How Independent Hoteliers Can Capitalize on Smartphones and Social Media
1. Academic Year 2010/2011
International Hospitality Management – Prepa MBA
Hospitality Management Center- Paris
Research Project
How Independent Hoteliers can Capitalize on the Smartphone Revolution
through the Use of Social Media, to Entice Business Travelers.
Submission date: November, 14th 2011 NICOLAS Emilie
Supervisor: Lisa Wines MBA 1 B
+33 6 03 05 09 49
em.nicolas@gmail.com
3. HOSPITALITY MANAGEMENT CENTER – PARIS
- Submitted on November, 14th 2011 -
How Independent Hoteliers can Capitalize on the
Smartphone Revolution through the Use of Social Media, to
Entice Business Travelers.
Compiled and Written
by Emilie NICOLAS
Supervised
By Lisa Wines
Academic Year 2010/2011
Prepa MBA
Bachelor of Science in Hospitality and Luxury Brands Management
3
4. ACKNOWLEDGEMENTS PAGE
This research project, realized within the framework of my Bachelor of Science
in Hospitality and Luxury Brands Management at the Hospitality Management Center
of Paris, would not have been conceivable without the support and encouragement
from my family and professional surrounding.
I would like to thank Lisa Wines, Marketing Teacher at HMC-Paris, for her
direction and guidance in the elaboration of my outline.
I also wish to thank Liz Craig, CEO and Founder of the web-marketing agency
Oneglobe Network, who enabled me to get important studies and statistics in relation
to the hospitality industry.
Special thanks should be given to Sharon Bidaure, English teacher in San
Francisco, who took time to review this entire research paper; and to Samuel Alba,
Engineering manager at DotCloud, who guided me concerning the technical part
about the smartphone development.
4
5. SUMMARY
Chapter 1: The Smartphones Evolution and the Impact on Business Travelers
I - The Smartphone Development over the Years
A- Smartphone Presentation
B- Birth of the Smartphone: a Challenging Competition for Mobile Manufacturers
C- General Statistics About Smartphone Development
II - The Impact of Smartphones on Business Travelers
A- Business Travelers’ Profile
B- How do Business Travelers Use Smartphones?
C- The Services Provided by Social Media and Mobile Applications
Chapter 2: The Impact of Smartphones in the Hospitality Industry
I- Hotels’ Adaptation to Business Travelers of Today
A- Business Travelers Attitude with Regards to Hotels in the Aftermath of the
Economic Crisis
B- The Evolution of Online Reservation in the Hospitality Industry
C- Smartphones: Business Travelers’ Perfect Assistants
II- Hotels’ Adaptation to Smartphones in order to Entice Business Travelers
A- The Use of Smartphones in the Hospitality Industry and the Development of
Online and Social Media Tools.
B- Social Media: Positioning Strategy and Efficient Marketing Tools
III- Measurement Tools: an Evolution in Hospitality Marketing
A- Digital Competence Measurement
B- Web Analytic Tools: a Growing Trend in the Hospitality Industry
Chapter 3: Mobile and Social Media Strategies for Independent Boutique Hotels
I- The Evolution of Independent Hotels since the Beginning of the Economic Crisis
A- The Situation of Independent Hotels during the Economic Downturn
B- The Situation of Independent Hotels in 2010/2011
C- The Rise of Boutique Hotels
II- Digital Involvement of World Hotel Groups and Chains
A- The Digital Strength of the Best World Hotels Groups and Chains
B- The Three Latest Digital Trends Developed by World Hotels Groups and Chains
III- Digital Marketing Solutions for Boutique Hotels through the Example of
CitizenM
A- CitizenM Boutique Hotels
B- CitizenM: an Example of Smart Social Media Strategies for Boutique Hotels
C- Smartphone Applications and Competence Measurement Tools
5
6. GENERAL INTRODUCTION
In 2011, independent hotels and world hotel groups and chains were (and still
are) in competition to win over business travelers – back on the road after the harsh
and long world economic crisis. More technologically savvy than ever and hugely
work-oriented toward the success of their businesses, business travelers have new
needs and expectations, which oblige hoteliers to readapt their customer services and
marketing strategies.
On one hand, the huge presence of business travelers on the Internet is
beneficial for world hotel groups and chains, which paid to get attractive websites and
online visibility on desktop computers and mobile devices. On the other hand, the
interest of business travelers for a unique experience within home-like hotels is
beneficial for independent hotels, especially boutique hotels.
As a result, the only solution for independent hotels to compete with the “big
boys” is to turn digital. It represents a real challenge when it is a matter of course, to
regularly follow the latest trends in new technologies when one has few skills in the
digital field and a limited marketing budget, while closely following the fast growing
evolution of their competitors.
This research project takes into account all the difficulties independent hotels
are facing, in its approach to provide themselves with efficient digital marketing
solutions.
The situation of independent hotels brings one to wonder how independent
hoteliers can capitalize on the smartphone revolution, through the use of social media
to entice business travelers.
The objective of the research was to demonstrate that with the impact of social
media on local businesses and the fast growing evolution of smartphones, it is
essential for the success of hoteliers to turn digital, and invest time and money to
create effective online marketing strategies. To achieve thus said, this research
project provides the essential basics and knowledge concerning the online, social
media and mobile tools in relation to the hospitality industry.
The research also paints a portrait of today’s business travelers, so that hoteliers
can adapt their products and services to the new needs and expectations of business
travelers. In addition, an analysis of the digital competence of world hotel groups and
chains will allow independent hotels to set up digital strategies, taking into account
their competitors’ strengths and weaknesses. Last but not least, the case study of
“CitizenM”, a successful boutique hotel chain, will be an excellent example to follow
for independent hotels, as far as social media strategies and online visibility are
concerned.
This research project mainly sought to follow daily the latest trends in digital
technologies and the hospitality industry on new websites, and compare and analyze
numerous studies and statistics concerning the digital field, the hospitality industry
and the activities of business travelers.
6
7. This research paper consists of three chapters.
The study starts with an overview of the smartphone industry evolution, and
demonstrates how, with the influence of social media, mobile manufacturers
succeeded in responding to the needs of business travelers, and how they contributed
in changing their habits and expectations, especially when traveling.
The second chapter focuses on the impact of the profile of new business
travelers and the economic crises in the hospitality industry, which naturally drove
hotels to turn digital. This part highlights the difficulties of hoteliers in adapting their
marketing to mobile devices and social media sites, and provides solutions to use
these digital tools for marketing purposes.
The third chapter introduces the situation of independent hotels facing the
consequences of the economic crisis; and the will of world hotel groups and chains to
acquire independent boutique hotels. This part also analyzes the way world hotel
groups and chains use mobile and social media for marketing purposes and provides,
through the study of CitizenM hotels, social media and mobile marketing solutions to
help independent boutique hotels remain in the market.
7
9. Introduction
The fast growing development of smartphones is a revolution for smartphone
users. They proved to be a perfect alternative to desktop computers and laptops
despite their smaller size. Used for leisure and /or business, they contributed in
turning the world from offline to online.
Business travelers, using them the most and for a longer time, have integrated
smartphones into their life, which contributed to changing their habits, needs and
expectations. As a result, the travel industry is facing a new type of customer that
they have to approach in different ways.
The new business travelers are more present online than offline and tend to
unconsciously do the work of travel companies by simply using their smartphones.
The hospitality industry is the most affected by smartphones given business travelers
spend more time in hotels than in any other travel related companies such as airport,
restaurant, etc.
9
10. I - The Smartphone Development over the Years
A- Smartphone Presentation
Smartphones are, as the name implies, mobile phones with computers abilities,
hence the attribution of the adjective “smart.” According to the Smartphone
1
definition on businessdictionary.com , “Smartphones provide a one-stop solution for
information management, mobile calls, email sending, and Internet access. They are
compact in size and often only slightly bigger than standard mobile telephones.”
Smartphones are driven by operating systems that can be different according to
mobile manufacturers. A mobile operating system (also called “Mobile OS”) is the
system that controls the mobile device, similar to an operating system such as Linux,
Mac OS X, or Windows that controls a desktop computer or laptop.
More than a cell phone and less than a laptop, smartphones are the ideal
compromise for business travelers. They attract people via their size and immense
quantity of features. The tables below introduce the most used functions of
smartphones by basic users.
Top Smartphone Activities
Source: mobile.ecosystem.digital, Econsultancy, page 1, Appendix 1
1
http://www.businessdictionary.com/definition/smartphone.html, June 15th, 2011
10
11. According to the tables, people obviously make no difference between using a
smartphone or a desktop computer for their daily needs. As a result, even if
smartphones have a smaller screen and are less practical to use, people are satisfied
with them as long as they have access to the information they need. The tables indeed
show that they visit search engines, email, check the weather forecast, use Facebook,
watch TV and use maps, apps and SMS. People away from home, like business
travelers, see in smartphones a real “travel assistant.”
All the functions provided by smartphones make it such that they are used more
on a daily basis than they used to be. As a result, people, especially business
travelers, need comfortable, easy to use and good quality smartphones. In the
smartphone market, for a long time we could differentiate Apple iPhones and all the
other smartphones whatever their brands. The arrival of iPhones in the market
created such a revolution that the brand “Iphone” was used more than the name
“smartphone”. The graph below compares the iPhone with the other smartphones
according to their six most used functions.
Smartphones and Iphones: many unused functions
Source: http://www.test-achats.be/telephonie/smartphones-et-iphone-beaucoup-de-fonctions-
inutilisees-s576103.htm, Surveys, Date not mentioned, Appendix 2
According to a survey about smartphones’ functions carried out by Test-achats2,
the three most used functions of smartphones are the phone (for 97.3% of total users),
the web (for 77.5% of total users) and emails (for 71.7% of total users.)
2
http://www.test-achats.be/telephonie/smartphones-et-iphone-beaucoup-de-fonctions-inutilisees-
s576103.htm, Surveys, Date not mentioned
11
12. This graph clearly shows the advantages of using an iPhone instead of another
smartphone. Except for basic phone functions, music, web and emails functions are
more appreciated on the iPhone because of its ergonomics and ease of use.
Apple has remained a leader in the smartphone market, but with time, the competition
with other manufacturers has become harder.
B- Birth of the Smartphone: a Challenging Competition for Mobile
Manufacturers
The first smartphones for the general public were introduced in the market one
year before the world economic crisis of 2008. Smartphone manufacturers had to
face a double challenge: integrating the market and enticing potential customers
despite the recession period. However, according to the technology research center
Gartner3, 38.14 million smartphones were sold in December 2008, which represents
an increase of 3.7% compared to the same period the previous year. This increase in
2008 is, according to Gartner, due to the development of the emerging markets. For
instance, China went beyond the 600 millions sales of smartphones and became the
first mobile market in 2008. The graph below, from Teleco4 shows the continuing
increase of smartphones through 2010. Teleco claims that “Smartphones were the
main driver for the growth of cell phones sales in 2010.”
Smartphones in the total of sold cell phones
Source: http://www.teleco.com.br/en/en_comentario/en_com404.asp, Surveys, February 8th, 2011,
Appendix 3
The economic crisis did not really affect the sale of smartphones, which kept
increasing. This means that there was a real need in the market and it was time for the
mobile manufacturers to satisfy the consumers’ expectations.
3
http://articles.economictimes.indiatimes.com/2009-03-12/news/28390664_1_smartphones-sales-fall-
worldwide-sales News, March 12th, 2009
4
http://www.teleco.com.br/en/en_comentario/en_com404.asp, Surveys, February 8th, 2011
12
13. Windows mobile Palm Treo 700w
Contrary to what people may think, the first smartphones
that came out are neither the Apple iPhone nor the RIM
“Research In Motion” Blackberry; it is actually the
Windows mobile Palm Treo 700w. The latter came out in
September 2005, and brought the advantages of pocket PC
to a classic cell phone. However, the Treo 700w did not
have integrated Wi-Fi support and had poor pixel resolution
(240 x 240).
Appendix 45
Apple iPhone 2G
Two years later, on January 9th 2007, the
original Apple iPhone, also known as
“iPhone 2G” was introduced in the United
States by Steve Jobs, the former Chief
Executive Officer of Apple. It was sold to
6.1 million users, who were seduced by its
excellent pixel resolution (320 x 480),
storage capacity (4.8 or 16 GB flash
memory), large 3.5 inch multi-touch screen
and integrated Wi-Fi support and 3G
technology.
Appendix 56
The success of the iPhone announces the beginning of a tough competition in the
mobile phone industry. The success of the brand was such that people started calling
their smartphones iPhones, which can sometimes be confusing especially with the
development of other smartphone brands.
5
http://www.newlaunches.com/archives/palm_and_microsoft_team_to_bring_healthcare_solutions_to_p
alm_treo_700w.php, News, February 17th, 2006, Appendix 4
6
http://knowyourgadgets.com/apple-iphone-2g/#.TqgV_Jyhnwg, News, February 2nd, 2011, Appendix
5
13
14. Google Android HTC Dream
It took only one year for Google to launch its
own operating system known under the name
of “Android”. The first smartphone using
Android was the HTC Dream which came out
October 22, 2008 in the United States. It was a
slider phone with a keyboard, which looked
totally different from the iPhone. It had a full
HTML web browser and many Google
applications such as Gmail, Google calendar/
maps/ talk, YouTube and so on.
Appendix 67
One year later, on April 23, 2009, according to T-Mobile USA8, one million HTC
Dreams had been sold in the world. Android proved to be a success and other mobile
manufacturers such as Samsung, Motorola, Dell and LG became affiliated with
Google Android and in April 2011, Google announced that 350,000 Android phones
were sold per day along with three billion applications uploaded in the world every
day. Google has overtaken Apple in that it sold 18.65 million iPhones in three
months earlier this year, which represents about 200,000 iPhones sold per day.
According to the analysts Inforna9, half a billion people will be using Androids by
2015.
7
http://happy-qi-snoopy.blogspot.com/2009/02/htc-dream-or-google-android.html, News, 2009,
Appendix 6
8
http://en.wikipedia.org/wiki/HTC_Dream
9
http://www.telegraph.co.uk/technology/google/8013383/Android-to-be-most-popular-smartphone-
brand.html, News, September 20th, 2010
14
15. Nokia N95
Appendix 710
Nokia, which was the world’s top cellphone maker for 15 years, started creating
smartphones in 2007 and bought the Symbian operating system. Their first
smartphone, Nokia N95, integrated a GPS, a 5 megapixel camera, 3G and Wi-Fi
connectivity and TV-out. Early in June 2011, according to analysts from Nomura
Research11, “lead in smartphone units sales will be lost this quarter for the first time”.
Nokia who was successful mainly for producing good quality phones, was surpassed
by Samsung Android and Apple iPhone.
RIM Blackberry Thunder
Appendix 812
Blackberry, from RIM, has a different but just as important story. Even if the devices
have existed since 1999 with the Blackberry Thunder, the popularity of the
smartphone began in 2004 with two million subscribers worldwide. In April 2010, at
the WES (Blackberry world conference), Blackberry revealed that 90 millions phones
had been sold so far, which is not much in a seven year period compared to its
10
http://www.mobilefonereviews.co.uk/phone-reviews/Nokia-N95.aspx, News, No date mentioned,
Appendix 7
11
http://www.bgr.com/2011/06/13/samsung-apple-to-overtake-nokia-in-smartphone-share-this-
quarter/, News, June 13th, 2011
12
http://www.tecnocino.it/articolo/rim-blackberry-thunder-e-la-tastiera-virtuale/11031/, News, July
14th, 2008, Appendix 8
15
16. competitors. According to an expert from Business Week Magazine13, RIM is facing
two problems: market saturation and the company’s loss of credibility in creating
great products. However, Blackberry phones provide the main and most important
devices whose users are very satisfied with such as a digital assistant, a media player,
Wi-Fi support and so on.
Since 2005, we can see that the mobile industry market is obviously expanding.
New smartphone models are coming out every year from every mobile phone
manufacturer. Each of them are trying to stand out by satisfying the constant new
needs of the consumers - all this in the objective of gaining market shares and
customer loyalty. Competition is tough between Apple, Samsung, Nokia and RIM
and the competition level will remain high for the years coming.
C- General Statistics About Smartphone Development
Smartphones round up new people every year with their enticing new features.
As a result, research centers can obviously foresee a growing evolution of sales from
one year to another. Gartner carried out a detailed analysis on the sale of smartphones
during the years 2010-2012 and shared its estimation for sales in 2015. According to
Gartner14, at the end of 2011, 468 millions smartphones should have been sold,
namely an increase of 57.5% compared to the 296 millions smartphones sold in 2010.
Regarding Operating Systems, Gartner forecasts for the end of 2011 the world
domination of Google Android with a market share of 38%. Google Android actually
collaborates with phone brands (Motorola, HTC, LG, Samsung, etc.) to help them
compete with Apple iOS, which explains their huge market share acquisitions.
Symbian (used by Nokia) would hardly reach 19.2% and Apple iOS would only reach
19.4%. Google Android would keep increasing to reach 49.2% of market share at the
end of 2012.
Such an evolution for Google is not surprising given its recent acquisition of
Motorola as a separate business. According to Larry Page15, SEO of Google, the
acquisition of Motorola is the opportunity to create an even greater user experience.
Google Android is obviously becoming a formidable challenger in the smartphone
market, especially for young operating systems such as Windows Phone.
According to Gartner16, at the end of 2015, Windows Phone should represent 19,5%
of market shares, thus becoming the second mobile operating system in the world.
Apple iOS would keep declining in 2014. As for Symbian, it would disappear in
2015 with 0.1% of market shares because of its recent link with Windows.
13
http://mobileopportunity.blogspot.com/2010/10/whats-really-wrong-with-blackberry-and.html, Blog,
October 19th, 2010
14
http://www.planetoscope.com/electronique/156-ventes-de-telephones-portables-dans-le-monde.html,
Statistics
15
http://investor.google.com/releases/2011/0815.html, News, August 15th, 2011
16
http://www.planetoscope.com/electronique/156-ventes-de-telephones-portables-dans-le-monde.html,
News, 2010
16
17. The tables below shows the evolution of the most influential smartphone brands
during 2010 and 2011.
Worldwide Top-10 Smartphones Brand Ranking
Source: HIS Isupply May 2011, Appendix 9
The figures confirm Gartner’s forecast in that they reveal a significant fall for
Nokia and Motorola at the beginning of 2011; hence Google’s acquisition of
Motorola. As for Android phones such as LG, Sony, and HTC, they have been
increasing so far (except for Motorola and Samsung which dropped a little). Apple
has remained more or less constant, with a slight growth early this year.
For the years coming, still according to Gartner, the sale of smartphones would
reach 630.5 million in 2012 and 1.1 billion in 2015. As a result, it is in the interest of
any merchant company (the hospitality industry included) to invest in digital
marketing in order to reach potential customers and keep in touch with loyal
customers. According to research centers’ results, the priority for business companies
is to make their mobile platforms accessible from iPhone iOS and Google Android.
By mobile platforms, it especially means mobile websites and applications.
17
18. II - The Impact of Smartphones on Business Travelers
The mobile industry’s constant growth, since the arrival of smartphones in the
market, has created a shift from computer to mobile throughout the world. This shift
is improving the daily routine of smartphone owners, especially business travelers
who are on the road most of the time and are constrained to work remotely.
A- Business Travelers’ Profile
1- Business Travelers as Smartphones’ Users
Business travelers belong to a category of professionals who benefit the most
from smartphone usage. Away from home and office, in transport or at the hotel,
during, before or after a meeting, smartphones have become a real need for business
travelers, if not an addiction.
A business travel survey made by Deloitte17 stated that 48% of the business
travelers questioned owned a smartphone in November 2010. 84% of them were
between 18 to 29 years old and 63% had an income of more than $150,000.
These figures are justified by another study made by Comscore18, which in 2010
analyzed the percentage of smartphone owners according to their age.
Source : http://www.comscoredatamine.com/, Statistics, July 2010, Appendix 10
According to these figures, most of the people who have smartphones are
between 25 and 44 years old. Most of them are likely to be employed with a
comfortable income as mentioned in the previous study. They are closely followed
17
http://www.hospitalitynet.org/news/4049166.html, News, November 18th, 2010
18
http://www.comscoredatamine.com/wp-content/uploads/2010/09/Data-Gem_Smartphone-by-
Age.png, Statistics, July 2010
18
19. by people between 18 and 24 years old who probably need smartphones for school or
to start their career.
Recently, in January 2011, Comscore19 analyzed smartphone owners according
to their revenue. The tables below show that the higher the income is, the likelier
they are to have a smartphone. Their need is certainly linked to their executive
functions at work.
Source: http://www.onlinemarketing-trends.com, Statistics, April 10th, 2011, Appendix 11
The bar chart highlights the smartphones’ need by executive workers. This
need is growing according to the high level of responsibility executives have at work.
Business travelers are part of workers who need a smartphone the most, no matter
whether they are executive or lower income workers. This need for smartphones
won’t stop growing because smartphones are more and more adapted to fit the
business travelers’ profile.
2- Business Travelers’ Profile: a Perfect Target for Smartphone
Manufacturers
When thinking about business travelers, we may picture them as greying people
head down on their computers in a first class seat on a plane. They used to be like
this, and some of them still are today, but also imagine young people driving cars
guided by a smartphone.
19
http://www.onlinemarketing-trends.com/2011/04/us-smartphone-ownership-usage-top-5.html,
Statistics, April 10th, 2011
19
20. A study led by National Household Travel Survey20 between 2001 and 2002
details the characteristics of business travelers in the United States. This study is
interesting in that we can figure out how smartphones can make business trips easier
today.
Concerning transportation of 60,000 business travelers surveyed, 81% said they
used their personal vehicle instead of air travel (16%). It was not in an economic
crisis context, so we can guess that it is pretty much the same today. Computers
being useless in vehicles, business travelers appreciate the GPS functions of
smartphones but also geolocation services such as Google maps or applications that
can indicate the closest services you need on the road.
According to the survey, most of business travelers in general are attracted to
the West Coast (U.S.), and there were 7.5 million who came for business between
2001 and 2002. As for the South, there were 7.7 million.
In terms of jobs, among all the business travelers surveyed, 77% were men, and
among them:
- 53% occupied a professional, managerial or technical position
- 28% worked in sales or services
- 4% had a clerical or administrative job
As for the average age:
- 28% were in their 30’s
- 27% were in their 40’s
- 18% were in their 50’s
- 10% were in their 60’s
- 16% were between 18 and 29 years old
Business people who traveled the most during the beginning years of the 21st century
were those between 30 and 50 years old, which explains why in 2011, the highest
number of smartphone owners are between 25 to 44 years old. They are people
highly involved in their companies and they are involved in the future of the
company, which implies traveling to raise money, and working on contracts or
business contacts.
In addition, their average income is higher than the average population at about
$47,500 a year. Specifically:
- 27% earn $100,000 a year
- 18% earn between $75,000 and $90,000 a year
- 6% at $25,000 or less per year
These figures confirms the data in the tables « Smartphones ownership », which
shows that people with a high income are the most who own a smartphone.
As a result, we can notice that, even if the characteristics of business travelers
arise out of a study made in the years 2000 and 2001, the sale of smartphones today
matches the business travelers’ profile made 10 years ago. This means that the
business travelers of today have more or less the same profile. And basically, what
transpires from the survey studied is that smartphones are sold the most to middle-
20
http://www.bts.gov/publications/america_on_the_go/us_business_travel/html/entire.html, Surveys,
May 2002
20
21. aged business travelers with high salaries and high skilled jobs. Smartphone
manufacturers have therefore succeeded in targeting and responding to the needs of
business travelers. This is important for companies targeting business travelers as
customers such as those in the hospitality industry, in order to know their needs and
anticipate their expectations according to their average profile.
B- How do Business Travelers Use Smartphones?
The previous studies showed that smartphones are sold more and more each
year. People, not only business travelers, are obviously becoming addicted to the
services provided by smartphones; so much so that the use of smartphones has
become a priority in people’s lives on a daily basis and has changed people’s habits
and behaviors.
1- General use of Smartphone by Business Travelers
Small enough to phone but large enough to write an email, smartphones have
made business travelers’ lives easier, sometimes making work a priority even in
private life. According to a recent survey by Ring Central Survey21 conducted March
16-18, 2011 on 400 business travelers:
- 85% use their smartphone a few times a day
- 64% use their smartphone for business more than last year
- 58% take urgent calls in their bathroom
- 49% check their phone even before getting up in the morning
47% most appreciate the smartphone for its ability to send and receive emails
everywhere
As a result, business travelers have shown that they have integrated new
technologies, and they will keep using them because it has a positive impact on their
job. Hotels being a home away from home for business travelers, these business
travelers have to be able to use their smartphones as they do at home, which implies
getting Wi-Fi access throughout the premises.
New technologies make daily work easier, so much that people don’t have to
travel to manage their business thanks to the Internet. Making a smooth-running
video conference is possible, and sharing business cards can be replaced by simply
adding contacts on LinkedIn. However, business travel still exists because face-to-
face meetings remain an essential part in dealing with business partners. This is what
was revealed in a survey by Wakefield research22 led between March 23-28, 2011 on
709 business travelers ages 21 and older. 97% of them assume that face time is
essential to “develop and maintain strong client relationships.”
The study also highlights the fact that 53% of the respondents stated that they had
“more in-person meetings with clients in 2011 than in previous years. This trend is
21
http://www.ringcentral.com/whyringcentral/company/pressreleases/051811.html, Surveys, May 18th,
2011
22
http://phx.corporate-ir.net/phoenix.zhtml?c=88577&p=irol-
newsArticleOther&ID=1554150&highlight, Surveys, April 26th, 2011
21
22. probably due to the experience of video conferencing, which appeared as a perfect
tool to save time and money during the economic crisis but which, in the end, was not
very efficient. The survey indeed reveals that:
- 78% of respondents who experienced less face time reported a negative impact
on their business relationships
- 18% admit having lost a project because they could not travel
- 7% of them added that they lost the client altogether
Consequently, it is no surprise that all business travelers answered “no” to the
question: “Can apps, emails and video replace face time?”
The future of the smartphone was guaranteed but this study announces a promising
future for the smartphone applications markets (travel applications turning out very
useful on a trip) and all mobile features.
2- Social Media and Smartphone Applications: Their Influence on
Business Travels
Social media and mobile applications are an actual trend with a potential
development that is guaranteed for the future. They are used everywhere and every
day at anytime, especially since access to the Internet through mobile devices has
been made easier by smartphones. However, even though they are used every day,
understanding what is really social media, social networks (especially the difference
between them) and mobile applications turns out to be complex.
According to Business Dictionary 23 , a smartphone application is “a self-
contained computer program (usually a commercially produced software) that
performs a specific useful task. Called 'apps' for short, application programs are the
most familiar form of software and comes in a very wide variety of types (such as
accounting, database, graphic and illustration, and word processing programs).”
Nowadays, social media and many companies, especially the hospitality and travel
industries, have developed mobile applications so that people can access their favorite
websites in a simple and quick way through their smartphones.
According to Econsultancy24, the leading source of independent advice and
insight on digital marketing and ecommerce, social media are websites allowing users
to participate in the creation of the content. Social media enables the communication
between B2C + B2B + C2B + C2C in every direction, the aim is to share and discuss
information. For example YouTube, Flickr, TripAdvisor and Foursquare are social
media in that they are tools used to share information that can be discussed.
Social media also includes “social networks.” As explained by Computing
Dictionary25, they allow users to publish content themselves. The information may be
on any subject and may be utilized by (potential) friends, mates, employers,
employees, etc. The sites typically allow users to create a "profile" describing
themselves and to exchange public or private messages and list other users or groups
they are connected to in some way. For example Facebook, Twitter and LinkedIn are
23
http://www.businessdictionary.com/definition/application-program.html
24
http://econsultancy.com/us/about
25
http://dictionary.reference.com/browse/social+network
22
23. social networks in that they are communities of interest enabling people to connect to
one another.
The tables below, from the slideshare "Social media in travel and hospitality
business by Katrien Cattoor 26, explains the function of the actual most famous social
media websites and the number of users in 2011. As each site keeps evolving, these
figure keep changing but the order tends to stay the same. However, these sites are
hard to measure because there is a large quantity of accounts created that are no
longer used.
Social Media: usage by web surfers
* in 2010
Source: slideshare "Social media in travel and hospitality business, Katrien Cattoor, Statistics, May
2011, Appendix 12
The table shows the leading position of Facebook, which is due to the diversity
of services it provides to its users. Facebook enables one to post photos and videos as
Flickr and YouTube respectively do, and allows one to share reviews as TripAdvisor
does, provides the ability to check-in just like Foursquare and enables one to post
promotional offers like Twitter. As a result, Facebook is number one in terms of
usage by hoteliers for marketing purposes. However, Facebook monopoly was a
motivation for the other social media websites to develop new attractive features for
hoteliers in terms of digital marketing. For example, Twitter recently developed a
photo-sharing process.
26
http://www.slideshare.net/kcattoor/social-media-in-travel-and-hospitality-business-8074238,
Statistics, May 2011
23
24. Google+, Facebook and Twitter’s direct competitor, is not mentioned in the
table because of its launch in July 2011. However, Google+27 gathered 25 millions
users in one month without having set up a business platform.
As a result, the success of social media has created a harsh competition between
them, which forces them to always provide new services for users. Consequently, it is
advised for hoteliers to keep posted about the latest trends in social media services so
they can use them as marketing strategies.
C- The Services Provided by Social Media and Mobile Applications
The success of smartphones is largely due to the use of the mobile applications
they provide. Immediately accessible from a 3G connection or through Wi-Fi, they
guide, inform, and entertain business travelers before, during and after their trips.
1- Before Making a Reservation
Before a trip, one of the first things one usually does is gather information on
the Internet either through a desktop computer or a mobile phone. Social media show
themselves very useful in that they enable users:
- To make research and interaction easier: customer reviews are one of the
latest trends in terms of communication for a brand. Reviews are comments about
hotels for example, made by customers in order to share their experience on the
Internet and to influence future potential buyers. They are becoming more and more
consulted before reservations are made and are becoming more and more available on
social media such as Facebook, Yelp, Yell, etc. Furthermore, more and more services
such as restaurants, car rentals, hotels and so on display interesting offers if the
reservations are made through social networks.
- To communicate about upcoming travels and scheduled meetings.
Communication about business trips is usually made through Facebook, Twitter and
LinkedIn between business travelers because they are the most used by people in
general.
- To manage the trip (hotel bookings, itineraries, etc.): they are usually made
from a computer and used from smartphones thanks to mobile applications. For
example, the TripIt application is a travel organizer that enables one to put travel
documents in one place, provides an itinerary, gives real time information for
transportation and alternative solutions, book hotel rooms and so on. Other
applications enable social car sharing such as “Getaround” or enable access to deals
such as “Zipcar” or “Autoslash.”
Young business travelers seem more confident using social networks than older
business travelers, which encourage them to consult these sites before planning a trip.
27
http://www.searchenginejournal.com/google-plus-reaches-25-million-users-activity-declines/31500/,
News, August 3rd, 2011
24
25. According to a survey made by Embassy Suite Hotel28 on 700 American business
travelers, 50% ages 21 to 34 years old, consult Facebook to plan their trip. Only 26%
of older business travelers use Facebook before a trip.
2- During a Trip
During a trip, whether in a taxi, waiting in line, in a boarding hall, at a front
desk, etc. the first thing many business travelers automatically do is taking their
smartphones out of their pockets. On a trip, mobile applications are both useful and
entertaining.
The most used applications by business travelers are weather forecast, maps,
GPS, photo sharing and applications such as TripIt. In terms of social media, the
most ones used to get recommendations and share documents or photos are Facebook,
Twitter and LinkedIn. Once at the destination, applications such as Yelp, Zagat,
Foodspotting are used a lot to find services such as restaurants, car parking and hotels
because they highlight customer reviews and rate the services. To finish with,
meeting applications are greatly being developed because the main reason for
traveling is to meet other business people. To do so, applications such as “Meetup”
and “Plancast” are used a lot. They indeed enable users to discover events and share
plans with people in the business they are interested in.
Since 2010, “check-ins” have become another reason to take out smartphones.
“Check-in” is a growing trend which consists in telling your friends on social media
where you are. Nowadays, people can “check-in” from parks, bars, restaurants, hotels
and so on; each “check-in” awards points which deliver badges. This new funny way
of traveling is provided by applications such as Foursquare or Gowalla that in general
also enable travelers to find services with reviews in a town or city they know nothing
about. More and more, check-ins are enabling one to get rewards such as free
products and reductions, and thus have become a marketing tool that entices
customers to communicate on social media about a brand.
3- After a Trip
Back from a trip, the most important thing for business travelers to do is
connect with people they have just met so they can maintain relationships. They
usually use Facebook, Twitter and LinkedIn because these sites are the most used by
people, and they enable one to update real time information and are available on any
type of smartphone.
The other thing business travelers are getting used to doing is writing reviews
about every place they have been to. Any positive or negative experience is shared on
social networks. One of the most used by business travelers is TripAdvisor. This site
gives detailed information about places, including hotels, displays reviews that are
sorted out according to the different types of customers, and ranks the places
according to the grades given by customers who have been there. Reviews are more
and more used because they are convincing sales arguments for potential customers
28
http://www.inc.com/news/articles/2010/06/survey-says-half-of-young-travellers-use-social-media-
for-business-trip-decisions.html, News, June 24th, 2010
25
26. and they enable businesses to get information for free about their business structure,
which allows them to improve their services or products.
As a result, before the next trip, social media enables business travelers to keep
expanding and maintaining relationships, which is the most essential thing for a
business to work. Smartphones have become a tool business travelers cannot live
without in the 21st century.
4- The Influence of Social Media on Business Travelers
The use of social media is beneficial for professional reasons but also to
maintain relationships with family members, especially for people on the road
throughout the year. According to a global social media survey made by Studylogic29
among 4204 business travelers in November 2010, more than 60% of respondents
reported staying in touch with family and friends while traveling. Among them, 36%
admitted that they prefer using social media than phone calls to contact family and
friends.
Logging to social media has become a habit for the most active people on these
sites. Distance also tends to encourage people to log in to social media sites more
than they normally would when they are not traveling. They tend to consult their
profile as much as they consult their mailbox, sometimes even more. The study
mentioned above reveals that:
- Four out of five respondents access networking sites throughout the day
- One out of three logs in multiple times each hour
- One out of five checks social media sites multiple times throughout the day
while traveling
Business travelers rely on social media to develop a project. It is obvious that
the more someone is visible online the more it is beneficial for a business. Being
active for business reasons on social media shows the real interest of this person for
his work and for his company, which conveys confidence and reliability. The survey
stated that:
- 56% of respondents agree about the importance of doing business with people
active in a social media channel
- 55% claim using online social networking to meet new business contacts and
maintain the relationships
- 54% admit checking their new contacts’ social networking profile
29
http://wwww.askbte.com/RedlineNews/RedlineNews1/Sheraton_Survey_Outlines_Business_Travelers
_Social_69510.aspx, Surveys, November 23rd, 2010
26
27. Conclusion
To conclude, the development of smartphones has created a revolution for both
business travelers and their businesses relationships. All year long on the road,
business travelers spend a lot of time in hotels.
As a result, the hospitality industry is the most affected by the smartphone
development. Hotels actually have to adapt to business travelers’ new ways of living,
which mainly consists in providing Wi-Fi networks in the hotels.
As smartphones provide quick access to the Internet, they have contributed to
the development in mass use of social media websites. As a result, speaking of
smartphone development in hospitality consists of dealing with social media and
mobile strategies.
However, the most difficult part for hotels is to introduce social media and
mobile in their marketing strategies. Customers have turned digital, which forces
hotels to get rid of the ancestral marketing methods to be where the customers are.
27
29. Introduction
The development of smartphones contributed greatly to the development of
social media and mobile features applications in that they could be consulted on
mobile phones anywhere at anytime. Social media including social networks can
therefore be seen as a “word of mouth” extension, which is the most efficient
marketing and communication tool in the hospitality industry. Consequently, both
hotel chains and independent hotels have no other choice than to invest time and
money in developing social media strategies in order to maintain relationships with
loyal customers and reach potential ones.
Furthermore, the year 2011 will be particularly crucial to revenue increase in
the hospitality industry because since the first quarter of this year, business travelers
are back on the road. According to a survey made by Deloitte30 on 1001 business
travelers, “80% of them are expecting to take more trips in 2011 than they did in
2010 ». As a result, hoteliers will have to manage the increasing number of
reservations, more stressed and demanding business travelers with different needs and
expectations.
To finish, the real challenge will be to take into account the aforementioned
change along with mobile and social media development. Turning digital will be an
investment in time and money. However, once set up, digital marketing will cost less
than the advertising campaign hoteliers used to run on the Internet. Moreover,
business travelers will keep looking for good prices on the Internet. According to the
survey made by Deloitte, it stated 79% of business travelers intend to spend as much
as they did in 2010 or more. As a result, when talking about marketing in the
hospitality industry, hoteliers can no longer ignore mobile and social media strategies.
30
http://www.gadling.com/2010/11/11/more-business-travel-in-2011-80-to-hit-the-road-more/,
Surveys, November 11th, 2010
29
30. I- Hotels’ Adaptation to Business Travelers of Today
The hospitality industry provides business travelers with more than an
experience; hotels contribute to the smooth progress of their stay, which is directly
linked to their business. This is the reason why it is essential for hotels to understand
the customer’s behavior before, during and after their stay and satisfy them the most.
These last two years, two events contributed to a change in the customers’ attitude:
the new technologies with the smartphone influence especially on social media, and
the global economic crisis, which imposed budget limits.
A- Business Travelers Attitude with Regards to Hotels in the
Aftermath of the Economic Crisis
1- Business Travelers Hotel Booking Process
Business and leisure customers travel differently and even book in a different
way according to the purpose of their trip. This is why hotels have to know who their
customers are, where to reach them and how to entice them, especially in a recession
period.
As far as business travelers are concerned, in terms of booking they first rely on
their companies’ recommendations (leisure travelers first tend to use
recommendations made by friends and family). According to a study made by
Cornell University31 on 2830 business travelers in December 2010, they found that
approximately 40% of travelers select the hotel recommended by their company. In
general, it is important to point out that even in a period of economic stability,
companies tend to follow procedures in order to manage their budget better.
However, since the end of the economic crisis, companies have been making profit
again, and a large number of business travelers claimed that their companies still
enforce travel policies. At the time of the survey made by Deloitte32 in November
2010 on 1001 business travelers, 59% of the respondents revealed that their company
was taking strict procedures such as:
- Pre-trip approvals: 50% had to have their choice of hotel, flight, etc. validated
by the company before making a reservation
- Early booking accommodation: 42% had to book their hotel room in advance
- Budget limits: one third of the respondents reported dollar limits on
accommodations
The economic crisis made companies realize that business travels were
accessible at lower costs. However, in 2011, business travelers seem to spend much
more for flight and food than during the economic crisis. According to the Embassy
31
http://www.hotelschool.cornell.edu/research/chr/pubs/reports/abstract-15359.html, How Travelers
Use Online and Social Media Channels to Make Hotel-choice Decisions, Cornell Hospitality Report,
Vol. 10, No. 18, December 2010
32
http://www.gadling.com/2010/11/11/more-business-travel-in-2011-80-to-hit-the-road-more/,
Surveys, November 11th, 2010
30
31. Suites Hotel’s third annual survey33 led in April 2011, “business travelers remain
budget savvy about accommodations but they are splurging more for flight and food.
Only one corporate traveler out of five is constrained in cutting back on meals, which
represents a fall of 4% compared to 2010).”
http://phx.corporate-ir.net/phoenix.zhtml?c=88577&p=irol-newsArticleOther&ID=1554150&highlight
2- Business Travelers’ Expectation Development on Rewards
During the economic crisis, hotels also took measures to entice the most
customers, including business travelers, as much as possible. The best solution they
found was to launch loyalty programs such as points or room upgrades making
customers gain points and providing reward and value in return. On top of keeping
loyal guests connected with the hotel, this strategy was beneficial in bringing people
into the hotel, which provides more spending in the different services of the hotel.
However, customers got accustomed to these services and kept expecting a gesture
from the hotel as a thank you for booking. According to the Embassy Suites Hotel’s
third annual survey led in April 2011, 27% of the business travelers surveyed (against
24% in 2010) are still looking for value in 2011 when it comes to booking hotels. In
an article published by Lodging magazine34 website and based on a survey made in
the hospitality industry in December 2010, it is said that “Business travelers who were
paying premium prices were thinking beyond loyalty points and expecting added
value and more complimentary services.”
As a result, most business travelers expect to get the basic services (a clean
room and a comfortable bed) along with additional incentives (such as free Wi-Fi or
free parking) as well. This trend is becoming a problem this year with the return of
business travelers. Basically, it was the reduced demand that permitted hotels to
provide reward to the customers. For example, they could easily offer an additional
night stay for a certain amount of points given there were available rooms. To solve
this problem, in an international study on “Hotel Revenue Management in an
economic downturn” made from February 4 to the end of March 2009 by Eye for
Travel 35 , customer relationship managers suggested rewarding guest with status
rewards rather than pure discounts.
B- The Evolution of Online Reservation in the Hospitality Industry
Advanced communication technologies such as smartphones, social media and
mobile applications are essential tools to maintain relationships with customers and
reach other potential customers. More and more hotels are implementing digital
platforms and tools to target business travelers. The best time to turn digital was in
the last two years, when there was a slow down in business traffic, by impressing
33
http://www.examiner.com/global-travel-in-national/new-business-travel-statistics-released, Statistics,
June 16th, 2010
34
http://www.lodgingmagazine.com/Blogs/Blogs/A-Look-at-the-New-Business-Traveler--39.aspx,
Blog, December 2nd, 2010
35
http://events.eyefortravel.com/tdsasia/docs/Special_Report.pdf, Study, Hotel Revenue Management
in an Economic Downturn, March 2009
31
32. customers this year with hotel mobile applications, using advanced online reservation
systems or digital coupons, etc.
However, most of the hotels were on limited budgets during the economic crisis,
which prevented them from developing their online presence and implementing all
kinds of digital marketing strategies. Even if these measures don’t request a high
amount of money, it requests time and knowledge. This is why many hotels recently
hired community managers or web marketing managers. They need their services to
answer the evolving needs and expectations of the customers.
1- Business Travelers’ Online Reservations: a Change in the Hotel
Booking Process
One of the most impressive changes is the booking process. The first thought
that usually comes to one’s mind when finding a hotel is to use the Internet. So far,
most of the reservations have been made through a computer but according to Abou
Tourism statistics36 from March 2011 (an international destination development and
marketing consultancy), among the business travelers surveyed, more than one third
plan to book their services, hotels included, from their smartphones next year. 59%
added that photos of the destinations and hotels would help them make their choice
and 25% would appreciate watching videos before booking.
However, as far as business travelers are concerned, we have seen that 40% of them
selected hotels recommended by their company but a Cornell University37 study
previously mentioned revealed that the others were using search engines or online
travel agents. The table below sums up the information sources business travelers use
when choosing a hotel:
Source: How Travelers Use Online and Social Media Channels to Make Hotel-choice Decisions,
Cornell Hospitality Report, Vol. 10, No. 18, December 2010, Appendix 13
36
http://www.relevanceweb.com/blog/online-tourism-marketing-smart-marketing-with-
smartphones.html, Statistics, March 22nd, 2011
37
http://www.hotelschool.cornell.edu/research/chr/pubs/reports/abstract-15359.html, How Travelers
Use Online and Social Media Channels to Make Hotel-choice Decisions, Cornell Hospitality Report,
Vol. 10, No. 18, December 2010
32
33. The table shows that multiple information sources are used by business travelers
before booking a hotel. Most of them use search engines and hotel search websites
such as Expedia. It may be surprising to see that they don’t consult social networks as
much when making bookings. Actually, social networks are used more by leisure
travelers in that before bookings, they often ask advice from their family and friends,
which is not the case for business travelers. Business travelers use social networks,
but much more to maintain relationships with business people they have met or with
their friends and family when they are abroad.
Furthermore, when studying the phases of a hotel purchase decision, deeper
analysis shows that customers visit different websites according to the stage of their
research. In other words, the more they reach their departure date, the more they will
focus their research on selected websites. The table below shows the websites
consulted during the three phases of research.
Source: How Travelers Use Online and Social Media Channels to Make Hotel-choice Decisions,
Cornell Hospitality Report, Vol. 10, No. 18, December 2010, Appendix 14
The result show that during the early stage of research, future travelers consult
search engines (Google, Bing, Yahoo, etc.), as it is a way to have a broader idea of
what is said about the destination. Then, they have a look at travel agency websites,
probably to read information made by professionals, and then they start looking at
some hotel websites they have selected. During the middle stage, they tend to focus
more and more on hotel websites, while consulting online travel agencies and getting
other information from search engines. At this stage, we can see that they keep
consulting TripAdvisor in parallel, probably to read reviews and see the grades
attributed to the hotels. During the final stages of research, they are close to making
their reservation and many of them are going to do it online. This is why the two
most consulted websites are hotel websites and online travel agencies. At this stage,
TripAdvisor is still visited a lot because the online information and especially
reviews, are going to determine the choice of the hotel.
33
34. 2- Reviews Involvement in the Booking Process
Another change concerning the booking process is the way reviews influence
both potential customers in choosing a hotel and hotel improvements, if negative
comments have been written by customers. Social media and more particularly social
networks “naturally” gave birth to reviews. The movement has been inspired from
blogs, where people could leave a comment about any subject. Then, it was
developed with Facebook as business pages were set up by companies in order to
directly interact with potential and loyal customers.
But the real concept of reviews comes from TripAdvisor, the world’s largest
travel site enabling travelers to get information, and plan and book all the necessary
services regarding their destinations. TripAdvisor has considerably developed the
review concept, so much so that more and more hotel customer relationship managers
answer to reviews made by their customers to show that they stay tuned to their
customers’ recommendations, whether they are positive or negative. This
communication strategy is utterly relevant all the more so as, in an article38 about
mobile growth in travel companies, Eye for Travel reported that six million visitors
now visit TripAdvisor’s mobile site per month. More recently, the check-in concept,
which consists of informing friends and family about the place people are visiting by
connecting through social networks like Facebook or Foursquare, integrated the
possibility for customers to post a review.
Reviews are all the more important in the hospitality industry because hotels
provide a service in relation to the individuals’ primary needs along with an
experience. This is why, according to a Cornell University study39 about “business
travelers’ use of online and social media channels in order to make hotel choices
decisions” they realized that hospitality guests were writing more reviews than rating
the hotels they stayed at. As reviews became popular, doubt started increasing about
the authenticity of the comments or simply on what criteria the comments had been
applied. To solve this problem, professionals or experts in hospitality started posting
comments assuming the authenticity of the fact in order to give a more reliable picture
of the hotel. For example, Forbes Travel Guide has developed the 3.0 travel platform,
which combines expert assessment of restaurants and hotels.
Furthermore, the study points out the importance of professional and customer
reviews in that they have different impacts on business travelers. For instance, the
study reveals that businesswomen tend to read both types of reviews, whereas
businessmen tend to rely more on professional reviews. However, the study
demonstrates that both men and women are equally as likely to eliminate hotels with
negative reviews as to select hotels with positive reviews. The two tables below show
the likelihood for business travelers of booking a hotel according to negative and
positive reviews.
38
http://www.eyefortravel.com/news/europe/why-travel-industry-needs-wake-mobile, News, July 7th,
2011
39
http://www.hotelschool.cornell.edu/research/chr/pubs/reports/abstract-15359.html, How Travelers
Use Online and Social Media Channels to Make Hotel-choice Decisions, Cornell Hospitality Report,
Vol. 10, No. 18, December 2010
34
35. Source: How Travelers Use Online and Social Media Channels to Make Hotel-choice Decisions,
Cornell Hospitality Report, Vol. 10, No. 18, December 2010, Appendix 15
Source: How Travelers Use Online and Social Media Channels to Make Hotel-choice Decisions,
Cornell Hospitality Report, Vol. 10, No. 18, December 2010, Appendix 16
These tables clearly show that no matter the category of hotels, whether they
have a negative review, men and women will stay away and turn toward hotels with
positive reviews. However, it is interesting to see that there is still a small quantity of
people that would select hotels with negative reviews. This happens when reviewers
were not satisfied with a hotel because the atmosphere did not match their way of
living. It is all the more the case when business travelers book a hotel more adapted
for leisure travelers. They would clearly be disappointed with the noise in the hotel,
the presence of children, the slow Wi-Fi or the lack of desks in the rooms. However,
if business travelers complain about that, it won’t prevent a leisure traveler from
35
36. booking this hotel. This is why some negative reviews can have positive effects for
hotels.
C- Smartphones: Business Travelers’ Perfect Assistants
1- Mobile Applications and Social Media Influence
When traveling, business travelers use and hugely appreciate the most, all the
functions of smartphones. On the road, smartphones are the most unique, most
practical and quickest way to access all the information they need. Especially in
travel environments, mobile applications – whether social media or for local
businesses – catch their interests and are very appreciated especially in the hospitality
industry.
Business travelers recognize that mobile applications and social media are very
useful abroad not only for business but for managing their personal life as well.
According to a survey40 done on 200 business travelers by KRC research for Omni
Hotels and Resorts in June 2010, 61% of respondents admitted managing their
personal life online at night in their hotel room.
For entertainment, business travelers tend to use social media the most for the
following activities:
- Checking-in with personal contacts
- Updating their Facebook profile
- Looking for the nearest coffee spot
- Tweeting
However, for daytime activities, business travelers prefer using local businesses’
mobile applications and travel applications for:
- Travel plans: car rentals, flight and hotel reservations, etc.
- Making dinner reservations: according to Abou Tourism statistics in March
2011, four out of five business travelers would like a mobile application that
lists and recommends all restaurants and bars near their hotel.
- Checking-in into hotels
As a result, mobile applications and social media have become real travel
assistants throughout a trip for a business traveler and an essential tool to gain and
manage time on the road. To go further, smartphones are used the most for their
computer devices rather than phone functions.
2- The Impact of Social Media Development on Hotel Reputation
Smartphones, associated with social media, have marked the digital era.
Travelers seem to have forgotten the existence of travel agents. Social media is
clearly an influence in hotel decision making for many young business travelers but
40
http://mobile.channelinsider.com/c/a/Spotlight/Business-Travelers-Relying-on-Social-Networking-
Tools-Survey-Finds-849431/, Surveys, June 28th, 2010
36
37. for more and more older business travelers as well. In June 2010, according to the
Embassy Suites Hotel survey41 on 700 US business travelers previously mentioned:
- 50% of young business travelers use Facebook against 26% of older ones.
Those between 21 and 34 years old are “twice as likely as any other group to
consult their Facebook friends before making work trip decisions.”
- 22% of young business travelers use MySpace against 13% of older ones.
- 17% of young business travelers use Twitter against 8% of older ones.
- 9% of young business travelers use LinkedIn against 5% of older ones.
The growing influence of social media in terms of hotel choice decisions
naturally started with the intrusion of social media in peoples’ lives. When traveling,
it is natural for everybody to enjoy sharing the experience, and today social media is
the most accessible and quickest way to display information, especially from a
smartphone. According to a KRC study42 on 200 business travelers mentioned above,
Twitter and Facebook are social websites or applications most used to share a travel
experience.
As far as Twitter is concerned, 55% of travelers never tweet during business
trips. However, 11% of the respondents tweet often and many of them claimed that
they would tweet about free room upgrades if they were upgraded and about free Wi-
Fi. As a result, for some people satisfied with a service or an offer, it is important for
them to share this positive experience on social networks.
Regarding Facebook, 65% of the 200 business travelers surveyed mentioned
updating Facebook to let their friends and family know where they are, and 35%
admitted updating their Facebook status to let their contacts know that they were
“road warriors.”
Furthermore, the Internet in hotels contributes to the business travelers’
comfort. According to the survey, when they are not working, 61% of the business
travelers surveyed love surfing the web randomly, and 34% contact their friends and
family through Skype or through an instant messaging system. Six out of 10
mentioned requesting a car service to the airport using their mobile application, and
48% are influenced by ordering things as soon as they are available through multi-
touch devices.
This study reveals that social networks naturally contribute to the reputation of a
hotel. The traveler experience displayed on Facebook and Twitter is authentic, which
makes social networks one of the best tools to consult before choosing a hotel. With
the social media development, hotel guests experience starts and finishes with digital
tools.
41
http://www.examiner.com/global-travel-in-national/new-business-travel-statistics-released, Statistics,
June 16th, 2010
42
http://mobile.channelinsider.com/c/a/Spotlight/Business-Travelers-Relying-on-Social-Networking-
Tools-Survey-Finds-849431/, Surveys, June 28th, 2010
37
38. II- Hotels’ Adaptation to Smartphones in order to Entice
Business Travelers
A- The Use of Smartphones in the Hospitality Industry and the
Development of Online and Social Media Tools.
With the smartphone development, the hospitality industry is turning mobile. A
large part of potential customers and loyal customers are indeed active on their
smartphones, so hotels have no other choice than to position themselves on this
channel. World hotel groups and chains have already invaded the mobile space to
satisfy their customers’ needs as fast as possible. However, as the whole hospitality
sector is being impacted, it is becoming urgent for independent hotels to be accessible
on smartphones. This is a real challenge; all the more so as turning mobile warrants a
perfect and regular control of online and social media tools.
1- Mobile Development: Three Difficulties Hoteliers Have to Adapt
Many hoteliers have realized the importance of smartphone use and a
considerable number have even started prioritizing mobile technology at the top of the
list. In a survey by TripAdvisor43 on new UK accommodation owners, among 800
hoteliers and bed and breakfast owners, 72% of them reported that mobile visibility
and marketing strategies were the most important for their business. The potential of
smartphones along with the growing number of smartphone users are indeed a
motivation for hoteliers to adapt. This motivation is essential because turning mobile
revealed not to be easy for three reasons.
a- The Fast Growing Evolution of Mobile Devices
First and foremost, the continuing evolution of mobile platforms requires the
communication and marketing strategies to be adaptable and steady enough. On that
subject, in a recent interview44, the Vice President of e-commerce of Mandarin
Oriental Hotel confessed “The problem is that the mobile device is always changing,
something new is always coming, but the mobile strategy needs to be consistent
across platforms and outlets.”
One example is the “check-in” strategy. It was first introduced by Foursquare, then
extended to Facebook places and Gowalla, and today they are available on Yelp,
SCVNGR, etc. As a result, before planning a “check-in promotion” strategy,
hoteliers have to take into account all the existing platforms and choosing between the
most used by their customers. If they want to plan a “check-in promotion” for a
second time, they have to do the same research work in case a new check-in version
was rolled out or if other check-in platforms were recently launched.
43
http://www.tripadvisor.co.uk/PressCenter-i4764-c1-Press_Releases.html, Surveys, June 29th, 2011
44
http://www.luxurydaily.com/consistency-is-integral-to-maintaining-mobile-consumer-interaction-
mandarin-oriental/, News, July 1st, 2011
38
39. b- More and More Demand Every Year
Secondly, knowing that smartphones are winning over more and more people
every year, hoteliers have to rapidly adapt to the mobile world and display an easy,
practical and perfect use of smartphone tools for their potential and loyal customers.
According to the Fifth Annual Benchmark Survey 45 on Hotel Digital Marketing
Budget Planning and Best Practices of July 2011, 1.5% to 3% of visitors to hotel
websites have accessed the hotel site via mobile devices and there is a 3000%
increase in mobile hotel searches year after year on Google.
One of the main difficulties encountered by hoteliers is managing Mobile SEO
“Search Engine Optimization” in order to appear first and remain first on mobile
search engines like Google and Bing. The challenge is all the more difficult for small
and independent hotels because world hotel groups and chains have content and
enough skill to appear first whether on mobile or computer search engines. Small and
independent hotels, on the contrary, already have trouble being visible in computer
search engines, so turning to Mobile SEO will require time, hard work and money.
c- The Lack of Skills in the Digital Field
Thirdly, the lack of skills in terms of digital and mobile tools may prevent
hoteliers from efficiently using all the potential of smartphones. The competition
between hotels being tight on the Internet, some hotels have to hire people with skills
in online, mobile and social media tools or delegate digital work to intermediaries
specialized in this field. For example, Pacific Hotel Group and Mandarin Oriental
Hotel Group46 recently hired a social media marketing manager to efficiently run the
digital field. Small and independent hotels need cheaper solutions to compete; they
are advised to turn towards a third party company such as ReviewPro, specialized in
online reputation management.
Hoteliers are aware that they can’t afford to lag behind when it is a matter of
mobile technologies. However, the difficulty is such that many of them who tried to
adapt to smartphones last year did not achieve their objectives. According to the Fifth
Annual Benchmark Survey47 on Hotel Digital Marketing Budget Planning and Best
Practices of July 2011, 41.7% of respondents missed their mobile marketing objective
in 2010. Hoteliers have to keep adapting and improving in the digital field, especially
smartphones, because the Forrester research study of July 201148 estimates that by
2013, smartphones and traditional websites will be “the two most important
touchpoints in travel.”
In addition, an older study by Forrester research49 estimated that by 2020, more
than half of travel providers expect to offer virtual reality services to enhance the
customer experience. Hotels will be the first concerned, especially as customers will
want to virtually experience the hotel to make their purchase decisions.
45
http://www.4hoteliers.com/4hots_nshw.php?mwi=8885, Surveys, July 26th, 2011
46
http://www.mobilemarketer.com/cms/news/advertising/10365.html, News, July 1st, 2011
47
http://www.4hoteliers.com/4hots_nshw.php?mwi=8885, Surveys, July 26th, 2011
48
http://www.tnooz.com/2011/07/13/mobile/forrester-smartphone-mobile-travel-strategy-means-
immediacy-push-alerts-and-video/, News, July 13th, 2011
49
http://www.tnooz.com/2011/06/02/mobile/can-mobile-change-the-way-travellers-feel-about-
ancillary-products/, News, June 2nd, 2011
39
40. 2- Mobile Marketing: Two New Challenges for Hoteliers
Once mobile tools are all set up, hoteliers have to face two other considerable
challenges in terms of mobile marketing, which are:
a- Adapting the Product and Services Displayed on the Internet to Mobile
The first challenge, which mainly consists in adapting the information present
on the Internet to smartphones, is aimed at enhancing the travelers’ experience and
increasing sales. So far, hoteliers have been focusing on the three following major
tools:
- Mobile websites: Mobile websites provide the most important information and
widgets concerning the hotels in order to enhance customer experience and end up
with a sale. Managing a mobile website turns out more difficult than a desktop
computer base website because of the platform fragmentation of mobile devices,
operating systems, and browsers and because of the small size of the screen which
limits the content resolution.
Developing mobile websites is becoming a priority for hotels along with
redesigning their computer-based websites. Actually, mobile websites are made from
the computer-based websites, so hoteliers have to start with displaying professional
and user-friendly websites before creating mobile websites. In 2011, according to
Edigital Research50, computer-based websites are not user-friendly enough, are in
general more adapted to business travelers than to leisure travelers, and do not include
customer reviews. Another study by Compuware Gomez 51 added the lack of
delivering enough speed when loading the home page and during customer’s
transactions. Actually, many hotel sites take more than two seconds to load a home
page whereas, according to a Forrester research52 of 2009, 40% of shoppers abandon
websites when they need three seconds or more to appear.
As a result, before turning mobile, hoteliers have to work on their actual computer-
based websites, and correct the mistakes made in the past. This year, 37.5% of
hoteliers have planned to develop a mobile website. They were 25.9% in 201053 (see
figures on the table below)
- Booking engines: whether on the hotel computer-based websites, on Facebook
pages or on mobile devices, these booking engines can bring considerable revenue
increase to the hotel. They indeed enable the hotel to get reservations without passing
through an intermediary that usually keeps a percentage of the reservation. Mobile
booking engines are all the more useful for people on the go such as business
travelers. This year, 37.5% of hoteliers have planned to set up their own mobile
booking engines. They were 22.4% in 2010. (see figures on the table below)
- Smartphone applications: They are interesting tools but not essential for every
hotel. Well-made apps have the advantage of providing a better user experience than
50
http://www.travolution.co.uk/articles/2011/07/07/4849/hotel-chains-score-low-for-online-customer-
usability.html, News, July 7th, 2011
51
http://abcnews.go.com/Travel/travel-websites-fastest/story?id=13739017, News, June 2nd, 2011
52
http://abcnews.go.com/Travel/travel-websites-fastest/story?id=13739017, News, June 2nd, 2011
53
http://www.4hoteliers.com/4hots_nshw.php?mwi=8885, Surveys, July 26th, 2011
40
41. mobile websites. However, they usually are very expensive and have to be built from
scratch for each operating system (Apple, Android, RIM, etc.).
Recently, many large hotel groups have developed smartphone applications for
each of their brands. It is best to provide the customer with selected and clearer
information about the hotel and its surroundings. Single property hotels, independent
and franchised hotels and resorts or smaller and mid-sized hotel chains can largely be
satisfied with mobile websites that actually can provide pretty much the same
information for a much cheaper cost.
As a result, hoteliers prefer focusing on setting up or improving their mobile
websites, and working on mobile marketing instead of wasting money on apps.
Consequently, the smartphone applications industry has seen a considerable decline in
2011. Only 8.9% of hoteliers have planned to invest in a mobile application this year
against 24.1% in 2010. (see figures on the table below)
The table below shows the latest trends in mobile marketing taken by hoteliers the last
two years.
Mobile Marketing Trends in the Hospitality Industry
Source: http://www.4hoteliers.com/4hots_nshw.php?mwi=8885, Surveys, July 26th, 2011,
Appendix 17
The table clearly shows the increase of mobile sites and mobile booking engines
and the decrease of smartphone applications. SMS Text marketing is decreasing
because they are slowly being replaced by Push Notifications, which are free. As for
Mobile banner advertising, their fall can be explained by the increase in social media
strategies (which are successful in terms of communication and are far much cheaper)
and by links towards offers strategically placed around the hotel websites. On the
other hand, many hoteliers are not planning mobile marketing in 2011 – many of
whom must have been trying the previous year without success and who prefer
investing in computer-based websites redesign and social media strategies.
b- Finding Marketing Strategies Adapted to Mobile Technology and Making
Them Appear Like a Service to Customers instead of a Sale
Concerning the second challenge, which is related to mobile marketing
strategies, it consists of hoteliers distinguishing themselves from direct competitors to
41
42. gain market shares and increase hotel revenue. The most difficult part is to increase
sales within the hotels via mobile technology while appearing only as a provider of
valuable services for customers.
To be efficient, the main mobile marketing strategies, according to a Forrester
research study54 and Digital IQ index study55, hotels have to set up are the following:
- Provide the ability to modify or cancel reservation from mobile devices. This
service is valuable especially for business travelers who may be constrained to modify
a reservation for professional reasons. Currently, according to the Forrester study
from July 2011 previously mentioned, already 55% of US business travelers are using
smartphone devices.
- Send Push notifications: They are the free alternative of SMS messages and are
appreciated by customers because when downloading the applications, they agreed to
receive notifications, especially offers. The best time for hotels to reach customers is
when the customer is most likely to need a service, for example when they first enter
the building. The aim for the hotel is to sell a product at a reduced cost that the
customer would not have bought without the push alert.
- Videos: Whether on computer or mobile websites, videos of the hotels are
extremely important before, during and after the stay. Consumers who are satisfied
will want to share the video of the hotel to their contact in order to share the
experience they are living. Too many hotels don’t provide videos but it is a channel
to invest in, especially as more and more hotels mainly draw in customers thanks to
videos. Moreover, according to Cisco’s Fifth annual “Visual Networking Index
Forecast”56, one million minutes of video will be available on the Internet every
second by 2015.
- Augmented reality: as previously mentioned, customers will get used to using
augmented reality for shopping, then they will require the same service for hotels in
the near future. Even though augmented reality is early in the game, hotels should
consider its evolution and what competitors are doing in terms of digital strategies.
One of the latest trends is the digital concierge services. According to Bjorn Hanson,
divisional dean of the Preston Robert Tisch Center for Hospitality Management at
New York University, “high-tech concierge services enable hotels to differentiate
themselves, to add a service that usually ranks among the highest for guest
satisfaction and to achieve higher rates.” To achieve these goals, Mintier Hotel uses a
digital concierge offering restaurant recommendations, flight arrivals and departures,
and driving directions via smartphones and other electronics. Another example is the
Hyatt Hotel chain, which invites its customers to send requests on Twitter with agents
available 24 hours a day to take care of the online customers.
- Adapt emailing to smartphone devices: Email marketing programs keep being
employed in the hospitality industry. 90% of the travel brands surveyed in the Digital
54
http://www.tnooz.com/2011/07/13/mobile/forrester-smartphone-mobile-travel-strategy-means-
immediacy-push-alerts-and-video/, News, July 13th, 2011
55
Study, L2 Digital IQ Index: Travel, by Scott Galloway, April 26th, 2011
56
http://russswan.com/?p=410, News, June 1st, 2011
42
43. IQ index study, send an average of one email every two weeks to customers.
However, 87% of email messaging has not been optimized for mobile devices. Email
adaptation to smartphones will probably increase sales insofar as 63% of customers
receiving emails are likely to end up purchasing. Emailing is part of the highest ROI
“Return On Investment” marketing tools and it has survived the rise of social media.
Hoteliers obviously have a lot to do to adapt to mobile devices in order to
enhance their customers’ experience. However, before turning mobile, they have to
ensure that they provide the right online and social media strategies. If these
strategies remain superficial or not relevant enough, then they are not ready to turn
mobile yet.
B- Social Media: Positioning Strategy and Efficient Marketing Tools
1- Social Media Development in the Hospitality Industry
a- Social Media Evolution: a Challenge for Hoteliers
After the large development of websites in the hospitality industry, hoteliers
started realizing the importance of social media for their marketing strategies and for
enhancing the traveler’s experience. According to the Fifth Annual Benchmark
Survey57 on Hotel Digital Marketing Budget Planning and Best Practices published on
July 2011, 43% of hoteliers believe that social media is one of the Internet marketing
strategies that brings the best results and the highest return on investment. In 2007,
they were only 16.8% who believed so.
However, the same study also highlights the lack of skills in social media among
hoteliers. To solve this problem and gain the best from social media, in 2011 31.1%
hired a social media manager and 24.3% paid a company to handle the task for them.
There are still 27.2% of hoteliers who deal with social media on their own. And
according to a survey conducted on 600 hoteliers during a TravelClick webinar in
2011, a quarter of hoteliers are not positioned at all on social media yet.
On the other hand, social media keeps being developed and enlarged. We have
seen the recent launch of Google+ that is currently adapting to business companies.
In a few weeks, hoteliers will have another space where they will have to position
themselves without knowing the potential of this new social tool. As a result, many
hoteliers position themselves at random; where they think potential customers might
be, without really considering how large the social media space is. Many of them also
don’t realize that social media marketing requests daily work in terms of searching the
latest trends, thinking how to use them to differentiate from competitors, maintaining
website and blog updates, interacting with the most interesting and potential contacts
in social networks and measuring the evolution and the impact they have on the
Internet.
57
http://www.4hoteliers.com/4hots_nshw.php?mwi=8885, Surveys, July 26th, 2011
43
44. b- Hoteliers’ Lack of Skills in Social Media
The way hoteliers use social media has a direct impact on their customers and
on the reputation of the hotel. This is why social media has to be controlled and used
in a professional way. However, when talking about social media, today many
hoteliers mention only Facebook, others add Twitter, which means that most hoteliers
have a narrow view of social media and how to manage it. The tables below draws
the list of the social networks websites used by independent hotels and hotel chains in
2011, according to a survey conducted by Flexis Hospitality Solutions58 in 2011.
Social Media Usage in the Hospitality Industry
Social Media Hotels (May-June
2011)
Facebook 90%
Twitter 65%
YouTube 27%
Flickr Less than 10%
Foursquare Less than 10%
LinkedIn Less than 10%
TripAdvisor No mentions*
Couponing (Groupon, Living Social, etc.) 10%
No social media at all 8%
How they use Social Media
Content updating Once a week 40%
Once a day 25%
Spend less than 2 hrs./week on social media 87%
marketing
Will use social networks as a key part of their 48%
customer marketing plan next year
Don't understand how to market through social 30%
networks
Play at social network, but could make more of 43%
it
*Hoteliers probably did not consider TripAdvisor as a social media marketing tool
Source: http://linkd.in/nlEe2X, News, 2011, Appendix 18
The figures show that more and more hoteliers realize the importance of using
social media because most of them have integrated Facebook and Twitter into their
marketing strategies. However, the fact that they don’t use them regularly (87%
spend less than two hours a week on social media) indicates their lack of skill in this
field. Even worse, there are only 48% who plan to use social media as a key part of
their customer marketing plan next year, which means that more than half of hotels
don’t know where to target their loyal and potential customers.
58
http://linkd.in/nlEe2X, News, 2011
44
45. A study on “How Travelers Use Online and Social Media Channels to Make
Hotel-choice Decisions” conducted by Cornell University 59 in December 2010,
highlighted the fact that no hotel chains of 50 surveyed were strong in the four main
social networks: Facebook, Twitter, YouTube and Flickr. The figures above confirm
this fact but it also shows that six months after the Cornell University study, nothing
has changed.
Furthermore, the Flexis study states that independent hotels are making the
same mistake of not using at least the four main social networks. Only the hotels
belonging to the chain “Great Hotels of the World” and a few others are now using
these four social networks, and in a very efficient way.
2- The Advantages for Hoteliers to Use Social Media
a- The Impact on the Customer’s Decision Making Process
Facebook, Twitter, YouTube and Flickr altogether contribute to the success of
social media strategies of hotels. They have existed for several years and have gained
the user’s confidence. Also called “word of mouth” electronics, these four social
networks have an impact on potential customers’ motivation.
As far as potential or loyal customers are concerned, social media enables to:
The Impact of Social Media Websites on Customers
Source: Plate of the author, Appendix 19
This scheme shows that social media has more impact on potential customers
than travel agents do. They even provide more information about a hotel than travel
agents to entice customer to make a reservation. Social media indeed offers videos,
59
http://www.hotelschool.cornell.edu/research/chr/pubs/reports/abstract-15359.html, How Travelers
Use Online and Social Media Channels to Make Hotel-choice Decisions, Cornell Hospitality Report,
Vol. 10, No. 18, December 2010
45
46. the latest promotional offers and customer reviews, which were not provided by travel
agents. As a result, it is in the advantage of hoteliers to use social media than to go
through the sales rooms at travel agencies because social media is free and has a
better impact on potential customers’ decision making process.
b - How to Use Social Media
The use of the following social networks requires a good knowledge of their
main functions in terms of marketing. However, as social media tools are constantly
being developed and improved, hoteliers have to regularly find out about the latest
trends in this field.
The Four Main Social Media Websites
Source: Plate of the author, Appendix 20
(1) Facebook gathers 750 million users, including more than 250 million active
users through mobile devices, which represents a huge source of potential customers
for hoteliers. Facebook for business requires hoteliers to create a Facebook page. It
46