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Web2.Opalooza
 

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November 5, 2008 - Online peer reviews, the most visible part of the Web 2.0 phenomenon, have become a tidal wave of whispers, replacing word of mouth with (as one travel industry solution, the Avalon BUZZ Report calls it) 'word of mouse'.

The success is driven by a consumer's desire to connect to the truth of a hotel's reputation. Research shows 75% of consumers believe companies lie in advertising, and only 27% trust so-called 'experts'. Travelers are eager to learn if reputation equals reality and are seeking ways around corporate 'bluff'.

The democratization of information has changed the face of credibility. In 2004, only 20% of consumers claimed to trust 'a person like me', by 2006 that figure had grown to a staggering 68%. In fact, a 2007 study showed 70 % of hotel shoppers preferred traveler reviews to professional reviews and up to 88% of those reading them said online guest reviews impact their decisions. Despite all the chatter that reviews are posted by competitors and are false, it is clear consumers still believe in the medium.

All this is not new to the business traveler, after all Flyer Talk has been around since 1998, well before the Web 2.0 hype. The change comes in the increasing level of transparency now available, one that puts everyone's dirty laundry at a traveler's fingertips. As more consumers demand 'objective' information (and one study says up to 91% want reviews), more companies will strive to create networks where users 'share a story', such as Sheraton's Global Neighborhood. Companies like Best Western have entered the sphere with a sponsored blog, 'On the Go With Amy', targeted at family travel. Likewise, sites like TripAdvisor.com, already boasting 7 million registered members and 30 million unique visitors per month, will continue to grow.

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In times of economic difficulty, pricing is always the number one concern for consumers. However, given the ease of competitive rate parity, what may often remain unique in a market is brand or quality score. With the average business traveler belonging to two or more travel programs, brand competition increases. The pressure from tightening corporate travel budgets will increase as well, a trend that has many saying budget hotels are poised to benefit from the trading down by bargain conscious business travelers.

Hotels that cut services or amenities or staffing will certainly feel it in traveler reviews and bookings. With a growing 40% of travelers now using UGC (User Generated Content) regularly, the vast majority on OTA's (Online Travel Agencies-sites like Expedia and Travelocity), it is at the virtual point of reservation the influence of peer reviews is felt most. This presents a unique opportunity for the savvy hotel executive because it is precisely at the virtual point of sale that a hotel may overcome equivalent branded and priced competitors with a superior quality perception, especially if it is created by travelers and not by marketing.

Whether 4-star or 2-star, to beat their competition, hotels must encourage refreshed traveler content without providing incentives, a tactic decried by most sites. Hotels accustomed to encouraging internal comment cards, must retool to now encourage their public comment card, traveler reviews. Hoteliers must also keep in mind most customers give positive reviews, in fact surveys indicate 80% of ratings are 4 or more stars out of 5. These surveys also show having less than perfect reviews is superior to having no reviews and the imperfect helps overcome purchase paralysis.
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Roger Mullins, busy senior sales executive says, “I belong to several hotel programs for points, but I don’t make a reservation without doing my research. Frankly, I can stay at any major brand and get benefits, so I want to stay at the best hotel, regardless. I don’t learn much from hotel websites, so I read reviews on a couple of sites to see what’s going on at the hotel.

If I don’t like what I read, I pick another hotel.” Mullins travels 70-110 nights per year. “Whether I’m on a business trip, or on a vacation, I want to enjoy my time away from home.”

Statistics bear out Mullin’s strategy. Most business travelers belong to two or more loyalty programs. While brands have been successful at driving traffic to their sites rather than OTA’s, up to 84% of travelers claim they have researched on these sites, but have booked on brand sites in the past. Mullins continues, “I receive emails, offers and stay in touch with my preferred hotel brands, but I don’t have time to pollute my desktop with advertising. I’m loyal; I even bought a bed from a hotel company. But, I know every hotel is different. Some are older, some are newer; some have a great restaurant, some are noisy. Hotel companies aren’t that honest. To me, I read traveler reviews to make sure I’m making the best decision possible.”

Web 2.0 also offers ways to connect to buyers in a more personal manner. Companies such as TravelScream (www.travelscream.com) develop widgets, RSS feeds and other tools to enhance the engagement consumers feel with brands. It is yet to be seen if these tools can overcome economic pressures or the consumer drive for veritas, but given the migration of corporate travel programs to OTA's, the peer review will remain a force in the marketplace for the foreseeable future. In fact, among UGC users, 36% claim the review/rating is the most influential factor in their decision, while only 21% claim brand.

Every brand has loyal advocates, but increasing numbers of business travelers are faced with similar brands, identical pricing and identical benefits. Elizabeth Wilson, Director of Sales and Marketing for the Sheraton Mission Valley in San Diego puts it this way, 'We have every major brand in our back yard. We find the climate for business travel to be increasingly competitive.' In response, Wilson analyzes page placement and rates in conjunction with traveler reviews. Her goal is to see the value perception a consumer may have on a site, not just the rate. She suggests hoteliers mashup the disparate concepts of rate, placement and reviews to understand the risks in the marketplace. She supplements rate shopping tools with an automated web 2.0 shopping tool, the Avalon BUZZ Report (www.avalonreport.com). Her own management of these factors in tandem has shown beneficial results in market share. Additionally, staying abreast of traveler reviews allows her to encourage the staff push for more user content, the logical response to the wild card of reviews, the only factor she cannot negotiate or control. She also posts the traveler review summary report in operational departments and educates her sales team on perceptions of competitors based on results of automated searches.

Wilson's point of view is the new paradigm of competitively managing her hotel's virtual image at point of sale. This new school of thought acknowledges the power of brands and pricing, but does not ignore the transparencies of Web 2.0. It strives to balance all critical factors that motivate a consumer's decision, not just pricing. Blogging, widgets, and RSS feeds may create opportunities for greater engagement with the consumer and convert some to brand advocates, but one may also count on increased ease of research on the web and growing customer sophistication that may provide a counterbalance. In 2007, 43% of travelers claimed they went to only one site for travel research. That number was 28% by 2008 and the more tech-savvy a consumer becomes, the more likely she is to surf multiple sites.

Perhaps Elizabeth Wilson said it best, 'It's easy to think negotiated rates and branding will bring you all the business you need, but both of these factors just get your foot in the door. I know other competitors have been invited in too. We don't ignore our advantages, but we won't risk losing a guest by assuming his loyalty is stronger than his curiosity.'
 

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Also See: Destination Hotels & Resorts Tackles Web 2.0 with Avalon BUZZ Report / October 2008
OUTRIGGER HOTELS Takes Control of Web 2.0 by Selecting Avalon BUZZ Report, the Leading Hotel Solution / August 2008
Dolce International Selects Avalon BUZZ Report© to Track Traveler Reviews / June 2008
Avalon Report Partners with EZYield.com; Synergistic new partnership allows EZYield.com users to monitor Web 2.0 sites and track online Consumer Generated Content / June 2008
Keeping Your Management Team Upbeat / April 2008
Six Ways Web 2.0 Helps In a Weak Economy / April 2008
LUXE HOTELS Selects Avalon BUZZ Report, the Leading Web 2.0 Solution / March 2008
Travel 2.0 -- So Many Sites, So Little Time; Monitoring the ‘Reviewsphere’ is overwhelming: focus on key sites is the solution / February 2008
Interstate Hotels & Resorts Partnering with Avalon Report for Travel 2.0 Solutions / November 2007
Sunstone Hotels Selects Avalon Report for a Greater Competitive Advantage / June 2007
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