How to Calculate ROI for your Hotel Website?

June 04, 2008

When someone in business talks about their ROI, they mean their Return on Investment. A savvy hotelier will want to know all about the ROI of his business, because it tells him how successful it is. ROI is a simple calculation which involves a number of different factors.

What is ROI?
For all those who don’t understand what ROI exactly is, it refers to the returned value in profit, savings, or productivity that can be attributed to a given investment. The overall ROI for an enterprise is used as a way to measure how well a company is managed.

Keep in mind that it is not always possible for the ROI to be accurate and that some error is always expected, but an approximate figure is sufficient. Once you know what your initial figure is, you can look at ways to increase your website ROI. ResAvenue can help you track and calculate your hotel websites ROI. It can help you identify your websites weaknesses that undermine your conversion rates. Once you have that information you can address the problems, and take initiatives to improve your website ROI.

How ResAvenue can help you track the ROI?
Estimating the traffic to your website is the building block for calculating your ROI. This can be done by calculating how many people visit your hotel website on a daily, monthly or yearly basis. E-Marketing i.e. Search engine optimization, appropriate keywords, meta tags etc are the ways by which you can increase the traffic to your website.

With ResAvenue’s comprehensive back-end system you can get a thorough ‘Traffic Report’ that shows you how many times availability has been checked at your hotel, the total number of reservations submitted as well as the country of origin of the availability check.

Traffic to your website can be further encouraged by word of mouth, enquiries made by emails and telephone calls that eventually lead to confirmed reservations.

On the other hand the ‘Revenue Report’ gives you a monthly / yearly summary of room nights booked as well as the total revenue generated, which you can take a print out of on a monthly / yearly basis. It can be very helpful in terms of deciding your strategies to market your property in a better way.

Also our ‘Reservations List’ allows you to view the list of reservations made through the ResAvenue booking system. The reservation list can be sorted based on Agent name, Arrival month and Booking status of the reservation. With the help of this feature you van draw the complete information about reservations awaited, confirmed reservations, cancelled reservations, no shows etc.

Hence, generating bookings or leads and calculating ROI (return on investment) is the first and most important step to understanding your hotel's presence on the Internet.

After establishing the conversion rates, we can look on the following statistics:

For every 100 visitors visiting your hotel website per day multiplied by 30 days in a month equals 3000 visitors per month. If 1% of the visits convert into room nights through your website by clicking on Online reservation button, which would equal 30 room nights per month booked using our online booking engine.

Or else, If 5% of the visits convert to regular email leads, that would equal inquiries worth 150 room nights per month. Out of those If 10% of the inquiries convert to actual bookings, you would have 15 room nights per month booked via lead generation through email. If your hotel’s Average Room Rate (ARR) is Rs 2000, then your hotel website's monthly revenue generation is:
  1. Direct Bookings 30 room nights X Rs 2000 = Rs 60,000
  2. Via Leads 15 room nights X Rs 2000 = Rs 30,000
How to increase your hotel’s ROI?
Leads, sales, revenue and profit can be calculated on a monthly or quarterly basis to determine business generated from your hotel’s website. Once revenue and profit have been calculated, the website design costs and marketing / operating expenses can be subtracted to determine the exact ROI.

After the results have been measured you can see whether your sales conversion rate has improved by which you can determine the increase in the revenue on your hotel website by using ResAvenue’s online Reservation System.

Back     Top

Direct Connect

Our Clients


Request A Quote

Frequently Asked Questions
Our Partners