Introduction
As we have entered the second decade of the 21st century, our habits are changing significantly. The Internet is still on the rise and now is more than ever impacting virtually all the industries worldwide. The case is not different for the hospitality industry, where sites like TripAdvisor.com, Trivago.com or Oyster.com lead the way of new-age hotel reviewing. According to ReviewPro “The influence of online reviews and social media has now reached an unprecedented level within the hotel industry.” and therefore hoteliers must recognise the importance of these on their sales and reputation. This essay will be focusing on the hotels’ point of view to explain the significance of online reviews on hotel industry and how hotels can use them to their advantage.
How customers select hotels
To understand how the reviews affect hotels and their booking figures, we must first understand how customers choose where they are going to stay.
Research carried out by Market Metrix research company on January 13, 2010, shows that nowadays customers value guest experience factors in favour of location or even price. In previous years however, the location was the main criteria that potential customers looked at when selecting hotel. In the Exhibit 1, you can see this information. It must be said that hotels in different segments of the market are affected differently by positive and negative reviews as their GRI elasticity differs quite significantly. The mid scale hotels are by far most influenced by the online reviews (Anderson, 2012) where the elasticity for their ADR , Occupancy and RevPAR very elastic, meaning that they are easily influenced by positive or negative reviews. On the other hand, luxury hotels have very low GR...
... middle of paper ...
...2013, from Market Metrix: http://corp.marketmetrix.com/research/what-is-more-important-than-location-in-selecting-a-hotel/
McGuire, K. (2013, June 13). Pricing in a social world: Five tips for revenue managers. (SAS Institute Inc.) Retrieved November 12, 2013, from The Analytic Hospitality Executive: http://blogs.sas.com/content/hospitality/2013/06/21/pricing-in-a-social-world/
Rheams, C. (n.d.). The Impact of Internet on Hotel Operations, by Connie Rheams. Retrieved November 11, 2013, from Hotel Business Review: http://hotelexecutive.com/business_review/1710/the-impact-of-the-internet-on-hotel-operations
TOI Tech. (2013, January 18). Online reviews impact hotel's pricing power: Study - Times Of India. Retrieved October 29, 2013, from The Times Of India: http://articles.timesofindia.indiatimes.com/2013-01-18/internet/36414499_1_tripadvisor-occupancy-indian-hotels
The competition in the hospitality industry is increasing. Hilton and Intercontinental Hotels are of same class, offering same quality services; this is making each hotel to face very high threats of substitute products. For model, in the absents of Hilton, Intercontinental will satisfy the customers’ needs perfectively and the same time, if Intercontinental is absent, Hilton will satisfy the needs of the customers perfectly.
This study will make inferences by content analysis in line with “Analyzing the Use of an Advance Booking Curve in Forecasting Hotel Reservations” “Hotel reservation methods--a discriminant analysis of practices in English Hotels” “A comparison of forecasting methods for hotel revenue Management”. As well company information from annual reports (2014 and 2015) will be analyzed with regard to occurred reservation system failures to conclude recommendation for how capacity utilization and demand management can be enhanced by updating current reservation system with better forecasting capabilities.
Apart from booking time, the stars of hotel also affect the booking decision of the customer for example a four to five star hotel will have higher price for the booking while 3 or 2 stars have lower booking price. Thus consumer knows the price, brand, its location etc. The customer can also have information any fluctuation in its prices therefore the customer rational about his booking; as the customer has full information about the market price, he can assess the available information and can make good decision regarding the online hotel booking. Her in the analytical formwork we will only discuss the customer behavior for price change. Initially the equilibrium of rational expectation was based on strong assumption in econometric model. However due the advancement in mathematics in late fifties and early sixties “General Equilibrium” model, it has been developed mathematically by Rander (1968, 1972), however he imposed so many restrictions. The analytical framework is based on Rander (1968, 1972) and it is the transformed form as it is applied
Internet Marketing News and Know-How. Hotel Marketing. 18 Feb. 2011. Web. 19 Apr. 2011. .
The hotel industry performs within a saturated market, driven by customer loyalty and competitive pricing to stand-out. This competitive nature makes it extremely important to capitalise on strengths while improving on
The Hotel industry in India follows a mixed strategy of advertising, they go for online advertising through websites like Expedia.co.in , Yatra.com etc. where they give different promotional offers in terms of price discount and complementary services.
From being able to book online to social media being free advertisement, the Internet has taken traveling to a whole level. Travelweb.com emerged in 1994 as the first comprehensive catalogue of hotel properties around the world. Booking capabilities were added a short time later. In 1996, still popular Expedia.com was launched and its website offered online bookings for hotels, air and car rentals all in one. Later in 1996, a site known as Travelocity was launched. The Internet allows consumers to search, buy and share destinations in the touch of a button. New opportunities emerged to provide travelers with more information about hotels they were booking as the development of the Internet accelerated. The Internet has had many affects on the travel agent. Closure of many small agencies, tour operators merging, the web being easier to search for holidays and quicker to book are just a few ways the travel agent has been affected by the introduction of the internet. Though the Internet did, at first, somewhat replace the travel agent, agencies have found ways to grow with the
Before understanding the dynamism of the Budgets and Luxury Hotels in the global industry one must know about what Hospitality is all about. Hospitality could be an act of serving anyone in a warm and welcoming way. It could also be called as a “home away from home”. Giving priority to needs of the guests is a vital aspect of hospitality and service.
Who is the hotel’s target market and what services do they use to attract and satisfy this market?
Thanks to these factors, pricing becomes one of the primary uses with which hotels attract customers. However, due to customers’ independent nature, there influence over industry players is limited. In the high-end segment of hotels, price influence becomes even less as hotels find it easier to differentiate themselves from the competition and customers become less price sensitive coming to expect higher prices as a symbolism of superior quality and services. Lastly, corporate business and tour operators can exert more influence due to their large purchases but this affect is of a limited nature and does not extend across the whole
The Hotel industry has become very important in the past years due to immense traveling and growth of international business. Hotel industry not only plays an important role in the life of people but as well as the economy of the country. Development and advancement in the Hotel industry have rapidly been taking place and especially since the rapid change in technology, it is very important for hotels to be promptly keeping up to date. When the hotel industry is spoken of, there are many famous hotels but one hotel company that has been outstanding in growth and other aspects of business, like in Leadership, Teamwork (Employee turnover), Motivation (Customer retention and satisfaction, Goals and objectives, (changing the way hotel business has worked), and Change within the company; structurally inside and physically outside, adding elements, like entertainment, gaming, and outdoor activities, is the Hilton Hotel Company.
Components of marketing mix of hospitality industry and other industry are same but the blending process is different as services are perishable in nature. Product, price and promotion may remain as same another physical product but the place is the service provider itself as service cannot be separated from its provider and service is produced and consumed simultaneously. Hospitality companies have to create unique value proposition and market offering (product) set an affordable and competitive charge in return (price) and let people aware about their market offering (promotion). As technologies advances many hotel and restaurant have online service like advance booking, information about service, history and legacy about the hotel make available
Moreover, the InterContinental Hotels & Resorts is considered the first international hotel brand in the world, as it began operations in the year 1946 (About InterContinental Hotels Group Brands, 2015). Over time the hotel group has evolved to encompass quality hotel rooms not only in North America, but in Central and South America, Europe, the Middle East, Africa, Australia, and Asia-Pacific (IHG – InterContinental Hotels Group, 2015). In addition, they have acquired extended stay facilities and the Hualuxe Hotels & Resorts, which specifically “celebrates the essence of Chinese hospitality” (About InterContinental Hotels Group Brands, 2015). In my opinion, this shows that their target market has changed by expanding their scope of travel, which means they are traveling to farther and farther locations and require the familiar surroundings with equivalent product quality at the final destination. The InterContinental Hotels Group is in the fourth and final stage of the product life cycle, which is the decline stage (Editorial Board, 2014, p. 212). Indeed, the brands lengthy history indicates it has loyal customers, but its addition of innovations indicates the targeting of new customers for the organization, which are clear signs of a business in the decline stage of the product life cycle (Editorial Board, 2014, p.
The Hotel industry has become very important in the past years due to immense traveling and growth of international business. The Hotel industry not only plays an important role in the life of people but as well as the economy of the country. I spent an hour of my day relaxing in the lobby at the Fontainebleau resort in Miami, while on vacation with my family visiting from out of state. It was my first time staying at the resort so I was eager to check it out, after seeing such great reviews on Yelp and hearing great things from friends who have been there in the past. The employees working at the resort were very welcoming, professional and willing to go above and beyond to help their guests. The check-in process was very quick due to having
To promote destinations and build their unique touristic image, DMOs have started using social media as a destination marketing tool. It helps them have a better understanding of how tourists from around the world perceive this touristic destination and build marketing strategies on that basis (Neuhofer et al., 2012 as cited by Kavoura and Stavrianea, 2015) . Social media also help DMOs interact with the tourists and build and maintain online relationships with them which would attract them more to the destination and ensure their loyalty on the long term (Page, Buhalis and Hays,