By Ruben Reyes, Assurance & Marketing Program Director
In a recent article, I talked about the importance of working with online travel agencies – to increase your hotel’s bookings and improve your online presence. One of the perks that goes along with working with an OTA is that your property’s listing is not only saddled to the OTA, but also channeled to other affiliate sites, as many OTAs have an affiliate marketing program that is designed to increase your property’s reach to help channel more bookings to your hotel. Generally, affiliate programs produce 15-30 percent of all advertised sales; this strategy is designed to target other markets that you would not have otherwise seen. This passive income of boosted business comes with a marginal price, as many sites collect a commission by promoting your property.
To understand how affiliate marketing works, you must first understand that this type of marketing is not isolated to businesses that deal strictly within the lodging industry. The elements of affiliate marketing start with the advertiser; this will be you, the hotelier. Then it involves the publisher; this may be an OTA affiliate site, a blogger or a cost-per-action payout site that advertises your property to gain exposure with the use of banners or widgets, but generates revenue per click (leads). Or, your booking URL will just simply reside as an external link on an external website. Booking.com, for example, offers the “Affiliate Partner Program,” which is offered in 43 languages and dialects and works with over 12,000 affiliate partners. TripAdvisor also offers an affiliate program that gives the ability for bloggers, YouTubers and social media enthusiasts to encourage people to book your hotel through TA in exchange for a commission.
Affiliate marketing is built on the idea of creating a large scale of impressions to reach as many potential guests as possible. Obviously, OTA sites such as Booking.com can hold their own, but they use affiliate programs such as this to target a larger audience by reaching out to a more diverse group of potential guests. Bloggers and YouTubers (influencers) who already have a large following, which is equal to high website traffic, will take advantage of their already loyal followers to help them generate more revenue by helping you sell rooms at your hotel.
OK, so why would you want to do this, and how can you do this on your own? You should want to do this because you can generate more direct bookings for your hotel by expanding your relationship to a wider and more diverse audience. Also, by networking with other companies, you may even be able to generate passive revenue by becoming an affiliate yourself; 81% of brands and 84% of publishers leverage the power of affiliate marketing in the United States and the trend has been increasing steadily by 10.1% annually, bringing that number to $6.8 billion in 2020.
Let us say that your hotel is in a primary market and that spring break and weddings are what drive revenue for your hotel. Partnering directly with a spring break blogger or wedding planner who can add a backlink to your hotel for booking under a special rate code in exchange for a commission will help you to drive more direct bookings. Now, let us say that you have your own site and have spent a great deal of money paying a propeller-head to set up a site that supports a booking engine, is great with content marketing and manages your SEO, or that your current brand supports a blog with a large following. You may reach out to other business in your area such as restaurants, golf courses or family sports complexes that may include a backlink for guests that visit your site to patronize their business in exchange for a margin of the cost of their services.
Regardless of whether or not you wish to burn the candle at both ends to be an advertiser or an influencer, you will no doubt benefit from both. You will increase bookings, which will lead to higher occupancy, a stronger consumer base and a long-lasting relationship with influencers. This will allow you to maintain a strong and stable ADR or generate a passive income that will benefit your bottom line. Remember that the benefits of having a stable ADR and a steady occupancy are key to is an indispensable element of sales forecasting.