TripAdvisor is touting a Forrester Consulting study The Total Economic Impact of TripAdvisor’s Business Listings that is sharing some interesting ROI results from 154 lodging properties (hotels, inns, resorts, etc.) with about 50% of them located in the U.S..
In a nutshell, say the TripAdvisor Business Listing:
- Offered a 410% “risk adjusted ROI” Annually.
- Averaged $6 in incremental booking for every $1 spent.
- Only tracked click-throughs and online bookings. Phone calls not tracked.
Does this mean every hotelier should run out and buy an ad?
Some of the factors that caused a higher than average ROI were:
- Your Popularity Ranking
- Whether the hotel used the Special Offers feature
- Smaller hotels (100 rooms or fewer) did better
In another Forrester Report, an anonymous organization that manages twenty hotels using TripAdvisor’s Business Listing shares some eye opening results… with a 400% return being on the low end.
So, if you have a good popularity ranking, and will take the time and trouble to use the Special Offers feature, you should probably purchase a TripAdvisor Business Listing.
How does the TripAdvisor Business Listing compare to other sources in terms of ROI?
I took a look at 55 lodging websites using Google AdWords and found that ROI was about 1,050% (for July-December, 2010) and that the conversion rate was .34% (average for 2010).
I didn’t “risk adjust” the ROI, I just got it out of Google Analytics. If you believe it, every $1 spent in Google AdWords brought $10.50 in online revenue. (It takes about 300 visitors for a conversion.)
So, should you run out and do PPC? Not so fast. Maybe you should run out and do better SEO!
The average conversion rates for organic listings are:
- Google Organic: .45%
- Bing: . 49%
- Yahoo: .50%.
(They run about 200 visitors per conversion.)
The best advice is that you should probably be doing all three, while keeping in mind that organic search provided 41% of all traffic to our 85 property dataset.
SEO deserves the lion-share of the budget if you believe those numbers.