Thursday 31 January 2013

Social medias : a key new tool for customers and hospitality companies


With the fast growth of new technologies, our habits have significantly changed during the last decades. Thanks to the Internet development, we now have a large amount of different source of information. In the tourism industry, social medias have proved that they have a real impact on customer decision-making process, but do also constitute a real opportunity for companies.

On a customer point of view, Social Medias has changed the way customers search for information and determine where they will stay. During the last decade, we observed a “phenomenal increase in travellers using customer reviews on social media websites such as Tripadvisor in their search for information about hotels” (Mc Carthy L., Stock D., Verma R., 2010).

A study conducted by these three authors allows us to determine different trends. First of all, it shows us that the leisure travellers are more likely to use that information than business travellers. Indeed, business travellers often follow the choice of their companies and keep using search engines or Online Travel Agents (OTAs). It is also relevant in this study that the word-of-mouth from friends or family has a strong impact on a hotel perception in customers’ mind (see table below). Social Medias posts can be considered as extension of this word-of-mouth which could explain the importance of these new tools, which represents key information sources for leisure travellers. (Mc Carthy L., Stock D., Verma R., 2010).

Source : How travellers use online and Social Media Channels
to make hotel-choice decisions 

On top of that, the study highlights the importance of Social Media by analysing the likelihood that customers will choose a hotel depending whether it has positive or negative reviews. The study results differentiate the diverse standings of the hotels but as the results are surprisingly similar, we decide not to do so. The likelihood of guests booking a hotel that have negative reviews is under 2.5 chances out of five whereas for a hotel which has positive comments, chances are between 3.5 and 4 out of five. This makes a huge difference in term of image and companies have to maintain their good online reputation.
Finally, at the opposite of the often-repeated factoid that unsatisfied guests are more likely to comment compare to satisfied ones, the study came to the conclusion that there are three chances out of five that a customer will post a comment after his stay whether his experience was positive or negative. It creates data about hotels that companies are not able to control and that can have a huge impact on their attractiveness for potential customers. Stuart Greif said: “social media constitute a focus group of millions of people who provide information without being prompted”.

The table above also demonstrates that OTAs, travel-related websites or search engines remains the main sources of information. This is linked to the fact that customers are not able to do their bookings directly via social medias. It influences a lot the late stage of the decision-making process where customers will gravitate towards a more tightly defined set of channels where they will have the opportunity to finalize their choice (Mc Carthy L., Stock D., Verma R., 2010). There is here a real challenge for companies to optimize their use of social medias by using them as distribution channels.

Customer relationship management is already a major aspect of social media as it allows companies to improve their customer services at a modest cost. (Wooden M.). This is extremely important to respond to customers’ post and some companies like McDonald’s, have a real work to do as “someone is posting or talking about the firm every seven seconds on average” (Mc Carthy L., Stock D., Verma R., 2010).

Companies also use social medias in order to promote themselves through online campaign. For example, RCI has created YouTube “webisodes” regarding its flag-ship Oasis of the Seas, which had received 700,000 hits as of his speech in October 2010.

Social medias have changed the relationship between companies and customers. Customers have now access to new relevant sources of information in their decision-making process, while companies have to deal with non-entire controlled tools of promotion. 



Bonetto Thomas & Bunoz Nicolas

2010: Mc Carthy L., Stock D., Verma R., 2010. How travellers use online and Social Media Channels to make hotel-choice decisions, Cornell Hospitality Report


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