In the current economic climate, the hotel industry cannot rely on traditional drivers of business growth and raising prices may mean travellers just book elsewhere. Brands, hotel owners and operators that are able to capitalise on social media, mobile, analytics and cloud (SMAC) – and put customer experience at the heart of everything they do – can gain significant competitive advantage in the longer run.
It’s well known in the industry that better reviews generate better revenues. This is true in terms of volume of bookings, but also in some cases in the ability to impact prices. A study by Cornell’s Center for Hospitality Research entitled The Impact of Social Media On Lodging Performance (2012) found that online guest satisfaction (as measured by their review score) had a direct impact on the financial performance of hotels. The study showed that a one point increase in a hotel's 100-point ReviewPro Global Review Index leads up to a 0.89% increase in price, a 0.54% increase in occupancy, and a 1.42% increase in RevPAR.
Review Express, a new service from TripAdvisor, will allow hotels to solicit more reviews from their customers, increasing review volume to the benefit of both hotels and TripAdvisor. At the same time, TripAdvisor is also taking steps to better manage older negative reviews that may no longer be applicable as hotels improve their standards or change owners.
So the hotel industry understands the power of reviews, and is getting in the game. But beyond this – travel and social actually make the perfect partners. Travel experiences are shared across social networks which are available at every step of a traveller’s journey.
Just one example: Facebook is available at every step of the guest’s experience journey, from inspiration, research, booking, then throughout a trip, and also as a reminder of the trip. Around 24 million people in the UK (one third of the population) check into Facebook every day and 82% of them do so on mobiles or tablets. * And 63% of generation X travellers and a third of baby boomers share a daily status update while on holiday. Those consumers – through interacting with the brands, posting images, checking in and recommending to their friends – can become powerful ambassadors for the hotel they visit, even if they do not themselves become loyal to that brand or location. Each instance in which your customer interacts with your brand on their social network is another opportunity for you to win new customers, and to increase loyalty and ultimately share of wallet from your current customers.
Social media is also powerful because people like to share not only simple updates, but also what they wish to achieve and what they have achieved. If a hotel can use social media to associate – in the mind and heart of the consumer – the consumer’s wished-for or actual achievements to the brand of the hotel, then loyalty will be generated.