Online payments are playing an increasingly more paramount role in the hotels and hospitality industry.
In 2016, the global online travel sales reached almost $565 billion, a figure that is projected to grow to nearly $756 billion in 2019. Each year, 148.3 million travel bookings are made on the internet. These include bookings through online travel agencies (OTAs) and direct booking through companies and hotels’ websites.
According to a report by PwC, an advisory firm that specialises in various industries, including hospitality and tourism, online reviews are an important source of information for customers.
The growing usage of mobile devices for travel bookings further enhances the importance of online reviews in travel decisions. Guests in the Middle East and Africa rated their hotels on average with a global review index (GRI) of 80 percent.
The reputation of the three-star hotels was the lowest with 73 percent, five-star hotels were the highest ranked with 86 percent, while four-stars were in-between.
Middle East and Africa hotels’ best features, say the online reviews, are location and cleanliness.
Here’s what Martin Berlin, partner and global deals real estate leader shared about the importance of the online reputation of hotel when it comes to attracting business.
Online reputation is imperative in today’s hotel industry. Modern travellers, in particular the growing number of Generation Z travellers, are increasingly relying on the web for information to eliminate uncertainty regarding all their travel arrangements as well as the entire organisation of their trip from start to end.
According to TripAdvisor, 93 percent of people use online reviews when determining which hotel they want to stay at. 53 percent of people would not book a hotel that didn’t have online reviews. On another level, TripAdvisor’s research shows that hotels witness an 11 percent increase in pricing with each one point increase in the review score. Evidently, a customer’s decision to stay at a hotel and pay premium rates is greatly influenced by their impressions formed on the net. Consequently, it has become imperative for hotels to not just have an online presence, but also achieve positive feedback and reviews. Furthermore, hotels increasingly react to the feedback received and respond to complaints and question online.
Regional hotels are more concerned about it. There are various firms (who have an online presence) that do comparative analysis of hotels (based on customer feedback) on parameters such as location, cleanliness, facilities and amenities, value for money, etcetera. Additionally, customers are able to provide written reviews regarding their experiences. For travellers using online reviews to decide their travel arrangements, these are useful tools to tailor-make plans that meet their expectations.
Beware these challenges. There are several challenges that hotels face as they mature to technological advancements and disruptions. Notable amongst these are interpretation of and response to online reviews, adjusting product and service offerings to a wider audience, and using customer data and feedback to enhance operations and implement immediate actions. They also involve the protection against reputational risk, communication management to overcome and manage negative feedback, and the impact of negative reviews on operating performance of the property.
With challenges come opportunities. Technological advancements, apps, and social media present several opportunities that can enhance both reputation and financial performance of hotels. The key is to effectively use online data and reviews to strengthen operations and focus marketing efforts. Opportunities include personalising customer experiences, price and product positioning, and focused marketing to customer groups. In addition to that, they also help developing brand loyalty amongst customers, and developing a coherent communication strategy for online platforms, while improving the property’s operating performance and the communication with customers.
Online reviews are here to stay. Their influence on a traveller’s choice is ever increasing. With regional and international hotel companies focusing on the Middle East for growth, the market is going to increase room supply. This will increase competition, and hotels will need a competitive edge to outperform their peers. Going forward, proper management of online platforms and customer perception will play a crucial role towards developing brand loyalty and ensuring the long term sustainability of hotel properties and companies.
In line with the growing trend of tech embracing hospitality and tourism, Marriott International, the largest hotel chain in the world, has launched TestBED Middle East & Africa, an accelerator programme powered by Marriott Hotels with the aim to find cutting edge technologies that can transform hotel guests experience.