Social Media and User Generated Content: A challenge and opportunity for tourism and hospitality managers
By Sara Fedele Marketing Communications Manager , USI Università Della Svizzera Italiana | April 17, 2011
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.