marketing budget in tourism

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A well-structured tourism marketing budget guides your marketing strategy and ensures that you allocate the right resources to promote your business effectively. It is the cornerstone of any successful tourism business.

Like many business processes, determining a marketing budget can be a challenge. One of the most common rules of thumb is that your marketing budget should be 10% of your yearly revenue. However, that figure only works for some tourism businesses.

So, let’s delve into the intricacies of creating a tourism marketing budget. And offer insights and examples tailored to the tourism industry’s unique needs so you can start building your budget.

Factors that determine Your Tourism Marketing Budget

The amount you should allocate to your tourism marketing budget can vary widely based on factors like:

• Your business goals.
• The size of your business and tourism services offered.
• And, of course, the growth rate of your tourism business.

Align Your Marketing with Business Goals

Your tourism marketing budget should be in sync with your overarching business goals and marketing plan. Consider what you want to achieve, whether attracting more tourists, increasing bookings, or expanding your offerings. Your budget should serve as a strategic tool to support these objectives.

FURTHER READING: How to Write a Successful Tourism Marketing Plan in 10 Steps

Consider Your Business Size & Service Offerings

The nature of your tourism services and the size of your business play a pivotal role in determining where and how you allocate budget resources, be it in digital advertising, content creation, distribution partnerships, or branding efforts. Thus, your tourism marketing budget becomes a financial plan and a vital tool intricately woven into the fabric of your tourism business’s success.

Understand Your Business Growth Stage

1. high growth (startup).

If you’re a startup in the tourism industry, aiming for rapid growth is essential to gain a foothold. Allocate 15% to 30% of your projected revenue to marketing. For example, a tourism startup with a $100,000 annual recurring revenue (ARR) target should allocate between $15,000 and $30,000 for marketing.

2. Moderate Growth

A tourism company with moderate growth should be willing to increase its marketing budget to keep up with the competition. For tourism businesses experiencing moderate growth, consider dedicating around 10% to 15% of your total revenue to marketing. For instance, if your business generates $1 million in revenue, allocating $100,000 to $150,000 for marketing can help scale your growth effectively.

3. Stable Growth

Tourism companies with sustainable growth commonly have larger marketing budgets. They also collect data and ensure they can spend effectively, reducing marketing costs. Allocate 2% to 10% of your revenue towards marketing efforts.

An Example of Tourism Marketing Budget Breakdown

Once you have decided what percentage of your yearly income you will allocate to marketing, it’s time to break down the budget. A well-structured tourism marketing budget should allocate resources to various marketing channels and activities.

Here’s a sample breakdown to guide your budgeting process:

Content Marketing: 30-40%

Content marketing in the digital age is crucial in promoting your tourism offerings. It involves creating and publishing engaging on-brand content such as blog posts, travel guides, videos, ebooks, graphics, marketing automation, social media posts or other materials your tourism business needs. Much of your tourism marketing budget should be spent on content creation as it delivers a 3X lead boost compared to traditional methods, making it a wise investment choice.

Creating and sharing top-notch content that propels your business forward may require investment in a skilled content marketing team and resources. When budgeting for content, consider each piece’s monthly content volume, format choices, and promotional needs. Adjust your budget based on the expected Return on Investment (ROI), ensuring your content strategy aligns with your marketing goals.

Paid Advertising: 20-30%

Gaining visibility in the competitive tourism landscape requires a powerful tool such as paid advertising. It offers an invaluable edge, particularly for tourism businesses striving to establish their market presence or venture into new segments.

When engaging in paid advertising, you pay for access to the specific audience of the chosen channel, whether it’s traditional advertising, online promotions, or a blend of both. Your budget allocation should encompass diverse paid ad options, including pay-per-click and social media advertising, search engine optimisation (SEO), display ads and traditional mediums like newspapers and magazines, or even television, radio, billboards, and posters.

Branding and Creative Design: 5-10%

In the realm of tourism marketing, your brand is your signature, your visual story, and the heart of your connection with prospective tourists. Budget allocation for branding and creative design is indispensable as it encompasses vital elements such as logo design, brand style guides, graphic design for promotional materials like flyers, and the overarching design of your website. Consistency is key here. Why? Because it ensures that potential tourists can effortlessly recognise your brand amidst a sea of options.

This budget category encompasses expenses for printing, supplies, IT equipment, and even hiring freelancers or specialists. It fuels the engine that makes your marketing materials look good and stand out in the competitive tourism landscape. Furthermore, it plays a pivotal role in content marketing, enhancing your content’s visual appeal and memorability.

When travellers encounter your logo, peruse your brochures, or navigate your website, they should experience a harmonious and coherent brand identity. This consistency breeds trust and cultivates a sense of familiarity that can influence their decision to choose your tourism offerings.

Therefore, branding and creative design form a critical budgetary element that deserves careful attention to ensure prospective tourists can recognise, remember, and resonate with your brand.

FURTHER READING: The 101 on How to Craft a Comprehensive Tourism Brand Style Guide

Public Relations and Events: 5-10%

Building a solid business presence is not just an option; it’s a necessity. This is where public relations (PR) and events come into play, forming a pivotal aspect of your marketing budget. These activities are the beating heart of your brand’s engagement with the world.

The costs associated with PR and events can fluctuate significantly based on the nature and scale of the activities. Consider events such as prestigious awards ceremonies that showcase your achievements, networking events that leverage word of mouth to amplify your reach, or captivating product launches that unveil your latest offerings to an eager audience. These endeavours may require budgetary allocations for travel, venue rentals, catering, event promotion, and guest speakers, among other aspects.

However, even if your company doesn’t host these events, it’s essential to recognise that participation can still incur expenses. Registration fees for industry expos, travel expenses to attend trade shows or conventions, and booth and display costs for exhibitions contribute to the overall PR and events budget.

Why is it worthwhile to invest in PR and events? Because managing your brand’s reputation and fostering meaningful connections with your audience is an ongoing effort that yields substantial returns. Engaging the services of a PR agency and implementing reputation management strategies can help ensure that your brand’s narrative remains compelling, positive, and aligned with your core values.

PR and events are not mere budgetary line items; they are the threads that weave your brand’s story into the fabric of the tourism industry. By investing wisely in these activities, you can forge lasting connections, enhance your brand’s visibility, and ultimately create an indelible mark in the hearts and minds of prospective tourists.

FURTHER READING: Public Relations for Tourism: Crafting Your Unique Strategy

Tools and Software: 10%

Elevating your marketing game requires the proper arsenal of tools and software at your disposal. It’s all about investing wisely to streamline operations and boost overall efficiency. Consider allocating your budget towards essential tools such as marketing automation platforms, content management systems, email marketing tools, and social media management platforms. These are the gears that make the machinery of your marketing efforts run seamlessly.

Tools and software are your trusted allies, capable of saving you precious time, conserving financial resources, and optimising manpower by automating key tasks. They serve as your analytical compass, providing insights into campaign performance and facilitating the tracking of essential marketing metrics that unveil the true impact of your strategies.

It’s necessary to remember that these tools and software usually come with a service fee, either monthly or yearly. Some noteworthy categories to explore include:

• marketing automation platforms that simplify repetitive tasks
• content management systems (CMS) for streamlined content creation and publishing
• email marketing platforms for targeted outreach
• customer relationship management (CRM) tools for nurturing leads
• social media management platforms that empower you to effectively engage with your audience.

In a nutshell, embracing these tools and software isn’t just a matter of convenience; it’s an investment in enhanced productivity, data-driven decision-making, and the ultimate success of your tourism marketing endeavours.

Team Members: 10%

Your marketing team is the engine driving your tourism marketing efforts, whether they are in-house or outsourced. Allocate a portion of your budget to staff salaries, training, and technology needs. Motivated and skilled employees are vital to achieving your tourism business goals.

Or allocate part of your budget to outsourcing to freelancers or an agency. You cannot do everything yourself .

Wrapping it Up

Creating a tourism marketing budget that aligns with your business goals and industry-specific needs is essential for success in the competitive tourism market. Use this guide and sample budget breakdown as a starting point to craft a budget that propels your tourism business to new heights. Remember that flexibility and adaptability are essential, so review and adjust your budget regularly to stay ahead in the dynamic world of tourism marketing.

Tania Shirgwin

Founder + Head Consultant

Tania is a marketing strategist specialising in tourism, wine and hospitality marketing. As founder of Decant Digital (formerly bizeez communications), Tania’s unique role over the past 14 years has enabled her to follow her passions of travel and her marketing obsessions of strategic marketing planning, consumer-focused web development, search optimisation, and training. With over 80 customised websites built to date, successful event marketing campaigns and new business branding, Tania’s wealth of experience ensures businesses continually increase website traffic, direct bookings, and sales via proven marketing tactics.

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How to Setup a DMO and Travel Marketing Budget with Examples

by Bryan Reynolds | Feb 6, 2024 | Destination Marketing

Let’s Say You Are Allocating a $100,000 Marketing Budget

Imagine you’re given a $100,000 marketing budget to promote a scenic coastal town as a travel destination. How might you allocate this budget across different marketing strategies? To approach this thought experiment, we first analyze the target demographics, peak travel seasons, and the unique selling propositions of the town. Assuming an integrated marketing strategy, we allocate $30,000 for digital marketing, utilizing SEO, social media, and influencer partnerships to target tech-savvy travelers. Another $25,000 is earmarked for traditional marketing methods, including local print and radio ads, especially since our research shows a significant number of potential visitors still engage with these mediums. Event marketing, requiring more intensive capital, might take up $20,000 of the budget to sponsor local festivals or trade shows that attract high volume traffic. Through partnership marketing, including deals with hotels and airlines, we set aside $15,000 to create enticing travel packages, which could also involve revenue share agreements to maximize resources. The remaining $10,000 is reserved for unexpected opportunities and market research to monitor and measure the effectiveness of our campaigns, allowing for agile responses to market dynamics.  This theoretical budget allocation underscores the need for a multifaceted approach, balancing various marketing techniques with the flexibility to adapt and optimize based on real-time feedback and analytics.

5 Examples for Setting up a Marketing Budget

In drafting your marketing budget, aim for clarity, specificity, and flexibility. Language should be concise and jargon-free to ensure accessibility for all stakeholders. Through the use of real-world examples and practical scenarios, we will illustrate a variety of approaches to allocating funds effectively. Each example will encapsulate realistic marketing challenges and solutions that underscore the importance of adaptability and strategic foresight in budgeting.

Example 1: Traditional Marketing

In this first example, we will explore a DMO’s marketing budget that allocates most of its funds toward traditional marketing methods. This could include print advertising, TV and radio commercials, and billboards. While these methods have been effective in the past, they may not be as impactful in today’s digital age where consumers are bombarded with advertising messages. The budget should also include a portion for market research and analysis to measure the effectiveness of these traditional methods.

Example 2: Digital Marketing

Example 3: Integrated Marketing

An integrated marketing approach combines elements of both traditional and digital methods. This allows for a broader reach and a more diverse target audience. For example, a DMO may use traditional methods to reach an older demographic while also investing in digital marketing to appeal to the younger generation. This approach requires careful planning and coordination between different marketing teams, but can ultimately lead to a more comprehensive and effective campaign.

Example 4: Event Marketing

Another way to allocate marketing funds is by hosting events. This could include festivals, trade shows, or community events that showcase the destination and attract potential visitors. Event marketing can be a valuable tool in creating buzz and generating interest in a destination, but it also requires a significant investment of time and resources. The budget should factor in event planning costs, as well as any additional promotional efforts.

Example 5: Partnership Marketing

What is a DMO Marketing Budget?

A DMO (Destination Marketing Organization) marketing budget is a financial plan that outlines all the costs associated with promoting and selling a tourist destination. This marketing budget outlines what is expected to be spent. It’s a crucial component of any comprehensive marketing plan, detailing the allocation of funds for various marketing activities. These activities can range from traditional advertising to digital marketing efforts, including social media ads. The marketing budget templates can be used to structure and manage these expenses effectively. It’s important to note that a well-planned marketing budget should account for global advertising spending trends, especially in the ever-evolving realm of digital marketing. A detailed marketing budget breakdown is also essential to understand where funds are being allocated, whether it’s for tourism marketing campaigns, content creation, or other promotional endeavors.

Allocating Funds Across Marketing Channels

Why is it Important to Look Beyond Traditional Marketing Channels?

Traditional advertising methods like direct mail and paid advertising are no longer the only means of reaching your prospective travelers. Digital marketing channels such as social media advertising and search engines offer new opportunities to engage with your audience.

• Digital advertising allows for more precise targeting, helping you reach the right audience.
• Social media posts can help build brand awareness and foster a community around your destination or tourism business.
• Search engines, through SEO and Google Ads, can help increase your website traffic and visibility.

Ranking Effective DMO Marketing Channels

When setting up a marketing budget for a Destination Marketing Organization (DMO), it’s crucial to prioritize the channels that offer the best return on investment. Below is a ranked list of some of the most effective marketing channels for a DMO:

• Search Engine Optimization (SEO) – Optimizing your content for search engines is essential for driving organic traffic to your destination’s website and improving discoverability.
• Content Marketing – High-quality, engaging content tailored to your audience can establish your destination’s brand as authoritative and trustworthy.
• Social Media Platforms – Utilizing platforms like Instagram, Facebook, and TikTok can increase brand visibility and allow for direct engagement with potential travelers.
• Email Marketing – Personalized email campaigns can nurture leads and keep your destination top of mind among those who have expressed interest.
• Influencer Partnerships – Collaborating with influencers can tap into their loyal following and promote your destination to a wider, yet targeted audience.
• Paid Search Advertising – Google Ads and other paid search options can position your destination in front of users actively seeking travel options.
• Display Advertising – Visually appealing ads on relevant websites can attract attention and redirect traffic to your site.
• Travel Fairs and Expos – Participating in industry events increases networking opportunities and direct promotion to travel professionals and consumers alike.

Investing in Mid and Long-term Strategies

While immediate results are often desirable, it is also crucial to budget for mid and long-term marketing strategies. This could include investing in kiosks or other physical marketing efforts that can create an impact from day one.

• Kiosks can serve as interactive marketing channels, providing information and engaging visitors.
• Sustainable growth requires a balance between short-term tactics and long-term strategy.
• Investing in digital marketing automation tools can save your marketing team time and resources in the long run.

Highlighting the Core Culture of the Destination

Content marketing is a powerful tool to highlight the core culture of your destination. It is worth dedicating funds to creating compelling content that resonates with your audience.

• High-quality content creation can help portray the unique aspects of your destination.
• Distributing quality content across digital channels can help improve your market presence.
• Publishing tools and creative software may be necessary expenses for content marketing.

Co-branding Campaigns with Local Businesses

Co-branding campaigns can be an effective way to stretch your marketing budget and increase your reach. Partnering with local businesses can also enhance the overall visitor experience.

• Co-branding allows you to share marketing costs and leverage each other’s audience.
• It is a great way to support local businesses and promote community.
• Co-branding can help align your DMO or tourism business with recognizable local brands.

Other Considerations for Your Marketing Budget

In addition to the above, other considerations should factor into your marketing budget. This includes market research, public relations (PR) costs, website development or redesign, and email marketing.

• Market research can help inform your marketing strategies and ensure you’re meeting your marketing objectives.
• PR costs can include hiring freelancers or agencies to manage your public relations efforts.
• Website development or redesign is often necessary to ensure your online presence aligns with your brand and serves your visitors effectively.
• Email marketing remains a cost-effective digital marketing channel, offering high ROI.

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Setting up a DMO and travel marketing budget requires careful consideration of various factors. From traditional advertising to digital marketing, from immediate tactics to long-term strategies, each aspect should align with your business goals and marketing objectives. By using a marketing budget template, you can gain a clear view of your entire financial picture, enabling you to allocate funds effectively and achieve sustainable growth. Remember, each dollar spent should ultimately address your marketing goals and contribute positively to your projected revenue.

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Travel and tourism industry advertising in the U.S. - statistics & facts

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Detailed statistics

Number of U.S. residents travelling overseas 2002-2022

Number of inbound international visitors to the U.S. 2011-2022

Number of domestic leisure and business trips in the U.S. 2019-2026

Editor’s Picks Current statistics on this topic

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Digital ad spend in the U.S. 2022, by industry

Average memberships in loyalty programs in the U.S. 2022, by sector

Advertising effectiveness among U.S. travelers 2022

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Overview - travel industry.

• Basic Statistic Annual change in number of U.S. residents traveling overseas 2002-2022
• Premium Statistic Number of inbound international visitors to the U.S. in 2022, by origin
• Premium Statistic Travel product bookings in the U.S. 2023
• Premium Statistic Travel product online bookings in the U.S. 2023
• Premium Statistic Flight bookings by airline brand in the U.S. 2023

Annual change in number of U.S. residents traveling overseas 2002-2022

Annual change in number of United States residents traveling overseas from 2002 to 2022

Number of inbound international visitors to the U.S. in 2022, by origin

Number of inbound international visitors to the United States in 2022, by country of origin (in millions)

Travel product bookings in the U.S. 2023

Travel product bookings in the U.S. as of December 2023

Travel product online bookings in the U.S. 2023

Travel product online bookings in the U.S. as of December 2023

Flight bookings by airline brand in the U.S. 2023

Flight bookings by airline brand in the U.S. as of December 2023

Overview - advertising and marketing

• Premium Statistic Travel sector ad spend growth worldwide 2021-2023
• Premium Statistic Travel industry ad spend in the U.S. 2020-2022
• Premium Statistic Travel sector ad spend in the U.S. 2022, by segment
• Premium Statistic Travel marketers budget allocation in the U.S. 2019-2021, by type
• Premium Statistic Marketing expenses of leading OTAs worldwide 2019-2022
• Premium Statistic Airline and cruise line advertising spending U.S. 2019-2021
• Premium Statistic Lodging industry advertising spending share U.S. 2022, by channel

Travel sector ad spend growth worldwide 2021-2023

Travel industry advertising spending growth worldwide from 2021 to 2023

Travel industry ad spend in the U.S. 2020-2022

Advertising spending of the travel industry in the United States from first quarter 2020 to 3rd quarter 2022 (in million U.S. dollars)

Travel sector ad spend in the U.S. 2022, by segment

Travel industry advertising spending in the United States from January to April 2022, by segment (in million U.S. dollars)

Travel marketers budget allocation in the U.S. 2019-2021, by type

Distribution of marketing budgets of travel marketers in the United States from 2019 to 2021, by type

Marketing expenses of leading OTAs worldwide 2019-2022

Marketing expenses of leading online travel agencies (OTAs) worldwide from 2019 to 2022 (in million U.S. dollars)

Airline and cruise line advertising spending U.S. 2019-2021

Airline and cruise line travel advertising spending in the United States in 2nd quarters 2019 to 2021 (in million U.S. dollars)

Lodging industry advertising spending share U.S. 2022, by channel

Distribution of lodging industry advertising spending in the United States from January to April 2022, by medium and channel

Digital advertising

• Premium Statistic Digital ad spend in the U.S. 2022, by industry
• Premium Statistic Digital Market Outlook: digital ad spending share in the U.S. 2022, by industry
• Premium Statistic Digital ad spend growth in the U.S. 2023, by industry
• Premium Statistic Travel industry digital ad spend in the U.S. 2019-2024
• Premium Statistic Mobile ad spend in the U.S. 2021, by industry

Digital advertising spending in the United States in 2022, by industry (in billion U.S. dollars)

Digital Market Outlook: digital ad spending share in the U.S. 2022, by industry

Distribution of digital advertising spending in the United States in 2022, by industry

Digital ad spend growth in the U.S. 2023, by industry

Growth of digital advertising spending in the United States in 2023, by industry

Travel industry digital ad spend in the U.S. 2019-2024

Travel industry digital advertising spending in the United States from 2019 to 2024 (in billion U.S. dollars)

Mobile ad spend in the U.S. 2021, by industry

Mobile advertising spending in the United States in 2021, by industry (in billion U.S. dollars)

Market leaders

• Premium Statistic Leading TV travel advertisers in the U.S. 2022, by ad spend
• Premium Statistic Leading TV travel advertisers in the U.S. 2022, by ad impressions
• Premium Statistic Sales and marketing expenses of Booking Holdings worldwide 2015-2023
• Premium Statistic Selling and marketing expenses of Tripadvisor worldwide 2009-2023
• Premium Statistic Selling and marketing expenses of Expedia Group, Inc. worldwide 2009-2023
• Premium Statistic Advertising expense of Caesars Entertainment worldwide 2018-2022
• Premium Statistic Advertising costs of Wynn Resorts Limited worldwide 2014-2022

Leading TV travel advertisers in the U.S. 2022, by ad spend

Leading TV advertisers in the travel and tourism industry in the United States in 2022, by ad spend (in million U.S. dollars)

Leading TV travel advertisers in the U.S. 2022, by ad impressions

Leading TV advertisers in the travel and tourism industry in the United States between January and July 2022, by share of ad impressions

Sales and marketing expenses of Booking Holdings worldwide 2015-2023

Sales and marketing expenses of Booking Holdings worldwide from 2015 to 2023 (in billion U.S. dollars)

Selling and marketing expenses of Tripadvisor worldwide 2009-2023

Selling and marketing expenses of Tripadvisor, Inc. worldwide from 2009 to 2023 (in million U.S. dollars)

Selling and marketing expenses of Expedia Group, Inc. worldwide 2009-2023

Selling and marketing expenses of Expedia Group, Inc. worldwide from 2009 to 2023 (in billion U.S. dollars)

Advertising expense of Caesars Entertainment worldwide 2018-2022

Advertising expense of Caesars Entertainment worldwide from 2018 to 2022 (in million U.S. dollars)

Advertising costs of Wynn Resorts Limited worldwide 2014-2022

Advertising costs of Wynn Resorts Limited worldwide from 2014 to 2022 (in million U.S. dollars)

Consumer insights

• Premium Statistic U.S. adults planning travel via selected information sources 2021, by generation
• Premium Statistic Leading types of ads considered as engaging among U.S. travelers 2022
• Premium Statistic Advertising effectiveness among U.S. travelers 2022
• Premium Statistic Personalized advertising attitudes among U.S. travelers 2022
• Premium Statistic Favorite apps and websites for travel in the U.S. Q1 2021
• Premium Statistic U.S. adults using travel influencers for recommendations 2021
• Premium Statistic Average memberships in loyalty programs in the U.S. 2022, by sector

U.S. adults planning travel via selected information sources 2021, by generation

Share of adults who use selected sources of information for travel planning in the United States as of May 2021, by generation

Leading types of ads considered as engaging among U.S. travelers 2022

Share of travelers motivated to engage with selected types of advertising in the United States as of May 2022

Share of travelers who were motivated to make a booking influenced by selected types of ads in the United States as of May 2022

Personalized advertising attitudes among U.S. travelers 2022

Attitudes to personalized and non-personalized advertising among travelers in the United States as of May 2022

Favorite apps and websites for travel in the U.S. Q1 2021

Travel apps and websites that the public view the most positively in the United States as of Q1 2021

U.S. adults using travel influencers for recommendations 2021

Share of adults who looked to travel influencers for recommendations in the United States as of May 2021

Average loyalty program membership in the United States as of February 2022, by sector

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Tourism budgets.

When U.S. states and cities attract more visitors, their local economies thrive

Destination marketing attracts new visitors to cities and states, whose spending creates significant economic activity. This in turn generates crucial tax revenue that supports essential public services, improving the quality of life for the area’s residents. Despite these proven benefits, securing and preserving tourism promotion funding from local governments is an increasingly uphill battle for many U.S. states and cities. When a state or city loses all or part of that funding, it cedes the economic benefits of tourism to another destination, as visitors simply choose to travel elsewhere. It can take years to recover from the loss of new visitors and subsequent economic activity. 

U.S. Travel is committed to helping destinations convey the power of travel promotion to lawmakers in their communities, which never fails to drive new visitors to destinations and deliver broad economic growth. 

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Travel Industry to Congress: Enact Urgent Policies to Restore Travel Demand

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U.S. Travel Applauds Senate Committee Markup of Travel and Tourism Omnibus

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U.S. Travel Applauds Brand USA Bill Committee Passage

U.S. Travel Association Executive Vice President of Public Affairs and Policy Tori Emerson Barnes issued the following statement on the U.S. House Committee on Energy and Commerce passing the Restoring Brand USA Act (H.R. 4594).

State-level Economic Impact

Travel's economic impact spans across all 50 states. In addition to national-level data, U.S. Travel now partners with Tourism Economics to release state-level stats.

How much should a tourism business spend on marketing?

13 May 2019 | Marketing

When researching what budget your business should set for marketing, you’ll find a lot of figures and suggestions out there. But, you’ll probably be left somewhat confused and still asking, how much should my tourism business spend on marketing?

One of the most common rules of thumb is that your marketing budget should be 10% of your yearly revenue. However, I feel this method of figuring out how much you should spend on marketing is a little unsophisticated.

How much would you pay for more direct bookings?

I think a better way for tourism operators to determine their marketing budget, is to figure out how much they will save in 3rd party commissions if they increased their direct bookings by a specific figure and then used this as a basis for their budget.

The core of this concept is that you need to pick a direct booking KPI (Key Performance Indicator) that you are going to aim for. Then you can work out your budget backwards from there.

Accommodation Operators

This is how I would figure out the budget requirements to generate more direct bookings for an accommodation operator.

Figures we will need:

DB = The number of direct bookings you want to achieve. The total number of properties/rooms times by 10 weeks of full capacity bookings.

P = The average price per night for a room.

N = The average amount of nights people stay at your business.

C = The percentage of commission you currently pay for bookings made through 3rd party engines.

Formula to crunch:

MB = ((P x N) x DB) x C

MB = The marketing budget required to generate the desired direct bookings

Example 1 – Small Accommodation Operator:

In this example, we run a property that offers self-contained accommodation for couples and families. We have 10 accommodation options at our property, prices vary between 250-300 depending on which option travellers go with. Most of the guests stay between 2 & 4 nights, very rarely do we have guests staying only 1 night. We currently get a lot of 3rd party bookings through bookings.com which we pay a 12% commission on.

Based on this information we can figure out a marketing budget that this business can use to generate more direct bookings.

MB = ((275 x 3) x 100) x 12%

MB = $9,900

This business could choose to do nothing and forfeit the almost $10k to booking.com. Or, they could invest that $10K into their own marketing and build value in their assets, like a conversion focused website or investing new photography and video of their business. Once they take their 101st direct booking then all of the assets they had built have already been paid for.

Example 2 – Holiday Park:

In this example, we run a holiday park that has over 50 accommodation options, ranging from budget style cabins to deluxe apartments. Prices per night vary from $150 to over $300 a night depending on the option. Most guests stay between 2-4 nights, but the length of stay increases during peak seasons. We’re on multiple different booking platforms with the highest commission paid of 15% per booking.

MB = ((210 x 4) x 500) x 15%

MB = $63,000

This business has a decent size budget and could look at doing some larger-scale projects or run a comprehensive marketing campaign.

Attractions

The same formula can also be used for tourist attractions with some slight tweaks to the formula.

DB = The number of direct bookings you want to achieve. The total number of tickets times by average number of shows per month. (T x S)

P = The ticket price.

N = The average tickets sold per order

MB = ((P x N) x DB=(TXS)) x C

Example 1 – Weekly Music-Based Attraction:

In this example, we run a ticketed music-based attraction aimed at a middle-aged demographic. Tickets sell for $135 each and most customers attend with friends. On average 4 tickets are sold per order. We have signed up to red balloon to leverage their database of customers, but we pay a hefty commission of 25% on all tickets sales.

Based on this information the marketing budget to generate 100 more direct bookings works out to be…

MB = ((135 x 4) x 600) x 25%

MB = $81,000

Due to the rather large commission, this business pays the budget is of a decent size. A budget of this size means the business could look at hiring dedicated staff to focus on aspects of their marketing (like implementing a Social Media Strategy ). Alternatively, they could look at using this budget for google ad campaigns or facebook advertising campaigns during their off-peak season, where tickets are the hardest to move.

The method outlined in this blog article might not work for every type of business. If your business doesn’t pay 3 rd party booking systems commissions and you’re generating plenty of direct bookings then you probably already have a decent marketing budget and strategy in place.

The key to making a budget like this work is tracking where your bookings are coming from and maximising the impact of channels that are delivering you the best results. Regardless of your business’s budget, there are plenty of things that can be put in place to establish ongoing value from your marketing.

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• Oxford Economics

Budget Analysis provides a fact-based, compelling evaluation of current competitiveness and the economic opportunity associated with the budget funding of destination marketing

DMO budgets are benchmarked against known measurements for each destination, including:

• Hotel room revenue
• Leisure and hospitality employment
• Leisure and hospitality income
• Bed Tax Rates

Various competitive sets and indicator combinations are explored to identify those that best highlight the current situation.  Based on the findings of the competitive benchmarking analysis, Tourism Economics identifies an optimal budget to enable a DMO to compete both domestically and internationally. Tourism Economics will make recommendations on funding levels based on quantitative analysis.

Economic rationale for destination marketing: 

This analysis describes the competitive nature of tourism, the perishability of the product, seasonality, the value of scale, and the importance of brand development. In all these areas, a case is built for why destination promotion is an essential part of fostering the economic value of the tourism sector in the state.

This is based on a combination of economic theory, statistical analysis, and case studies. Recent Tourism Economics research on how destination marketing drives broader economic development is used as references to buttress the case for competitive funding. 

When the rationale is defined, the Tourism Economics team presents both positive and negative case studies of when destination marketing has been well-funded and defunded. The iconic “Colorado story” as well as the more recent “San Diego story” authored by Adam Sacks of Tourism Economics provide cautionary tales of what happens to market share when destination marketing is defunded. More recent case studies are included.  Key performance indicators (KPIs) are also leveraged in building the case for the economic benefits of destination marketing investments.

Track competitiveness over time: 

An analysis of a DMO’s tourism sector performance relative to the nation and its competitive set, which is defined in consultation with the client. Losses in market share, and the parallel effect on room nights, are calculated over the past five years.

Room demand, room revenue, leisure and hospitality employment and wages are tracked over the past ten years to determine the extent to which a destination are competing (or not) in the tourism market

Conduct scenario impact analysis: 

The last phase of work produces a calculation the potential benefits of increasing the marketing budget to be in line with its competitive set. 

Impacts are measured in terms of visits, business sales, jobs, income, and tax generation. Incremental visits, room nights, and spending that would be realized through investing more in destination marketing are calculated using a combination of case studies and historic KPIs.

The IMPLAN economic impact model for the region is used to calculate direct, indirect, and induced impacts by industry sector. IMPLAN is an input-output model that measures the relationships between and among industries and consumers. For example, the model tracks the flow of a visitor’s restaurant expenditures to wages, profits, capital, taxes and suppliers. The supplier chain is also traced to food wholesalers, to farmers, and so on. In this way, the model allows for the measurement of the direct and indirect sales generated by a restaurant meal, for example. The model also calculates the induced impacts of tourism. These induced impacts represent benefits to the economy as employees of tourism sectors spend their wages in the local economy, generating additional output, jobs, taxes, and wages.

Economic impacts are measured on three levels:

The results of the analysis are typically shown for two scenarios, including a “do nothing” scenario and funding scenarios over the next five years, to be defined in coordination with the client.

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Destination Marketing Outlook 2022

Executive summary, grave impact of the pandemic on tourism, survey methodology, the pre-covid setup, negative impact on traveler volume and revenue for majority dmos  .

• Funding cuts - Recovery funds come to aid

Declining staffing levels 

Marketing strategy underwent an overhaul, dmo roles accentuated further, movers and shakers, increase in revenue, funding sources come to a full circle, staffing levels to stabilize, marketing trends, dmo roles on the backburner come to the forefront , related reports.

• State of Travel 2023: Travel in 250 Charts July 2023
• Sustainability in Travel 2021: Quantifying Tourism Emissions for Destinations June 2021
• EU Traveler Profile and Key Statistics: The Impact of COVID-19 January 2021
• U.S. Travel Tracker December 2020: Further Slip January 2021

Report Overview

DMOs hold a special position in the tourism industry. They can be envisaged to be at the helm of the industry in a sense that they bridge all relevant stakeholders and act as a central communication channel with access to enormous data of both the stakeholders and the consumers.

The last two years have proven to be an extremely challenging time for DMOs. The entire industry was being put on hold, and DMOs had an additional unprecedented responsibility to their audience: encouraging people to travel less and even avoid traveling.

  Skift Research conducted its Destination Marketing 2022 survey in December 2021 to know how Covid impacted the working of Destination Marketing Organizations (DMOs). In addition, we interviewed executives from seven key DMOs to get additional insights from the ground.

Through our survey findings and industry discussions we aim to assess how DMOs reacted to and dealt with the pandemic and make sense of what the future holds and how DMOs will shape up in 2022. These findings will be particularly useful for DMOs to gain peer insights, executive interviews and Skift analysis that can help them optimize their own strategies and for other travel industry stakeholders to push their DMOs to work in the right direction.

What You'll Learn From This Report

• The pre-Covid setup of DMOs
• Impact of Covid on DMO operations
• DMO responses to Covid in shifting roles, priorities and marketing strategies
• Recovery aid and timeline
• Marketing spends, channels and priorities for 2022
• Emerging trends in destination management for long-term recovery

Executives Interviewed

• Chang Chee Pey, Assistant Chief Executive, Singapore Tourism Board Marketing Group
• Chris Heywood, EVP, Global Communications, NYC & Company
• HE Saood Abdulaziz Al Hosani, Undersecretary of the Department of Culture and Tourism, Abu Dhabi
• John De Fries, CEO, Hawaii Tourism Authority
• Nina Zantout, Head of Strategy and Deputy Director Destination Management & Corporate Development, visitBerlin
• Robert Dougan, Executive General Manager of Strategy and Research, Tourism Australia
• Representatives of the Azerbaijan tourism Board

The pandemic has revealed a lot about tourism and the way it is managed in destinations worldwide. From Venice to Virginia Beach, the first half of 2020 has highlighted the importance of tourism on a destination’s economy, and in some places exposed where its strategy might be unsustainable in the long term.

The scope of work for Destination Management Organizations (DMOs) broadened massively to keep up with the changing trends and patterns owing to the pandemic. In this report we examine the pre-Covid setup of DMOs, how DMOs evolved during the pandemic and how they make sense of what the future holds. 

We conducted a survey in December 2021 of about 100 professionals from destination management organizations (including Convention Visitors Bureau) globally to analyze the functioning of DMOs across five key facets: funding, revenue, expenses, staffing levels, and marketing. For each of the facets we have assessed the trend from the pre-Covid to the post-Covid phase.

We found that funding, revenue and expenses are expected to increase in 2022 compared to the last two years, in line with the macro travel recovery trend. However, at this point it is crucial for DMOs to diversify their funding and revenue sources along with allocating their expenses in a targeted manner. Staffing levels are expected to more or less reach 2019 levels in 2022. Digital marketing is expected to remain the dominant marketing channel going forward, although marketing approaches like partnership marketing, cross-DMO collaborations and community marketing are expected to show better results in the near future.

As DMOs continue to find their footing in the new travel landscape, DMO functions are expected to broaden even more with increased emphasis on sustainability initiatives, airport route development, and stakeholder engagement. 

Furthermore, we interviewed executives from seven key DMOs. Through our survey and discussions with industry stakeholders we gauged the recovery timeline of the traveler volume and discussed the pace of recovery by origin and purpose. Consensus is that full recovery is expected only after 2024.

The overall goal of the report is to highlight the lessons learned through battling the crisis and the fundamental areas that can contribute to a sustainable recovery and growth.

The Covid outbreak caused a global travel collapse since mid-March 2020, with cross-border travel taking the gravest hit. The arrivals of international tourists showed a sharp decline of 73% in 2020. Between January and September 2021, worldwide international tourist arrivals were 20% lower compared to 2020 and 76% below the pre-pandemic levels.

The last quarter of 2021 was expected to see a travel boom owing to the holiday season, but the emergence of the Omicron variant in early December is resulting in countries re-imposing more extensive travel restrictions and making the future uncertain yet again.

The only thing certain is that the pace of recovery will remain slow and uneven across world regions due to varying degrees of mobility restrictions, vaccination rates, and traveler confidence. 

Exhibit 1: International tourist arrivals decreased sharply in 2020 and 2021 as compared to 2019

Given this dire decrease in international travel, many destinations have focused on domestic and nearby markets to make up for the loss. However, for a considerable number of countries, revenue from international tourism contributes significantly to their GDP and revival of international tourism is crucial for their tourism industry.

As per UNWTO , the impact of Covid on tourism could result in more than $4 trillion loss to the global economy. In our annual outlook for the travel industry, Skift Research created 2022 global forecasts for all major travel sectors. Revenue of these sectors are expected to reach 2019 levels by 2024 at the earliest.

Exhibit 2: Revenue of major travel sectors is expected to reach 2019 levels by 2024 at the earliest.

Skift Research’s Destination Marketing 2022 survey was conducted in December 2021 to examine how Covid impacted the roles and priorities of DMOs and what destination organizations are doing to prepare for changes post pandemic. The total sample size is ~100, representing DMOs across different regions and levels of management. The charts below display the demographics of the survey sample and their represented organizations.

Exhibit 3: Demographics of the survey sample and their represented organizations

In ordinary times, the role of a DMO is to generate demand for tourism from key source markets by building their destinations’ brands and raising traveler awareness about their respective destination offerings.

With the travel industry enjoying nearly a decade of unfettered growth, DMOs had been increasingly taking on additional roles. Skift Megatrends 2019 discussed how progressive DMOs were already developing new partnerships with local organizations to improve the destination experience, based on trends reshaping consumer expectations in the global visitor economy. So much so, that many destination leaders started calling themselves DMMOs – Destination Marketing and Management Organizations.

Our survey data confirmed these expanded responsibilities. According to our data, 75% of respondents said their organizations were responsible for stakeholder engagement in 2019 while 80% of them said that their organizations were focusing on tourism research and data in 2019, along with concentrating on their core job of destination branding and marketing. 

Exhibit 4: Destination tourism marketing and branding remained the core DMO functions pre-Covid

As regards to funding, DMOs usually raised funds via public channels but they could also be funded privately. Among public channels, the most common way for DMOs to secure funding is via hotel occupancy tax and therefore local governments. In addition, DMOs could accrue government grants, membership dues, advertising revenue, marketplace revenue and other forms of public & private funding.

Our survey results validated that hotel transient tax was the dominant funding source pre-Covid while state/city government funding and private firm partnerships/sponsorships were ranked as the other major sources of funding. 

Exhibit 5: Hotel transient tax was the dominant funding source for DMOs pre-Covid

More than half of the survey respondents said that their organizations focused more on domestic tourism pre-Covid and around 37% said that business travel was a major component of overall tourism to their destination before Covid hit. It should be noted that our survey sample majorly consists of regional and local level DMOs and hence their focus might be skewed more towards domestic tourism. 

Exhibit 6: Based on the survey responses, domestic tourism and business travel were the focus areas for DMOs pre-Covid 

Even before the pandemic hit, DMOs were evolved enough to be using a wide range of marketing channels. Our survey results showed that more than 85% of the respondents said that their organizations were using almost all relevant channels. 

Exhibit 7: DMOs used a wide range of marketing channels in the pre-Covid phase

Digital marketing channels like content marketing, social media marketing and search engine optimization were marked as ‘very effective’ marketing channels pre-Covid. 

Exhibit 8: Digital marketing was the most effective form of marketing pre-Covid

Evolution of the DMO Landscape with the Advent of Covid 

The pandemic broadened the role that DMOs can play in dealing with a crisis and recovering from it. Chris Heywood, EVP, Global Communications at NYC & Company told Skift: “It has been such a change. Role of DMO has shifted. DMO became a mouthpiece to deliver real time information to our leaders and to our members. We were indispensable during the crisis.”

Heywood further discussed: “During a typical year, we will be doing all sorts of sales & marketing activity in a particular destination, with Covid our infrastructure changed, 50% of staff was laid off, budget cuts, we lost significant funds from our private revenues, and we disbanded our international network. In the interim we were focussing on revitalising the city by engaging our own New Yorkers and now since international tourism is expected to open up we have a different set of challenges.”

Below we have highlighted the changes that occurred in the DMO industry as a result of the pandemic. 

When asked how Covid has impacted the traveler volume in their destinations, 77% of the respondents said that the traveler volume decreased.

About 70% of the respondents asserted that the revenue of their DMO decreased in 2020 as compared to 2019 with 16% saying that the decrease in revenue was more than 50%. However, the revenue situation slightly improved in 2021, with 60% of them saying that their organization’s revenue in 2021 would be above the 2019 level.

Expenses showed a similar trend of decreasing aggressively in 2020 followed by a slight increase in 2021. However, the severity of decrease in revenue in 2020 was higher  in 2020 as compared to 2021. For example, 16% of the respondents said that the revenue of their organizations decreased by more than 50% while 10% said that the expenses decreased more than 50%. This shows that in this phase DMOs were still trying to gauge the situation and streamline their expenses accordingly. 

On the other hand, in 2021 the revenue decrease is behind expense decrease indicating that destinations were cautious of overspending given the abrupt travel recovery. 

Exhibit 9: Revenue and expenses of DMOs decreased in 2020 in line with the diminishing travel demand before slightly increasing in 2021

Interestingly, 21% of the respondents said that the traveller volume to their destination increased during the pandemic. We went on to ask the reasons for the increase in traveler volume in these destinations and found that destinations which offer places to practice social distancing outperformed during the pandemic. Also, according to the respondents, the right marketing promotions, emphasis on health and safety and the surge in domestic travel due to international travel restrictions boosted traveler volumes in these destinations.

A good example of a destination which witnessed an increase in traveler volume by pulling the right strings at the right time is Abu Dhabi. HE Saood Abdulaziz Al Hosani, Undersecretary of the Department of Culture and Tourism – Abu Dhabi , shared with Skift, “​​Despite the pandemic, the UAE recorded a 55% hotel occupancy rate in 2020 when other hotels in the Middle East recorded just 43% occupancy. The pandemic created new opportunities for domestic tourism, with a surge in demand recorded over the past year contributing $11 billion (AED 41 billion) to the national economy. The majority of Abu Dhabi’s successful steer through the pandemic was due to the government’s continued commitment to the community’s and visitors’ health and safety. DCT Abu Dhabi’s Go Safe certification programme was crucial in demonstrating our commitment to public safety and responsible tourism and we were able to instill confidence and trust in its citizens, residents and tourists.”

Funding cuts – Recovery funds come to aid

54% of the respondents stated that their organization did not receive the same level of funding starting March 2020 till date compared to 2019. Survey results suggest that with the advent of Covid, advertising revenue, hotel transient tax, membership fees and sponsorships from private firms were pulled back to a great extent while government funding at a city/state and federal level became important financing sources for DMOs. 

John De Fries, CEO, Hawaii Tourism Authority, told Skift: “Until Full Year 2021-2022, HTA was funded by a dedicated portion of the Transient Accommodations Tax (TAT) charged by the state on hotel rooms and other short-term lodging. Every dollar invested in HTA returned $20 in state tax revenues. In their 2021 session, state legislators needed to balance the many needs of Hawaii’s residents with lower tax revenue projected from our heavily tourism-dependent economy. HTA’s budget was cut from $76 million to $60 million, and the dedicated funding from the TAT was removed.”

Exhibit 10: Government funding sources gained importance during Covid

With the hotel demand and occupancy rates tanked, DMOs became completely cash strapped. However, tourism is a major contributor to world economies and DMOs play a crucial part in developing and promoting tourism. Hence, to keep the show running most of the DMOs gained access to recovery funds to ensure that they can continue to provide critical business support and start to prepare for recovery.

Sixty percent of the respondents of our survey said that their DMO received recovery funds. 55% of the funds received came from the Federal government. The second biggest source was the State/Province government followed by the City/Municipal government.  

In 2020, 62 million travel jobs were lost, representing a drop of 19%, leaving just 272 million employed across the sector globally, compared to 334 million in 2019.

Destinations were no exception to this drastic workforce reduction. Forty percent of our surveyed respondents said that their organizations laid off employees in the first six months of 2020 and 28% said they furloughed employees during this time period. Survey results suggest that around a quarter of employees were laid off and furloughed.

In addition, 20% of surveyed organizations reduced the working hours and salaries of their employees. Although 17% say that DMOs hired new staff during the first six months of 2020, the number of employees actually hired is negligible. 27% of the DMOs in our sample managed to keep their staff size the same as in 2019.

Exhibit 11: Considerable share of employees in the DMO industry were laid off during the first six months of 2020

Marketing spend decreased

Marketing remained the foremost function of DMOs. Seventy-two percent of the respondents said that the marketing spends decreased in 2020 and the number for 2021, while better, was still at 54%. 

The decrease in marketing spends in 2020 can be attributed to budget cuts overall but also insignificant travel demand. As Heywood from NYC & Company said, “When the pandemic started, we had nothing to market as people could not come.” As the situation got slightly better in 2021, DMOs started launching campaigns to lure travelers and ensure visitation as soon as travel restrictions were eased.

Exhibit 12: Marketing spend decreased in 2020 before slightly improving in 2021

Increased focus on domestic tourism

With wide spread restrictions on cross-border travel up until the recent few months, 65% of the respondents said that their organization focused more on domestic tourism during Covid as compared to 52% before Covid hit (refer exhibit 6). 

For example, Chang Chee Pey, Assistant Chief Executive, Singapore Tourism Board commented: “Our marketing strategies had to evolve to target a new domestic audience. STB launched the SingapoRediscovers domestic campaign in July 2020 to encourage locals to explore different sides of the country and in December 2020, STB launched complimentary SingapoRediscovers Voucher Scheme that provided Singaporeans with $100 worth of tourism credits as an incentive to support local tourism businesses.”

Representatives from the Azerbaijan Tourism Board further solidified the importance of domestic tourism during the pandemic, they told Skift: “During the pandemic, one of the main roles added to ATB’s functions was the promotion of domestic tourism, creating accessible tourism products for locals, putting them into a domestic tourism platform and communicating them to relevant target audiences. Acting as a hub for industry partners, including tour guides, accommodation providers, tour agencies and operators, has become a new role too to support the human capital within the industry.”

Offline marketing channels take a back seat; Innovative marketing campaigns became crucial

Survey results reflected that while digital channels like social media marketing and search engine optimization continued to be the top most marketing channels, community building, email and influencer marketing got a few extra points in terms of their efficiency during the pandemic.

On the other hand, publicity events and offline advertising channels were proven to be ineffective marketing channels during Covid given the restrictions on holding gatherings and the risk of virus transmission.

Chee Pey at the Singapore Tourism Board told Skift, “During the pandemic, digital channels were critical ones that allowed us to engage with our target audience when we were unable to do so physically. We expect this to continue going forward.” 

Exhibit 13: Digital marketing remained an impactful marketing channel during Covid

60% of the respondents of our survey said that their DMOs’ marketing message changed when the destination started witnessing signs of recovery from Covid based on changes in traveller preferences.

Slight recovery marked the beginning of in-the-moment marketing campaigns. For example, in January 2021 NYC and Company tweaked its very famous NYC Restaurant Week event to NYC Restaurant Week To Go. This simple change to make the most of the situation was a win-win allowing customers to enjoy favourite restaurants while staying at home at a bargain price, and allowing restaurants, many for the first time, to make takeout/delivery a revenue stream to help get through the winter months.

In the initial stage of Covid, in particular, DMOs around the world needed to encourage people to stop travelling. Even for destinations that bounced back faster thanks to a larger domestic travel market, the marketing focus needed to be on responsible and safe travel. According to our survey, 84% of the respondents said that their organization reviewed its primary roles and responsibilities as a result of the pandemic and 58% said that their organization changed its primary roles and responsibilities.

Stakeholder engagement, integrating locals, focus on sustainable tourism development and revisiting target markets and segments were the top few changes being reviewed at DMOs.

Other than the areas mentioned in the chart below, respondents highlighted that their organization’s main focus has been on transparent, timely communication, and brand positioning. Additionally, DMOs have been re-evaluating their membership models and made a shift from marketing members to marketing the entire destination.

Exhibit 14: In line with the changing industry landscape, DMOs reviewed and changed their focus areas

Recovery Timeline

Forty percent of the respondents expect travel to reach pre-pandemic levels in 2023 while ~30% feel recovery might happen in 2024 or later. As per the survey results, recovery in 2022 seems a far-fetched possibility.

Exhibit 15: Recovery in 2022 seems a like a bleak possibility

As far as the pace of recovery by purpose is concerned, 93% of the respondents believe that business travel to their destination will recover slower than leisure travel. However, Robert Dougan, Executive General Manager of Strategy and Research, Tourism Australia told Skift, “Business demand is not as dire as it was expected to be. Leisure will definitely recover before business but the gap might be narrower.” 

NYC & Company shared with us the expected timelines for recovery of travel volume by origin and purpose wherein domestic demand is expected to surpass 2019 levels in 2023 and international will breakeven in 2025. Similarly, leisure travel is expected to recover sooner in 2023 and business will follow in 2025.

  Exhibit 16: Domestic demand and leisure travel is expected to recover faster as compared to international and business travel respectively

As per the survey, DMOs feel that they themselves are leading the way and spearheading the recovery initiatives, while they see hotels as leading industry stakeholder in spearheading recovery on the ground. 

Exhibit 17: DMOs themselves are leading the recovery initiatives

What will 2022 Look Like for DMOs?

Our survey results indicate that the respondents are bullish on the fact that their organizations’ revenue will increase in 2022 as compared to 2019, with 60% expecting their revenue to increase in 2021 and 75% expecting their revenue to increase in 2022 considering 2019 revenue as the baseline. However, half of them believe that the increase will be less than 20%, indicating that the traveler volume is expected to recover only partially in 2022, quite so in line with the recovery timeline suggested by our survey results (refer exhibit 15)

Note that the survey was conducted in December 2021 and does not take into account the impact of the Omicron variant. The recovery might be further suppressed if destinations levy travel restrictions again.

Nina Zantout, Head of Strategy and Deputy Director Destination Management & Corporate Development, visitBerlin confirmed that full recovery in 2022 is a bleak possibility, “visitBerlin receives public funds for its tasks in Destination Management and Marketing and generates its own revenues through product sales. ~55% of our budget is own revenues. We received additional funding out of the recovery fund from the City of Berlin for the tourism sector in 2020 and 2021 in order to intensify the Berlin marketing, initiate new campaigns and to support the industry with tourism know-how. We do not expect to reach the same budget in 2022 as in 2019.”

On the expense side, it is notable that the expected increase in expense is exactly in line with revenue expectation, pointing towards the increased confidence of DMOs in handling the ever-changing Covid situation as compared to the situation in 2021 where expense increase was behind revenue increase and destinations were cautious of overspending (refer exhibit 9).

As far as expense allocation is concerned, DMOs are being nimble and are using their resources judiciously to get quick returns. Dougan from tourism Australia stated, “There are two major shifts in budget allocation. One, we have increased investment in the industry. And second, in the short term a higher ratio towards partnerships and conversions – we want to get people in the country as soon as possible once borders reopen.”

Exhibit 18: DMO expenses are expected to increase in line with increase in revenue in 2022

Most organizations believe the Covid-induced funding changes are transient and once we put the pandemic behind us, their funding sources and amounts will be back to pre-Covid level or continue to grow. Among all the surveyed respondents, 80% said they expect their organizations to get more funding post-Covid compared to 2019.

Respondents expect hotel transient tax to return back as the leading source of funding post-Covid. Advertising revenue and membership fees which were not contributing substantially before Covid are expected to become significant funding sources going forward.

However, 73% of them agreed with the statement “My organization will seek to develop new sources of funding”, indicating changes in the original balance of funding sources. Heavy reliance on hotel tax related funding is being contested in the industry and many industry experts believe that the hotel bed tax should no longer be the sole source of funding for their activities. 

Lebawit Lily Girma, Global Tourism Reporter at Skift discussed the funding crisis at destinations in her recent article. Kristen Jarnagin, CEO of Discover Long Island is quoted in the article saying: “I personally think the industry long-term needs to diversify beyond just hotels because of what we’re going through right now and, just like any other corporation would in America, you would look at any funding stream you had to be successful, and that’s exactly what we should do.”

Forty percent of the respondents also said that their organization expects to receive recovery funds in the future with the major source expected to be the Federal government, suggesting that DMOs will not be all out of the woods as yet and will still need outside support in 2022. 

Exhibit 19: Hotel transient tax is expected to become the dominant source of funding post-Covid

In 2021, as the demand for travel began to strengthen in line with the easing of restrictions and the recovering domestic market, the labor supply in the travel sector was unable to match the rising labor demand, particularly during the second half of 2021. Many countries, especially the U.S. and some European countries, showed significant staff shortages, with employment demand starting to outstrip the available labor supply.

Our survey results represent the same trend in late 2021, with 60% of the respondents saying that their organizations hired new staff while only 25% of them were successful in taking the number of staff back to 2019 levels. 

According to World Travel & Tourism Council’s latest economic projections from October 2021, travel sector’s employment is set to rise by 0.7% in 2021, representing 2 million jobs, followed by an 18% increase in 2022 to reach 324 million jobs – only 10 million below 2019 levels. Considering that DMOs will follow the overall industry trend, staff levels are expected to stabilize in 2022. 

Exhibit 20: Staffing levels in DMOs is expected to stabilize to a certain degree in 2022

Marketing spend to increase moderately 

77% of the survey respondents believe that marketing spends will increase in 2022, with around half of them saying that the increase will be less than 25% indicating that DMOs’ marketing budgets will remain tight and they should define their marketing focus and allocate resources carefully. 

Marketing priorities adjusted

Building brand and destination awareness was rated as the most important marketing priority for 2022. Chee Pey at the Singapore Tourism Board commented, “The most significant shift in STB’s marketing was from driving visitor arrivals and spend, to retaining destination mindshare globally. Our priority is to make Singapore the destination of choice, as consumers prepare to travel again.”

The priority next in line is to pursue a yield-driven marketing approach by building optimal data and analytics capacity. With limited funding and resources to channel, DMOs have realised the importance of taking a highly targeted approach. Heywood at NYC and Company told Skift, “We have to be very nimble in what channel to use, following the opportunities we are presented with, for example, we have shifted our resources from the Chinese market – we are simply doing a very targeted marketing. We will fish where the fish are.”

One of the major lessons for DMOs during Covid has been to diversify their revenue streams (42% of the respondents said that their organizations started to identify new revenue streams after Covid hit – refer exhibit 14). Over-reliance on a few markets has significantly challenged their revenue base and operations during the crisis. Hence, acquiring new customers, rated as a top marketing priority by the survey respondents, ought to be a crucial strategy in the years to come.

Retaining existing customers, ensuring repeat visitation, building return on investment measurement methods and generating revenue remain other marketing priorities for 2022.

Exhibit 21: DMOs look to adjust their marketing priorities in 2022

International tourism regains importance

Twenty-seven percent of the survey respondents said that their organizations will focus more on international tourism as recovery begins as opposed to 9% of them saying that their organizations’ focus was international tourism during Covid. 

Despite the surge in domestic tourism during Covid, DMOs are bent towards investing in international tourism as that is where the major chunk of tourism revenue comes from. Heywood from NYC & Company told Skift, “In New York, 50% of our spending comes from international travel. Currently domestic is important – it is 80% of the volume right now, however, getting back international is crucial for the industry. It is basically a concentric recovery where the focus was first on hyperlocal, then on local/regional, followed by domestic and then international markets.”

Exhibit 22: International tourism is expected to regain importance once recovery begins

Business tourism starts to regain importance

When asked about the focus of their organization’s calendar events for 2022, 46% of the respondents said that the organization will focus both on leisure and business tourism, signifying that despite of an expected lag in the recovery of business tourism, DMOs are willing to dedicate their time and resources in reinvigorating business demand. 

Exhibit 23: DMOs aim to focus both on leisure and business segments in 2022

Through our discussions with DMOs like NYC & Company, STB and Azerbaijan Tourism Board, we recognise that they are already pushing campaigns and promotions focusing on business tourism revival.

Marketing messages to be modified

83% of the survey respondents believe that marketing messages will have to be changed once their destination has fully recovered from the impact of Covid.

Attractiveness of the facets/offerings of the destination will also change in line with evolved traveler preferences. Results suggested that outdoor recreation and cultural heritage become key products to be marketed post Covid. In addition, undoubtedly, health related protocols and safety standards are bound to become important factors to attract tourists in 2022. 

Under its It’s Time for New York City campaign, NYC & Company shows how they used the culture and heritage facet to invite visitors right when the U.S. international borders were reopening. Right before the start of the holiday season, the DMO invited locals and visitors to enjoy holiday traditions and cultural experiences across the five boroughs, many of which are in person for the first time in two years.

Keeping the need for health and safety, destinations are opening their borders cautiously. As Chee Pey at the Singapore Tourism Board told Skift: “In recent months, Singapore launched Vaccinated Travel Lane (VTLs) with over 20 markets, allowing fully vaccinated travellers to travel without quarantine after closely monitoring source markets and ascertaining travel demand. STB also partnered with ClassPass to jointly promote Singapore’s wellness offerings and enhance the city’s attractiveness as an urban wellness destination.”

Other facets which are set to become very important once destinations recover from the pandemic are accommodations and food & beverage outlets.

Exhibit 24: Attractiveness of destination offerings is expected to change in line with changing traveler preferences

However, the post-Covid phase will bring its own share of struggles for the DMOs. In order to eliminate the risk of virus transmission yet again, DMOs will have to be extra careful in which source markets to target and when. Heywood at NYC & Company discussed, “Now international has reopened. It is getting much better – we need to understand that the vaccination situation is different in each country and everyone might not be able to follow the requirements to enter our country.”

Marketing channels to maintain balance but few innovative approaches expected to transpire

In the near term, digital marketing channels are expected to maintain their supremacy as post advent of the pandemic. However, partnership marketing, community building, and cross-DMO collaborations are expected to gain importance in the coming years as compared to the pre-Covid setup (refer exhibit 13). 

Partnership marketing to pick up

Eighty-six percent of the survey respondents said that their organization is actively partnering with tourism stakeholders, like airlines and hotels, to work towards the common goal of bringing back travelers. The results further suggest that 84% of the respondents believe that partnership with hotels turn out to be the most fruitful and efficient. 

It is important to mention that based on the survey results, we believe that DMOs have a natural tendency to favour hotels over other travel partners (later in the report we will see that DMOs vote eco-conscious products and services of hotels as the most attractive tourist offering). This bias can be attributed to the fact that hotel transient tax was a major funding source pre-Covid and the trend is expected to continue and hotels are much more closely tied with the local economy that destinations represent than other travel segments (refer exhibit 19).

Exhibit 25: DMOs believe that partnership with hotels turn out to be the most fruitful and efficient

NYC & Company’s It’s Time for New York City tourism campaign that we mentioned earlier is a good example of partnership marketing. As part of this campaign, the DMO formed a partnership with British Airways with billboards installed in the UK to promote eight daily flights to Gotham.

They also collaborated with Virgin Atlantic along with British Airways, and hosted an event to commemorate the opening of U.S. borders to vaccinated travellers with the aim of creating a buzz and attracting more British travellers. Heywood from NYC & Company in an interaction with PR Week said, “The thing that equates to success is having the power of partnership and having different people bring their strengths to the table was what really propelled this event from being something that could have just been a run-of-the-mill reception to something that garnered a lot of media attention.”

Similarly, Tourism Australia launched the National Experience Content Initiative, a new $12 million media creation program aimed at supporting tourism businesses across the country in their recovery and driving increased visitation by helping them to better market their experiences and attractions.

Cross-DMO collaborations on the rise

About 60% of the respondents said that their organization is exploring cross-DMO collaborations to rationalize costs and standardize basic functions. 

Destinations Put Aside Old Rivalries With New Combined Marketing , a recent article by Skift, talks about how the new ‘friends not rivals’ approach to marketing destinations might just get more traction from today’s changed traveler.

One good example to showcase such partnerships is the #ThroughMyWindow campaign put together by the Los Angeles Tourism & Convention Board, NYC & Company and San Francisco Travel in April 2020. Through this campaign the DMOs encouraged those who live in their cities to share their views with the hashtag #LAThroughMyWindow, #NYCThroughMyWindow, and #SFThroughMyWindow. The idea was to provide a virtual window into each other’s  cities, a sign of unity and support.

However, we believe that this is an interim strategy, as navigating joint messaging amid varied target markets across destinations will be a challenging task once they have fully recovered from the pandemic. 

Community engagement to grow

Around 90% of the survey respondents said that their organization has started focusing more on building local/community partnerships.

Over the last few years, destination marketing has broadened and shifted to a more cohesive community outlook. Locals have a direct influence on the visitor experience, from being welcoming, sharing their culture, creating safe and secure environments, to spreading positive stories about the destination. On top of that, destination organizations have increasingly realized that bringing in tourism should be integrated into building local community and culture and improving the quality of life for the local residents. 

Denaye Hinds, managing director of JustaTaad , a sustainability consultancy firm and a board member for the Center for Responsible Travel , during the Skift Destination and Sustainability Summit held in July 2021 discussed: “Tourism starts before getting on the plane and taking that trip, and getting that responsible message across to future visitors is where the opportunity also lies as far as including communities in marketing messaging.”

A recent article by Skift, Lebawit Lily Girma mentions, “As tourism returned, doubts lingered as to whether tourism boards would keep prioritizing their residents and continue to market to them. At Skift Global Forum, leaders of California and Florida tourism indicated that the shift was here to stay, and that they would continue to market to their insiders as local marketing campaigns had been well received with pent up desire from locals to explore their backyard and support their homegrown businesses.” 

DMOs will continue to find their footing in the new travel landscape. The chart below shows how some of the DMO functions are expected to broaden massively to keep up with the changing trends and patterns owing to the pandemic. 

Exhibit 26: DMOs continue to find their footing in the new travel landscape

Increased emphasis on Sustainability initiatives

In the post-Covid world, we found that sustainability initiatives are at the top of destination professionals’ minds. While only 34% stated their organizations worked on sustainability initiatives in 2019, 74% said their organizations will work on them post-Covid. 

Eighty-three percent of the respondents feel that there is a need to provide eco-conscious travel options given the focus on climate change and sustainability issues post Covid. And among the travel products offered by various travel providers, destination professionals believe eco-conscious products and services offered by hotels and food & beverage outlets will be the most attractive to travelers. 

Exhibit 27: Destination professionals believe eco-conscious products and services offered by hotels will be the most attractive to travelers

Furthermore, 50% of the respondents said that their organization started working on developing methods and advocating for regulations that can prevent over-tourism and/or managing its negative multi-facet effects for the purposes of advanced sustainable development as a result of Covid. As one respondent shared, “Emphasis will be on sustainable practices with dispersal of tourists so that the threshold hold capacity of a tourist destination does not cross its limit.”

However, industry experts believe that although sustainability practices are being included in their strategic agenda on a theoretical basis, for now it has been put on the backburner as the need of the hour is to get tourism going by any means possible. Dougan from Tourism Australia commented, “Undoubtedly, sustainability and tourism go hand in hand, however, currently we need cash in the industry to survive and to remain competitive. Labour shortage and the ability to service demand are the things the industry should be much worried about.” 

Airport route development and overall stakeholder engagement resurge as key DMO functions

While only 25% said that their organization focused on airport route development in 2019, 40% said that their organization will focus on it going forward. 

Dougan at Tourism Australia, told Skift: “We will have to focus on more support areas – from our core function of marketing to a much higher degree of aviation engagement, distribution engagement, industry engagement as well. We have set up programs to help the industry become more competitive, to help industry stakeholders do the right marketing. We also have been very active in talking to airlines in keeping them informed of what is happening in Australia. Trade and Aviation are crucial to keep it going.”

Increased emphasis on economic development, and crisis management is expected to continue. Over and above the functions mentioned in the chart above, respondents listed policy development, political advocacy, increased accessibility with round the clock communication options for visitors and residents as other functions that are expected to become important post Covid.

Heavy investment in Data

Tourism research and data was already of significant importance to DMOs before the pandemic, with 80% respondents mentioning it as a key function of their organization. In the post-pandemic phase, 90% of the respondents voted it as a key function. As we have already mentioned above, budget restraints due to Covid have made it essential for DMOs to take a more targeted approach with respect to internal business practices and their overall strategy to efficiently utilise the budgets available. As Heywood at NYC and Company said, “We are as good as our data.”

Survey results show that Google and social media analytics are used ubiquitously by DMOs. At the same time, internal data sources from stakeholders and the government are also being used to make informed decisions.

The Roadmap for Tourism’s Reimagining and Recovery document published by NYC & Company in July 2020 shows how they track essential data to define their success metrics. A few of the metrics tracked by them are measuring changes in search terms, site traffic, social media engagement, social listening, custom/proprietary traveler sentiment surveys. The DMO even tracks indices like the performance of hotels, shopping trends and regional mobility.

Exhibit 28: Google and social media analytics are used ubiquitously by DMOs along with direct stakeholder data sources

To conclude, the overall objective of creating demand, boosting visitor numbers and spending will require all facets of the DMOs to function in perfect harmony in 2022. We believe that 2022 will be a pivotal year of laying the groundwork for the DMOs to build back better in a real sense. Identification of new revenue and funding opportunities, streamlined internal operations, implementation of performance measurement metrics, use of sophisticated data and analytics and targeted marketing along with significant focus on health & safety, sustainability, partnerships and community building are some of the interesting changes that the DMO landscape will entail in 2022. 

We’ve received many uplifting comments from our surveyed destination management professionals that echo the above message. We will end the report with messages from a couple of respondents that capture the essence of the work that many DMOs are planning to do: 

“In 2022, we will focus more on the health and safety aspects of our industry partners – and promote the Safe Travel Stamp and all businesses that are certified. We will also feature the outdoor attractions more than we have in the past. We will also focus more on the sustainability message across all markets – travel trade, business events and leisure. We will ensure that all of our messaging demonstrates that our destination is welcoming and inclusive to all.” 

“Our offer will develop considering the wants and needs of our target groups putting them in accord with those of our residents and stakeholders. We aim to become a safe and friendly destination for them offering a better quality of life, products and services, making our destination a nice and interactive place for all our long or short-stay residents and visitors. In addition to the safety messaging, we’re talking about increasing awareness around sustainability and environmentally friendly ways to travel.”

“More than ever we’ve seen the importance of being nimble so will be much more flexible with our messaging and advertising placement. There will be new customers’ needs to be answered in our marketing communication, it will focus more on safe travelling, health information, new digital services – and we will continue to be a home-away-from-home and will welcome visitors to take part in the locals‘ life.”

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Tourism Marketing #09: Create Your Marketing Budget & Know Where to Spend It

Nz pocket guide is 10 years old. thank you for trusting us with your trip for over a decade, what should a marketing budget for a new zealand tourism business.

Oh marketing, you’re such a necessary evil. After all, most tourism businesses would just prefer to just guide a kayak tour, look after travellers in their amazing accommodation, or rent out some sweet campervans – that’s what you’re best at! But there’s no point in having such a wonderful travel product if no one knows about it… An empty tour is a sad tour. When starting your New Zealand tourism business, you will need to put funds aside to get your travel product out there. That’s when your marketing budget comes in. In this ninth instalment of our tourism marketing series, I’ll go through how to create a marketing budget for a tourism business and where to spend it.

A Note About This Tourism Marketing Guide

If you are just stumbling upon this page randomly or through a search engine, lucky you! But before you keep going, you should definitely read the introductory article to this series of marketing guide for New Zealand tourism businesses , so you get a bit of context about the tone and the content within it.

This article follows directly from Tourism Marketing #8: Know How to Approach Influencers & Publishers .

How to Work Out a Marketing Budget

Working out a budget when looking at advertising is not as hard as most people think. Honestly, it comes down to simple math. You’ve got to stick to what you have in the bank and your ROI. Let’s break it down ROI quickly together so you know what it is all about.

ROI stands for “Return on Investment” and, usually, you’d like to be a 5 or 4-to-1 ratio. That means that for every $1 spent on marketing you would like to get $4 or $5 back. This, of course, depends on the value of what you are selling and the value that you place toward brand exposure. If you are selling a high-end product and want to increase your brand awareness, a ratio of 2-to-1 could be good.

Do the Math as Follows

(Sales generated by your campaign – Money spent on your campaign) / Money spent on your campaign = Your ROI

As a simple example let’s imagine that you are running a kayaking tour that is worth $99 and have spent $1,000 to promote it. You can trace 60 sales to the campaign. Here is the math:

((60x$99) – $1,000) / $1,000 = 4.94 <- Great!

Now Set Your Marketing Budget

Ok, so now that this is established, let’s go over how to set a marketing budget for a tourism business in New Zealand. First, I would not spend more than what I can afford, as when it comes to marketing, there are no guarantees. The numbers that are given above as an example are for a well-run campaign and neither you nor the intern to which your account will be given at your chosen marketing company will be able to get 100% of the time.

When I started my first tourism business in New Zealand, I went over the numbers like this:

I wanted 500 clients in the first year and was confident I could get about 150 myself through my contacts. I was also confident that my two resellers would be able to bring about 50 clients each. So I had to find 250 clients. My main product was $399 so I did the math in reverse with an ROI of 3.5, as at the time I was starting and had low overheads.

((250x$399) – Marketing costs) / Marketing costs = 3.5

($99,750 – Marketing costs) / Marketing costs = 3.5

$99,750 – Marketing costs = 3.5 x Marketing costs

$99,750 = (3.5 x Marketing costs) + Marketing Costs

$99,750 = 4.5 x Marketing costs

$99,750 / 4.5 = Marketing costs

$22,166.67 = Marketing costs

Here you go, I allocated myself a marketing budget of $22,166.67 with a goal of generating $99,750 worth of sales. And every year after that, I used the same budget but increased the spending by 10 to 20% and the goal accordingly.

Admittedly, it took me until the second year to reach that ratio, as there is always a learning curve, but I had clear benchmarks to hit. It also allowed me to see which of my marketing spending were pulling their weight and which ones were not. For instance, I spent about $3,000 on some influencer content in my first year for little results so I redirected that amount on year to toward a publication that worked super well for us and we made target the second year. And this brings me to how to allocate your budget…

How to Allocate Your Marketing Budget

In my view, there are about four different areas to concentrate on when it comes to allocating your marketing budget:

• Social media Ads
• Online publications
• Physical marketing

I’ll give you my personal take on each of them, as well as roughly how much I would spend on each below.

This is by far the largest online advertisement platform and thus will probably be your highest area of spending. Google Ads will allow you to bid on selected keywords in order to get an ad placed right above all the organic results. In the beginning, this tends to be incredibly efficient when your website is not ranking high enough. Plus, it integrates well with Google Analytics so you can track conversions through your website and get a great view of your customer’s path from ad to purchase.

I would spend about a third (30%) of my marketing budget there, as Google is pretty much the first thing that people will use when looking for tourism products.

Implementation and getting started can be a bit daunting but don’t fall into the easy pitfall of reaching out to a large marketing agency that barely understands your location and your product to do all this for you. There is a great bunch of small companies that I can recommend depending on your location, so feel free to reach out .

To wrap up my take on Google Ads, there are other products such as display ads and remarketing that don’t work as well. Display ads have a very low click-through rate while remarketing ads basically make you pay Google to convert the people that have already visited your website quicker. There are very innovative ways to use remarketing ads and we do have some products available to help you with that but otherwise, I am not for it. Again, this is just my two cents on the subject, so be a free business owner and do as you please!

Social Media Ads

As you probably know already from our social media guide, I am not a big fan of the beast. However, social media ads can still yield great results as long as you focus on conversion. There is no need to run an ad to get likes or to boost a post that does not sell your product. If you spend money on an ad, you need to be able to track sales from it. On the other hand, if you want to build brand awareness through a social media ad campaign for engagement (not views) that people can interact with or through on a social media influencer featuring your business, this works best when running a campaign with locals, rather than international tourists.

In any case, running an ad campaign is always preferable to boosting a post if you want my opinion. I would spend about 20% of my budget there, depending on results. Some years it dropped to only 10-15%, as I found better places to spend my money. Again, track your results and decide.

Online Publications

Putting aside the fact that I now run the most popular online publication for tourists in New Zealand, here is how I started with advertising through online publications in the beginning.

I knew from the get-go that this kind of coverage is usually long-lasting, compared to short-lived social media posts. They provide both SEO juice, as well as referrals constantly as the search for my product grew. For this reason, I went big and spent a large portion of my year one budget there. This was simply because after the year was over, there was quite a lot of it that would stay there for cheap. I got a full page written about my business, for instance, which came at a one-off cost or a very cheap yearly renewal fee.

I also like to run highly-targeted campaigns because they can be quite cheap. Knowing that you can be featured on only 4-5 pages that specifically target travellers planning a trip to your area can be super powerful and not so expensive when compared to a generic sitewide campaign.

On my first year, I spent more than half my budget on highly-target pages, as it was a great way to be put on the map, but on a normal basis, I would spend between 30 and 40% of my budget there. Referring to the list of pages and blogs where you’d like to be featured from the “Google Yourself” article of this series, that should help you get quite a few pages in each year.

A pro tip for this would be to use a UTM link which allows you to track a link specifically in your Google Analytics, in order to know what kind of referrals you are getting from a said source.

Do You Want to be Featured on NZ Pocket Guide?

NZ Pocket Guide can be a brilliant option for your business to reach active travel planners. If you want your business to be featured on New Zealand’s largest and most popular travel guide, we’re just a quick email away. Just head to our contact page . Plus, if you mention this article series, we’ll shout you 20% OFF your first year ad campaign – just like that!

Physical Marketing

Finally, we get down to the grandpa of them all. Physical marketing is a generic term for a bunch of things like business cards, vehicle stickers, i-SITE fees, brochure design and print, magazines, newspapers, billboards, radio, etc. Although a bit antiquated, it is still worth spending a bit of money on those. But not all at once. You truly do not need to get a full vehicle wrap on each of your rental vans on year one – one vehicle is perfectly fine and put a car magnet on the rest, for instance.

Having your brochures at the i-SITE is still something that most businesses do, but when it comes down to tracking sales, it gets a bit harder aside from the sales made by the travel agents which you pay for in the form of a commission.

You may want to invest in posters and brochures to display in accommodations and the likes in the region. I also like to get a bunch of business cards printed to hand out to clients inviting them to leave a review about their experience or share on social media. Make it super personal by leaving a big blank section so you can write your name or a note for each of them. You can get those done cheaply on websites like Vistaprint, for instance. There’s no need to spend big bucks on this.

When it comes to billboards and radio ads. I never used them. I don’t see the use for them, so no opinion there. It’s probably good for the local market, I guess.

Anyhow, this should only take about 10 to 15% of your budget, which not a big area of concern in our constantly-connected world. Plus, to be honest, the grey cloud of the unknown that surrounds those marketing avenues is not really rewarding. I like to be able to track where my sales come from and what is my hard-earned cash spent on advertising is giving me back.

Continue Reading the Tourism Marketing Guides…

To keep going with this article series, check out Tourism Marketing #10: Build Recommendations to Get More Clients or go back and start afresh with the 10 Tips to Promote Your New Zealand Tourism Business .

The information in this guide has been compiled from our extensive research, travel and experiences across New Zealand and the South Pacific, accumulated over more than a decade of numerous visits to each destination. Additional sources for this guide include the following:

Our editorial standards : At NZ Pocket Guide, we uphold strict editorial standards to ensure accurate and quality content.

About The Author

This article has been reviewed and published by Laura, the editor-in-chief and co-founder of NZ Pocket Guide. Laura is a first-class honours journalism graduate and a travel journalist with expertise in New Zealand and South Pacific tourism for over 10 years. She also runs travel guides for five of the top destinations in the South Pacific and is the co-host of over 250 episodes of the NZ Travel Show on YouTube.

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Related posts, tourism marketing #10: build recommendations to get more clients, tourism marketing #04: list your product on newzealand.com & more…, tourism marketing #07: how to improve your seo, tourism marketing #01: know what you are selling, tourism marketing #06: have a well-thought social media presence, 10 tips to promote your new zealand tourism business, recommended for you, the top new zealand events & festivals 🙌 [2024], 15 best backpacker hostels in tongariro national park 🎒 [2024], 10 best hostels in national park village & whakapapa 🎒 [2024], destinations, travel tips, connect with us, accommodation.

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var mps=mps||{}; mps._queue=mps._queue||{}; mps._queue.gptloaded=mps._queue.gptloaded||[]; mps._queue.gptloaded.push(function() { (mps && mps.insertAd && mps.insertAd('#dart_wrapper_badgec', 'badgec')); }); The Big Crunch

How much do countries spend to get you to show up, total government spending on tourism is expected to top $413 billion this year, according to the world travel and tourism council..

If you find yourself suddenly wishing you were in Scotland, it may be more than just the whisky talking.

Perhaps you were swayed by a series of advertisements on TV, or in your taxi or on popular news websites, all aimed at getting tourists to consider the "Spirit of Scotland" for their next vacation. The campaign spent about $5.6 million this year on commissioned music, narration by Scottish actors and other promotional efforts involving "jaw-dropping imagery and stirring content."

Scotland isn't alone in hoping foreigners stop by with their tourist money. You may have also heard actor Chris Hemsworth asking you to come to Australia , Usain Bolt promoting Jamaica or comedian Lewis Black wooing you to Aruba .

These aren't just celebrities touting the virtues of their homeland, they're big-budget ad campaigns. And in some parts of the world, overall spending on projects that promote travel and tourism (including things such as commercials, museums and keeping resort areas safe) can make up a hefty part of government budgets.

Total government spending on just tourism marketing, promotion and visitor-related infrastructure is expected to top $413 billion this year, according to the World Travel and Tourism Council . That's up 10 percent from five years ago, and it's expected to increase another 29 percent over the next decade.

The Seychelles, an archipelago northeast of Madagascar, spends more than 22 percent of its budget — excluding defense and welfare costs — on total travel and tourism expenditures, according to WTTC figures reported by the World Economic Forum . The Dominican Republic and Jamaica also spend a hefty portion of their national budget on tourism, 22 and 17 percent, respectively. Jordan, Iceland and Singapore spend more than 10 percent.

Spending millions on marketing campaigns makes sense for many countries, which rely on tourists for a significant share of their GDPs. A modest investment can also yield a solid return: The Visit Denmark campaign reported a return of $16 in revenue for each dollar spent, while Tourism Ireland found a return of 10 percent for its television and online advertising, according to a WTTC report .

Smaller nations may have little choice if they want to keep their economies working. Countries like Seychelles (21 percent of GDP comes from tourism), Malta (14 percent), Mauritius (11 percent) and Barbados (11 percent) are especially reliant on foreign visitors. Cape Verde, Croatia and Cambodia are also dependent for more than 10 percent.

"For many of these countries, if they didn't have travel and tourism, they wouldn't have the GDP or economies that they have," said Rochelle Turner, director of research at WTTC. "It's key to many small island states around the world. It's so important and so integral."

So we know which countries are most desperate for tourists, but where do they want the tourists to come from?

Many ad campaigns target the large, rich populations of places like the United States and Germany, but on average Americans don't spend as much per capita outside the country as people in other developed nations do. People from Luxembourg, for example, spend an average of $7,000 outside the country. (Of course, it doesn't take much of a journey to leave the tiny nation.)

Residents of Singapore spend an average of over $4,000 each every year on travel and tourism, far more than the global average of around $450. Norway, Kuwait, Qatar and Hong Kong are also at the top for per-capita travel spending.

Overall spending on tourism and travel by governments has recently recovered since the global recession started in 2008. But government are now more careful about how that money is being spent — they can use modern advertising methods to target audiences that are most likely to show up and spend money, piggyback on other media productions (think New Zealand and Lord of the Rings ) and use public-private ventures to get the word out.

Competition is heating up, said Turner. European governments have long assumed that travelers will remember to stop by the Eiffel Tower or the Tower of London. But with so many other travel destinations available, they're going to have to work harder to keep travelers from heading to a blue-watered Caribbean beach or remote Malaysian resort instead.

"Governments sometimes think that people are going to come anyway, and they need to see what would happen if the marketing is taken away," said Turner. "They don't quite understand the level of competition between destinations and the transferability of destinations in the minds of consumers."

In other words, national marketing campaigns work, and for many countries they are an economic necessity. So there's no reason to think the cheesy commercials or catchy jingles are going to end any time soon.

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Fact sheet: 2022 national travel and tourism strategy, office of public affairs.

The 2022 National Travel and Tourism Strategy was released on June 6, 2022, by U.S. Secretary of Commerce Gina M. Raimondo on behalf of the Tourism Policy Council (TPC). The new strategy focuses the full efforts of the federal government to promote the United States as a premier destination grounded in the breadth and diversity of our communities, and to foster a sector that drives economic growth, creates good jobs, and bolsters conservation and sustainability. Drawing on engagement and capabilities from across the federal government, the strategy aims to support broad-based economic growth in travel and tourism across the United States, its territories, and the District of Columbia.

The federal government will work to implement the strategy under the leadership of the TPC and in partnership with the private sector, aiming toward an ambitious five-year goal of increasing American jobs by attracting and welcoming 90 million international visitors, who we estimate will spend $279 billion, annually by 2027.

The new National Travel and Tourism Strategy supports growth and competitiveness for an industry that, prior to the COVID-19 pandemic, generated $1.9 trillion in economic output and supported 9.5 million American jobs. Also, in 2019, nearly 80 million international travelers visited the United States and contributed nearly $240 billion to the U.S. economy, making the United States the global leader in revenue from international travel and tourism. As the top services export for the United States that year, travel and tourism generated a $53.4 billion trade surplus and supported 1 million jobs in the United States.

The strategy follows a four-point approach:

• Promoting the United States as a Travel Destination Goal : Leverage existing programs and assets to promote the United States to international visitors and broaden marketing efforts to encourage visitation to underserved communities.
• Facilitating Travel to and Within the United States Goal : Reduce barriers to trade in travel services and make it safer and more efficient for visitors to enter and travel within the United States.
• Ensuring Diverse, Inclusive, and Accessible Tourism Experiences Goal : Extend the benefits of travel and tourism by supporting the development of diverse tourism products, focusing on under-served communities and populations. Address the financial and workplace needs of travel and tourism businesses, supporting destination communities as they grow their tourism economies. Deliver world-class experiences and customer service at federal lands and waters that showcase the nation’s assets while protecting them for future generations.
• Fostering Resilient and Sustainable Travel and Tourism Goal : Reduce travel and tourism’s contributions to climate change and build a travel and tourism sector that is resilient to natural disasters, public health threats, and the impacts of climate change. Build a sustainable sector that integrates protecting natural resources, supporting the tourism economy, and ensuring equitable development.

Travel and Tourism Fast Facts

• The travel and tourism industry supported 9.5 million American jobs through $1.9 trillion of economic activity in 2019. In fact, 1 in every 20 jobs in the United States was either directly or indirectly supported by travel and tourism. These jobs can be found in industries like lodging, food services, arts, entertainment, recreation, transportation, and education.
• Travel and tourism was the top services export for the United States in 2019, generating a $53.4 billion trade surplus.
• The travel and tourism industry was one of the U.S. business sectors hardest hit by the COVID-19 pandemic and subsequent health and travel restrictions, with travel exports decreasing nearly 65% from 2019 to 2020. 
• The decline in travel and tourism contributed heavily to unemployment; leisure and hospitality lost 8.2 million jobs between February and April 2020 alone, accounting for 37% of the decline in overall nonfarm employment during that time. 
• By 2021, the rollout of vaccines and lifting of international and domestic restrictions allowed travel and tourism to begin its recovery. International arrivals to the United States grew to 22.1 million in 2021, up from 19.2 million in 2020. Spending by international visitors also grew, reaching $81.0 billion, or 34 percent of 2019’s total.

More about the Tourism Policy Council and the 2022 National Travel and Tourism Strategy

Created by Congress and chaired by Secretary Raimondo, the Tourism Policy Council (TPC) is the interagency council charged with coordinating national policies and programs relating to travel and tourism. At the direction of Secretary Raimondo, the TPC created a new five-year strategy to focus U.S. government efforts in support of the travel and tourism sector which has been deeply and disproportionately affected by the COVID-19 pandemic.

Read the full strategy here

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Tourism , Strategy & Planning

How dmos can align marketing budgets with marketing strategy, by pam parker.

Maybe you’ve heard this before: “Our destination sells itself.” 

While it’s certainly true that every destination can sell itself (once people get there), it takes marketing to let visitors know why they should visit, and that takes money. 

If you’re in destination marketing and tourism marketing, you might be among the folks who have to fight for your share of the tourism budget. You might also be among the high percentage of DMOs who had budget cuts over the last few years.

According to an article Tourism Does Not Sell Itself , by the American Indian Alaska Native Tourism Association in Albuquerque, New Mexico, “the travel and tourism industry generated more than $1.87 trillion in economic impact in 2019, supporting 9.2 million U.S. jobs.”    

That’s a lot of money and a lot of jobs. In 2021, with travel and tourism as hot topics among all of us who have been cooped up for a year, it’s important to stress the value of tourism. Now that the United States is opening back up to travelers, continued marketing keeps your location uppermost in visitors’ minds. For example, if you stop advertising, potential tourists might forget about your location and look at others. We’ll revisit this notion a little later.   

So where do you start and how do you persuade the financial folks to earmark a substantial amount for marketing?

Every DMO and Heritage Area needs funding to complete projects and attract more visitors. Our recorded webinar “Secure Funding & Demonstrate Credibility Through Marketing” can help you discover out how to get it.

Start with an Actionable Marketing Strategy

Planning often sounds overwhelming, but just take a breath and look at our tourism-specific funnel model . This quick and free read can help you build a strategy around consumer behaviors. The easy-to-follow model focuses on various members of your audience and how to turn them into destination tourists. For example, you start by making people aware of your destination. Then you show folks what makes your location stand out from others. Then you address planning needs and follow through.

In developing your strategy, you’ll take a hard look at the traveler you want to reach and what they’re looking for. You’ll more than likely have primary, secondary and tertiary audiences. Many marketers can’t afford to reach all of them, so be selective. Check out market research that considers competition, trends and more to help you narrow who to target. 

We also have a webinar that gives you a more detailed look at all of these ideas, found here .

Jumpstart Funding

We put together the Ultimate Guide to Funding for DMOs

Structuring a Budget Based on the Strategy 

Now it’s time to figure out what you’ll spend, why and where. There’s plenty of research on every tourist persona and how to reach them. Learn everything you can about your tourists so you know how to connect with them and others. You’ll be looking at marketing channels, content and tactics. Do they watch TV? Do they love direct mail? Catalogs? Social media? How do you find the right mix?

To move the marketing budget process forward, some expert advice can be found from DMOs  with $150,000 budgets. A survey reveals that two-thirds of them allocate about half of their budgets to digital media, according to Advance Travel and Tourism .

A great guide for choosing media based on trends can be found in Allocate ad spend for each channel from Advance Travel and Tourism. It gives you a look at how digital display ads, content marketing, search engine marketing and social advertising stack up against one another and how DMOs with budgets under $50,000 allocate funds compared to DMOs with $50,000 to $450,000 budgets.

A June 1 Forbes article is also a fascinating read on how voice search with Alexa, Nest, Siri and others compares with visual searches and how both are changing the face of marketing. 

Another impressive tool is video content. Forbes notes that YouTube, Instagram and TikTok short videos “are powerful storytellers.” 

How to Allocate Your Marketing Budget

Knowing your audience is the best way to start your allocation process because your audience profiles help you learn potential visitor habits, and you can cater to those habits. That means digital media, email and other digital marketing plans are must haves. But make sure you follow current, and we mean current stats because they change so fast. 

Phocuswire suggests prioritizing tactics by biggest impact, and in that article, Celine Chaussegros – Sojern notes “the biggest threat to destination marketing success in 2021 is outdated metrics.” 

She suggests that branding will play a key role and reminds DMOs to look for co-op marketing opportunities and partnerships with other attractions.    

You need to carefully analyze all advertising packages. For example, a $250 Facebook ad can easily be far more targeted and offer better reach than a $1,000 billboard. But billboards do have a place in marketing. Yet, in terms of cost, evaluate the reach and what the ROI will be. We all have to do more with less. 

According to Advance Travel and Tourism, “Facebook is the must have channel for marketing budgets of all levels with 100% adoption by all respondents. But beyond Facebook, DMOs are not embracing the full spectrum of social channels.”

It’s also important to be consistent and not get caught up in tactics or events rather than strategy. Check out these resources for more information .

Smart Resources

We love sharing knowledge that empowers people to be successful.

Making It Worth the Investment

If you need some support on maintaining and increasing destination marketing funds, we’ve seen some research that indicates some western states cut marketing budgets during COVID-19, and according to an article in the Colorado Sun , the results were disastrous. Colorado and Washington suffered when they made huge cuts, while Montana took advantage of its neighbors’ short-sighted budgeting and increased its budget and “traveler spending in Montana grew 70 percent faster, and as a result took in far more travel-related tax revenue than its more populous neighbor.”

While budgeting for marketing is no easy task for DMOs, it’s an effective way to elevate your destination’s messaging. There are many resources to reference when thinking about developing an actionable marketing strategy and shaping your budget around it. No matter your goals, investing in a marketing plan is investing in your destination’s future, providing a road map to success.

Pam Parker is an award-winning reporter and editor from Gannett's Erie Times-News who recently retired and is now a project manager at the Erie County Historical Society - Hagen History Center in Erie. She has worked in marketing and publishing most of her life and had careers as an account executive and media director for multiple ad agencies. She has also been a freelance writer who has written about homes, women’s issues, hard news and in-depth features. She is a proud wife, mom/stepmom of six, GramPam to seven and a wicked-good tennis player.

The Pro gressive Mark eter

These progressive marketing articles offer tactics and strategy inspiration for heritage tourism, economic development, destination marketing organizations and other industry segments working to make their communities better places to work and live.

Your Visitors Just Want to Feel Understood

When it comes to travel, your visitors want to feel understood. Destinations that can show empathy and understanding will gain their trust and loyalty.

What Does the Metaverse Mean for Rural Destinations?

With the Metaverse making tourism headlines everywhere, it’s vital for rural DMOs and CVBs to know what this trend means for their destination.

How to Build an Authentic Brand Promise with Your Destination’s Website

It’s important to make sure the first impression, and every touch-point in between, is one that’s authentic for your DMO, CVB or cultural nonprofit. Your visitors want to know that your area is worth the visit, and that they can trust that you’re marketing an experience that will match up to expectations.

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An Assessment of the Marketing Budget in the Tourism Businesses

2019, ANAHEİ

The aim of the study is to create a framework for the marketing budget for the tourism businesses by examining the marketing budget, the environments and factors affecting the marketing budget, and the methods used in the marketing budgeting. Research is a conceptual study. Literature related to the subject was examined and secondary data were used. The results show that both the sectoral differences and the businesses’ environmental differences such as the international environment, natural environment, macro environment, market environment, and organization environment diversify the methods used to determine the marketing budget. When the literature is examined, it is seen that there are various methods for determining the budget. However, it is stated that, for the tourism businesses, the most appropriate budget determination method among these methods are the flexible budgeting method and the activity-based budgeting method

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Common Marketing Budgets for Medium Sized DMOs

Of the DMOs we surveyed, the average percentage medium-sized DMOs’ (with budgets between $151k – $450k) marketing budgets received from the total budget was 23% . Here’s what they said about the digital tactics they’re using:

Download the full whitepaper:  What’s Trending in DMO Marketing .

Learn more about how we can help you adapt to the evolving marketing landscape and ramp up your efforts.

Share this story, choose your platform, april 16, 2024.

The 2024 Travel Outlook Survey Results: Slicing Up the Paid Media Pie

Reaching repeat visitors and driving the right prospects requires having multiple paths from engagement to conversion. Based on our recent findings and given all the options at their disposal — both digital and traditional — how are DMO marketers planning to allocate paid media resources in 2024? When asked about directing American Rescue Plan Act (ARPA) funds toward marketing efforts, a [...]

The 2024 Travel Outlook Survey Results: Appealing to the Traveler’s Niche Interest

“Local gastronomy, nature, wellness and rural tourism experiences will take centre stage in travel in 2024.” […]

April 10, 2024

The 2024 Travel Outlook Survey Results: What are DMO’s Marketing Priorities?

Our 2024 Travel Outlook highlights DMOs' Marketing Priorities, with professionals from destination marketing organizations (DMOs) emphasizing brand awareness as their top goal for 2024, even surpassing the importance of increasing visitor numbers.Brand awareness, indicated by 40% of respondents, is deemed crucial for destinations in generating demand and emerging from the recent pandemic years. DMOs recognize that establishing brand awareness is foundational to [...]

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How to Manage Your Entire Marketing Budget [Free Budget Planner Templates]

Learn what a marketing budget should look like and how to plan and manage your marketing spend with these free marketing budget templates.

8 MARKETING BUDGET TEMPLATES

Easily manage your finances with the help of these budget templates available for Microsoft Excel and Google Sheets

Updated: 12/08/22

Published: 12/08/22

Marketing Budget

Marketing Budget Allocation

How to Create a Marketing Budget

Marketing budget templates, sample marketing budget.

A marketing budget outlines all the money a business intends to spend on marketing-related projects over the quarter or year. Marketing budgets can include expenses such as paid advertising, sponsored web content, new marketing staff, a registered blog domain, and marketing automation software.

Marketing Budget for Small Business

Marketing budgets are especially important for small businesses. Small business owners may lack the experience drawing up budgets; moreover, it's critical that these companies keep costs as low and lean as possible as they scale.

Ironically, you need marketing to scale. Without it, it's hard to sell your products and services. In addition to the budgeting templates provided below, check out some of our free offers and courses to mitigate your company's marketing costs.

Yet marketing budgets can be difficult to establish for companies of all sizes.

How much should a company spend on marketing?

Well, digital media makes up more than half of both U.S. and global advertising spend. This includes initiatives that cater to audiences on desktop computers, search engines, video streaming platforms, social media, and mobile devices.

Given the success marketers have seen in it, you might consider planning to spend at least half of your marketing budget on some of these digital channels.

Let's talk about other ways to allocate your marketing budget.

8 Free Marketing Budget Templates

Free templates to manage your marketing spend across channels.

• Product marketing budget template
• Paid advertising budget template
• PR budget template

You're all set!

Click this link to access this resource at any time.

Fill out the form to get the templates.

Marketing costs.

Marketing costs are all of the expenses a company incurs in order to sell, promote, develop, and market its brand. These expenses can include advertising, software and services, personnel, and content creation.

As you build a budget, there are a few items you'll want to keep in mind when planning your marketing budget allocation.

Marketing Cost Examples

1. software.

When it comes to digital and even print media, you may need software to create your marketing campaigns or handle your daily processes. There’s a marketing tool for just about any task you can think of, but they are generally broken down into the following categories:

• Customer relationship management (CRM)
• Online advertising
• Social media
• Content creation and design
• Event marketing
• Lead capture and lead generation
• Marketing automation
• Data reporting and analytics
• Digital asset management
• Team collaboration

The costs of these tools can quickly add up, so it’s worth it to try out the free options until you’re ready to commit to a tool your team loves.

2. Freelancers

If you have a temporary campaign or want to test out a new marketing strategy, you might want to hire a short-term freelancer before bringing on a full-timer.

Reach out to your network for recommendations or consider using a site like UpWork. Freelancers typically charge an hourly rate, so be sure to examine your budget before hiring.

3. New Personnel

When you do hire full-time employees, you'll want to budget costs including their computer, technology, benefits, and onboarding-related needs. According to research from Zippia , the average cost of hiring a new employee is $4,425.

4. Advertising

Budget how much money you'll spend on paid opportunities such as physical ads, native ads, sponsored content, search engine ads, and social media promotions.

Most businesses will benefit from some form of online advertising whether via social media platforms, search engine, or native ads. Statista estimates there were an estimated 4.9 billion internet users worldwide as of 2021. If you’re not advertising online, you're missing out.

5. Content Creation

When you create content such as videos, photos, or even blog posts, you'll need to put paid time into it.

Content marketing brings in 3X as many leads as traditional options, so it’s worth dedicating funds to this area. Budget how much money will go into creating this content so you can adjust accordingly based on its return on investment.

Now that you know more about what to include in your budget, let’s look at how to those funds are spent.

Marketing Budget Breakdown

Companies generally spend 7% to 10% of their overall company revenue on marketing. According to a Gartner CMO survey, marketing budgets as a proportion of company revenue dropped to 6.4% in 2021, down from 11% the previous year.

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If you’re not sure where to start with budget allocation, a good guideline to follow is the 70-20-10 rule. Using this as a benchmark:

• 70% of your budget is allocated toward strategies you know work well
• 20% of your budget is allocated toward new strategies aimed at helping you grow
• 10% of your budget is allocated toward experimental strategies

Marketing Cost Example

Let’s say your business has a marketing budget of $10,000. The budget allocation may look like this:

• $7,000 towards a CRM or other software you love, successful paid search campaigns, social media marketing
• $2,000 towards marketing a new product, feature, or service you’re testing
• $1,000 towards testing sponsored content

Allocation by Channel

How you allocate your budget per channel depends on your company’s particular goals, so there is no hard and fast rule. However, the chart below from Statista can give you a ballpark idea as it illustrates the share of marketing budgets from large companies across North America, the UK, Germany, and France.

Organized by channel, you can see that the top spots belong to social marketing, digital advertising, and search engine optimization (SEO).

By 2023, it's estimated that marketers will spend more than $52 billion on ads across websites or apps that are mainly eCommerce-focused. Let’s look at some examples of how these digital marketing costs apply to your budget.

Paid Search Advertising

You’re probably familiar with the ads at the top of a Google results page that show up above the list of search results. Those are a form of paid advertising called pay-per-click (PPC) . You can create and run ads on Google , and each time someone clicks, you pay. The cost-per-click (CPC) can range anywhere from a few cents to a few dollars. You can use Google’s keyword planner to help estimate costs.

With this method, you only pay for clicks you receive. So even if you’ve set aside a budget of $2,000, your campaign may only generate $1,500 worth of clicks.

Social Media

Like Google Ads, social media platforms have advertising programs based on the PPC model, but also charge by impressions. The CPC of running a paid social campaign varies depending on the platform of choice, but ranges from a few cents to a several dollars.

Some companies may opt to hire an agency to run their campaigns and to create a social media strategy. Outsourcing this function is more expensive and can cost anywhere from $2,000 to $20,000 per month.

Content Marketing

Having a brand blog is a great way to get into content marketing, especially if you have in-house staff tasked with keeping it updated. Instead of a blog, you may be more interested in creating case studies, eBooks, videos or guides. They’re all designed to promote your brand and attract new customers.

Content marketing costs vary widely based on what your goals are and area of focus. Hiring outside consultants or agencies to handle content marketing for you can range from $2,000 to $10,000 per month for small to medium-sized businesses. While it isn’t cheap, paying an agency to handle this task will free up your team’s time to work on other projects and may yield better results than going solo.

Email Marketing

Email marketing is a must-have for businesses, especially online retailers. With a customer acquisition rate 40X more effective than Facebook and Twitter combined, it’s no surprise why this tried and true method is a staple in most marketing budgets. Email marketing also provides higher ROI as you’re connecting with people already interested in your brand.

Email marketing costs depend on the size of your business, your goals, and chosen software or platform. Hiring an outside firm to handle these efforts will cost significantly more than doing it yourself.

Search Engine Optimization

SEO aids marketing efforts by improving your webpages so that they show up in search engines like Google. The more often your website comes up in search, the more potential customers will see it and hopefully visit your website.

If you don’t have staff to handle your SEO needs in-house you may need to work with an agency. Depending on what your business needs are, this can cost thousands per month.

While the marketing channel choices can seem endless, don't feel pressured to use all of them. Every business is different and you should prioritize putting funds toward the methods that best suit your needs.

• Know your buyer's journey.
• Align your budget with your marketing goals.
• Beware of hidden costs.
• Remember where your priorities lie.
• Spend your budget smartly.
• Prepare to measure ROI.

Spreadsheet knowledge alone won't help you understand how you'll spend your marketing money this year. Creating a sound marketing budget starts with knowing what purpose this budget will serve and which marketing teams it will represent.

1. Know your buyer's journey.

Your buyer's journey is the steps your audience takes as they 'journey' from prospect to paying customer. Knowing your buyer's journey allows you to understand how your audience interacts with your marketing — and where to set your goals and budget to better reach your customers.

Ask yourself these questions as you define your buyer's journey:

• How do your leads and customers typically discover your products?
• What do they need to know before they make a purchase?
• How many site visits do you see per month?
• How many leads are you generating per month, and how many of these convert to paying customers?
• What is the cost of generating new leads and then converting them to customers?
• What's the typical value/revenue of each lead?

This process should point out what marketing tactics are (and aren't working), where you should alter your marketing goals, and where you can focus your marketing budget.

2. Align your budget with your marketing goals.

What you spend and where you spend it will depend on what you're trying to accomplish.

So, when starting to create your marketing budget, make sure you're only spending money on the things required by your current marketing goals — goals set based on your audience and their journey from prospect to customer. These could include:

• Display ads to promote a new product you're launching this year.
• Sponsored social media posts to generate followers on your new Facebook page.
• Paid search engine ads to drive traffic (and purchases) to a specific product page.
• Contract bloggers to get more organic search traffic to your company's website.

Former Demand Generation Marketer at HubSpot and current Head of Marketing at Tailscale, Jessica Webb Kennedy , says this about how your costs can change when focusing on lead generation vs. lead conversion: "The majority of the money you spend on paid efforts is usually calculated based on the volume of clicks or impressions. Because of this, you'll often want to put more budget toward campaigns with higher-volume offers and audiences."

"For example, a tweet or Facebook ad promoting a lead generation offer that leans more top of the funnel will likely receive more clicks than something that falls more toward the middle or bottom of the funnel," she explains.

Your paid advertising costs will also change depending on how wide of an audience you are attempting to reach.

"You can look at Twitter advertising as an example," Webb says. "You have to option to target your campaigns based on users' interests or keywords searched for. Interests are a much broader category, whereas smaller pockets of users are searching for any given keyword, therefore your interests-based audience is going to be much larger and require a larger budget."

3. Beware of hidden marketing costs.

One of the great advantages to having and maintaining a budget spreadsheet is that it helps you avoid those end-of-the-quarter or end-of-the-year freak-outs when you realize, "Whoa … what did I spend all that money on?"

In many cases, unanticipated costs can force marketers to fork over cash that they didn't plan on spending. Product marketing offers a perfect example. According to former HubSpot VP of Marketing and current CMO at The Wanderlust Group, Meghan Keaney Anderson , it's easy to forget that successfully marketing your products and services requires more than just promotion.

"When people allocate budget for product marketing, they tend to think in terms of product launches and promotional activities," Anderson explains.

"That's certainly an important part of it, but another area of focus to remember is setting aside resources to conduct research and message testing long before the product ever goes to market. Having conversations with customers about the pain points your product will ultimately address is critical to shaping the messaging and having a successful launch."

4. Remember where your priorities lie.

Marketing is overflowing with add-ons and extras, upsells, and "premium" versions. One of the best ways to assess what's nice to have versus what's absolutely necessary is to (you guessed it) organize all of your expenses.

By keeping tabs on where your budget is being allocated, and cross-checking that spending with the results you're getting, it will be much easier to figure out what should keep getting budget and what should get kicked to the curb.

For example, let's look to the world of public relations. In PR, there are countless tools to which you can allocate budget, which could leave you overspending where it doesn't matter — and underspending where it does.

"Tools abound to help PR practitioners not only create and distribute great content and find and target key stakeholders, but to ultimately measure reach and effectiveness," says Nathaniel Eberle , HubSpot's former Director of PR & Brand and GoTo’s current VP of Global Brand & Creative Management.

"The key is making sure you're laser-focused on who you're setting out to reach and influence, then ensuring that your budget supports how they'll most likely want to receive (and share) your key messages.

"As the media and digital landscape evolves at breakneck speed, continually reassessing the tools, services, and programs you're employing is a great way to determine real-time ROI of your overall spend. Today's measurement tool may be worthless to you tomorrow."

5. Spend your budget smartly.

When you open up these budget templates and check out all the various expenses detailed in them, don't fret if you can't tick every box. I'm not advocating for an "always spend more" approach to marketing.

I'm advocating for an "always spend smart" approach. The expenses listed out aren't mandatory — they're just meant to guide your thinking and to help ensure that you haven't overlooked any hidden costs.

6. Prepare to measure ROI.

When you put a certain amount of money into a certain area, you'll want to determine if your budgeting helped you or hurt you as you plan out future budgets. The best way to do this is by measuring ROI — or return on investment.

If the money you spend on one item results in your company making more in return, you may want to increase budget in the next year. If your money went nowhere, you should examine your budget.

Using a marketing budget template can be useful when you’re not sure how to split or track your marketing costs. For instance, let's say your company decided to invest in a website redesign to improve lead generation, and you're responsible for managing the project. Naturally, one of the first questions you ask is, "How much is this website redesign going to cost ?"

The answer, of course, is "it depends." Are you simply switching to a new template and adding some new CTAs, or are you migrating your entire website to a new platform?

If only there were a way to organize your answers to all of these questions — a place where you could enter in estimated costs for all of your line items, and then compare your projected marketing budget to what you actually end up spending. Good news: Marketing budget templates can help.

Included in our eight marketing budget templates bundle is a template to manage your website redesign ... as well as templates for both Excel and Google Sheets to help you track your content budget, paid advertising budget, event budget, and more.

With these templates, you'll be able to manage all of the moving pieces of your budget at a monthly and quarterly level.

Use the Excel version of the templates to keep all of your budgets in one place. When you download the zip file, you'll find a separate file for each marketing team, as well as a Master Budget Template to maintain a high-level view of your overall expenses.

Interested in sharing your marketing budget across a larger team? Try the Google Sheets version of our templates to share access with other Gmail users. For the Google Sheets templates, each team budget is found in a separate tab of the same Google Sheet.

No matter which version you choose, each budget is optimized with the same line items, tips, and graphs. Read on to learn how to use each budget template.

1. Master Marketing Budget Template

Download the Master Marketing Budget Template here.

While it's helpful to have individual budget templates for specific marketing departments and activities, it's also nice to be able to take a step back and see the bigger picture.

The Master Marketing Budget Template lets you do just that: It's the place where you can collect the totals from the other seven templates in the bundle and see all of your expenses in one place.

Budget Overview from All Departments : In the first table, you get to see both your budget and actual spending from all marketing departments, including product marketing, content marketing, paid advertising, PR, branding and creative, and events.

Month-Over-Month Expense Summary : For a more bird’s eye view of all expenses, look at this table, where you can see the aggregated budget and actual spending for all marketing activities.

Marketing Budget vs. Actual Spend Chart : This chart allows you to pinpoint trends in spending and budgeting — where you came under and where you over-spent.

2. Product Marketing Budget Template

Download the Product Marketing Budget Template here.

This template will guide you step-by-step through the process of budgeting for a product launch. From determining product/market fit, to running user testing sessions, to promoting your finished product, our Product Marketing Budget Template will help ensure you don't overlook any important expenses.

Budget & Spend per Product Marketing Activity: This table allows you to set a budget and track your spending for product marketing activities such as carrying out focus groups, hosting launch events, and creating white papers.

Year-to-Date Summary of Categorical Expenses : Here, you can see an aggregated summary of all expenses divided by category, such as product release spending and product testing. It will also automatically calculate the amount of money you have left.

Year-to-Date Summary Chart: This chart allows you to see a visual breakdown of where most of your funds are going, which is immensely helpful for figuring out where to scale back and where to invest more.

3. Content Budget Template

Download the Content Budget Template here.

The budget required for creating and promoting content can vary greatly from organization to organization. For example, while some organizations keep most of their content operations in-house, others rely more heavily on freelancers and contractors. And while some use many different software products, publishing tools, and services, others take a much simpler approach.

Our Content Budget Template is designed to cover as many content-related bases as possible. So, if you see any expenses listed that don't apply to your organization, go ahead and delete them. (That's the beauty of Excel spreadsheets: You can customize them to your specific needs.)

Budget & Spend per Content Marketing Activity: This table allows you to set a budget and track spending for content marketing activities, such as purchasing design software, creating landing pages, and hiring freelance writers.

Year-to-Date Summary of Categorical Expenses : Here, you can see an aggregated summary of all expenses divided by category, such as software purchases and freelancer costs. It will also automatically calculate the amount of money you have left.

4. Paid Advertising Budget Template

Download the Paid Advertising Budget Template here.

Paid advertising: Does it really qualify as an inbound marketing tactic/channel? That is a loaded question, my friends, and one that I don't have room to answer in-depth in this post.

What I can tell you for sure is that you can do paid advertising in an "inboundy" way — i.e. by targeting specific buyer personas and using paid advertising as a supplement to your organic efforts to help drive awareness and conversion opportunities.

Measuring the effectiveness of your paid advertising campaigns is also paramount to doing things the inbound way. Using our Paid Advertising Budget Template, you can keep tabs on your monthly (and quarterly) ad spending, and then cross-reference the amounts with your lead-generation metrics to determine your cost-per-lead.

Budget & Spend per Paid Advertising Activity: This table allows you to set a budget and track spending for paid advertising activities, such as launching CPC campaigns, creating social media ads, and investing in a content discovery platform.

Year-to-Date Summary of Categorical Expenses : Here, you can see an aggregated summary of all expenses divided by category, such as search advertising and lead generation. It will also automatically calculate the amount of money you have left.

5. Public Relations Budget Template

Download the Public Relations Budget Template here.

Public relations expenses amount to more than just paying for press releases. From reputation monitoring software, to traveling (e.g., to events and trade shows), to applying for awards, there are many PR costs that can be all too easy to overlook.

To ensure you're accounting for all of your organization's PR-related expenses, check out our Public Relations Budget Template.

Budget & Spend per Public Relations Activity: This table allows you to set a budget and track spending for PR activities, such as purchasing a press release service subscription, creating PR content, and hosting PR dinners.

Year-to-Date Summary of Categorical Expenses : Here, you can see an aggregated summary of all expenses divided by category, such as subscriptions, content, tradeshows, and media relations. It will also automatically calculate the amount of money you have left.

6. Branding & Creative Budget Template

Download the Creative Budget Template here.

In order to produce high-quality, innovative graphics, videos, and other content, the branding and creative teams of today need more than just Photoshop ... a lot more. One of the largest — and often most overlooked — expenses is storage.

If your organization is producing a lot of video, storage is especially important. Because as it turns out, when budgeting for video storage, you shouldn't be thinking on a megabyte (MB) or even a gigabyte (GB) scale, but on a terabyte (TB) scale. FYI: 1 terabyte = 1 trillion bytes. You can keep track of all your storage costs (and other branding and creative costs) using our free template.

Budget & Spend per Branding & Creative Activity: This table allows you to set a budget and track spending for branding and creative activities, such as purchasing creative software, investing in hardware, and renting equipment.

Year-to-Date Summary of Categorical Expenses : Here, you can see an aggregated summary of all expenses divided by category, such as software subscriptions, equipment rentals, and outsourcing costs. It will also automatically calculate the amount of money you have left.

7. Website Redesign Budget Template

Download the Website Redesign Budget Template here.

Budgeting for a website redesign can be seriously tricky. With so many moving pieces to consider, there is a lot of room for underestimating or miscalculating costs. We created our Website Redesign Budget Template so you can keep all of your redesign-related expenses in one convenient location.

Unsure if your current website is right for a redesign? Grade your website using this tool .

Budget & Spend per Website Redesign Activity: This table allows you to set a budget and track spending for website redesign activities, such as purchasing a domain name, investing in CMS software, and creating wireframes.

Year-to-Date Summary of Categorical Expenses : Here, you can see an aggregated summary of all expenses divided by category, such as software, content and design, and content migration. It will also automatically calculate the amount of money you have left.

Website Redesign “Actual Cost by Category” Pie Chart: This chart allows you to see a percentage breakdown of where most of your funds are going, which is immensely helpful for figuring out where to scale back and where to invest more.

8. Event Budget Template

Download the Event Budget Template here.

When planning an event, the associated costs can seem obvious at first. There's the venue to consider, of course. And the P.A. system and microphones. And then the costs associated with booking and bringing in presenters/performers. That's pretty much it, right?

For example, does the venue come with tables/chairs, or will you have to rent those separately? Do you want your attendees to wear name tags, and if so, will you be printing out the name tags ahead of time or will attendees be writing their own names on blank tags?

If the latter, have you factored in the pens or markers you'll need to accommodate that? As you can see, planning for an event can lead you down many rabbit holes.

Use our Event Budget Template to stay organized.

Budget & Spend per Event Hosting Activity: This table allows you to set a budget and track spending for event hosting activities, such as renting an event hall, purchasing food and drinks, and hiring presenters.

Year-to-Date Summary of Categorical Expenses : Here, you can see an aggregated summary of all expenses divided by category, such as revenue, refreshments, and promotion. It will also automatically calculate the amount of money you have left.

Event “Actual Cost by Category” Pie Chart: This chart allows you to see a percentage breakdown of where most of your funds are going, which is immensely helpful for figuring out where to scale back and where to invest more.

With your chosen template downloaded, it's time to consider which digital channels to allot a budget for. Hint: There's no right answer — it'll depend on the market research you do to figure out where your specific audience spends most of its time.

If you find your buyer prefers learning and consuming content in the form of video, for example, you might invest more of your money in YouTube advertising .

Advertising Budget Example

Here's a small sample budget for a quarter's worth of expenses by a hypothetical company that has decided to invest heavily in video marketing. This template was created using the Master Budget Template, the first template listed in the section above.

Based on the figures above, video advertising's total expenses for the quarter exceeded budget by $20, while full-time recruitment's total expenses exceeded budget by $2,400. This means the company is trending over budget for the first three months of the year.

Why might this happen? Perhaps a pay-per-click (PPC) campaign on YouTube received more clicks by viewers than expected, and a sharp video-savvy job candidate negotiated a higher salary.

Based on the difference between this company's planned spend and actual spend, their budget template produced the following graph:

Create a Marketing Budget That Prioritizes Your Goals

A well-thought out marketing budget serves as roadmap to your team's success. Revisit the buyer’s journey, flesh out your goals, and stay away from tempting add-ons that are not in line with your marketing priorities.

Go now, and plan wisely — your marketing staff is counting on you.

Editor's Note: This blog post was originally published in December 2015 and has been updated for comprehensiveness.

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Colorado’s tourism marketing budget revived as lawmakers bet travelers will be crucial to coronavirus recovery

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The Joint Budget Committee on Friday finalized a plan to give the Colorado Tourism Office $10 million , reversing an initial plan to defund tourism promotion as lawmakers slash more than $3 billion from the state’s COVID-19-ravaged budget. 

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The tourism industry rallied last week after committee staff recommended eliminating 87% of the state’s tourism budget . The industry pointed to the 1990s, when Colorado eliminated tourism marketing and the state lost as much as $2 billion a year in visitor spending . On Friday, the beleaguered committee approved about a 47% cut in funding for the tourism office. The proposed budget needs approval from state lawmakers who convene later this month.

“We have to protect the marketing programs that will draw travelers to Colorado next winter and the spring and summer of 2021,” said Colorado Sen. Bob Rankin, a Republican from Glenwood Springs who serves on the committee and fought to restore tourism marketing as a tool to revive rural economies devastated by COVID-19 shutdowns. “We know from experience that we will lose tourism market share if we don’t fund those programs. It’s important that even with our disastrous budget cutting, we remain optimistic for Colorado’s future.”

Cathy Ritter, the director of the Colorado Tourism Office, has spent the last two weeks trumpeting more than 20 years of annual reports showing exponential returns for every dollar invested in tourism advertising and marketing. For the last two years, Colorado tourism has set records, growing at twice the national rate . Travelers to Colorado spent $22.3 billion in 2018 , supporting 174,000 workers who earned $6.8 billion. That spending generated $1.4 billion in local and state taxes. 

The Colorado Tourism Office spent $6.5 million on marketing last summer and $2.0 million for the 2019-20 winter. Those ads prompted 2.3 million visitors to travel to Colorado. And those travelers spent $3.85 billion, or more than $450 for every dollar invested in the state’s media promotions and “Come to Life” campaign. Those travelers also generated $210 million in state taxes. The return on investment for tourism advertising ranks Colorado among the top 10% of states, Ritter said.

The Colorado Tourism Board meets next week to start planning deep cuts to the budget, which was $18.5 million last fiscal year. Nearly $15 million of that funding came from gaming taxes, but with the state’s casinos closed for more than two months , that revenue stream has evaporated. The JBC’s recommendation directs more than $10 million from the state’s general fund to support the tourism budget. 

“Obviously some tough decisions lie ahead,” Ritter said. “Our singular focus in the next year is going to be on supporting activities that have the highest probability of driving immediate recovery for our tourism economies. That is marketing. Marketing will drive our recovery.”

After Joint Budget Committee staff recommended a total blackout on tourism marketing, Ritter had to battle the timeworn notion that Colorado sells itself and ad campaigns are unnecessary. That idea was tested in 1993, when voters declined to support a tourism marketing tax and the state’s tourism promotions went dark. The state’s share of the U.S. vacation market plummeted and it took nearly 20 years for the state to regain its share of American travelers. The collapse of Colorado’s tourism economy made the state a case study for what happens when marketing stops . 

“It is a fallacy that Colorado sells itself,” Ritter said. “Colorado is the poster child for demonstrating that investment in tourism promotion is directly related to tourism spending.”

Telluride Town Councilman Tom Watkinson cheered the decision to keep the marketing lights on.

“We went dark in the 90s and we know that it’s a bad idea,” he said. “When everyone opens up to visitors, the market will be flooded with messages and we can’t remove ourselves from that. People will be traveling again and when they do, we need Colorado to be on their minds.”

Watkinson sees his town’s efforts to revive tourism closely aligning with the state’s. He expects more people visiting in their cars. They will want clear policies on how to protect themselves and others. And both Telluride and state are developing those policies with an eye toward safely reviving economies built on visitor spending. 

”We are going to ease into it,” Watkinson said. “Health and wellness is also economic. You need to feed your family. You need a job. So the economy is part of our health and wellness. We do not want to do this again, so we are being very careful and we will be doing everything differently. But we are planning for visitors this summer. We need them. Without them we are in real trouble.”

Jason Blevins Outdoors Reporter

Jason Blevins lives in Eagle with his wife, daughters and a dog named Gravy. Job title: Outdoors reporter Topic expertise: Western Slope, public lands, outdoors, ski industry, mountain business, housing, interesting things Location:... More by Jason Blevins