rates over the entire year.

Who to Choose?
So you’ve decided to ramp up your property’s digital marketing. Congratulations! This
is a huge step towards increasing occupancy rates. Now, you face an even bigger
decision—who you’ll hire to tackle this Herculean task.
First, you need a great website. Not just a good one, an amazing one. You’ll need to
decide who you want to build or revamp your hotel’s website. You have a few
choices here. You can hire an agency, a web gal or guy, the computer kid down the
street, build the thing yourself, or subscribe to Cloud-Based Digital Marketing
Software. These options run the gamut from crazy expensive to
straight-up intimidating.
Improving your web presence is a big job that requires time, tact, and attention to
detail. Check out the following cast of characters that you can choose from to
spearhead your hotel’s digital marketing. Each contender has his or her strengths and
weaknesses. This rundown will help you decide who’s best for your property.
The Agency
The Agency does all the work, including making the design and content decisions. For some,
this comes as a huge relief. Their work comes at a price, however. Depending on the size,
quality, and reputation of The Agency, you’re looking at upwards of $5,000 to get your site up
and running. And once your website’s live, it’s static. This means that you’ll have to pay The
Agency to make any changes that you want done to your website. For example, if you want to
change your room pictures or pricing, The Agency will charge you an hourly rate to make
these revisions.

The Web Guy/Gal
The Web Guy or Web Gal works on a freelance basis. You probably found him or her via the
Internet on a website like Craigslist or Freelancer.com. The Web Guy/Gal is cheaper than The
Agency, but also works at a slower pace. Also, just like The Agency, The Web Guy/Gal gives you
a static site and will charge you for any changes. They work alone, so they don’t have the well
of expertise of The Agency or a Cloud-Based Digital Marketing Software company. That said,
they’ll give you a pretty hands-on experience.
The Computer Kid Down The Street
The Computer Kid Down The Street (CKDTS) is a true whiz. He learned to hack before he
learned to walk. He doesn’t have that much experience, but he also charges next to nothing.
A Coke from you fridge might tide him over for an entire afternoon. CKDTS is really sweet and
hardworking, but he doesn’t have all that much experience. As a result, your website probably
isn’t going to work that great or stay current for very long.
You
Building your website can’t be that complicated, right? Wrong. Even if you do have the
know-how to design and launch your hotel’s website, this project will require a whole lot of your
attention. Even though this is a low-cost option, think about all the time you’ll lose that you could
have otherwise devoted to the million other tasks involved in operating your property.
Cloud-Based Digital Marketing Software
Cloud-Based Digital Marketing Software built specifically for the hospitality industry helps you
build and grow your hotel’s web presence. Basically, this software does all the heavy lifting of
revamping your website and then hands over the reins to you. The software company designs
and continuously updates a platform that makes sure your website looks and works great even
as the Internet evolves.

Nuture Your Website
Clearly, you have a lot to consider. Some considerations are more obvious than others,
such as how much time and money you want to invest in this ongoing project. That
said, you should also think about how much control you want in your property’s overall
digital marketing strategy.
Just because your website’s live doesn’t mean that the website’s doing a good job.
Think of your website as a plant. A living but ignored plant will shrivel and turn to dust.
A plant that’s watered and given sunlight will thrive. Exercising smart digital marketing
is like feeding and sunning your website.
The rest of this whitepaper examines some key aspects of a successful digital
marketing campaign. As you read, think about who will use these techniques to
nurture your website best.
You pay a subscription to gain access to software that you can log into any time you want to
make content changes. Cloud-Based Digital Marketing Software brings together all the good
stuff of The Agency and The Web Guy/Gal at a fraction of the price. Plus, you get to control the
content whenever and wherever you want.

The L-Word
These days, the term “local” carries a lot of weight. People care where their food,
clothing, kitchenware, bicycles, watches, candles, you-name-it, were produced. Some
take it a step further and only shop at locally owned businesses.
The reasons are varied. Some people care about preserving an area’s economy and
character, while others are concerned about the environmental toll of shipping
products a long way. These locavores believe that the less distance something has to
travel, the better.
But can a hotel be local, too? Absolutely! A hotel is fixed in place, set in a locale. You
can leverage your hotel’s location to attract guests looking for a more authentic travel
experience. This isn’t necessarily a new concept. After all, location, location, location
is the oldest business mantra around. What’s new is how you sell your hotel’s location.
Interactive Maps
People shouldn’t have to work to figure out where you’re located. An interactive map
right on your website shows, rather than tells, prospective guests your location. The
map keeps prospective guests close to your booking engine, thus increasing the
likelihood that they’ll become actual, paying guests.
As opposed to a static map, an interactive map allows users to zoom in, zoom out,
and move the center of the map. These features allow your prospective guests to
explore the area around your hotel. You can even mark points of interest such as
airports, conference centers, and popular tourist destinations.

Also, consider that to some travelers “tourist” is a dirty word. These folks want to
go where locals go, eat what locals eat, live how locals live. In order to appeal to
local-minded people, interactive maps let you pin spots that are off the beaten path.
For instance, you could add text describing the brewery down the street that
exclusively uses hops grown within 100 miles. Boom. That’s how to really blow up
occupancy rates with an interactive map.
Mobile
Clearly, mobile devices play a huge role in keeping people entertained and informed.
Smartphones and tablets are also integral in driving higher occupancy rates. A 2013
study2
estimates that mobile travel sales will total nearly $50 billion by 2017. If you
want a piece of that pie, your hotel’s website needs to be mobile compatible—
and fast.

Speaking of fast, mobile also provides a crutch for those who book hotel rooms at
the last minute. According to studies by Orbitz and Travelocity, 60 percent of mobile
books happen within a day of the stay. That’s some low hanging occupancy right
there.
Read More: See how the mobile booking craze is especially popular amongst
the millennial set.
There’s also a huge opportunity for using mobile to engage guests after they’ve
booked. In a recent interview with The Next Web3
, TripAdvisor CEO Stephen Kaufer
touched on his vision for the future of tourism:
“There’s an incredible amount left to be done on mobile … We think there’s a phenomenal
opportunity once travelers are in-market to change their in-market or in-destination activity.
How cool would it be to be able to open up your phone and not only be able to find a great
restaurant next to where you’re standing—you can do the today with our app—but actually
get custom tours?”
In other words, there’s a bright future for mobile experiences designed for people to
use as they travel. Kaufer envisions something fun and educational in his custom
mobile tours. Of course, the future of mobile also includes practical purposes, such
as room keys that guests could download to their smartphones.
What can you do to prepare for the mobile future? Adjust your thinking about how
you craft content for your website today. Don’t just make your content mobile-
friendly, make your content mobile-minded. Add tools to your hotel’s mobile website
that people would find useful during their stays, like a click-to-call link to your front
desk or concierge. Create content for tourists such as a walking tour downloadable to
your mobile-compatible, interactive map.

Heartbreak Hotel
Being stood up is the Worst Feeling In The World. Yup, it’s so bad, it’s a proper noun.
What’s worse, you don’t even have to be a real person to get stood up. Hotels get
stood up all the time. True story.
It’s not like some Holiday Inn is sitting alone at a table for two right now.
Obviously. We’re talking about a different kind of blow off, like when a prospective
customer makes all the right moves—pokes around on your website and engages
with your booking engine—but never seals the deal.
You’ve been played. Terrible, right? All you can do is keep your chin up and do better
next time. Below, see how an integrated, conversion-minded booking engine will help
you get back your game and end your occupancy dry spell.
Booking Engine
There’s a lot riding on your hotel website’s booking engine. No matter how
glorious your written descriptions, sparkling your TripAdvisor reviews, or amazing your
location, even seemingly small snags in a person’s booking experience can send them
running for the hills. All is lost if your booking engine fails to convert potential
customers into paying customers.
Depending on your outlook, this will seem obvious or exaggerated. But no matter
if your glass is half-empty or half-full, know that booking engines are nuanced
creatures. As such, pay close attention to your booking engine as you rebuild or
update your website.

Remember that on the Internet, familiarity does not breed contempt. Familiarity breeds
trust. All the pages on your website, including your booking engine, should share the
same soul. Nothing jars a user more than when a booking engine looks or feels
dramatically different from the rest of a website. This leads people to question to
whom, exactly, they’re forking over their precious information and money. Worry
stresses people out. Stressed out people leave your website. Gone, poof, bye-bye.
Similarly, your customers shouldn’t have work to find anything on your website—the
availability calendar, room descriptions, rates, buttons, promotional offers, everything.
A booking engine should integrate all of this information in an easily digestible manner.
It should gently guide a potential customer to his or her final destination. The fewer
clicks it takes someone to book a room, the better.

Time’s On Your Side
Once your website’s up and running, how do you do drive traffic to it? Social
media—Twitter, Facebook, Google+, Instagram, TripAdvisor— can help. In fact,
“I saw on Facebook…” is one of the most commonly uttered phrase of the twenty-first
century. But just because everyone is seeing everything on Facebook, is social
media necessarily worth your time?
And what about search engine optimization (SEO) and search engine marketing
(SEM)? There’s so much chatter around these two marketing strategies, it’s hard
to understand what exactly SEO and SEM do. The Internet’s a nebulous place. We’ll
guide you through the basics so you can walk away with a strong understanding of
SEO, social media, and SEM.
SEO
Search engine optimization, commonly known as just “SEO,” involves making changes
to your website’s structure and content in order to rank higher on search engine results
pages (SERPs). Since everything happens so quickly on the Internet, many people
expect SEO to work instantly.
Au contraire. SEO is not wizardry. It is systematic, grounded, practical. It’s about the
steps you take and the content you create. In his now-famous 1996 speech,
“Content is King,” Bill “Nostradamus” Gates nailed it when he predicted that those
offering compelling web content would make money on the Internet. “Those who
succeed,” he said, “will propel the Internet forward as a marketplace of ideas,
experiences, and products—a marketplace of content.4
”

Today, Gates’ “marketplace of content” is strong. Search engine algorithms are
becoming more sophisticated, and websites with quality content do the best. As the
days of shady SEO tactics—keyword stuffing, doorway pages, invisible text—fade
further into the annals of the Internet, those who put time into building websites with
relevant articles, rich photography, and videos rank higher. The Internet’s a market,
after all, a place of supply and demand.
As you can imagine, creating good content takes time. Properties wait months, even
years, to see SEO increase traffic to their websites. This isn’t exactly the news that a
hotel facing low occupancy likes to hear. Instead, think about SEO as a sustainability
measure. A decision to continuously update your hotel’s website is an investment in
SEO. SEO now will help drive occupancy down the line.
Social Media
SEO prepares you for the long haul. The same can be said of social media marketing
campaigns. Don’t expect conversions to soar after one month of posting on Facebook
or Twitter. It can take over a year to gain traction on social media.
Be patient. You may be receiving benefits from your social media efforts that you don’t
even know about. Google knows everything about you, remember. And the search
engine uses a lot of different factors to determine the strength of your website. So
even though it might seem like a trivial thing, the number of Facebook “likes” that
content linking to your website receives does improve your place in search engine
results pages. The same holds true for other social media such as Google+ and
Twitter. The more popular you are on social media, the more Google likes you, too.
Your property’s popularity on review websites like TripAdvisor and Yelp also matters.
Now, instead of ranting at the water cooler or neighborhood bar, people take their

complaints to the web. Review sites are kind of like virtual meeting places where
people give and take advice from folks they’ve never met. Weird, yes, but this is how
we live now.
And thanks to the glory of the Internet, you can be a fly on the wall of the places where
your customers hang out. Check out how people are reviewing your property. Because
while the motivations behind these reviews are varied (CNN cites wrath, euphoria,
profit, status, and duty5
), their influence should not be underestimated. Good or bad
reviews can make or break your occupancy levels. In fact, upwards of 95% of
customers will not buy a product if they read a negative review about it6
.
Check out “Tips for Responding to Online Reviews” on the BookingSuite blog.
SEM
On the other side of the Internet marketing coin is search engine marketing (SEM).
SEM increases a website’s visibility on SERPs through pay-per-click ads. This
strategy tends to show results quicker than SEO, so if you need to find new guests
right away, SEM could be a good addition to your digital marketing strategy.
But like everything else in life, SEM’s convenience comes at a price. Each time a
user clicks on a paid ad, you shell out cold, hard cash. More clicks aren’t necessarily
a good thing. It’s more important to get referrals from people most likely to book at
your property. When it comes to SEM, think quality over quantity. As such, good SEM
targets audiences that would be most interested in your website—even if they don’t
know it yet.
Google AdWords is today’s search engine marketing powerhouse. Research the
service and decide if it’s right for you. If so, research, research, and research some
more. The Google AdWords tool includes measurement tools for you to study your
conversion data in order to assess the efficacy of your SEM campaign.
Click here to learn more about SEO vs SEM in our free eBook.

Best For You
We’ve spent a lot of time discussing the ins and outs of marketing your property
digitally. There are plenty of solutions concerning how you market your hotel online.
But in the end, chose the people, tools, and strategy that are right for your business.
As the years go by, digital marketing will only get more important to the hospitality
industry. But no matter how technology and the Internet progress, be confident that
your business can grow with the times. Get excited and ready for what’s next.

About Us
BookingSuite is a new unit of Booking.com that helps accommodation providers
grow their businesses and brands through smart software solutions and services. Our
cloud-based solutions include responsively designed websites, true ROI analytics, and
easy-to-use content-management tools which empower partners like never before.
The software is built to integrate with numerous reservation systems, channel
managers, social media channels, and property management systems. Our innovative
technologies are engineered and backed by the breadth of the Booking.com
organization including support teams in 200 offices worldwide.

Sources
1
McBride, Bill. “Hotels: Occupancy tracking pre-recession levels.” Calculated Risk: Finance &
Economics. 9/13/2013. Web.
http://www.calculatedriskblog.com/2013/09/hotels-occupancy-rate-tracking-pre.html
2
“Slow and Steady Continued Gains for US Digital Travel Sales.” eMarketer. 5/22/2013. Web.
http://www.emarketer.com/Article/Slow-Steady-Continued-Gains-US-Digital-Travel-Sales/1009909#T-
mPjlpVtOiMRAiVO.99
3
Bryant, Martin. “TripAdvisor plans mobile travel guide features in the face of competition from
rivals like Foursquare and Google Now.” The Next Web. 3/1/2014. Web.
http://thenextweb.com/insider/2014/03/07/tripadvisor-plans-mobile-travel-guide-features-face-competit-
ion-rivals-like-foursquare-google-now/#!zyylr
4
Gates, Bill. “Content is King.” 1/3/1996. Text found on:
http://www.craigbailey.net/content-is-king-by-bill-gates/
5
Burchette, Jordan. “5 ways to decode a TripAdvisor Review.” CNN. 3/9/2014. Web.
http://www.cnn.com/2014/03/09/travel/tripadvisor-decoded/
6
Jamieson, Lee. “Hotel Reviews: Revenue Lost to Fake Hotel Reviews.” Hotel Industry Magazine.
9/10/2012. Web.
http://www.hotel-industry.co.uk/2012/09/hotel-reviews-revenue-lost-to-fake-hotel-reviews/

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