I get this question on almost every intro call, usually phrased a little nervously: “What should we actually be spending on marketing?” And the person asking is rarely comparing themselves to the right benchmark. The 30-room boutique inn owner heard a number from a 400-room resort conference panel. The B and B owner read a brand-hotel statistic and panicked. So let me do the thing I wish more people did, which is size the spend to the property instead of handing you one magic percentage and walking away.
This is a budgeting post, but specifically about how big the number should be for your size of property and how to split it. If you want the channel-by-channel tactics, I have other posts for that. Here I want to get the dollar figure right first, because almost everyone I meet has it wrong in one of two directions.
First, the honest truth about the “percentage of revenue” benchmark
You will see “hotels spend 4 to 10 percent of revenue on marketing” repeated everywhere. It is a fine starting point and also nearly useless on its own, because it hides three things that matter more than the percentage:
- Which revenue? Total revenue including food, beverage, spa, and events is a very different denominator than rooms-only revenue. I budget off room revenue, because that is what marketing is mostly fighting for. If you run a busy restaurant, do not let that inflate your marketing number.
- New or established? A property in its first 18 months has to buy awareness it does not have yet. An inn that has been the town favorite for 20 years is coasting on equity it already paid for. Same size, very different budget.
- Does the number include OTA commissions? This is the big one, and almost nobody counts it correctly.
If a guest books your 220-dollar room through an OTA at a 18 percent commission, you just paid roughly 40 dollars to acquire that booking. That is a marketing cost. It does not stop being one because the accountant filed it under distribution. Once you count OTA commissions honestly, most independents are spending 12 to 20 percent of room revenue acquiring guests, not the 5 percent they think.
I am not saying that to scare you. I am saying it because it completely reframes the budget conversation. The goal is rarely “spend more.” It is usually “redirect money you are already spending into channels you own, so you reduce OTA dependence and claw back margin.” I broke down that exact math in the book-direct math post, and it is worth a read before you set any number.
Sizing the spend: three property tiers
I think in tiers because the constraints are genuinely different at each size. These ranges are deliberately broad, and they are illustrative starting points, not promises. Your market, your seasonality, and your starting visibility all move the number.
| Property size | Typical room revenue | Marketing as percent of room revenue | What that money mostly does |
|---|---|---|---|
| Small B and B or inn (under ~25 rooms) | Under ~1M | 4 to 7 percent | Win the few high-intent searches, own the GBP, fix the direct-booking path |
| Mid-size independent (~25 to 80 rooms) | ~1M to 6M | 6 to 10 percent | Build content and authority, take metasearch seriously, run always-on direct campaigns |
| Larger boutique or small group (80+ rooms) | 6M+ | 5 to 9 percent | Diversify demand, defend the brand term, invest in AEO/GEO and PR at scale |
Notice the percentages do not climb in a straight line. The mid-tier often spends the highest percentage, and there is a real reason for that, which I will get into. Let me walk each one.
Small B and B or inn: spend narrow and deep
If you are under roughly 25 rooms and under a million in room revenue, your enemy is not underspending. It is spreading a small budget across too many things. I see owners with a 30,000-dollar annual marketing budget trying to do paid social, three review platforms, a blog, email, a loyalty program, and a chatbot. None of it gets enough fuel to work.
At this size I want the money concentrated on demand that already exists and assets you own:
- Google Business Profile, done obsessively. This is the highest-leverage free asset you have, and most small properties have it half-finished. Photos, categories, Q and A, posts, and review responses. If you do nothing else, do this. My full approach is in the Google Business Profile playbook, and it is most of what our local SEO service handles for properties this size.
- The direct-booking path on your own site. A small inn loses an absurd number of bookings to a clunky booking engine and a phone number buried in a footer. Fixing conversion is cheaper than buying more traffic. That is the heart of book-direct CRO.
- Your own name in search. If someone Googles your inn by name and an OTA listing sits above you, you are paying commission on a guest who was already looking for you. That is the most fixable leak there is, and I wrote about why it happens here.
For a property this size, a 4 to 7 percent room-revenue spend is plenty if it is focused. I would rather see 5 percent doing three things well than 9 percent doing nine things badly.
Mid-size independent: the awkward, expensive, high-growth middle
This is where most of my clients live, and it is the trickiest tier to budget. You are big enough that “just nail the GBP” is no longer the whole story, but not so big that you have a brand-marketing department or national recognition carrying you. You have to manufacture demand and authority, and that costs real money.
This is why the mid-tier often runs the highest percentage, 6 to 10 percent of room revenue. You are building things that compound:
- Content and reputation as an engine, not a hobby. Property-area guides, neighborhood pages, an actual content calendar tied to search demand. This is content and reputation work and it is the layer that feeds both Google and the AI assistants.
- Metasearch, taken seriously. Google Hotel Ads and the metasearch ecosystem are where mid-size independents can compete on the same shelf as the OTAs for the direct rate. I walk through the mechanics in the metasearch post. This is a real line item, not a rounding error.
- AEO and GEO, while it is still cheap to be early. When a traveler asks ChatGPT or Google’s AI for “a boutique hotel near downtown with a good bar,” you want to be in that answer. The search volume signals are loud, with “aeo” at about 27,100 monthly US searches and “generative engine optimization” around 5,400, which tells you the industry is racing here even if your competitors down the street are not yet. If your property is invisible to these tools, this post is the wake-up call, and our AEO/GEO service is built for exactly this window.
The mid-size independent is the property most punished by OTA dependence and most able to do something about it. You have enough volume that a few points of commission clawed back is real money, and enough margin to invest in owning your demand. That combination is why I push this tier hardest.
If you are at this size and spending under 5 percent of room revenue on marketing while paying 18 percent commission to OTAs, the budget is not too big. It is mis-allocated. The fix is usually to hold the total roughly flat and move dollars from rented demand to owned demand.
Larger boutique or small group: diversify and defend
Once you are past 80 rooms, or running a few properties, the math shifts again. You have more absolute dollars, so the percentage can come down a little, to roughly 5 to 9 percent, while the spend gets more sophisticated. At this size the priorities are diversification and defense:
- Defend the brand term aggressively. At volume, every direct booking you lose to an OTA bidding on your name is meaningful margin. I explain the dynamic in how OTAs siphon your search.
- PR and authority links at scale. You can now afford to earn the kind of coverage and links that move both rankings and AI citations. That is PR and authority link work, and it compounds over years.
- Brand mentions across the LLMs. The larger you are, the more you benefit from being the property the AI models reach for by name. That is the frontier of brand mentions in LLMs.
The trap at this tier is complacency. Bigger properties often have brand equity that masks slow erosion of direct share. The budget can look healthy while OTAs quietly take a larger and larger cut of bookings. Audit the mix, not just the spend.
How to actually split the budget
Sizing the total is half the job. Here is a rough allocation I use as a starting frame for an independent, expressed as a share of the marketing budget itself. Adjust to your reality.
| Bucket | Small B and B | Mid-size independent | Larger boutique |
|---|---|---|---|
| Owned assets: site, SEO, GBP, content | 50 to 60 percent | 40 to 50 percent | 35 to 45 percent |
| AEO/GEO and AI visibility | 5 to 10 percent | 10 to 15 percent | 10 to 20 percent |
| Metasearch and paid acquisition | 15 to 20 percent | 20 to 30 percent | 20 to 30 percent |
| PR, authority, partnerships | 5 to 10 percent | 10 to 15 percent | 15 to 20 percent |
| Email, CRM, retention | 10 to 15 percent | 10 to 15 percent | 10 to 15 percent |
A few notes on reading this table honestly. The owned-assets share shrinks by percentage as you grow, but the absolute dollars climb, so do not read that as “big hotels neglect SEO.” They spend more on it, just alongside more of everything else. And every tier puts the biggest single share into things you own, because that is the spend that keeps paying after the campaign ends. Rented demand stops the day you stop paying. If you want the foundational sequence, our hotel SEO service is where most properties anchor this, and the 2026 starter guide lays out the order of operations.
Realistic timelines, because the budget only works if you stay the course
Here is where I have to manage expectations, and I would rather do it now than on a tense call in month two. The owned-asset spend, SEO, content, GBP, AEO, is not a faucet. It does not turn on in two weeks. In my experience you are usually looking at:
- Weeks, not days, for technical and GBP fixes to start showing up.
- Three to six months before content and authority work meaningfully shifts rankings and AI visibility.
- Six to twelve months to see the compounding effect on direct-booking share and a healthier OTA mix.
I cannot promise a number one ranking, and you should be suspicious of anyone who does. Search and AI results move for reasons no agency controls. What a well-sized, well-allocated budget does is maximize the odds, point money at demand that already exists, and build assets that keep working. That is the honest pitch.
So what number should you write down?
If you want one sentence to act on: take your trailing twelve months of room revenue, multiply by the percentage for your tier, then add in your OTA commissions and ask whether that total is going mostly to channels you own or mostly to channels you rent. For most independents, the answer reveals the real opportunity, and it is rarely “spend more.” It is “spend the same, more deliberately.”
If you want help pressure-testing your number against your actual market and OTA exposure, that is exactly what we do on a free intro call. Book a time here and bring your last twelve months of room revenue and a rough sense of your OTA share. We will size it together, no slide deck required. Or if you already know owned demand is your gap, start with our hotel SEO service and we will build the budget around it.