Briefing: Industry unclear on customer acquisition costs

According to Kalibri Labs customer acquisition cost is now upwards of 15%-25% of room revenue.

The shift from direct booking to multi-channel booking means that cost of acquisition has become more of a cloudy issue in hospitality. Businesses must now take into account; fees, commissions, marketing cost, revenue, and effectiveness of each channel.

So which channels overall are more cost effective? Our experts discuss:

The issue of Rate Parity has been contentious between hotels and OTAs. Any difference in the rate offered on each channel certainly affects the overall cost of customer acquisition. Any new channel, be it an OTA, Metasearch site or new entrant that a hotel or alternative accommodation decides to display rooms on, adds new factors and makes cost harder to keep track of. Not forgetting the bookings that still come in through non digital channels.

According to Travel Click, the Average Daily Rate from customer booking directly with a property either in person or over the phone is growing 5.6% in Q1 2016. In Q1, ADR is also growing 4.0% for CRO (phone calls to a brand), 3.3% for OTA, 3% for GDS (in-person travel agents) and 2.3% percent for ‘Brand.com’ (a company’s website).

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Video clips produced by ybc.tv for the Hospitality Channel, including interview from industry conferences such as the IHIF conference as well as specific Hospitality Channel shoots.