When we think about revenue management, we naturally think about numbers: occupancy, ADR, RevPAR, booking pace, demand, pricing and forecasting.
Marketing, on the other hand, is often seen as the team responsible for attracting attention, creating campaigns and driving traffic.
But these two areas are much more connected than they may appear.
A guest doesn’t simply wake up one morning, visit your booking engine and make a reservation. Their journey may have started weeks or even months earlier with a social media post, a Google search, a recommendation from a friend or an article about your destination.
That journey is your marketing funnel. And understanding that funnel can give Revenue Managers a much clearer picture of what is happening before a booking ever appears in the system.
What exactly is a marketing funnel?
At its simplest, a marketing funnel describes the journey a potential guest takes from first discovering your property to eventually making a booking.
It might look something like this:
Awareness → Interest → Consideration → Conversion → Repeat
At the awareness stage, a traveller may simply discover your hotel while scrolling through Instagram or searching for things to do in your destination.
As their interest grows, they may visit your website, look at your rooms, check your location, read reviews or browse your social media.
Then comes consideration. They may compare your property with competitors, check rates for their dates and think about whether your hotel offers the experience they are looking for.
Eventually, they may convert into a booking.
And if they have a great stay, they may return, recommend you to someone else or become a repeat guest. The important point for Revenue Managers is that the booking is only the final visible step of a much longer journey.
Marketing creates demand. Revenue management helps understand it.
Marketing activity can influence when, where and how demand appears.
A destination campaign might inspire people to consider a trip several months in advance. A special offer might encourage travellers to look at dates they hadn’t previously considered. A social media campaign could generate a sudden increase in website traffic.
But increased traffic doesn’t automatically mean increased bookings.
This is where the Revenue Manager’s perspective becomes valuable.
Instead of simply asking, “How many bookings did the campaign generate?”, we can start asking:
- Is demand increasing for particular dates?
- Are people searching for the periods we’re promoting?
- Has the booking window changed?
- Which markets are responding?
- Are visitors actually moving towards booking?
- Is the current pricing appropriate for the level of demand we’re seeing?
Marketing may be creating the attention, but revenue data can help us understand what that attention is actually turning into.
The funnel can help identify where demand is getting stuck
Imagine a campaign reaches 10,000 people.
1,000 visit the website.
200 look at room options.
40 start the booking process.
But only 10 complete a reservation.
Looking only at the final number, you might conclude that the campaign produced very little.
But the funnel tells a more interesting story.
There is significant awareness and website interest, but something is happening further down the journey.
Perhaps the offer isn’t compelling enough.
Perhaps the room rates aren’t matching guest expectations.
Perhaps availability is limited.
Perhaps the website isn’t making it easy to find the information guests need.
Perhaps the booking process is creating unnecessary friction.
The funnel doesn’t necessarily tell you why people are dropping off, but it helps you identify where to investigate. And that can be extremely useful from a revenue perspective.
Not every visitor is ready to book
One of the easiest mistakes to make when looking at marketing performance is expecting an immediate booking from every interaction.
A traveller who sees your hotel on Instagram today may be planning a holiday six months from now.
Someone who reads your blog might be researching destinations rather than actively shopping for a room.
Someone who visits your website today might return several times before finally booking.
This is particularly important for hotels with longer booking windows.
A campaign that generates website visits but few immediate bookings isn’t necessarily ineffective. Its role may be to introduce the property to potential guests who are still moving through the earlier stages of the funnel.
This is where Revenue Managers can add valuable context. By looking at historical booking patterns, booking windows, source markets and demand trends, you can help the marketing team understand what happens after that initial interaction.
Marketing and revenue should be looking at the same journey
Marketing might be looking at:
- Reach
- Engagement
- Clicks
- Website traffic
- Campaign performance
Revenue might be looking at:
- Occupancy
- ADR
- RevPAR
- Pickup
- Booking pace
- Conversion
- Revenue
These may look like completely different sets of numbers, but they are all telling parts of the same story.
A marketing campaign can increase awareness.
Awareness can increase website traffic.
Website traffic can increase searches and room views.
Those searches can eventually become bookings.
And those bookings contribute to your revenue performance. The more closely marketing and revenue teams understand this connection, the easier it becomes to make informed commercial decisions.
What can Revenue Managers learn from the funnel?
The funnel can provide useful clues about guest behaviour.
For example, if marketing activity is generating plenty of traffic but bookings aren’t increasing, it may be worth looking at conversion and the guest experience on the website.
If there is strong interest in a particular travel period, that could be useful when reviewing demand and pricing.
If a campaign is attracting visitors from a particular source market, revenue teams can consider whether that market is already showing demand or whether there is an opportunity to develop it further.
And if a campaign is promoting a period where occupancy is already strong, the commercial conversation may be very different from one promoting dates where demand is soft.
The point isn’t for the Revenue Manager to take over marketing.
It’s about using the information marketing generates to make better revenue decisions.
Start talking about the guest journey
You don’t need a complicated system to start connecting the dots.
A simple conversation between marketing and revenue can be incredibly useful.
Ask questions such as:
What are we promoting?
Is the campaign focused on a destination, a particular experience, a special offer or specific travel dates?
Who are we trying to reach?
Are we targeting a particular market, traveller type or source market?
When are we expecting them to travel?
This helps put the campaign into the context of future demand.
What are we seeing after people click?
Are they viewing rooms, checking availability or leaving the site quickly?
What is happening with bookings?
Are we seeing increased searches, enquiries, pickup or actual reservations?
These conversations can help move the focus away from isolated marketing metrics and towards the bigger commercial picture.
Revenue management doesn’t begin when the booking arrives
By the time a reservation appears in your system, a lot of decisions have already been made by the guest.
They have noticed your property.
They have formed an impression.
They have compared alternatives.
They have considered your price.
They have decided whether your offering feels relevant to them.
And finally, they have chosen whether to book.
The marketing funnel gives Revenue Managers a way to understand some of those steps before the booking takes place. That doesn’t mean every marketing metric needs to become a revenue metric. It simply means that marketing activity can provide useful signals about future demand and guest behaviour.
Bringing marketing and revenue closer together
Hotels don’t operate in neat departmental boxes.
The guest doesn’t experience “marketing”, “revenue”, “sales” and “operations” as separate functions. They experience one journey.
The better those teams understand each other’s role in that journey, the easier it becomes to spot opportunities and potential problems earlier.
Marketing can help create and capture demand.
Revenue management can help interpret that demand and make decisions around pricing, availability and strategy.
And when the two work with a shared understanding of the guest journey, the numbers become much more meaningful.
Because a booking doesn’t start when someone clicks “Book Now”.
It starts much earlier. And Revenue Managers who understand the journey leading up to that click have another valuable source of information to work with.