Don’t Let This Weird Economy Disrupt Your Direct Business

It’s budget season again. Yet even after more than two years of pandemic-enforced shutdowns, a brief recession, labor issues, a significant (permanent?) decline in business travel, and the continued explosion in revenge travel, we are still faced with the strangest economy in history. Nominal wage growth is declining, but inflation continues to rise. Jobs are (mostly) booming, but growth and productivity are falling. Consumer confidence is the worst in 60 years and business travel is likely to lag for a long time, but leisure travel and restaurant purchases are up – in many cases up.

I mean, seriously. What is happening here? How are hotel marketers and revenue generation teams supposed to budget appropriately in a world gone mad?

What can you do there?

In fact, there are a few steps that work no matter how weird the economy gets. Here’s what you should think about.

Think ‘integrated’

Your guests live their lives in an integrated way. Business travel may not be dead, as long as it’s integrated with leisure travel – I prefer the term “mixed trip” – which integrates business and personal travel. And as your clients have learned to work from home and work from anywhere, they’ve learned that traveling doesn’t have to be limited to business OR leisure buckets. It’s business AND leisure, everywhere, all the time.

So should your digital efforts. As I said before, no one “go online” Longer; that hasn’t been true for years. They are online. Your guests carry the Internet in their pockets. Or at least they do during those rare times when they aren’t holding their phone in their hands. Digital is fully integrated into the lives of your customers. They browse and buy throughout the day.

This means thinking about your guests in terms of “search OR social OR metasearch OR display ads OR what-have-you” misses the point. This is “search AND social AND metasearch AND display AND what have you.” Your marketing should provide an integrated experience across all channels to connect with customers as they browse and book. Each integrated touchpoint feeds into the next to help your customers throughout their journey.

Think ‘Correction and Exploration’

Budgeting for an integrated reality requires the use of a “Search and Explore” template for your marketing spend. There are channels that consistently generate bookings and revenue, such as organic search, paid search, and email marketing. Invest in these key areas first. So get ready to “fishing where the fishing is good”, allocate additional budget to campaigns and channels that are performing better than expected.

At the same time, make sure you leave some budget for “explore” — maybe 10% to 15% to test and learn throughout the year as new opportunities arise. All of a sudden you see young travelers talking about your market or an event in town on TikTok? Cool. Use some of your “Explore” budget to jump on the trend and grab your fair share – or better yet, more than your fair share.

If you’re not already using this strategy, start talking to your property owner or asset manager today about why this is important. They know we live in uncertain times. Work with them to develop a budget that focuses most of your efforts on reliable channels that can also help you act quickly and with agility when opportunities arise.

Think about the brand

One of the most enduring trends in digital is the renewed focus on brands. Expedia is reducing its focus on performance marketing — paying for customers one transaction at a time — in favor of driving more business from “high lifetime value” customers who “generate approximately three times the gross bookings per customer and more than twice the gross profit per customer and twice the repeat business compared to non-members. Airbnb did something similar at the start of the pandemic.

What these digital leaders have learned is that in a world where Google dominates the travel landscape, your best strategy is to have customers search for you by name. Building those relationships depends on quality content and compelling storytelling shared through your website, email list, video channels on YouTube, and social media like Instagram and, increasingly, TikTok.

It also depends on a constant investment. I noted earlier that there is no such thing as free when it comes to generating direct business. But that cost increases as you build a library of assets and stories that you can reuse across multiple platforms. And you only recognize these benefits over time. As the saying goes, “the best time to plant a tree is 10 years ago; The second best time is today.”


We live in a strange economy. The only thing that might be weirder is building a budget that assumes everything is normal. Instead, allow flexibility in your budget. Control things you can control, like your brand and messaging integration across all channels. Provide flexibility where you lack control by using a “Search and explore” approach. And no matter if things go back to normal, your results won’t be weird. They will be amazing.

*This article originally appeared on Hotel News Now.

Tim Stone
Tim Peter & Associates, LLC

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