Ms. Fedele

Social Media & PR

Social Media and User Generated Content: A challenge and opportunity for tourism and hospitality managers

By Sara Fedele, co‐Founder, Tourism Hospitality Intelligence

The tourism industry has been strongly challenged by the Internet to the extent that it has been classified as the number one industry with respect to the online transaction value. With the emergence of ecommerce and online travel information, competition has clearly intensified and companies seeking to expand should fight to wrest market share away from competitors. In the last five years the tourism business model has changed dramatically, due to the surge of new market players and tools – such as online travel operators, or social media – which have radically changed the relationship between service providers and end-consumers. Due to these fast changes, tourism and hospitality managers should invest in a variety of strategies to overcome the challenge of losing market share and to get an edge over competitors.

Blackpool, September 16, 2010. The local newspaper ‘The Gazette’ reported a couple that was thrown out of the hotel for having written a negative online review during their stay at the Golden Beach Hotel. The couple was asked to leave by the manager of the hotel two days into their three night stay... Apart from the ethical implications, this story clearly constitutes an example of the importance of the online information directly produced by consumers in the travel and tourism world.

Nowadays, the decision making process is heavily influenced by the Internet: travelers prefer looking for information online as opposed to going to travel agencies. More and more holidaymakers book online because it is cheaper and faster.

Recent research conducted on the European travel market by PhoCusWright’s, revealed that, despite global economic challenges and declining market conditions, online booking channels reached a penetration of 30%. Already in 2008, Internet bookings of leisure/unmanaged business travel represented 29% of the 246 billion European travel industry with a decrease in the offline travel market of 5.1% since 2002. Moreover, additional data indicates a greater decline in the offline sector of 6.2%, in contrast to a 10% forecasted rise of the online one untill 2012. As Carroll Rheem - Research Director for PhoCusWright’s - emphasizes: “consumers are looking online to find the best value for their money and operators are looking to cut distribution costs as much as possible”.

But, why do travelers look for online information? Why isn’t the online/offline information delivered by travel managers adequate any longer?

As Rik Medlik, Professor Emeritus of Hotel and Catering Administration at the University of Surrey explained, tourism can be understood as a bundle of activities, services and benefits that constitute the entire tourism experience. These services and benefits, as the tourism experience itself, are by nature very difficult to evaluate before the effective purchase. Therefore, it is easy to understand how tourists look for advice from other travelers who had previous experiences with a particular tourism product.

Until about 15 years ago, the ‘booking‐a‐holiday’ process was relatively easy: people used to look for suggestions from close friends or relatives and then chose the best vacation packages in a travel agency (mostly accompanied by the advice of the travel agent as well).

With the growth and development of the internet, the search and offer of information moved online with social media – such as blogs and forums – defining a new way of communication that is very similar to word-of-mouth. A galaxy of new players revolutionized the classic relationship ‘prospective traveler -> travel agency -> holiday booking’. Nowadays, prospective travelers do not rely just on old sources of trust. Due to the remarkable amount of information on the web, they can have access to something that was inaccessible before: reviews, comments, criticisms and opinions of other users. They are not passive readers anymore: on the contrary they are actively involved in the production and publication of content insomuch as this information has been defined as UGC – User Generated Content.

To understand the extent of such a change, just think about the largest travel community in the world: TripAdvisor. The Expedia-owned company has 20 million members and 35 million reviews and opinions. These sources of pre-purchase information is the most preferred but also the most influential in the travel decision making.

A recent study conducted by Stefano Da Col, researcher at webatelier.net, ICT&Tourism Laboratory of the University of Lugano reveals that just 3.3% of travelers never use Internet for planning a vacation or for choosing a destination, while the remaining 96.7% “always” or at least “sometimes” looks on the Internet for the same purposes. In addition more than 90% of tourism-consumers gets information through social media, by reading online reviews and suggestions.

In the European market around 30% of users connect regularly with social networks, an increase of 18% from 2008, and more than 60% now engage with social media on a regular basis (a number that in some countries, such as the Netherlands, is up to 74%).

People prefer to receive recommendations from those who might have their same “status” of travelers and have already stayed at the hotel or destination they are researching, versus seeking advice or suggestions from professionals, which can be mediated by mere selling purposes. Consumers are literally becoming “trusted influencers”.

This massive and constant online exchange of information among travelers should be carefully monitored by tourism and hospitality managers: in fact, if travelers share negative or positive comments about a hotel online, this can certainly influence the decision of prospective travelers. A trend of bad or good comments would very likely hurt or help the business.

What can the hotel manager do?

This trend was initially intended as a threat for many tourism and hospitality companies: hotels especially were facing a critical point for online revenues which were tainted by the content created by their guests. Nevertheless, during the last few years more and more tourism companies seamed to understand the huge opportunities available by the trend and started to create new marketing vehicles with enormous effects on businesses. Having a profile on Facebook or TripAdvisor is a critical success factor for the hotel or destination.

Creating the profile, constantly updating the status, and answering to the posts and queries of customers/visitors, providing new stimulus to their customers for visiting them should become an ordinary task implemented by a staff with specific competences.

The value of the information contained in the User Generated Contents (UGCs) is, not surprisingly, more than crucial for tourism and hospitality managers because UGCs allow better shaping marketing strategies for hospitality services, to assess the overall service quality, to improve travelers’ overall experience, and finally to increase their online reputation and consequently their value.

New studies estimate that UGCs affects more than 10 billion dollars a year for online reservations.

Reading what the guest writes about the hotel is an important source of information that can help understand the strengths and weaknesses of the business itself. If done properly, answering directly to a positive or negative post would undoubtedly increase the reputation of the hotel or destination for one simple reason: the customer feels at the center of the scene, pampered and taken into consideration, above all if the company tries to establish a personal relationship with the customer.

Moreover, social media is inexpensive: it allows reaching authentic, and unsolicited customer feedback information and in some cases also feedback monitoring at minimum costs.

It is therefore vital, for tourism and hospitality managers to understand UGCs as a new technological phenomenon with enormous implications for the managing and promotion of the tourism businesses. It must be considered that the information contained in UGCs is potentially visible to the entire online tourism community and basically everybody can be influenced by what is said online: if tourists speak badly about a hotel, the hotel business might be hurt; if negative comments refer to more than one hotel, the hospitality business might be hurt; if restaurants or other services are involved, the general reputation of the entire destination might be hurt.

Social media is therefore a huge challenge for tourism and hospitality managers: the trick is to make use of this technology wisely. Instead of acting the way he did, the Blackpool Golden Beach Hotel Manager should have understood that behind the negative comments were hidden the needs of the clients, and above all, completely inexpensive solutions for improving the business.

If a manager understands that, social media becomes in an opportunity!

Sara Fedele is Communication Manager at the Global Alliance for PR and Communication Management, the umbrella organization of the national PR associations around the globe, which is headquartered in Lugano, Switzerland. Since July 2011, Ms. Fedele has also been responsible for the online marketing and communication activities of the Executive MScom Program, an international postgraduate program for experienced communications professionals at the Università della Svizzera italiana in Lugano. As part of her cooperation with Professor Sandro Formica (University of Florida), she has been coordinator of working groups during Strategic Think Tanks for Tourism Executives, following the Co‐Alignment Principle Method by Olsen, West and Tse (2008). She has moderated Think Tank activities both in Switzerland and Italy. Ms. Fedele can be contacted at sara.fedele@usi.ch Extended Bio...

HotelExecutive.com retains the copyright to the articles published in the Hotel Business Review. Articles cannot be republished without prior written consent by HotelExecutive.com.