Thursday, 17 March 2011

Growing power of online consumers

The ever increasing power of the World Wide Web is becoming very apparent in the travel industry according to research by Pasi Tuominen, a student on the University’s Business Administration programme.

Dr Tuominen's study highlights that reports suggest that 88% of visitors to travel review sites will be affected by what they see in user generated reviews. However, he adds, what is less clear is how these reviews then impact on hotel performance.

Using popular travel review website, Tripadviser, the study presents evidence of the relationship between the reviews, hotel occupancy level, average daily rate and revenue per available room.

A more detailed look into how Tripadviser presents hotel accommodation following a review may help with the understanding of the above findings. The Tripadviser website will showcase the hotel accommodation according to its popularity - which is based on an overall popularity index score taken from customer reviews. This presentation will by default influence hotel choices that in turn will affect the profitability of a hotel - as the study suggests. Therefore, having a clear strategy to manage reviews would prove beneficial for this sector and it is obvious that any tourism manager which ignores the power of social media does so at his/her peril.

An interesting concept in addition to this however (and one to watch), is the evolving tension between two types of travel providers, the traditional tourism industry and the extremely influential online consumer.

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