In The Online Sector, Success Is All About Building Trust

By Jerry Tarasofsky CEO, iPerceptions Inc. | January 27, 2012

To date, with only 5% of all reservations being booked online, I believe it is fair to say that most web site owners in the hotel sector have not been able to convince users to complete a transaction/reservation online. And this will not dramatically change until site owners recognize that to get users to make an online reservation, the site must first and foremost establish a bond of trust with them.

On the web, establishing a bond of trust is the first and most essential step in creating an ongoing, successful and profitable relationship with your user. Online business is conducted at arms length. There is no front desk staff to speak with. No reservation person to question. No concierge to provide assistance. There are no physical buildings to touch. No pool to swim in. No dining room to eat in. There are just pictures, images and words. In a nutshell, if you have not established a previous level of sufficient trust with your web site users or your web site itself does not create an environment of trust, visitors will be extremely cautious and hesitant to share information or commit to making a reservation. In fact, a recent study conducted by Ebay named "trust" as the most important web site attribute - all others including lowest cost and broadest selection lagged far behind.

These finding are in line with, and supported by data taken from iPerceptions' "Aggregated User Index" for the hospitality sector which is derived by analyzing the feedback from 30,000 actual web site visitors obtained from 24 individual surveys run on some of the most prominent sites within the industry including Holiday Inn, Sheraton, and Omni and represents over 1,100,000 data points. This index serves as a comparative benchmark that allows web site owners to continually measure their relative position within the industry and with their own previous performance.

Our data confirms that trust is the strongest factor contributing to web site loyalty in the hotel sector. Trust is the barrier that users must cross on their road to making a reservation. Trust is rated significantly higher for users coming back to a site to make a reservation than for those simply at the site looking for more information or comparing rates

It is interesting to look at the various ways users interpret "trust" across hotel web sites. Trust encompasses believing that the room rate quoted on the site is the lowest or best available for that time period. It means trusting that room descriptions and pictures are accurate and fair representations of the actual physical make-up of the property. It means trusting that availabilities are accurate and that reservation confirmations will be honored. Finally it means a site will also maintain a high level of privacy and confidentiality with the information that the user has shared with the web site owner. User feedback comments such as "Web prices are not always the best - I feel I can get a better price by calling the hotel direct" and "Not all the information at their site was correct and when I can't trust the information, I can't trust the hotel" or "I don't trust your booking system - one moment it confirms there is space, the next moment it crashes which does not instill a lot of confidence in the site or the hotel" support these observations.

So what are the primary advantages for you as a web site owner to build an environment of trust? First and foremost is the fact that users are more likely to share personal information - the data you need to successfully build a relationship with them. Using this data, web site owners can provide a more personalized, productive and time saving experience for the web site user increasing their level of user satisfaction which in turn should result in higher "look to book' ratios", lower acquisition costs, increased revenue and of course increased profits for the site owner. This also translates into a significant competitive advantage.

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Eco-Friendly Practices: Corporate Social Responsibility

The hotel industry has undertaken a long-term effort to build more responsible and socially conscious businesses. What began with small efforts to reduce waste - such as paperless checkouts and refillable soap dispensers - has evolved into an international movement toward implementing sustainable development practices. In addition to establishing themselves as good corporate citizens, adopting eco-friendly practices is sound business for hotels. According to a recent report from Deloitte, 95% of business travelers believe the hotel industry should be undertaking “green” initiatives, and Millennials are twice as likely to support brands with strong management of environmental and social issues. Given these conclusions, hotels are continuing to innovate in the areas of environmental sustainability. For example, one leading hotel chain has designed special elevators that collect kinetic energy from the moving lift and in the process, they have reduced their energy consumption by 50%  over conventional elevators. Also, they installed an advanced air conditioning system which employs a magnetic mechanical system that makes them more energy efficient. Other hotels are installing Intelligent Building Systems which monitor and control temperatures in rooms, common areas and swimming pools, as well as ventilation and cold water systems. Some hotels are installing Electric Vehicle charging stations, planting rooftop gardens, implementing stringent recycling programs, and insisting on the use of biodegradable materials. Another trend is the creation of Green Teams within a hotel's operation that are tasked to implement earth-friendly practices and manage budgets for green projects. Some hotels have even gone so far as to curtail or eliminate room service, believing that keeping the kitchen open 24/7 isn't terribly sustainable. The May issue of the Hotel Business Review will document what some hotels are doing to integrate sustainable practices into their operations and how they are benefiting from them.