Conversion Rate

A common definition of ‘conversion rate’ refers to the change of the status of a person to another status. That sounds a little theoretical.

From the point of view of the sales or marketing controlling, the monitoring of the conversion rate is always then important if a) significant investments e.g.in the website or booking engine are made, or b) online advertising is actively carried out. If a hotel pays for the traffic, i.e. the visitors on its own website, E.g. on Google AdWords or Trivago with a pay per click model, then costs and profits should be exactly compared.

Two changes in the status should be monitored with the identification number of the conversion rate:

1. Change of the status of the visitor of a website to a requestor or booker
   (Visitor to a buyer)
2. Change of the status of the applicant (e.g. visitor of a booking engine / real-time online booking or sender of the contact or request form) to a booker or buyer.

If in a booking engine of 100 visitors, i.e. people who have landed by advertising, by their own search in Google or Yahoo on the hotel page, and exactly 1 visitor actually books in this booking engine, then this site has a conversion rate (abbreviated CR) of 1% (1 buyer divided by 100 visitors = 0.01 = 1%).

The monitoring of these indicators is an important prerequisite for controlling and using optimal measures, which can be very diverse.

Measures to improve the conversion rate can be: 

1. Extension of the offered product range (make available not only the normal price, but also early booking prices, packages etc.).

2. Improve the visibility of the homepage helps you to get started.

3. Optimization of the booking engine itself, measurement and monitoring the points where a visitor cancels e.g. after a request for the credit card and creation of alternative guarantees or payment options.

4. Improvement of online marketing, to focus less on quantity and more on quality. If my AdWords campaign appeals to the right searchers, the chance that they will buy is higher.

As with many key figures, there are multiple “systems” or data banks involved in the hotel. In the niche of online marketing, they can be the website analysis tool (such as Google Analytics or Piwik), the booking engine (WBE), the accounting software (it knows the issues of ongoing campaigns), and perhaps the hotel software.

Only with key figures, with their fluctuations or debit / actual comparisons that are regularly checked will be from experience actively monitored as well.

During the introduction of a project “sales and marketing controlling”, the RHC analyzes the systems involved and implements processes with simple exports from the systems that are then merged into an Excel application.