The influence of user generated content on the hotels image by using travel search engines - Dissertation Example

? User generated content and hospitality industry of Institute] [E-commerce] User generated content and hospitality industryLiterature Review Introduction to User-Generated Content (UGC) In this phase of our discussion we would be shedding light upon the ways through which technology has been able to make its impact on the hospitality industry however before proceeding to the other points related to User generated Content it is important to have a clear understanding what it is. If you post ideas, comments, questions, data, graphs, opinions, creations, customizations, ID or other information (such as information on bulletin boards, discussion forums) (hereinafter referred to as "User Generated Content"), on (the) site (s), or if you send to any company this user-generated content via the site (s), it will become the property of that organization. As a standard, the user-generated content is assumed to be non-confidential and we have the right to use or disclose in any manner whatsoever, without representation or notice. (Kary, 2002) The user-generated content or other information should not be offensive (e), pornographic, defamatory, profane, illegal or may violate applicable law, whether governed civil, criminal or religious. User-generated content (UGC) is to become a more important tool for travel marketers, as consumers rely more on independent advice. User-generated content is a delicate area for travel marketers, as there is a risk of negative reviews of destinations or hotels. However, the popularity of sites such as Trip Advisor has forced brands to rethink their strategies. (Jeanett, 1996) With the advancement of contemporary hospitality industry user generated content has turn out to be one of the significant features and requirement in marketing mix and status management strategy of a hotel. While there are many benefits of UGC and it plays an important role in the marketing and the reputation of the business there are some important points that must be considered for User-generated content. As not all the information is accurate or credible hence user generated content can develop a negative impact on the business of hotels. In order to acquire immunity from these ramifications one must keep in the view that in User-generated content all the available content is not authentic and some reviewers may have some other reasons and motivations which might develop adverse effects on the business. A good approach when dealing with such critical situations and making the condition work for your gain is essential. Inaccuracies can take place if the chance presents itself your reaction may make all the difference to how future readers read, understand and interpret the written message. Another important aspect that needs to be mentioned here is that excessive positive and appreciating remarks over a small time period or only positive remarks may raise doubt to the strength of the comments as this gives a feeling that the remarks are not original and added intentionally for the purpose of making good business. This is the fact that customers avoid hotels if they feel an hotelier has so many reviews that are same and positive. Some negative comments work intends to create a marketing balance, particularly if the response of hotelier gives you an idea about real concern and an effort to rectify or correct the situation. A readiness to get better and an interactive tone in the communication process is a good signal for most prospective customers. In the subsequent phases of our discussion we would be looking at the different ways in which the hospitality industry can have an impact upon small countries such as Dominican Republic in developing their tourism sector. Secondly, ways through which UGC has an impact upon consumer behavior will also be a part of the formulated research questions. UGC after the advent of Web 2.0 A recent survey shows that out of 78% of companies use electronic channels, web marketing and email for their marketing purposes (Witkowski, 2007). There are several reasons for this popularity. Firstly, the removal of printing costs and postage has been divided by 5 or even 10 the cost of a direct marketing campaign. On the other hand, there is a quick to implement, providing opportunities for customization, and a reactive tool, since only 2 to 3 days is enough to know the impact of web marketing and e-mailing.  Currently, online marketing budgets represent 37% of total marketing budgets for retail enterprises; their main goals are customer acquisition and / or generation tracks (Ville, 2009). Excluding social media marketing that focus on the number of visitors, marketing managers are basing their assessments on their marketing efforts on online revenue, such as sales. With all this attention on increasing income, why online marketing will not get the best results? In 2007, online sales by the private sector in Canada accounted for a meager 2% of total sales operations (Ville, 2009). Moreover, companies have increased purchases made online by 4% (48% in 2007 against 44% in 2006). Online sales by sectors engage in multi-trade remain much smaller than those to consumers. (37.7% vs. 63.3%). The trend persistently low rate of online marketing will have significant impact on competition in the near future, resulting in reduced competitiveness. Canadian exports of online sales have been declining since 2002. Another parallel reason that has played a highly pivotal role in the dissemination of UGC has occurred with the advent of web 2.0 a new wave of corporations like Google, Digg, Facebook, YouTube has emerged whose business model entirely depend on the collective intelligence of the users of Internet. This new trend of technology not only influences the consumers but it also affects the enterprises. Different scholars have shown that collaborative work and the level of tacit interaction has significantly increased (Bearsdley, Johnson and Manyika, 2006). According to a survey of executives “enterprise 2.0” is more than a simple anecdote (Bughin and Maniyka, 2007). Following facts are: Web 2.0 technology are already known to many executives The executives who are aware of Web 2.0 technology says that their companies invest in this new wave of technology The communication ventures that have been explored by the diverse applications provided by Web 2.0 particularly pose rampant development and progress in the sector of social media which have facilitated the promotion and fostering frontiers (Reactive, 2007) that actually facilitate interactive information sharing, interoperability through which a large number of different and diverse units that are under operation in an organization are able to consolidate their functions in the form of a single unit and entity and a centralized design that has been made for user convenience. (Anderson, 1993) In addition to this other prominent examples that can also be considered an outcome of the applications provided by web 2.0 include the communicative ventures that can be explored with the help of blogs, mashups and folksonomies. It has been estimated that people who are posting comments and contents on web are growing at a steady and rapid pace (Adler, 2007). O’Reilly (2005) is of the opinion that after amalgamating its operations with the dynamic nature of social media, the use and application of web 2.0 has also increased extraordinarily since it has become a pivotal marketing tool for small and large scale entrepreneurs who intend to advertise their products and services with the help of social media websites like Facebook, twitter and Linkedin. However on the flip side there are also some disadvantages that need to be considered in the entire scenario (Zeervas, 2007). UGC, Consumer Behavior and Hospitality Industry The user generated content has a great influence on present era’s consumer behavior. According to Wasserman (2006) almost 21% of the consumers trust the information and content provided through social networking websites. The hospitality industry has existed for several centuries and has become, over time, an industry of ??several billion dollars that was integrated in the economic landscape we know today. The statement of a few figures can give a good idea of ??the weight of the tourism sector in an economy. (CAO, N/A)  In France, for example, tourism has helped create in 2002 to 6.7% of national wealth. For the same year, international tourism receipts in French territory amounted to 36.6 billion euros. Also during 2002, there were 1.5 billion in France all types of hotel nights combined (Wang & Yu, et al. 2002). This data allow asserting that the tourism sector is a major economic sector. These include one of the sectors for which growth has been both the largest and fastest in the second half of the twentieth century. (Clinton and Gore, 1997) Within the hotel sector, we must first distinguish between conventional hotels and hotel chains. Hotel chain is defined as the set of hotels (subsidiaries or franchisees) grouped under the name of a hotel group. The Department of Tourism Action categorized these hotels into six groups in terms of stars. (Scott and Draughon, 2001) This operation aims to represent the standing of the institution based on requirements such as number of rooms, common rooms, the hotel's amenities, size and comfort of the rooms and the level services offered. Regarding the hotel concepts to come, it is no doubt that customer needs are more than ever in the heart of the marketing strategies of hotel companies, while current technology now allows to go very far in determining profile of users of products and services (Pudliner, 2007). Several scholars and studies have tried to identify the influence of web 2.0 marketing on travel’s choice of a hotel and destination. Ricci & Wietsma (2006) were of the opinion that reviews of online customers and bloggers affect differently on travelers when they are planning to travel. The study concluded that travelers consider the reviews about the hotel at the end of their planning and if the review about a hotel is negative, travelers give it more importance. Similarly it is also important to know how travelers can be assured whether any review about a destination or hotel is independent and trustworthy or not (Gretzel, 2006). However, there are online players like TripAdvisor available which reviewed the web content and assess the authenticity of reviews (Gretzel, 2007). Such players have the capability to convert the browsers into buyers and it has been estimated that these players can increase the travel bookings by 10% (EyeforTravel, 2006). According to a study 72% of young travelers of UK confessed that their travel decision has been influenced by such websites (EyeforTravel, 2007). According to Compete Incorporated the user generated content has impacted the choice of hotels of travelers and influenced more than $10 billion annually. (Borwanker, 1997) User Generated Content and Hospitality Industry today Apart from all the significant areas of discussion that have been discussed above there are also some other aspects that need to be provided due attention when considering and assessing the effects of UGC on the hospitality industry. Out of all other important components it is important to realize the fact that with the invasion of the contemporary corporate culture by economic recession the hospitality industry has turned increasingly vulnerable to the adverse repercussions of financial slump. (Hutchinson, 1997) In such circumstances according to (Lutz, 2010) there are a number of strategies that can be devised by the hospitality industry in order to ensure that the performance of their business and industry remains immune to these effects. It is also important to mention here that with the effects of the economic depression deepening the hospitality industry revenues are constantly moving southwards and in such alarming circumstances the social media and other media facilitating the use of user generated content remain a favorable ground for hoteliers to make use of opportunities that the social media brings at their disposal. Some of the ways of boosting revenues in these economically capricious conditions as devised by Lutz include: Developing an understanding towards the crux of the message: Once hotels have devised and chalked out their strategies for the year it is also important that they plan their marketing as well as PR strategies as well through which they can target their messages to the right audience at the right time. Involving the consent of staff when planning social media campaign: Teamwork can help in overcoming biggest hurdles especially in conditions when questions are related to the credibility and customer relations of an organization with its people. Hence it is therefore important in this context that opinions from all key stakeholders concerning the interest of the organization are pooled in and the most appropriate solution or strategy related to it is then devised. Handling the conversation metrics: It is not always mandatory that the opinions related to a hotel are always positive hence it is important that the conversations and discussions that are conducted on social media forums and platforms are closely monitored and supervised by a special communications team especially hired for the fulfillment of this purpose. At many instances it is also possible that the opinion posted by an individual might be of very virulent nature. Even in that case it is important that it is carefully and intelligently handled by the public relations department of the organization. (Folz, 1999) An important aspect that needs to be highlighted here is that Lutz has provided overwhelming significance to the segment of social media in her discussion than other areas utilizing the technology of UGC. This is important as with the passage of time as technology and its frontiers have undergone unprecedented innovation the importance of social media has expanded its scope of functioning from social interaction and networking to the handling and conduction of corporate related operations involving marketing of different products is the most prominent and emerging function out of all others. (Porter, 1985) In another research that has been conducted by (Kessler, 2010) some other aspects and recommendations regarding the devising of ways through which the hospitality industry can help in rejuvenating its falling revenues have been discussed in detail. Once again it is important to mention that the lion share of attention and significance has yet again been provided to social media which has been regarded as one of the most integral factors contributing to the development of the hospitality industry with the help and usage of social media. (Froomkin, 1998) Some of the factors and recommendations that are worth considering in this context include first and foremost the usage of concierge service coupled with the usage of social networking website of Twitter. This technology can be applied in the way that instead of loading guests with a pile of brochures and pamphlets about the hotel, they can simply be provided with this facility by the hotel through the use of which they can ask questions regarding the hotel and the different kinds of services that it provides to its guests with the help of this service. (Folz, 1999) It is worth mentioning here that many tourism bureaus have already started to promulgate such services for their guests whereas hotels are still in the midst of its experimentation. However one of the premium hotel chains located in UK known as Premier Inc has already started to experiment and implement this strategy. They provide their customers with the facility of tweeting their questions before they even check in the hotel. Other premium hotel chains such as Hyatt launched this service back in 2009. (Ghosh, 1998) Another important recommendation that can also play a highly pivotal role in this context is with the application of on-site merchandising facility. This is based upon the exploitation of the resource and facility that hotels can use through the intersection of social media and mobile. If the management of the hotel is aware of the fact that their guests are present in the hotel, this allows them to provide them with opportunities through which they can sow a trust worthy relationship with their guests. (Gill, 1996) Some hotels also make repeated use of this technique such as hotels in Las Vegas by making use of the presence of their guests offer them complimentary cocktails through which they are able to strengthen their trust and credibility with their guests. Hence with the help of on-site merchandising facility a hotel can acquire a number of advantages. (Maitra, 1996) With the growing and every broadening scope of social media the use of its websites has increased concomitantly. Marriot hotels have hired full-time employees to constantly supervise the tweets that are posted by customers about complains and dissatisfaction in terms of service that they had to bear at Marriot hotels. Personnel appointed for this job have been able to supervise their comments and hence this strategy has come in quite handy for re-attracting customers that ended despondently. (Adam, 1998) Another important factor that has been quite important when assessing the impact of user generated content and hospitality industry is through the use and emphasis on the unique properties of the place that people come and reside, once again the use and application of social media comes in as an extremely handy tool. With the help of social media and marketing means provided by these websites large as well as small scale hotels can easily highlight the services and facilities that they provide to their guests and customers. (Hutchinson, 1997) Furthermore with the help and usage of such technologies hotels can also publish case studies in the form of stories about people who had earlier visited the place. In addition to this with the help of different types of videos that can easily be posted on Youtube guests can easily develop access to a wide range of diverse facilities and packages that the hotel offers. (Kalakota, 1997) Research Questions 1. Does User Generated Content pose an impact on consumer behavior of hospitality industry? 2. Has the Hospitality industry become technologically oriented with the advent of UGC? 3. What possible impact can the development in Hospitality industry have upon the economic standing of Dominican Republic References Adam, N. R. 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