Hotel Marketing Becoming More Efficient

Hoteliers Stretch Advertising Dollars in '05 by Using Internet Technologies Trends in Hotel Marketing Expenditures: Click on the above chart to move to the next slide.

As sales expenses have continued astronomical growth, hotel advertising continues to decline as hotels discover how to use the Internet more efficiently, decreasing the cost in connecting with customers. From 2004 to 2005, the amount of money spent at the property level for promotional materials and media buys declined 0.7 percent. While the decrease is relatively low, it marks the sixth consecutive year of a downward slide.

When analyzing the thousands of financial statements in PKF Consulting’s Trends in the Hotel Industry database, the majority of marketing dollars spent at the property level currently pay for labor related costs. Hotel sales teams are the most highly compensated people on property, even more than the General Manager or Managing Director. Meanwhile, fewer increases in personnel, combined with Internet efficiencies, will most likely result in a slowdown in property-level marketing expenditures.

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Robert Mandelbaum is the Director of Research Information Services for PKF Hospitality Research. He is located in the firm’s Atlanta office. Steven Nicholas CHA is Executive Vice President, Operations for the Noble Investment Group. Steven works in the Atlanta headquarters of Noble. This article was published in the November issue of Lodging Magazine.

photo of Robert Mandelbaum