RevPar vs EBITDA – The Business Case for Influencers
RevPar and EBITDA stats speak for themselves.
Within the last decade, travel planning and booking behaviour has rapidly evolved and here are some key stats you need to know:
– Marriott states that millennials are now their largest consumer group
– 97% of millennials share images online when travelling
– 1 in 5 mobile minutes anywhere in world are spent on Instagram & Facebook
– 40%+ of all online travel sales will be made via mobile by 2020 according to IHG
Following this, Marriott’s stock over the past year has risen more than 36%; IHG’s stock is up more than 20%. They are doing something right: they have embraced influencer marketing full on.
If you ask any Wall Street analyst brands exhibit their worth by driving RevPar (revenue per available room); and owners derive wealth from growing EBITDA (earnings before interest, taxes, depreciation, and amortisation) and net operating income. The latter derives from the ability to fully maximise debt financing options and be able to service that debt by the revenues generated from the hotel.
Hotel companies using an asset-light approach are therefore often fee-heavy businesses, generating revenue from percentages paid by hotel owners to use their flags, marketing, distribution and loyalty programs.
At Travel Technology Europe in London this year we met Sweet Inn’s CRO, Eitan Reisel who proudly boasted that they were able to generate $15,000+ extra revenue per Influencer campaign. However, you don’t need to be an ex Google exec like Eitan to gain enormous value…
Why is this relevant to your venue?
It doesn’t matter which side of the table you’re on, or whether you’re focusing on RevPar or EBITDA. Using unsold inventory for Influencers will, as one boutique hotel in London found, boost both metrics over the long term.
As a result, using Influencers amplifies your venue’s visibility; leading to more pairs of relevant eyes engaging with your property. Influencers use visual platforms to create wow-worthy first touch points: putting your business at the top of the sales funnel.
“A wow first impression doubles the chances of a booking being made.” – Morgan Stanley
The influence of Influencer marketing is not untraceable, despite amateurs in the industry shying away from revenue tracking. Moreover, word-of-mouth recommendation generates an average of $6 ROI per $1 spent.
We have therefore created full reporting functionality, ultimately eradicating any ambiguity around the value hotels receive from partnering with the right Influencers.
Our reports include: Earned Media Value, ROI multiples and CPM (cost per 1000 impressions) values. You can share this data with relevant team members (GM, Revenue Management, marketing, reservations etc.) at the click of a button, providing relevant and real ROI metrics about your venue’s Influencer efforts.
The most successful client campaigns not only use unsold inventory to bring in Influencers, but they can also allocate some inventory as “room off” so revenue management’s occupancy levels aren’t affected. This also resolves any potential conflict between revenue manager KPIs and marketing/PR KPIs.
Now for those of you wondering about tracking actual revenue generated for bookings there are various options too we can discuss with you. There are several options…
Reaching more relevant customers, engaging with them, inspiring them and relating to them is now trackable, so don’t compromise…and no matter whether EBITDA or RevPar are your focus, ultimately both benefit with the right Influencer strategy using Influencers aligned with your property’s brand…
Want to learn more? Ping us a message on the chat on our site.