01/10/2023
Reading Time: 7 minutes

Crafting an Effective Tourism Marketing Budget: Tips & Strategies

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

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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