In the last decade, the Internet has reshaped the way people plan for and consume tourist products and services. More recently, the most significant development in Internet applications has been in the area of user-generated content (UGC) and peer-to-peer applications, the so-called Web 2.0.

Research is shedding light on the significant influence that UGC and Travel 2.0 applications have on generating the idea of travelling, both during the real planning process and even after travel decisions have been taken. Recommendations of friends and colleagues are less important to business travellers than they are to leisure travellers (McCarthy, Stock and Verma, 2010).  Sometimes UGC also induces tourists to alter their decisions after obtaining further information online.

Some empirical data

eMarketer (2007) reports that, among tourists who use peer reviews to help them make their hotel bookings, the percentage of infrequent and frequent leisure travellers who changed their booking based on reviews posted online by other consumers is 25% and 33%, respectively. An empirical investigation on a sample of 823 Italian tourist (Del Chiappa, 2011a) confirmed this figure with respondents reporting that, after having read reviews and comments posted online, they changed their hotel accommodation sometimes (64.8%), almost always (12%) or always (0.5%). In particular, Del Chiappa (2011a) found gender differences in this likelihood, with female respondents doing so (“always” or “almost always”) more frequently (14.8%) than male respondents (9.4%). Another study on a sample of 1,448 Italian tourists reported that 31.56% of respondents had changed the accommodation suggested by a traditional travel agency based upon UGC (Del Chiappa, 2011b).

Credibility and trustworthiness of UGC: Perceptions of American tourists

On the whole, UGC sources are considered more credible and trustworthy than market-provided information and, consequently, are more likely to direct and influence tourist choices. For marketing strategies to be effective, it is therefore crucial to know to what extent tourists consider the different types of Travel 2.0 applications to be trustworthy and whether these applications do in fact exert different influences over the way tourists perceive company image and make their decisions.

Interestingly, recent research has started to analyze the credibility and trustworthiness that tourists confer upon different Travel 2.0 applications, which helps clarify the extent to which they affect tourists’ attitudes and purchasing decisions.

A survey carried out on a sample of 1,900 of American tourists who usually buy tourist services over the Internet underlines the different influences that different Web 2.0 applications have on tourist behaviour (PhoCusWright, 2009). In decreasing order, these are: reviews on OTAs (50%), traveller-generated photography/virtual tours (43%), online travel reviews from travel experts (41%), professional photography/virtual tours (39%) traveller review websites (33%), professional online travel video (29%), traveller-generated online travel video (28%), travel blogs (22%), social networks/people you know (22%), social network/people you do not know (15%) and travel-related podcasts (13%).

Another study (Yoo, Lee, Gretzel, & Fesenmaier, 2009) of a sample of 1,170 American tourists indicates that UGC is most credible when posted on: official tourism bureau websites (41.2%), travel agency websites (36.8%), third-party websites such as TripAdvisor (33.5%), travel company sites (31.2%), personal blogs (18.1%), personal websites (16.1%), social networking sites (13.2%) and photo and video sharing sites such as YouTube (10.7%). To sum up, the aforementioned research underlines that tourists’ choices are influenced more by reviews and comments on online travel agencies (OTAs) than those on tourism-related social networks.

Credibility and trustworthiness of UGC: Perceptions of Italian tourists

Similar findings to those of the aforementioned research have recently been found in Italy. Based on an analysis of 823 questionnaires, the study shows that, for both female and male respondents, OTAs are considered the most trustworthy and therefore exert the most influence on company image and tourist choices. In order of importance, OTAs are followed by: tourism-related blogs, tourism-related social networks, video sharing, photo sharing, forums on the company’s website, non-tourism-related social networks and microblogging (Del Chiappa, 2011a). On the whole, the aforementioned study partially confirms the findings of prior research carried out in the United States by Yoo, Lee, Gretzel and Fesenmaier (2009),  where  OTAs were found to be the most credible Travel 2.0 applications, while non-tourism-related social networks were found to be the least trustworthy. Nevertheless, photo and video sharing sites were found to be less credible in the United States than in Italy.

Moreover, in the same study, respondents reported that they consider comments and reviews posted online to be more trustworthy when there is the same proportion of positive and negative comments (51.2%), or when there are fewer of the latter than the former (39.9%).

Managerial implications and suggestions

On the whole, the findings of the aforementioned research support the marketing and communication strategies of hospitality marketers who have to develop, monitor and manage their corporate brands in a practically infinite virtual domain. Indeed, the research suggests that, in terms of marketing and communication activities, hospitality marketers should split their time and financial resources differently between different Travel 2.0 applications, and pay attention to other differences such as the gender and age of their customers. In particular, hospitality managers should pay attention to UGC posted on OTAs as several studies highlight the great impact, the so-called “billboard effect,” these applications have on the hotel business and the fact that consumer decision-making frequently really starts by looking at these sites, both abroad (Anderson, 2011) and in Italy too (Del Chiappa, 2011c).

References:

Anderson, C. (2011). “Search, OTAs, and Online Booking: An Expanded Analysis of the Billboard Effect,” Cornell Hospitality Report, 11 (8).

Del Chiappa, G. (2011a). “Trustworthiness of Travel 2.0 applications and their influence on tourists’ behaviour: An empirical investigation in Italy,” in R. Law, M. Fuchis and F. Ricci (Eds.), Information and Communication Technologies in Tourism 2011. Vienna, Austria: Springer.

Del Chiappa, G. (2011b). Disintermediation of hotel reservations: the perception of different groups of Italian online buyers, in proceedings of TTRA Europe and AFM Conference 2011 “Creativity and innovation in tourism.” Archamps: April 11-13.

eMarketer (2007). Niche Sites Invigorate Online Travel. Accessed online April 11, 2007, at http://www.eMarketer.com.

McCarthy, L., Stock, D. & Verma, R. (2010). “How Travelers Use Online and Social Media Channels to Make Hotel-choice Decisions,” Cornell Hospitality Report, 10 (18).

PhoCusWright. (2009). Consumer Travel Report.

Yoo, K.H., Lee, Y.,  Gretzel U. & Fesenmaier D.R. (2009). “Trust in Travel-Related Consumer Generated Media,” in W. Höpken, U. Gretzel and R. Law (Eds.), Information and Communication Technologies in Tourism 2009, 49-59. Vienna, Austria: Springer.

Giacomo Del Chiappa – Assistant Professor in Marketing, Faculty of Economics, University of Sassari

Giacomo Del Chiappa received a Ph.D in “Marketing and Business Administration” at the Faculty of Economics of the University of Milan-Bicocca. He was Visiting Scholar at the University of Melbourne (Australia). He is Assistant Professor in Marketing at the University of Sassari, Faculty of Economics. He teaches in the areas of “Tourism Management and Marketing” and “Destination Management” for the Degree in Tourism Marketing and Management, based in Olbia (Sardinia). He is a member of the editorial board of the journal “Tourism Analysis” and referee for international journals. His research topics are related to destination governance and branding, convention site selection criteria and meeting industry and, finally, consumer behavior in tourism. In this latter field his studies are concentrated on responsible tourism, on web 2.0 in the hospitality sector and, finally, on community-based tourism.   Fields of expertise: Destination governance and branding Convention site selection criteria and meeting industry Consumer behavior Organization Web site

Throughout our nearly 15 years of hotel Internet marketing experience, we have been consistently concerned about the increasing level of disparity between savvy Internet/Mobile marketers in hospitality and travel, and the Internet/Mobile Marketing-inept players in the industry.With the advent of social media in recent years, Web 2.0 technologies and the mobile Web, this disparity has accelerated dramatically.

On one side there are the extremely Web-savvy:

• Online travel agencies like Expedia, Travelocity, etc.
• Most major hotel brands’ e-commerce departments
• Airlines
• Some e-commerce departments at smaller and mid-size hotel and resort chains
• Some very bright individuals at the marketing departments of full service hotels, resorts and casinos

On the other side there is everybody else, which unfortunately means the majority of hospitality executives and sales and marketing professionals.
HeBS defines “Web Marketing Ineptitude” as the lack of hands-on experience in Internet marketing and all of its formats: website re-designs, SEO optimizations, search marketing, email marketing, strategic linking, banner advertising and online sponsorships, social media and Web 2.0 and more recently, mobile marketing. In addition, this ineptitude also indicates a lack of understanding of best practices and latest trends in the direct online channel.

In the 1990s, it was “normal” that only a few hospitality and travel marketers were proficient in the online channel.  Less than 3% of travel reservations in the U.S. were booked online back in 1999. In the 2000s (in 2001, online travel bookings reached 5.4% of all travel reservations in the U.S.), hospitality marketers and the major hotel brands began to pay closer attention to the Internet channel. In the years that followed, Internet travel adoption increased dramatically and in 2009 alone over 55% of all travel reservations in the U.S. will be online (45% of all hotel reservations) to the tune of a staggering $116.1 billion (eMarketer).

Yet, to our dismay, over the past 15 years the level of Internet marketing expertise in the hospitality industry has not kept up with this remarkable growth. On the contrary, we are witnessing whole new generations of hospitality executives and marketing professionals who are unfamiliar with Internet marketing in general as well as best practices and trends in the direct online channel.

This problem has been exacerbated by a) the social media and Web 2.0 phenomena, and b) mobile marketing. Both of these new marketing and distribution channels introduced an entirely new level of complexity and skill set requirements, as well as new best practices and trends.

• Social Media have changed how customers plan and purchase travel, how customers access information, and how customers perceive the credibility of information. How can hoteliers create/monitor/take advantage of the social media “chatter” around the hotel, target receptive audiences, and ultimately stimulate hotel website visits, interactions and bookings? What type of Web 2.0 and interactive features and functionality do you need on the hotel website?

• Mobile Web is expected to surpass the traditional Web within the next five years. The promise of “immediate, anywhere and anytime” Internet access, instant information and transaction capabilities, location-based services and personalization are some of the key factors for the “explosion” of the mobile Web. Hotel guests–past, current and potential–are increasingly becoming mobile-ready and hoteliers have to respond adequately to this growing demand for mobile services. This is the reason why hoteliers and travel marketers need to have robust mobile Web initiatives in place, including mobile brand websites, mobile apps, m-CRM and mobile marketing.

Why Is There a Growing Web Marketing Ineptitude in the Industry?

There are many reasons for this “Web Marketing Ineptitude” among the ranks, but here are some of the most important:

Franchised Properties:

• Many major brands control all Internet marketing initiatives at the corporate level, including property-level initiatives, thus depriving staff at the property from any meaningful experience in Internet marketing.

• We have seen a trend among small/mid-size chains to establish small but vital e‑commerce departments. In many cases, these companies outsource whatever online marketing they do to outside vendors. Here again, when outsourcing, they make a crucial mistake by not demanding professional development to be part of the Internet marketing vendor’s responsibilities. This results in Internet marketing expertise not being disseminated to the properties in the process.

Independent Hotels and Resorts:

• The biggest concentration of Internet marketing knowledge is at this level.

• Many big full-service hotels and resorts have some form of in-house Internet expertise. However, due to staff turnover and constantly decreasing budgets, these properties tend to have a very spotty Internet expertise retention rate.

• Smaller hotels and resorts are most vulnerable due to limited budgets and difficulties with hiring and retaining employees with expert knowledge.

Destination Marketing Organizations (DMOs) and Convention and Visitor Bureaus (CVBs):

• These organizations boast some of the brightest Internet marketing stars and some of the most inept marketers.

• In many cases among DMOs and CVBs, ignoring Internet marketing best practices is not even a matter of budget size, but a result of inertia and commitment to traditional advertising formats.

• The government or quasi -government nature of CVBs and tourism offices does not help with the hiring and retention of Internet expertise.

So What Is the Verdict?

HeBS believes there are different levels of Web Marketing Ineptitude in the industry regarding three important marketing media: Traditional Web, Social Media/Web 2.0 and Mobile Web. Here are our estimates of the ineptitude rates in each of these media:

Internet Marketing/Traditional Web

• Nearly 15 years of existence of the traditional Web

• Internet Marketing Ineptitude rate in hospitality:  65%

Web 2.0/Social Media Marketing

• Nearly 5 years of existence of social media

• Web 2.0/Social Media Marketing Ineptitude rate in hospitality:  90%

Mobile Marketing/Mobile Web

• Nearly 10 years of existence of Mobile Web but in reality, the Mobile Web in the U.S. exploded with the introduction of the first iPhone in June 2007.

• Mobile Marketing Ineptitude rate in hospitality:  97%

Conclusion

Hoteliers should strive to gain a crystal-clear understanding of what the best practices and latest trends are in hospitality Internet marketing: what works, what doesn’t, and why. Hoteliers should recognize that they do not have all the answers in-house and that there are thought leaders and other proven industry experts who can help them and their property stay competitive in these economic times, preserve and increase market share, and generate the highest website revenues and ROIs.

Hoteliers should take a hard look at how Best Industry Practices are being utilized by their corporate offices or major brands, as well as by the hotel’s Internet marketing vendors. Almost 15 years after the first online hotel booking, best practices have been established in practically every aspect of hotel Internet marketing. Hoteliers should not allow their Internet marketing vendors to “learn the business on the hotel’s dime.”

The prospect of professional development should become the main criterion when choosing an Internet marketing vendor.  Hoteliers should hire experts who are able and willing to teach the hotel and staff best practices and keep the hotel appraised of the latest direct online channel trends.

Hoteliers should work only with Internet marketing experts who can help them acquire new core competencies and adopt best industry practices in the direct online channel. 

They should provide crucial professional development as well as guide the hotel’s direct Internet marketing strategies, online brand building strategies, e-CRM, website re-design and SEO optimization, search and email marketing, social media and mobile marketing initiatives.

Who took part in the study?

PhoCusWright interviewed nearly 1,500 Canadians for the study, including more than 200 Quebeckers, to analyze their travel planning and booking behaviour. To qualify, a respondent had to have made at least one trip by plane or by train in the preceding 12 months, and stayed in commercial accommodations. The Canadians used in the sampling also had to have used the Internet in the preceding month. Approximately 27% of the adult population meets this profile.

Although this sampling method is very restrictive because it eliminates three‑quarters of the adult population, the findings are nonetheless very valuable since the segment of Canadians used in the PhoCusWright study meet the profile of the industry’s ideal potential tourist.

In addition, the study only looked at consumer leisure travel and “unmanaged” business travel, in other words, business travel arranged by individuals without the help of a corporate travel agency or the company itself. In Canada, this market was worth over CAD$24 billion in 2006. Of this amount, 27% was purchased online, or the equivalent of CAD$6.5 billion. PhoCusWright predicts that this percentage will rise to 39% by 2009. By way of comparison, 34% of all travel‑related purchases in the United States were made online in 2006.

Travel planning and purchases

Approximately two‑thirds of Canadian online travellers use the Internet to plan and shop for their travel products. Online travel agencies (25%), search engines (23%) and supplier Websites (20%) are the primary sources consulted to compare travel products (Figure 1). On average, Canadians consult four sites before making a travel purchase.

When it comes to purchasing travel, nearly one‑third (31%) prefer to deal online directly with the supplier. Despite this tendency, traditional agencies remain competitive and are the trusted source for 27% of online travellers (compared to only 19% for online agencies), once the shopping process is over.

Online purchases

Plane tickets top the list of Canadian online travel purchases, accounting for 73% of the market. Hotel rooms come in second with 12%, compared to 10% for packages and 4% for rental cars. On the other hand, Canadian online travellers purchase plane tickets and hotel rooms in a greater proportion than Canadians in general (88%). (See Figure 2)

Furthermore, supplier Websites, particularly those of the airlines, clearly do better than online agency sites like Expedia. Major players like WestJet, Air Canada and the big hotel chains manage to generate a large percentage of their business online.

Factors influencing the purchase method

A large number of Canadians continue to be attracted by the lowest price, with 37% of those who make online purchases listing this as the primary reason for shopping online (Figure 3). The search for a deal is also an important criterion for those who deal directly with suppliers (25%) or through an intermediary (26%). People who buy their travel products offline do so primarily out of habit (29%) and because of better customer service (28%).

Factors influencing travel decisions

Regardless of whether a travel product is purchased online or offline, many Websites exercise a major influence on the consumer’s planning process and travel decisions (Figure 4). When shopping online, 90% of Canadian online travellers use general search engines like Google and 63% say that these tools influence their travel decisions.

First appearing approximately three years ago, personal review sites (see: Today’s consumers influence tomorrow’s choices) like TripAdvisor already play a major role, both at the planning stage (73%) and as an influence on purchasing decisions (43%). Not surprisingly, destination portals like Bonjour Québec also continue to play an important role. It is interesting to note that meta‑search engines like Kayak and SideStep, already popular in the United States, are also becoming indispensable in Canada. According to the study, 57% of Canadian online travellers use them and 26% feel they are influential when it comes to the decision to buy.

Leisure travellers use both online and offline channels

Despite the Web’s growing popularity among travellers, it is important to remember that traditional distribution channels continue to play a role in the purchasing process, particularly among leisure travellers. In fact, only 22% of online leisure travellers purchase their travel products exclusively online (Figure 5). At the same time, the percentage of those who never use the Internet to purchase travel is even higher (27%). Almost half (48%) have adopted a sort of hybrid approach by using both offline and online channels for their purchases. Overall, approximately 35% of all travel spending is transacted online.

Still plenty of untapped potential

The online travel marketplace in Canada has not yet reached its full potential. The PhoCusWright study examines the potential interest of Canadian online travellers who, at the moment, have still not made online travel purchases. It appears that it is only a matter of time, because 68% of them said they were interested in doing so in the future.

It is often said that the Canadian online travel market lags far behind the American market. According to the new information presented in this study, the Canadian market has made obvious inroads when it comes to using the various online tools available to travellers. Now it is up to businesses to stop hesitating and take action to build an effective Web presence to tap this market.

See also:

- Today’s consumers influence tomorrow’s choices

Sources:

- PhoCusWright. Canadian Online Travel Overview, 2007.

Some concrete examples from the industry

In its September edition of Cultur@, Tourisme Montréal discussed Facebook’s compatibility with the urban and culture sectors. Both sectors already attract the 18-35 year-old customer segment, which is also the most active demographic on Facebook. Many organizations are now using it to communicate with specific clienteles. For example, the Mutek group includes more than 300 fans of electronic music. These group members, in turn, have a multiplier effect. Les Rendez-vous du cinéma québécois has also made good use of Facebook, promoting the activities of this cultural event to its target public: a community of nearly 600 members, all devotees of Quebec film (see illustration).

In the hotel sector, some establishments use it to promote one-time events like a networking happy hour, reunions or art exhibits. For example, Montreal’s the Place d’Armes and the Nelligan, both boutique hotels, use viral marketing to promote their activities and send invitations to potential clients. The owner of these establishments, Dimitri Antonopoulos, uses his own Facebook social network for this e-marketing and has obtained good results. Art galleries are adopting the same strategy to announce upcoming openings. Ski resorts are using Facebook to stimulate discussion among their keenest customers, promote their new season passes, etc. In all cases, it is essentially free advertising.More and more businesses are also using Facebook to recruit employees. Its structure makes it a valuable, easy-to-use tool for recruiting candidates based on their qualifications, current employer, professional title and geographic location. Professional networks can also be used to efficiently circulate information about an opening, while employees can use them to indicate their availability.

Many tourism-based businesses are developing applications

Many businesses are attracted to Facebook’s open platform, developing third-party applications (widgets) that users can add to their profile pages. There are already more than 4,000 such free applications of various types (including 131 associated with travel). The following are a few travel-related examples:

• Mobissimo Travel: to get rates directly from travel partners of this meta-search engine
• Hostels: to search for inns and B&Bs around the world, consult commentary and reviews from Facebook members (anyone or just friends) and, ultimately, complete a transaction on the site itself [www.hostelbook.com]
• Fly by Farecast: to display the best rates and forecasts about one’s preferred destinations (see illustration)
• CityGuru: to find out where to get advice on what is in and out in a specific city
• Trip Planner: to plan and share trips among friends (automatically recognized by Facebook)
• My Travel Blogs: to create a personal travel blog
• Restaurant Reviews: to share advice and commentary about restaurants with friends
• Fly to Friends: to constantly monitor the Kayak meta-search engine for the prices of flights to visit one’s friends
• Cheap Deal Finder: to stay up-to-date on the best travel deals offered by the STA Travel network of travel agencies
• Video Travel: to share one’s most recent travel videos with one’s friends

Although there are countless ways to find travel-related information on Facebook, another relevant aspect is its role as an “influencer.” Unlike travel review sites like TripAdvisor, Facebook acts as a tool for sharing travel experiences and tips from trusted acquaintances and friends. According to Patricia Brusha of the firm A Couple of Chicks, the viral effect of a network of friends can have a tremendous influence on travel decisions.

For better and for worse

Many observers are noting that the effectiveness of traditional online marketing channels, like advertising banners, is likely to decrease rapidly. The Facebook phenomenon is leading the way to a new reality: with so many Internet users actively commenting on brands via their social networks, a company’s reputation on the Web is becoming a major issue, particularly in tourism. According to a study published by UK firm Tamar (specialists in emarketing), travel brands comprise the sector most at risk from negative comments spread through social networks. Furthermore, the great majority (80%) of users of these networks noted that they had used the network as a podium to discuss or comment on a brand or product.

Take the example of Delta Airlines. Facebook has several dozen groups related to this company. Some are made up of Delta employees and communicate a rather positive image. Others, like “Delta Airlines Sucks” and “Warning: Do Not Fly With Delta Airlines,” are used primarily to express frustration with a bad experience and thereby damage the company’s image (see illustration). Other carriers like Air Canada and Air Transat are not immune to this trend either.

On the other hand, aficionados of a product, members of groups like “I Love Tremblant” and “Montreal – The best city in the world” (13,000 members), can become brand ambassadors par excellence. Ultimately, the influence of such groups depends on the relevance and truthfulness of the cause defended by their administrator and, above all, on the credibility and influence of its members.

Of course, the phenomenon is still very young and sceptics are probably right to say that Facebook has yet to prove itself and that some other site could eventually surpass it. In addition, concerns about data privacy could arise and dampen user enthusiasm. However, whether one is talking about Facebook or another leader in the field of social media, the fact remains that businesses who neglect these networks in the next few years or whose managers fail to understand the importance of these new mass communication tools will face a steady decline in their brand reach and influence.

Sources:
- Bly, Laura. “Travelers Arrive at Facebook,” USA Today, August 30, 2007.
- Brusha, Patricia. “How Facebook Will Impact the Summer Tourism Season,” Hospitality Net [www.hospitalitynet.org], April 11, 2007.
- Burgin, Ken. “How to Use Facebook to Market your Restaurant, Cafe, Hotel or Bar,” Hotel News Resource [www.hotelnewsresource.com], August 27, 2007.
- Locke, Laura. “The Future of Facebook,” Time [www.time.com], July 17, 2007.
- Puchot, Pierre. “Facebook est-il l’avenir du Web?” Rue89 [www.rue89.com], September 6, 2007.
- Renaud, Jean-François. “Social networking and marketing: concrete opportunities,” Adviso Conseil [www.adviso.ca], July 12, 2007.
- Rocha, Roberto. “Facebook used to recruit employees,” CanWest News Service [You haven’t heard the last of Web 2.0!
- Your client’s friends are your friends

What is Facebook?

Facebook is hard to understand without experiencing it for yourself. To begin with, Facebook is more than just a Website; it is an entire online social network. However, unlike other virtual community sites focussed on creating new virtual connections, Facebook works exclusively with its members’ pre-existing contacts. One of its founders, Mark Zuckerberg, describes the site as a form of “social mapping” that enables people to communicate with friends, family and co-workers, share information, and create and post a variety of content, all within an extremely efficient, user-friendly environment. Experts are calling Facebook a revolutionary portal and some have even compared it to Google in terms of its eventual impact on society.

The popularity of this collaborative platform is impressive. Founded in February 2004 by some Harvard students, the site had already signed up more than one million active members within its first ten months. Initially reserved solely for students, Facebook did not really take off until it opened registration to everyone in September 2006.

Although the phenomenon is still very young, the site now boasts 40 million members around the world, with more than 6 million in Canada. “Facebookers” are very active; more than half of active users visit the site daily. Since January 2007, it has registered 200,000 new users a day. Interestingly enough, the site is not simply popular among adolescents; in fact, the demographic segment showing the most growth is that of 25 years and over.

For the time being, Facebook seems to be most popular in big cities. The Montreal network already has over 229,000 members, compared to that of Québec City, which has approximately 18,000. However, this data is for illustrative purposes only, given that individuals are not obliged to associate with their given geographic network.

How does it work?

Users start by creating a personal profile, and then connect with other people they know (either directly or through friends) who are already registered on Facebook. There is also a function for inviting other friends who are not already on Facebook to join their network.

Once a user has created a virtual community of their friends or professional contacts, this network is used as a platform for communication: to announce events, support causes, and post blogs, vacation photos and videos, parties, various activities, etc. What distinguishes Facebook in particular is that people use their real identities (see illustration). Users interact with their real-world contacts, whether friends or co-workers. Facebook is a dynamic form of networking and features a number of tools that facilitate communications among existing communities.

Beyond these basic functions, the possibilities are endless. With Facebook, users can share different types of content in a single location and enjoy access to an open technology. This technology has led to the creation of numerous new third-party applications (widgets) – some of which are useful, some of which are just fun – that can be used to personalize one’s profile. For example, the following image illustrates the connections that exist within a Friend Wheel.

According to the research firm comScore, last April this type of online application received over 178 million unique visitors in all.

The impact for businesses

In addition to impressive traffic numbers that have made Facebook the second most popular social network site after MySpace (and number one photo-sharing site), the concept of trust is what justifies the interest in this type of development. From a business standpoint, everyone knows how important “word-of-mouth” is to sales. Facebook is the ideal vehicle for such a viral effect, because it is a human chain based on the built-in trust members have in the individuals that make up their world. For businesses, it offers access to a highly targeted, qualified population.

Businesses and interest groups can also create their own profile to promote an idea, a concept, an event, etc. Facebook’s tremendous flexibility offers users a variety of ways to control the content they send and receive. For example, they can screen irrelevant information, even from within their own network of contacts.

And this is only the beginning!

Facebook is thus a prime example of a major Web 2.0 player. Its rollout is just beginning and its founder recently turned down two purchase offers, including one from Yahoo worth US$1 billion! Valued at over US$10 billion, Facebook is already expected to make a big splash on the public market.

We are probably seeing only the tip of the iceberg. In fact, the company is working on developing an advertising model based on the wealth of information it has about each user. Like Google’s sponsored links, businesses will be able to purchase highly targeted advertising banners on Facebook that match users’ interests and their social network, thus highlighting the true value of this impressive community.

See also:
- What is Facebook’s impact on the tourism industry?
- You haven’t heard the last of Web 2.0!
- Your client’s friends are your friends

Sources:
- Bly, Laura. “Travelers arrive at Facebook,” USA Today, August 30, 2007.
- Brusha, Patricia. “How Facebook Will Impact the Summer Tourism Season,” Hospitality Net [www.hospitalitynet.org], April 11, 2007.
- Burgin, Ken. “How to Use Facebook to Market your Restaurant, Cafe, Hotel or Bar,” Hotel News Resource [www.hotelnewsresource.com], August 27, 2007.
- Locke, Laura. “The Future of Facebook,” Time [www.time.com], July 17, 2007.
- Puchot, Pierre. “Facebook est-il l’avenir du Web?” Rue89 [www.rue89.com], September 6, 2007.
- Renaud, Jean-François. “Social networking and marketing: concrete opportunities,” Adviso Conseil [www.adviso.ca], July 12, 2007.
- Rocha, Roberto. “Facebook used to recruit employees,” CanWest News Service [www.canada.com], September 4, 2007.
- Vara, Vauhini. “Facebook Gets Personal With Ad Targeting Plan,” The Wall Street Journal, August 23, 2007.

What is CRM?

The goal of CRM is to collect as much information about one’s clients as possible, and to combine these individual pieces of information into targeted, personalized marketing initiatives in order to recruit and retain clients and encourage them to spend more.

Interhome and the reassessment of previous practices

Interhome has offices in 20 countries. Each year, it rents over 20,000 vacation homes and apartments to over 500,000 guests, for over 7 million overnight stays and sales of 120 million euros.

In order to promote an inventory of this size to such a large number of potential clients, Interhome uses a variety of communication, promotion and sales methods including distribution networks, advertising, a sales force, catalogue, and the internet. Although the company’s management team believes this number of methods is unavoidable, it is also convinced that using them prevents it from developing an accurate assessment of the profile and habits of its clients.Reflecting on this fact, Interhome’s managers began to ask themselves whether the impressive catalogues listing all the available homes were, in fact, relevant or effective. Producing them involved costs which were not necessarily offset by the relatively low reservation (or conversion) rate. The company also realized that client‑related information was distributed throughout a number of databases.

Know your client

It was then that Interhome decided to invest in CRM in order to consolidate and improve its client‑related information. This new database stores three different kinds of information:

1. history of the consumer’s contact with the company (catalogue orders, reservations, comments and complaints, etc.);
2. data collected during each consumer contact (visiting the site, requesting information, reserving a home, etc.) regarding his/her vacation preferences;
3. complementary information obtained via surveys (lifestyle, purchasing habits, household composition, habits and leisure activities, etc.).

Thanks to this information, Interhome was able to develop a system that creates a profile for each customer. These profiles list the customer’s profile, his/her loyalty index and the complete history of his/her interactions with the company.

The information this system records includes:

• prior expenditures
• preferred destinations
• preferred travel periods
• favourite type of accommodation
• family situation: number of children and their ages
• leisure activities, interests and motivating factors
• preferred method of communication

CRM enables companies to gather the information they need to create detailed consumer profiles which they can then use to implement marketing strategies based on personalized offers.

1‑to‑1 marketing

In order to bring consumer preferences in line with their offer, Interhome developed a new method of classifying residences based on the client’s stated preferences: spa, family, sports, comfort, pleasure, rest, snow and dream destination.

Interhome analyzed the client profile in order to identify the product categories likely to interest him/her. It then analyzed the characteristics of each vacation home (location, accommodation capacity, price, availability, etc.) so it can propose to each of its clients places that are perfectly suited to their preferences.

Henceforth, instead of receiving an exhaustive catalogue, the client receives a brochure listing no more than 8 prospective residences that both fulfill his/her requirements and are available during his/her preferred travel periods. This also enables Interhome to prioritize homes that will generate the highest profit margins.

This personalized brochure is either mailed or e‑mailed depending on the customer’s stated preferences. Automatic follow‑ups are generated by the system and all reservations can be made through Interhome’s website. It goes without saying that all action (requests for information, reservations, etc.) generated by this mailing will be added to the client’s profile, thus further increasing Interhome’s effectiveness.

Telling results!

Lehmann emphasized that the cost per reservation is 10 times lower with the personalized, or “1 to 1” marketing approach than it is with the undifferentiated, catalogue approach. Some of the results he mentioned are as follows:

1. a 30% reservation rate following a request for information (as opposed to a 7% rate with the catalogue);
2. the average rate is one reservation for every 12 direct mail messages, a higher‑than‑average conversion rate for direct marketing;
3. significant savings on postage, since two‑thirds of mailings are done electronically;
4. a savings of 500,000 euros on the cost of printing catalogues;
5. because the company was able to prioritize homes that would generate the highest profit margins as well as profitable complementary sales (transportation, car rentals, ski tickets, trips, packages, etc.), revenue per reservation increased by up to 30%;
6. every year, over 200,000 new client‑related information items are added to the database.

During his presentation, Lehmann did not reveal how much his company spent to develop such an effective CRM system but the results he presented lead one to believe that the move was a profitable one.

Will other tourism companies follow suit?

Many tourism companies have already gathered a significant amount of information about their clients and a number of these companies would probably benefit from adopting the same type of CRM that Interhome did. After all, client data is a gold mine; once data is collected, all the company has to do is put the data to work to make its marketing efforts more targeted and effective.

Source:

* Lehmann, Simon, “Best Practices in CRM & Personalisation, 1 to 1 Marketing @ Interhome,” PhoCusWright conference – ITB Travel Technology, Berlin, March 8, 2007.

An expanding service

Around the globe, an ever‑increasing number of places now offer wireless internet service (wi‑fi). According to an ABI Research study, the number of wi‑fi hotspots worldwide will grow by over 25% in 2007, for a total of 179,500 of those areas so beloved by laptop owners. About 72% of them are found in North America and Europe, but the Asia‑Pacific area is showing rapid growth in that respect.

It’s not just the offer; the interest on the part of internet users is also rapidly expanding. In addition to the burgeoning number of internet subscribers there is an astonishing growth in wireless use, as people become more and more used to going online to check the internet and e‑mail.

The trend reaches accommodation

The hotel industry is well positioned to make the advantages of wireless internet available to its clientele. There are currently 46,000 wireless hotspots in various kinds of accommodation establishments. This amenity confers an obvious competitive advantage that many large hotel chains are eager to acquire. Some operators also use wireless networks for their internal communication.

Two recent surveys conducted in January 2007 by YPB&R shed some interesting light on the relative importance of wireless internet service in hotel rooms. The first survey was conducted on 304 leisure travellers, while the second focussed on the same number of business travellers. Both samplings surveyed American travellers who had travelled over 120 km from their home and spent at least one night in commercial accommodation.

Internet in the room

Clearly, the internet is becoming an essential service and, increasingly, clients expect it to be offered free of charge. Business travellers more or less demand high‑speed wireless internet access in their hotel room (Figure 1). Over 39% of business travellers surveyed said that this free service is extremely important, and 46% of leisure travellers said it was very important (see ratings in columns 4 and 5). The stated importance of this service to travellers decreases significantly as soon as there is a cost attached to it.

Since an increasing number of travellers use laptops, customers obviously prefer wireless internet service. However, both clientele segments still displayed significant levels of interest in having wired connections in their rooms (Figure 2). However, it is to be expected clients will increasingly prefer wireless access.

When questioned about the importance to them of knowing that an accommodation establishment had a public space with high‑speed internet access, almost half (49%) of the business travellers surveyed (compared to 36% of leisure travellers; see Figure 3) felt this amenity was very important as long as it was provided free of charge. Travellers who are prepared to pay for this type of service are in the minority.

As soon as a cost is attached to internet access it becomes clear just how much travellers expect to receive it for free (Figures 4 and 5). Interestingly enough, 9% of leisure travellers not only refuse to pay for high‑speed internet but would quite simply stay elsewhere where the service is provided for free. Almost one quarter (23%) of business travellers feel the same way.

The majority, or 58%, of leisure travellers have less definite opinions: although they do not necessarily want to pay for internet access they would not change establishments in order to get it for free. However, 37% of business travellers would. Regardless of the type of travel, one out of five feels that $5 a day or less is an acceptable amount to pay for this type of service. Only 2% of tourists and 7% of business people would pay $10 or more.

There is one final factor that only affects business travellers, and that is the availability of Internet access in conference rooms. Roughly 44% feel that high‑speed wireless service is very important when it is provided for free, compared to 24% who still think it is important even if there is a charge for that service.

As the number of wi‑fi hotspots grows they will become an increasingly large part of consumers’ everyday life. In fact, a number of cities are working toward turning some of their neighbourhoods into wi‑fi areas, with either paid or free access. For instance, in September 2006, Toronto’s financial district went wireless. Industry players, particularly hotel owners, need to adapt to this trend because clients are becoming ever‑more demanding in that respect.

The goal of network‑based marketing is to increase (or create) awareness of a product or service by taking advantage of social connections between consumers – through either word‑of‑mouth or viral marketing (see also: Le marketing viral, le bon vieux bouche‑à-oreille revisité). However, over the past few years, a new factor has emerged with the increase of web‑based social networks and the many possibilities they represent.

The proof is in the study results

In a recent study of a telecommunications company that was launching a new internet service, two different ad campaigns were carried out: one aimed at potential clients identified by demographic and geographic characteristics, and another aimed at people in contact with current internet service users. The study showed:

• The people who were part of an existing client’s network were 3.4 times more likely to adopt the new service;
• The people who were identified as potentially interested AND who were part of an existing client’s network were five times more likely to try it;
• People who were part of the existing client’s network BUT who did not seem to be potential clients were roughly three times as likely to choose the new service.

The results of this study suggest, in general, that a company can find more buyers for its products by tapping into the network of its current clients. It is also true that the results of network‑based marketing can be influenced by other factors and may vary depending on the product or service in question. For instance, a new and exciting product is likely to generate more buzz. However, the basic truth is that social networks represent a new avenue worth exploring in the search for potential clients.

Clearly, the e‑commerce company Amazon has grasped this concept (see below).

Web 2.0 opportunities

In addition to traditional social networks, the increasingly popular virtual networks have become a mine of information for marketing experts eager to make a connection between a product and a common interest among internet‑users. For example, social networking sites such as MySpace, Friendster and Facebook, and personalized Web pages (MyYahoo) are proof of connections between individuals and hence provide vital information for network‑based marketers. Blogs also attract people with common interests and often provide links to other blogs, thereby creating vast social networks.

Major players have their own means of gaining access to other networks. For example, eBay recently acquired Skype, a free internet telephony and videoconferencing software company, so it can find out who is talking to whom!

Local applications of the trend

Although obviously not all local tourism companies can join forces with MySpace or Skype, here are some action items which will help them take advantage of the network‑marketing phenomenon:

• In your client database, enter any information on your clients’ interests they have given you: whether or not they ski, like fine dining or are interested in regionally‑produced gourmet products, etc. This kind of information can help you define your position with respect to social networks.
• Conduct direct marketing campaigns by encouraging people to pass a message on to their friends (such as contests they can invite people on their contact list to take part in).
• Watch out for instances where people are talking about your company online. Identify the networks and set up a Web presence there.
• Make sure your clients are truly satisfied with their experience. A significant percentage of your clients will be members of a social network and will probably talk to their contacts about their experience.
• Go a step further and invite your clients to tell their contacts about you through sites such as TripAdvisor or by sending virtual postcards.

Create your own web‑based social network

These days, marketing is all about innovation, so why not create your own online community? A new business has sprung up which enables tourism companies to do just that, and it may well inspire a number of copy‑cat versions. Holiday Smilers is aimed primarily at resorts and provides a personalized online space where the company’s clients can create their own profile and talk to other clients, whether past, present or future. The site is set up to enable people to exchange photos of their experience, discuss common interests, ask for suggestions, etc. Members can share their vacation experience with friends by inviting them to become members.

Whether this kind of community is run by a third party (such as Holiday Smilers) or operated by the company itself, it still offers many advantages for a tourism organization. Some of the benefits include client loyalty, the ability to create a personalized vacation product through contacts with other clients (chat forums, organized group activities, photo sharing), the opportunity to e‑mail special offers and, above all, positive word‑of‑mouth referrals.

Resorts are a good example because, due to the very nature of the offer, the buyers of this kind of product tend to meet each other. However, the idea also has great potential for other kinds of businesses as well. After all, as long as people have interests in common, there are opportunities for networking!

Sources:

- Hill, Shawndra, Foster Provost and Chris Volinsky, “Netword‑based Marketing: Identifying Likely Adopters via Consumer Networks,” Statistical Science, 2006, vol. 21, No. 2.
- Hospitality Trends, “Netword‑based Marketing: Using Existing Clients To Help Sell to New Ones,” January 2007.
- Online: http://www.holiday-smilers.com/?&=eng

The 2.0 Philosophy

With Web 1.0, internet users could do little more than browse for information on professionally‑constructed sites, using tools developed by a limited number of companies. The advent of the 2.0 era means users are now active participants, able to produce their own tools and data. They interact with the medium by creating, modifying, organizing, commenting on and uploading content.

Users can take advantage of the internet’s expanded functionalities to build virtual communities where they share information, favourite sites, photos, videos and much more. A wide range of tools have been developed that strengthen the Web’s influence: blogs, news aggregators, forums, meta‑search engines, podcasts, and so on. Some of the better‑known icons of Web 2.0 are:

• Wikipedia: web‑based free‑content encyclopaedia project
• Flickr: photo sharing website
• Del.icio.us: bookmark sharing website
• Myspace: social website with filesharing
• Youtube: video sharing website
• Netvibes: personal news aggregator

The 2.0 trend is spreading!

Today’s internet community includes millions of members, and a great many of them are excited about 2.0. The number of online communities, websites and webtools is growing rapidly. When sectors see 2.0 added after the name, they know it identifies them as a domain where the critical mass of content and users matches the 2.0 mindset.

Already, there is increasing online use of the term “Medicine 2.0,” to refer to the proliferation of sites where people share information and advice, enabling them to confirm a doctor’s diagnosis or diagnose their own illness by comparing their own symptoms with those listed online.

Tourism 2.0

Already a mainstay of the online world, the tourism sector lost no time in adopting the 2.0 philosophy; after all, travel has always involved an element of exchange between individuals. Also, since nobody can try a trip before they buy it, tourism is the perfect commodity to bring individuals together online where they can provide the inside scoop on vacation deals. The kind of networking made possible by the web is the perfect stepping stone to sites that promote the sharing of photos, videos, opinions, advice and referrals related to tourism destinations.

With popular influence rapidly growing, the role of critic and consultant is no longer the exclusive domain of professionals and the same is also true of control over the image of a company or destination. One of the results of web users being able to produce and broadcast information and visual content is that the general public is faced with increasing amounts of material of uneven quality. The power of internet users is so great that it influences the way information is organized and accessed.

It is precisely the emergence of a significant number of web‑tools and sites, specifically geared toward tourism and inspired by the Web 2.0 mindset, that gave rise to the term Tourism 2.0.

Culture 2.0… it’s only a question of time!

Culture in general already has a significant web presence. Many cultural organizations and artists were quick to take advantage of the web’s ability to reach new audiences by creating virtual museums, online art galleries, live concert broadcasts and increased access to archival material – although these offerings are mostly based on Web 1.0.

However, we are starting to see an increasing number of cultural projects that have been more influenced by the 2.0 philosophy, where the general public participates and is involved in creating, personalizing, classifying and broadcasting content. This trend is particularly pronounced among those in the vanguard of Web 2.0, all of whom devote part of their space to culture:

• Wikipedia lets internet users collaborate on writing encyclopaedia articles on a wide range of cultural topics;
• Youtube lets millions of amateur and professional artists upload video clips and short films;
• Various blogs and forums provide a space for authors to share and discuss their work with other community members.

A certain number of cultural entities are also trying to exploit the potential of Web 2.0; among them:

• www.cinemamontreal.com: A space devoted to commercial film, this site now lets people upload and read reviews and comments.
• www.librarything.com: This site lets people catalogue their personal book collection, share it with other community members and make recommendations; it claims it has 100,000 users and 7 million books.
• www.brooklynmuseum.org/community/blogs/: This section of the Brooklyn Museum’s website features blogs and photo‑, video‑ and document‑sharing as a means of promoting interaction with its community. The museum has also designed an impressive space on Myspace, the biggest social networking website (www.myspace.com/brooklynmuseum).
• www.australiadancing.org: Clicking on the Take Part tab on this dance site takes the user to a page that uses “wikis,” a collaborative online tool, to let people share their knowledge, ideas and news about dance.
• www.nzlive.com: Developed by New Zealand’s Ministry for Culture & Heritage, “New Zealand culture online” provides an online space that cultural partners and the general public can use to display information on a wide variety of cultural activities.

When the number of site and users reaches critical mass, the Culture 2.0 movement will take flight!

Culture 2.0…a world of opportunity!

Your clients want to express themselves and get involved, so give them the tools to do it! Adding a blog, forum, comments, opinion or review page to your site will enable them to interact not only with you, but also with each other.

Managers can make good use of this new public‑generated content (blogs, forums, virtual communities, social networks, comment sites, etc.) to learn what their clientele is actually thinking. Monitoring client comments is often much more effective than using customer comment cards, and definitely less expensive than setting up a focus group.

Sources:

- Krajewski, Pascal, “La Culture au risque du Web 2.0 – Stage d’étude,” École nationale supérieure des sciences de l’information et des bibliothèques, December 2006.
- Péloquin, Claude, “Web 2.0, vous n’avez pas fini d’en entendre parler!,” Réseau de veille en tourisme, Chaire de tourisme Transat ESG Uqam, June 27, 2006.

Start with a Website

The first basic principle is that no business is ever too small for a website. Many web design tools do not even require specialized computer knowledge. This accessibility is just one reason that the number of online blogs has mushroomed in the last year (over 100 million).

However, the best solution is to call on the services of a web design firm, who will be able to produce professionally looking content that delivers the desired result. By the way, not all site design techniques are created equal. It is crucial that the selected supplier be well-versed in tourism marketing. On average, a small inn would need to set aside a budget of $2,000 to $4,000 for the design and creation of a website.

Search engine optimization

If a site is well designed, it will be easily found by search engines. However, there are many strategies for increasing site traffic. The technique of search engine optimization can be very effective, but it may be too expensive for organizations with limited budgets.

Another, less expensive, way to increase visibility is to get other sites to include links to yours. Link popularity is an important criterion used by search engines like Google and Yahoo when ranking sites in search results. Incoming links to a site are interpreted as a “vote of confidence” by search engines and are considered in placement rankings. In a Google search using the same terms, this can make the difference between appearing on page 1 or page 10. Regardless of the strategy used, time is also an important factor. Often, the longer a site has been online, the more success it enjoys with search engines.

Develop networking opportunities

One does not need an enormous marketing budget to build online business connections, simply some time. Here are some strategies for increasing the number of sites with links to yours:

• Explore and identify the main points of contact with potential customers. Place a link to your organization on sites containing some tourism-related content such as your local business development centre, a directory of small hotels and inns, a tourist attraction in your region, a snowmobile club, your regional tourism association, etc.
• Create links on sites frequented by potential customers, even if they are not exactly travel-related (e.g., a bird club, wedding planner, chamber of commerce, etc.).
• Target only high-quality sites relevant to both your product and your clientele.
• Ensure your website address is clearly visible in all your communication tools, especially your email signature.

One way to assess the performance of your referencing strategy and the true contribution of your business partners, in terms of incoming links, is through tracking tools such as Alexa. This site instantly supplies very pertinent data on any website, completely free of charge. As an example, we used Alexa to analyze the site for Auberge des Falaises in Charlevoix (Illustration 1). Although not an exact science, Alexa produces statistics like traffic generated, number of pages visited, percentage increase in the past three months, etc. If a site generates enough traffic, one can also get graphs illustrating the breakdown of visitors and visits during a specified time period.

Illustration 1

The Related Links section in particular contains highly relevant information to help you better understand the influence of other sites in relation to your organization. Alexa draws up a list of the sites that send visitors to your site (Illustration 2). This data enables you to quickly see which sites send the most visitors and their traffic ranking, whether you are familiar with these sites or unaware of their existence.

Illustration 2

Finally, it is interesting to find out where else your visitors browse. If you have a lot of traffic but very few transactions, this information will give you a better idea of where your lost customers are going. You will also find out more about your potential customers’ interests. In our example, the most popular site among browsers of the Auberge des Falaises site was that of the Corporation du parc régional du mont Grand-Fonds (Illustration 3).

Illustration 3

Convert visitors into customers

The ultimate goal of attracting a visitor to one’s site is obviously to encourage this potential customer to make a reservation. However, according to search engine statistics, only 3.7% of visits to hotel websites translate into a sale. What usually makes the difference is the site’s professional appearance and usability.

The firm eMarketer has published a ranking of the best online marketing tactics, as well as the worst performing, according to a survey of tech-savvy online advertisers (Figure 1). Paid search ads and house email lists are the two methods that received the highest ranking. On the other hand, sending emails using rented lists was relatively ineffective.

Figure 1

Email segmentation

If you operate a small business, segmenting your email lists may be an effective marketing strategy. Purchasing email lists from specialized distributors may well be beyond your means and this strategy offers mixed results at best, so the ideal solution is to build your own email list.

Segmenting your list means grouping current and potential customers together by what they have in common: interests, purchasing behaviour, demographics, etc. Compiling this data enables you to more effectively target your efforts, adapt your message and obtain a better response rate than you would with blanket email marketing initiatives. On average, specialized firms that conduct such email campaigns charge anywhere from $15 to $150 per month, depending on the size of your list.

Regardless of the company’s size, a well-segmented house email list can encourage customer loyalty and increase sales, convey information relevant to the needs of potential customers, and create a high-quality channel of communication with customers.

There are many tools and strategies available to business owners; one has only to adopt them and use them effectively. We live in an era when the role of technology is to further the development of small business, not hinder it. With a minimum of investment, some good advice, several hours of research, a little curiosity and a dash of resourcefulness, you will be well positioned to market your business like the big players.

Sources:
- eMarketer. “What Works, and What Doesn’t, in Online Marketing,” February 7, 2007.
- Goodman, Gail. “Email Segmentation for Small Businesses,” iMedia Connection, August 30, 2006.
- Husin, Linda. “Booking Is the Keyword,” ehotelier, November 29, 2006.
- Salerno, Neil. “So, You Have a New or Improved Hotel Web Site – Now What – How to Promote Your Web Site,” HotelOnline, November 2006.
- Salerno, Neil. “Production Benchmarks for Your Hotel’s Web Site,” HotelOnline, August 2006.
- Max Starkov and Jason Price. “Strategic Linking in Hospitality: Build a Robust Link Popularity,” HotelOnline, September 2006.