The Customer is King: Social Media and the Hospitality Industry

The countdown has begun to the Olympics and London’s hotel market is gearing up for a boom. Francesca Land at Hotel News Now estimates that 18,000 additional hotel rooms are under construction or planned in London.

The Olympics provide a fantastic business opportunity for hotels not just in 2012. Perhaps more importantly, they can help showcase the UK and provide lasting benefits in drawing visitors to London and encouraging them to return.

Savvy hoteliers from across the industry are mindful of the key role that will be played by social media in both scenarios.

Social media is a double-edged sword. On the upside, it is an unparalleled opportunity to attract guests, get them back and through endorsements, to reach out to their friends and contacts.

Today’s customer experience doesn’t begin at a hotel’s website; it begins in the social media ecosystem and knowing the customer is king. Its influence is such that it can also do untold damage to a hotel’s reputation and business in a very short time.

For hoteliers, the importance of travel consumer review sites should not be ignored.

A recent poll conducted by MSNBC shows that 86% of travelers rely on review sites to choose hotel accommodations. Trip Advisor, the world’s largest travel site, boasts 20 million members and over 40 million reviews alone, and there are more than 50 iPhone apps – in addition to the online blogs and communities that have influence as trusted sources.

Cost is a major driver of the hotel review sites’ visitors.

In the run-up to the Royal Wedding, it was widely anticipated that hotel occupancy in the capital over the weekend of 29 April 2011 would be full. The reality was that room occupancy in London in April dropped - staggeringly – to 60%.

Why? One pretty compelling factor may have been that some hotels were charging seven times their normal rates. That kind of customer experience does not take long to get around the social blogosphere. It takes a lot longer- if ever – to change.

It is understandable that in times of depressed spending and highly pressurised business targets, any business would want to take advantage of a great one-off opportunity to make money. But you must always weigh up the risk of the long-term impact.

The customer experience is paramount in providing the point of differentiation in many businesses today. In order to wow them with it you must respect them and know them. This now means understanding the disciplines of business intelligence and social media and leveraging them through their communities and through your own relationship building.

Visitors stayed away in droves in April, but we don’t yet know how much long-term damage by social media has been done to London hoteliers.

Socialcustomer.com Peter Auditore developed a name for the deluge of Tweets, Facebook, LinkedIn mentions and other digital means of notification a social media message or blog may now get : ‘The Social Media Crescendo Effect’.

This flow of influence crescendos through the ecosystem of blogs and communities which are all about content aggregation, viewing and endorsement.

Fortunately, the social media space provides opportunities that are not simply reactive, however. Assuming the customer is still prepared to listen to you, hoteliers can and should take the initiative and actively embrace customers online. eCRM cards, guest satisfaction surveys, customer reviews and sharing (and publishing) guests’ experiences are useful marketing tools – with the advantage of inviting guests to share their thoughts with you first. Savvy hoteliers who can react fast will be able to mitigate or even stop the potentially devastating effect of ‘the crescendo effect’ in its tracks.

Ultimately, customer satisfaction boils down to the message in the title of the latest book by Jonathan Tisch of Loews Hotels: ‘Chocolates on the Pillow aren’t enough’.

We have entered the era of multi-channel marketing - and responding – to the hyper-interactive travel consumer across all available media.

For 2012 and beyond, smart hoteliers will make the necessary efforts to communicate with guests where they are, ignoring no channel, particularly any existing customer review site.