Hotels tend to be heavy social media users, whether individual hotels or big brands. We currently manage social media growth projects at both ends of the spectrum and have blogged on Twitter best practice at 10 London hotels.

How can hotels be sure that social media is an ROI-positive activity? And with the wealth of tools and opportunities on offer, how do they choose the right social media to focus on for maximum gains?

If you manage social media for a hotel or group, this post is a quick but essential read if you feel you lack transparency over your social media investment. It will guide you on how to calculate your social media ROI in 6 easy steps.

FREE DOWNLOAD: Grab your Social Media Strategy Toolkit to do your own calculations following the steps below.

1. Set your conversion goals


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What does conversion mean for a hotel? Obviously a direct hotel reservation is one key goal but there are a slew of intermediate actions that will also have value.

Please DO NOT listen to those who say that the benefits of social media are beyond measure.

Whilst social media should not be seen as a direct sales tool, there are nevertheless a range of fantastic measures you can link to your social media activity.

Think about the customer journey from discovering your brand/hotel for the first time and how each interaction leads them to feel trust and engagement. Then think of specific milestones along this path. Brainstorm this list with your team. Example goals for hotels from social media may include:

Contact us to accelerate your progress and find the most profitable path: we have direct experience managing ROI-positive social media for hotels since 2009. Or download this free strategy toolkit which does much of the work for you.

Here’s the thing: it doesn’t matter what goals you have, but you must have measurable goals or you are wasting your time and resources on social media.

2. Track key measures related to your goals


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Some of the goals above require complex interactions with your hotel’s customer management, operations and reservations systems and set-up of specific measurement processes.

Others can be automated very quickly with the use of Google tracking urls which are then monitored via your website analytics; or by defining Goals in Google Analytics, with values assigned as shown below.

The KPIs most hotels will want to track include:

The above merely scratch the surface. In reality, you should be able to come up with a range of KPIs that reflect your higher-level business goals.

And then you want to segment the above to come up with a clear picture of your target customer and social media fan. In the above list we’ve studiously avoided “vanity metrics” which so many social media managers are obsessed with. While we do track these as part of our social media ROI tracking services, they are a relatively minor aspect.

You also want to segment your KPIs by department so that you can hold your internal team fully accountable.

What about walk-ins and telephone bookings? Great systems and processes will allow you to incorporate all kinds of actions into your tracking to give you a comprehensive view of the impact of your social media activity.

Pro tip: get your social media team to obsess about metrics like conversion, sales, email subscribers, leads from key markets, direct enquiries NOT factors like social media reach and followers.

3. Assign a value to each goal


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This is often a bit of a roadblock but the principles are easy: start by calculating your Customer Lifetime Value.

To take a simple example, if you know that your average new customer will return to your hotel twice in their lifetime with an average spend of £500 each time, the LTV is £1000.

Try to work this out as a median value by reviewing your hotel’s key financial and customer data…at this stage you need not be exact. You can refine these values over time. For the example below we are assuming a lifetime customer value of £500.

You then need to estimate the percentage of your visitors taking a specified action that end up converting e.g. if 5% of those who do a booking search on your website end up becoming a lifetime customer, then the value to you of getting your leads to your booking page is £25:

LTV (£500) * % taking your desired action (5%) = £25 (Value of the chosen goal being hit)

This means that you can afford to invest anything up to £25 for each time a qualified lead is eventually brought to your booking page. See how empowering this kind of info is?

Estimate a value for each quantifiable goal you’ve chosen to target. Pick just a few to get started. These values can then be fed into Google Analytics as Goals – priceless data which should be segmented to profile your website visitors and traffic sources – which may or may not include social media – that give you best returns.

And the benefit of connecting your conversion Analytics with your social media activity is that it will help your social media managers post the right content at the right time, responding in real time to the data they can see. Most paid social media platforms focus mainly on vanity metrics thus giving an incomplete and at worst a misleading picture.

Your most valuable goals should dictate your best social media activity – this doesn’t mean being sales-y (far from it). It means having creative strategies in place that drive relentlessly towards your goals.

4. Link tangible benefits to each social media channel


Photo Credits: Garrett Heath

Once you have obtained the above numbers to assign a value to each goal, the next step is to break down the revenues for each social media channel.

Based on the example above of a £25 value of a lead on your booking page, you can assess the benefit of the those who reach this stage from each channel (Twitter, Facebook, Linked In, etc.). For example, if Google Analytics says Twitter is responsible for bringing 100 leads to your booking page, that means a value of £2500 added by Twitter.

Repeat for all conversion goals and social media channels, presenting the results in a table; this will clearly reflect which channels you perform well on and which not e.g.

Twitter: 120 leads reached booking page at £25 = Benefit of £3000

Facebook: 40 leads reached booking page at £25 = Benefit of £1000

Linked In: 10 leads reached booking page at £25 = Benefit of £250

To achieve the above you need to have discipline in setting up a process by which your leads go from social media to your website and are given every opportunity to land on your booking page; you also need to become or hire an advanced user of Google Analytics and other tools (e.g. social media segementation and profiling).

We recommend that hotels also include TripAdvisor and other channels in the above analysis where they have a direct hotel website booking link on TripAdvisor.

5. Calculate total cost


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Work out the labour cost multiplied by time spent on each channel plus any related costs like software, subscriptions, advertising etc. This will give you £X spent on Facebook, £Y on Twitter and so on as the following example shows:

  Hourly Rate Hours Labour Cost Other Costs Total Cost
Twitter 10 200 2000 400 £2400
Facebook 10 100 1000 200 £1200
Linked In 10 50 500 100 £600

If you have a group of hotels, the above calculation will vary depending on how you organise your social media e.g. by group, by hotel, etc.

This kind of ROI analysis always gives insights on how you can manage your social media more efficiently. If you use outsourced workers or agencies to manage your social media then the pound amount can also be plugged into the above model. Dont’ forget to include all costs of social media, both direct and indirect.

We have an Excel template with example calculation available for you as a free download which may help.

Bold claim: doing the above exercise will revolutionise your approach to social media.

6. Get your ROI for each channel


Photo Credits: Alan O’ Rourke

The equation is then simply (Benefits-Costs)*100 divided by Costs expressed as a percentage for each channel – the calculations done in section 4 and 5 above.

  Benefits Total Cost ROI
Twitter £3000 £2400 25%
Facebook £1000 £1200 (-17%)
Linked In £250 £600 58%
  £4250 £4200


In this hypothetical example, this particular hotel is active on 3 platforms and is close to breaking even overall. The logical action would be to reduce/eliminate Facebook activity and increase the emphasis on Linked In.

Assumptions are used in this exercise.And we know that a large number of social media leads will not book right away. And that being sales-y on social media is never a good look. However, by failing to track their social media activity at all, many hotels are losing a large amount of money through unfocused effort.

In our experience, the most successful hotels/brands have a clear grip on the costs and benefits of their social media activity, focused on fewer channels in a quality way, growing their audience consistently.

Read the case studies on our blog for further information. Or ask about our social media services which all include state-of-the-art ROI measurement and tracking.

FREE DOWNLOAD: Grab your Social Media Strategy Toolkit to do your own calculations following the steps above.

HOTELS: Don’t throw money down the drain! 


Photo Credit: Positive Partnerships

Conducting a social media ROI audit will allow you to:

  1. Determine which social media channels are most worth spending time on
  2. Which social media channels require more or less monetary investment

At Positive Partnerships we are social media geeks and can help you:

  1. Determine the ROI of your current social media activity
  2. Provide an action plan with recommendations to make your social media activity significantly more profitable
  3. Partly or fully manage your social media using our unique influencer-led social media management services, focused on growth in multiple markets and languages.

If you knew which of your social media activities gave you the best returns, wouldn’t you double down on what works? Ask us to audit your social media for you today.

Hotel expertise

Positive Partnerships is a social media digital marketing agency based in London, specialising in the worldwide hotel sector. Past and current partners in the hotel sector include: Baglioni Hotels, Tune Hotels, The Doyle Collection, Pestana Hotels, The Red Carnation Hotel Collection, Radisson Blu Edwardian Hotels, Base2stay (Nadler) Hotels, Montagu Place Hotel, The Beaufort Hotel, IKIES and a range of hotels and travel companies across all price points.

Contact us for further information.

Acknowledgements and Useful Links

Top photo credit: The Nadler Victoria.

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