Your guest is already upstairs spending $2,000 a night. Why the hell are you buying Facebook ads to find another one?

You’ve already got the customer you want at the hotel, paying the rate you want, and giving you several days to win her future business. Then some genius decides the right move is to spend on Facebook ads or search optimization or the like.

Readers of this forum know the universe I’m talking about: hotels with fewer than 100 rooms, average nightly rates north of $1,200, and guests who can stay anywhere they please. At $2,000 a night, these people aren’t sitting around wondering which sponsored post should choose their next hotel. Losing one of them and paying to replace her next year is the height of stupidity.

Many of the great hotels around the world in this class get repeat business of around 70%. At that level, the owner enters the year with a huge amount of demand already spoken for. There are simply fewer rooms that need to be sold to strangers. That means fewer dollars have to be spent finding them.

That counts for a lot when it comes to valuation, too. Seventy percent repeat business tells a buyer that much of tomorrow’s revenue comes from customers who’ve already proved they want the product. That certainty deserves a higher multiple.

Conversely, if a buyer sees a hotel with weak retention and the so-called marketing department scrabbling around with Facebook ads and the like, they’re already marking down what they’re willing to pay. More likely, they’re looking at other assets.

You think 70% retention sounds impossible? Tell that to the great hotels of the world. Go on, call them up and ask them. But they may be too busy satisfying Mr. Jones, who’s been coming for the same week every year for the past 15 years.

Now follow the money. Every returning guest saves you the cost of finding a replacement, so you can spend that money making the current guest happier. You can also keep more of that money. Buying clicks while your best customer’s already upstairs is how idiots turn a sure thing into an expense.

There’s all kinds of insurance in that repeat business, too. When something shiny opens next door, Mr. Jones already has fifteen years invested in you. He knows the place and likes the way he’s treated. A prettier lobby down the street has some work to do.

If your retention is weak, start with the people already sleeping in your rooms and get them to come back. Steal a page from people who know what they’re doing. Oetker, for example, is very good at securing next year’s booking while the guest is still in-house, sometimes using a modest discount to seal the deal. It’s a lot more effective than “social media marketing.” You get next year’s money while you still have this year’s guest.

Guests paying $2,000 a night can stay anywhere they want. Do you honestly think a Facebook ad is going to persuade them? Do you think they’re scrolling through their feed looking for their next $14,000 week? If you think that’s how this world works, no wonder you’re grasping at straws to fill rooms.