An experience like no other: The Northern Light Inn
In a magical place…
Located just 1km from Iceland’s spectacular Blue Lagoon and 45 km from Reykjavik, the Northern Light Inn is a family-run boutique hotel with a spa area and restaurant. The hotel features 42 rooms, a bar open 24/7, free shuttles to the lagoon and an exclusive airport taxi to Keflavík International Airport, 22 km away.
The modern spa area offers saunas, solariums, Aurora floating, fitness services and wellness treatments. Icelandic cuisine, Nordic specialties and fine wines can be enjoyed in the Hotel’s restaurant while appreciating Reykjanes Penisula’s lava field views. Truly an unforgettable stay!
The beginning
The Northern Light Inn began their collaboration with Myhotelshop to strengthen direct sales and gain a bit more independence from OTAs. At the same time, the hotel created a new website and switched to “SimpleBooking” booking engine based on our recommendation. We started consulting to optimize their website and booking engine and took the hotel live on our marketing placements, such as Google and Trivago. At the beginning of 2020, we saw our combined efforts start to bear fruit: in January and February 2020, we each saw a 30% increase in revenue compared to the same month the previous year.
As we all know, the global pandemic made life difficult for the industry; from March 2020 onwards, booking numbers plummeted dramatically and were reduced to a minimum. In March we paused all marketing campaigns, and as a gesture of goodwill we paused their entire contract from June 2020, to give the hotel some relief from fixed costs during this difficult time. The contract initially remained paused for a full 9 months, and due to the ongoing Corona pandemic the future looked uncertain.
Creating success
On the 19th of March, 2021, the Fagradalsfjall volcano in Iceland erupted and this proved to be an absolute stroke of luck for the Northern Light Inn, as the active volcano became a massive tourism magnet. And not only is the Northern Light Inn close to the Blue Lagoon, it also happens to be the hotel in closest proximity to the volcano. The hotelier immediately communicated with us, and we reactivated all campaigns on the 24th of March. Demand was particularly high in the U.S. and in several European countries, so we activated meta-campaigns for all potentially relevant markets to ensure maximum visibility; we also focused heavily on Google Ads and took brand campaigns live. In close consultation with the hotelier, we also switched to generic Google Ads campaigns to reach users searching for hotels near the volcano. In addition, we ran generic Google Ads campaigns on the hotel and the region, as well as on tourist hotspots in the immediate vicinity of the hotel, e.g. the Blue Lagoon, Aurora Borealis/Northern Lights or even the airport. Due to the success of the campaigns, we brainstormed together with the hotel to gather more "experimental", unusual keywords to generate even more visibility on Google. In addition, the hotel partnered with Sojern (a digital marketing platform for tour operators) to run campaigns on social media and the display network.
Teamwork Makes Dreamwork
The website revenue had an insane growth rate of 217% from 2020 to 2021 and it was even 24% higher than in 2019. The overall marketing spend and myhotelshop management fee expense ratio was only 6.72%, much lower than the OTA commissions, resulting in the website being the most profitable sales channel. The share of the website on the overall online revenue in 2021 was 37.40%. Before our collaboration this number was only 18.22%. The hotel benefited from cost savings and greater profitability as a result of this shift. In addition, it turned out that the website's cancellation rate was “only” 22%, compared to 47.50% of Booking.com, making direct bookings even more interesting for the hotel.
What the Future holds
Although the volcano is now no longer active, the booking trend currently continues and Q1 2022 has also been very successful. The hotel is looking to double website revenue this year compared to last year, and we think combined with the current trend of Revenge Travel (making up for everything missed by Corona, i.e. traveling a lot) and the high demand for Iceland as a destination, this is realistic.
Marketing campaigns, now solidly in place, continue to be live, driving demand from the US and Europe to the website and converting it to direct bookings. In addition, we added Microsoft Ads campaigns live this year, which have contributed to the success. We have, of course, now paused the Google Ads campaigns on the "volcano" theme, but are still active with the brand campaigns and a wide range of generic campaigns. In addition, an analysis of the Google Analytics figures showed that the hotel also gets a lot of traffic directly from Iceland. Since then, we now also run Google Ads campaigns in Iceland directly, which turned out to be a big positive surprise as they convert extremely well. We couldn’t be happier about this successful collaboration with this beautiful boutique hotel, and remember, if you are in Iceland, check out Northern Light Inn!
