Academic Year 2010/2011 International Hospitality Management â€“ Prepa MBA Hospitality Management Center- Paris
How Independent Hoteliers can Capitalize on the Smartphone Revolution through the Use of Social Media, to Entice Business Travelers.
Submission date: November, 14th 2011 Supervisor: Lisa Wines
NICOLAS Emilie MBA 1 B +33 6 03 05 09 49 email@example.com
HOSPITALITY MANAGEMENT CENTER â€“ 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
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.
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
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
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.
The Smartphones Evolution and the Impact on Business Travelers
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.
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
http://www.businessdictionary.com/definition/smartphone.html, June 15th, 2011
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-fonctionsinutilisees-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-inutiliseess576103.htm, Surveys, Date not mentioned
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 â€œSmartphones were the main driver for the growth of cell phones sales in 2010.â€? 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 consumersâ€™ expectations.
http://articles.economictimes.indiatimes.com/2009-03-12/news/28390664_1_smartphones-sales-fallworldwide-sales News, March 12th, 2009 4 http://www.teleco.com.br/en/en_comentario/en_com404.asp, Surveys, February 8th, 2011
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).
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.
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.
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
Google Android HTC Dream It took only one year for Google to launch its own operating system known under the name of â€œAndroidâ€?. 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.
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-smartphonebrand.html, News, September 20th, 2010
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
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-thisquarter/, News, June 13th, 2011 12 http://www.tecnocino.it/articolo/rim-blackberry-thunder-e-la-tastiera-virtuale/11031/, News, July 14th, 2008, Appendix 8
competitors. According to an expert from Business Week Magazine13, RIM is facing two problems: market saturation and the companyâ€™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.
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
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.
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 http://www.comscoredatamine.com/wp-content/uploads/2010/09/Data-Gem_Smartphone-byAge.png, Statistics, July 2010 18
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.
http://www.onlinemarketing-trends.com/2011/04/us-smartphone-ownership-usage-top-5.html, Statistics, April 10th, 2011
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 middle20
http://www.bts.gov/publications/america_on_the_go/us_business_travel/html/entire.html, Surveys, May 2002
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-toface 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=irolnewsArticleOther&ID=1554150&highlight, Surveys, April 26th, 2011
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 selfcontained 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
http://www.businessdictionary.com/definition/application-program.html http://econsultancy.com/us/about 25 http://dictionary.reference.com/browse/social+network 24
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.
http://www.slideshare.net/kcattoor/social-media-in-travel-and-hospitality-business-8074238, Statistics, May 2011
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.
http://www.searchenginejournal.com/google-plus-reaches-25-million-users-activity-declines/31500/, News, August 3rd, 2011
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-mediafor-business-trip-decisions.html, News, June 24th, 2010
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 contactsâ€™ social networking profile
http://wwww.askbte.com/RedlineNews/RedlineNews1/Sheraton_Survey_Outlines_Business_Travelers _Social_69510.aspx, Surveys, November 23rd, 2010
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 travelersâ€™ 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.
The Impact of Smartphones in the Hospitality Industry
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.
http://www.gadling.com/2010/11/11/more-business-travel-in-2011-80-to-hit-the-road-more/, Surveys, November 11th, 2010
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
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
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
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
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 donâ€™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 Travelersâ€™ 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 oneâ€™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
http://www.relevanceweb.com/blog/online-tourism-marketing-smart-marketing-withsmartphones.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
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 donâ€™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.
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.
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
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 wonâ€™t prevent a leisure traveler from
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-NetworkingTools-Survey-Finds-849431/, Surveys, June 28th, 2010
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 WiFi. 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 multitouch 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.
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-NetworkingTools-Survey-Finds-849431/, Surveys, June 28th, 2010
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.
http://www.tripadvisor.co.uk/PressCenter-i4764-c1-Press_Releases.html, Surveys, June 29th, 2011 http://www.luxurydaily.com/consistency-is-integral-to-maintaining-mobile-consumer-interactionmandarin-oriental/, News, July 1st, 2011 44
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 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-meansimmediacy-push-alerts-and-video/, News, July 13th, 2011 49 http://www.tnooz.com/2011/06/02/mobile/can-mobile-change-the-way-travellers-feel-aboutancillary-products/, News, June 2nd, 2011 46
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 travelersâ€™ 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 customerâ€™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 computerbased 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-customerusability.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
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 â€“ 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
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-meansimmediacy-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
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.
http://www.4hoteliers.com/4hots_nshw.php?mwi=8885, Surveys, July 26th, 2011
b- Hoteliersâ€™ 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) 90% 65% 27% Less than 10% Less than 10% Less than 10% No mentions* 10% 8%
Facebook Twitter YouTube Flickr Foursquare LinkedIn TripAdvisor Couponing (Groupon, Living Social, etc.) No social media at all 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 donâ€™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 donâ€™t know where to target their loyal and potential customers.
http://linkd.in/nlEe2X, News, 2011
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
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 customersâ€™ 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
is the opportunity for them to keep in touch with loyal customers, for example by offering them special deals or to attract potential customers thanks to a special event or a general promotion. One of the most used widgets to bring people on business Facebook pages is the Like button that can be incorporated on websites, blogs and other social networks. However, according to a Digital IQ Index study60, 20% of hoteliers don’t even think about placing the button on each of their social media tools. To go further, Facebook recently set up booking engines enabling customers to make their reservations without leaving the page, which limits the risk of losing the customer. Facebook also enables businesses to create marketing campaigns through the use of check-ins, reviews, videos and photos sharing. For example customers can get a free drink by simply checking-in, sending photos/videos to their contacts or writing a positive review about the hotel. This tool provides limitless possibility in creating marketing strategies and the opportunity to differentiate from competitors. (2) Twitter is an instant messaging system available to the public. Each day, 5,000-10,000 new people join Twitter. It is a source of potential customers not to be missed by hotels. Many businesses use Twitter to build their brand by maintaining their followers via updates about the latest trends in their industry without driving direct sales. However, hotels can drive direct sales by creating marketing strategies. For example, they can tweet promotion offers or they can reward customers who tweet positive information about the hotel. According to the Digital IQ Index study, hotel brands that have a Twitter account are not proactive enough, though it is an excellent and easy tool for hotels to interact more actively with their customers. The Four Season Hotel for example has an active customer service on Twitter where they answer customers’ requests everyday at any time. It is important for hotels to add Twitter to their social media list for three reasons: - Twitter enables them to target people who don’t essentially have a Facebook account. Twitter users are usually between 26-44 years old, contrary to Facebook, which draws people aged 18-24 years old. - Hotelier can automatically post on Facebook what they have just tweeted out, given Twitter posts can’t be longer than 140 characters. Facebook goes to 420 characters, which is good for detailed offers, events, articles, etc. - Google and Bing SEO index both Twitter and Facebook content, which can give hoteliers more keywords and a better referencing position. (3) YouTube is a video sharing website that is continually being used by people and businesses. On YouTube, 35 hours of videos are uploaded every minute and, according to a Nielsen study61, in May 2011 video viewing was up 35% on the Internet and up 20% on mobile devices. YouTube is a good tool for hotels to give an idea of how the hotel looks like to potential customers, with the advantage of displaying the video on the first page in search engines. YouTube also provides the ability to create advertising. In this case, videos are clickable and the viewer is directly sent to the hotel website. To finish with YouTube analytics, it enables hoteliers to find out about people who are watching videos and how they were found. Despite all these advantages, according to an HeBS Study62 42.7% of hoteliers still 60
Study, L2 Digital IQ Index: Travel, by Scott Galloway, April 26th, 2011 http://www.socialmediaexaminer.com/8-ways-to-maximize-your-youtube-marketing-results/, News, July 27th, 2011 62 http://www.4hoteliers.com/4hots_nshw.php?mwi=8885, Surveys, July 26th, 2011 61
fail to incorporate videos on YouTube, Facebook and on their websites. The study also advised sending videos via MMS messaging as well. (4) Flickr is a photo-sharing site that can be used as a promotional tool as long as it doesn’t drive direct sales. It enables potential customers to view photos of the hotels and share them with contacts. Just like YouTube, Flickr makes available an analytic tool that enables the user to see which photos are viewed the most and follow what is being said about the hotel. To finish with, Flickr accounts enable hotels to get indexed in search engines, which provide them with better positioning and visibility.
3- Facebook’s Success in the Hospitality Industry Facebook clearly dominates the social media space. Its popularity is mainly due to the fact that most of the potential and loyal customers are using it every day. According to the Digital IQ Index by Scott Galloway made in May 2011, Facebook alone accounts for 12.3% of consumer time on the Internet. As previously mentioned, Facebook’s functions are so varied for users and businesses that hoteliers tend to prioritize their Facebook page more than their other accounts. The Digital IQ index study also highlights three steps hoteliers took part in that contributed to Facebook’s domination in the social media market First of all, more and more hotels use Facebook to gain visibility. Actually, nearly half of the hotel brands have more than one account on Facebook (and on Twitter as well). Hotel chains indeed create at least an account for each hotel of the brand. For example, Four Seasons Hotels and Resorts have Facebook and Twitter accounts for each of their properties. Some hotel brands even choose to create no centralized Facebook and Twitter account to let each property manage their social media presence. Secondly, hotel brands are driving large traffic to and from Facebook. Among the 89 brands, (44 being hotels, and the others airlines and cruises), 78% are convinced that Facebook is the top source of referral traffic and drives 7% of traffic to their brand websites. 90% of them registered Facebook as the “top destination site” after having visited the brand site. Thirdly, the rise of Facebook frequency use is such that it has caused a drop in traffic on the brand websites, on online travel agent websites such as Expedia, and on review websites such as TripAdvisor and Yelp. The study indicates that 70% of US hoteliers manage guest reviews on their own at least once a week, and emphasizes the fact that consumers naturally choose Facebook and Twitter to post comments about a hotel to the detriment of third party review sites (this trend explains the fact that only 9% of the travel brands in the Digital IQ index enable customers to post reviews on their websites.) Despite the economic crisis, hotels have to find time and money to turn mobile and develop social media marketing strategies. Multiplying presence on social media and maintaining and updating each social network has become important for hoteliers to generate revenue. On that subject, many hoteliers have increased their digital marketing budget for 2011. According to the Digital IQ study, 49.1% of them
increased their digital marketing budget by cutting their offline marketing budget. 40.5% are convinced that online marketing produces better results than traditional and offline marketing. More specifically, 27.9% of hoteliers plan to use 11-20% of their budget for digital marketing in 2011 and 22.8% plan to devote 21-49% of their budget for digital marketing this year. Furthermore, in order to save money online, it is important for hoteliers to focus their marketing strategies on social networks. For instance, paid searches are becoming more and more expensive; the use of social networks such as Facebook, Twitter, YouTube and Flickr is a cheaper solution to gain visibility. However, to see their revenue and customers growing, hoteliers will have to work at creating original and interactive marketing strategies. As a result, increased spending through online advertisement for example, as 57% of hoteliers did this year, is a good initiative but it has to be accompanied with hard work in social media channels.
III- Measurement Tools: an Evolution in Hospitality Marketing A- Digital Competence Measurement As online presence and activity is becoming a big success factor for businesses, especially in the travel industry, it is becoming important for companies to have an idea of their digital competence. The use of measurement tools aims at diagnosing the online strengths and weaknesses of a brand, which helps hotel managers improve their online strategies in order to obtain better returns on investment. Digital competence can be measured in different ways. First, Digital IQ Indexes (IQ meaning â€œIntellectual Quotientâ€?) can be attributed to hotels by research centers. The IQ index classifies the hotel according to its online digital performance level. The more they perform on the Internet, the more they get a high IQ Index. Some studies such as the L2 Digital IQ Index63 study provides a large and deep analysis of online performance. For example the L2 Digital IQ Index study published in December 2010, took into account a large variety of data: websites, digital marketing strategies, social media and mobile activities. Secondly, analytic tools are being developed to analyze website performance â€“ taking into account the influence of social media. The most popular analytic tools are Klout, PeerIndex and Crowdbooster. They mainly analyze data belonging to Facebook, Twitter, YouTube, LinkedIn and Foursquare. With the evolution of social media and mobile fields, analytics tools enable one to fully manage the marketing development of a company. Additionally, digital competence measurement gave birth to social media reward programs, a marketing strategy which consists of rewarding the best social influencers of a brand.
1- The Digital IQ Indexes in the Hospitality Industry The hospitality industry being affected a lot by online and social media influence, measuring the digital competence of a hotel has become essential. For hoteliers, being aware of the digital performance of their hotel is very important for two reasons. - First, it lets them see which part their strategies or activities are weak. - Second, it allows them to compare the digital IQ of a hotel with any of its competitors, and determine in which part they excel. The L2 Digital IQ Index study by Scott Galloway made on 89 travel brands belonging to the airline, hotel and cruise industries gives an idea of the hospitality position in terms of digital competences. Among the travel brands, 44 belong to hotel groups, which represents nearly half of the travel brands analyzed. Despite the large number of hotels analyzed, this study reveals the lack of skills in the hospitality industry in terms of digital technologies.
Study, L2 Digital IQ Index: Travel, by Scott Galloway, April 26th, 2011
Source: Study, L2 Digital IQ Index: Travel, by Scott Galloway, April 26th, 2011, Appendix 21
The graph above demonstrates that the hospitality industry has a digital IQ of 97, which means that in general hotels provide less digital performance than the airline industry and more than the cruise industry. The study also reveals that only 30% of reservations are made online, compared to 48% for the airline industry. The lack of digital skills in the hospitality industry that we explained in the earlier part of this chapter (namely slow website performance, the use of only Facebook and Twitter, etc.) is confirmed by these figures.
2- Digital IQ Measurement and Classification of World Hotel Groups The Digital IQ Index study classifies hotels by categories according to the grade they obtained. This enables one to see which hotel groups perform higher than others in terms of online digital skills. The graph below indicates the five categories in which hotels have been classified according to their digital IQ.
Source: Study, L2 Digital IQ Index: Travel, by Scott Galloway, April 26th, 2011, Appendix 22
This ranking highlights the fact that there is approximately the same number of hotels in the Challenges (13 hotels) / Feeble (seven hotels) categories and in the Genius (four hotels) / Gifted (13 hotels) categories. This means that around 50% of hotels among worldwide groups are still lagging behind in terms of digital competences. This ranking also points out that the Starwood Hotel group has the highest digital IQ index of all hotel groups. Starwood indeed has two of its brands (W hotel and Westin) classified as Genius and four brands (Sheraton, Le Meridien, Luxury Collection and St. Regis) classified as Gifted. In addition, the study mentions that there is a relationship between the Digital IQ index and the amount of time users spend on the brand website. According to the study, users respectively spend 6.2 minutes and 4.9 minutes on the hotel websites 52
ranked in the Genius and Gifted categories while spending only 3.4 minutes on hotel websites ranked as Feeble. This means that the Starwood Hotel group is aware of the potential that digital tools can bring to increase revenue and they start with offering customers an enticing and practical website.
3- World Hotel Groups and the Use of Social Media by Brands As far as social media is concerned, the study reveals that the airline industry uses social networks much more and better than the hospitality industry. The table below shows the top 10 hotel brands and their online and social media activities. Top 10 Hotel Brands : Online and Social Media Management Social Media and Online channels Facebook (March 2011)
Social and Online activity
Top 10 hotel brands
Facebook Likes Fastest growing Facebook account
Twitter (Jan-Mar 2011)
Best in tweets Fastest growing Twitter account
Most upload views
No hotel brands Regent International 239% One & Only 39% Hyatt 32% No hotel brands Relais & Chateaux 47% Marriott Hotels 42% Jumeirah Hotels 32% Hilton 24.6 Peninsula Hotels 15.4 Ritz-Carlton 12.2 Sofitel 11.5 Four Seasons 11.1 Hyatt 10.4 Hyatt 1,666,208
Average emails per week
Tweets per day
YouTube (March 2011) Emailing (Jan-Mar 2011)
Source: By the author, made from Study, L2 Digital IQ Index: Travel, by Scott Galloway, April 26th, 2011 Appendix 23
These figures show that hotel groups and chains tend to be more active on Twitter than on Facebook even if they have created accounts on both. The figures also confirm the fact that the four main social networks websites are not used together. On that subject, we can see that Flickr is not even mentioned and, concerning YouTube, only Hyatt videos are the most viewed. Regarding emailing, Hilton is the only one with a cruise brand to send the most emails a week; all the other brands belong to the Airline Industry.
B- Web Analytic Tools: a Growing Trend in the Hospitality Industry 1- The Importance for Hoteliers to Use Analytic Tools The hospitality industry has clearly realized the importance of a performing and attracting website, whether on the Internet or on mobile devices. However, many hotel brands have trouble efficiently using and being active on social media websites. When starting with social media, hoteliers should use analytic tools in order to see the importance of regular posts and interactions with contacts. Several tools exist according to what hotels need to analyze. For instance, PeerIndex enables its users to find influencers from keywords about a topic, a person, a region and so on. It measures the influencers’ recommendations, the hoteliers’ actions about a topic, how the audience reacts and determines a score according to the online authority. Crowdbooster is another analytic tool which provides detailed insights about the hotel’s (or any business’) performance on Facebook and Twitter and how to get better results. Klout measures the social media influences of both companies and individuals, which enables hotels to use it for digital marketing strategies. To finish with, Vrank, a web service for Public Relations Management, measures on a 0-1000 scale, the brand online visibility according to its media coverage, social media mentions and activity, and search engine optimization performance. It also provides a complete report with detailed indicators that enable the brand to improve its online visibility. Klout and Vrank are by far the most recommended tools for the hospitality industry. They can be used separately according to what the hotel needs to measure or they can be used together for a deep analysis of the hotel’s online reputation. a- Klout’s Success Klout uses data on social networks (Twitter, Facebook, LinkedIn, Foursquare, YouTube, Flickr, Instagram, etc.) along with more than 35 variables to determine the social media reach of the users. Klout measures: - the audience (who they are, how many people the user follows, etc.) and their reactions to the user’s content. - the user’s content and its impact on the audience (if posts are ignored, retweeted, etc.) as well as message frequency. - the Network Influence, which means how influential the user’s audience is and who are the user’s influencers. This is the most interesting function for hotels in that it allows hoteliers to identify who are talking about the hotel. This function also enables hoteliers to sort out the best influencers to follow. For example, if someone with high Klout Scores has mentioned the hotel, then it is interesting to single him out because they must have a large contact network. As a result, their posts are likely to have farreaching effects.
Consequently, Klout is important for hoteliers to get an idea about the hotel’s return on investment, campaign reach and what is being done online. However, it is important to point out that Klout algorithms are unable to analyze the whole data on Facebook business pages, YouTube and Foursquare. As a result, this tool doesn’t provide precise information about the user’s real evolution on these social networks. As for scores and status attributed according to online presence and activity, it must not be considered as accurate yet. On the other hand, Klout gives reliable details about the social evolution on Twitter. The company is also working on improving its platform. Recently in September 2011, Klout launched topic pages64, which can show the top influencers in a specific topic no matter what the overall Klout score is. This improvement enables hotels to reward its most influential guests, no matter if their Klout score is high or low. Klout is also considering adding analytics, trends and more topic pages. In any case, Klout is useful in following the general evolution of a hotel on several social networks and it gives an idea about the followers’ profile. Thus, Klout helps one realize how important it is to interact with people, to send only valuable information and maintain the channels on a regular basis. And for more accurate information about the overall online reputation, hoteliers are advised to use Klout along with Vrank. b- The Development of Social Rewards Strategies Social media and online performance measurement in the hospitality industry gave birth to a new marketing trend: social rewards. It is a matter of a loyaltymarketing program, which consists of rewarding the best online influencers of a brand. Social rewards programs can be managed according to Klout scores or according to reviews, check-ins or Facebook Likes. According to the director of ecommerce for the Palm Casino Hotel & Resort in Las Vegas, having people talking about a brand is considered the best form of advertising; therefore, social rewards empower customers to just communicate about the hotel. However, these tools and widgets enable hoteliers to set up an infinite number of marketing strategies, which is an opportunity for them to differentiate from competitors. Their challenge is to use these tools in a very simple, funny and original way in order to entice customers. One example using Klout scores is that hoteliers may select high-ranking social media influencers according to their grade on Klout. For instance, the Casino Hotel & Resort in Las Vegas wanted to reward the best influencers among loyal customers so they created “The Klout Klub.” They decided to reward high-scored loyal customers with amenities in hope that they will share their experience with their online network. On a similar note, hoteliers can choose to reward people who contributed to the communication of a brand by tweeting out a review about a hotel or checking-in on Facebook or Foursquare or even simply Liking a Facebook page. Tweeting out reviews often gives points to guests whenever they tweet about the hotel. For example, the Palm Hotel in Las Vegas offers 10 points for each tweet and adds 250 points if the tweet has influenced one of their contacts to purchase. According to the 64
http://techcrunch.com/2011/09/15/klout-adds-topic-pages-to-give-users-more-context-around-asubject-and-its-influencers/, News, September 15th, 2011
number of points cumulated, customers can receive a free room, dinner, drinks and so on. Concerning check-in or liking strategies, they often consist of offering amenities to customers such as drinks, slippers, and so on. The Palm Hotel in Las Vegas offers two drinks to customers who show they checked-in to the hotel via Facebook. The Radisson Edwardian hotel chain showed itself more original by offering guests an extra two hours in their room before checking out, if they checked-in on Facebook or Foursquare. The social reward trend is being extended in that social media is evolving to make it easier for businesses to reward their influencers. For instance, Klout and Involver, social marketing platforms, have teamed up to allow brands to engage with and reward fans on their Facebook page according to their online influence. Brands only have to add a Klout app to their Facebook page, the app suggests users to measure their Klout score and according to the score, the brand offers a product or service to the customer. It is a way for a brand to offer a customized experience to potential customers, but also to encourage influencers to keep being active on the brandâ€™s social media website. The brandâ€™s communication is indeed more effective when it comes from potential or loyal customers themselves.
This chapter mainly focuses on the changes that the hospitality industry has been facing in recent years. The first decade of the new millennium has been marked by the growing evolution of mobile technologies and social media, despite one of the worst world economic crisises. The whole industry, independent hotels and hotel groups, had to reposition themselves. They had to adapt their marketing and communication strategies according to their loyal and potential customersâ€™ new needs, expectations and behaviors. Business travelers had fewer budgets for accommodations but they were invading the mobile and social media space. Independent hoteliers, with more limited budgets as well, had to turn mobile and adapt to social media. This situation made the competition between world hotel groups harder than it used to be, especially with the announced return of business travelers in 2011. Given the evolution of smartphones, world hotel groups rapidly invested in mobile websites and applications. However, they invested less time in social media developments. This must be due to Facebook domination among social networks. Hoteliersâ€™ priorities were to be on Facebook first, then Twitter. Now they maintain these accounts and mainly set up innovative marketing strategies. However, customers are passing more and more time on social networks everyday, which means that they donâ€™t limit themselves to Facebook and Twitter. Consequently, the difficulty for hoteliers is to enlarge their presence on social media while continuing to adapt to mobile evolution. To finish with, if mobile and social evolution stands for a challenge in world hotel groups, it led to an entire revolution for small and independent hotels. They have to take up the same challenge as hotel groups with even less budget and a few skills in mobile and social media space.
Mobile and Social Media Strategies for Independent Boutique Hotels
Introduction Independent hotels faced the economic crisis in a different ways. Independent luxury upscale and mid-scale hotels saw their customers, business travelers for many of them, reduce their stay or make reservations at independent, small or mid-scale hotels. As strange as it may seem, during the economic downturn, small and midscale hotels took over market shares thanks to their affordable prices. Independent boutique hotels, which are small or mid-size luxury hotels and more and more frequented by business travelers, were more affected by the economic crisis than luxury hotels belonging to world groups or chains. First, they lost market shares. Second, they were budget limited to turn digital at a time when potential and loyal customers were starting to be heavily influenced by good deals on the Internet. However, boutique hotels’ concepts based on offering guests a unique experience are still part of the current trends, which means that with the economic crisis calming down, the market is back. World hotel groups and boutique hotels are both targeting business travelers, which oblige independent boutique hotels to turn digital as much as possible, especially as world hotel groups and chains have already invaded the mobile space. CitizenM, an independent boutique hotel chain, launched an attractive concept for both business and leisure independent travelers. The idea is to provide “luxury for an affordable price.” At CitizenM, luxury is actually a cutting edge modern hotel, where guests can be as independent as they are at home and offering only what guests need. CitizenM banks on simplicity, originality and efficiency whether for the hotel design or its digital marketing and communication strategies. Part of CitizenM’s success is due to its excellent online presence, which earned it a remarkable online reputation. Unlike world hotel groups and chains, CitizenM chose to invade the social media space before turning mobile. As a result, CitizenM is a good example that shows how to benefit the most from online and social media strategies without neglecting the importance of mobile strategies on smartphones.
I- The Evolution of Independent Hotels since the Beginning of the Economic Crisis A- The Situation of Independent Hotels during the Economic Downturn 1- The Different Impacts of the Economic Crisis on Independent Hotels As mentioned in the previous chapter, the hospitality industry has been highly affected by the economic crisis, which started in September 2008. However, whether they were independent or belonging to groups or chains, whether they were luxury, mid-scale or economy segments, hotels suffered from the economic downturn according to different scales. A study led by Cornell University65 in February 2011 revealed that luxury and upscale hotels were most negatively affected by the crisis, essentially because four months after the beginning of the crisis, their situation continued to deteriorate. They indeed experienced a 5% to 6% reduced occupancy in November 2008, and in January, they were still experiencing a 2% to 3% reduced occupancy. Additionally, luxury and upscale hotels had to drop their prices. Luxury segments cut down prices up to $1,80 and upscale hotels reduced prices up to $0,80. Concerning economy and mid-scale hotels, independent for many of them, they suffered the least from the economic crisis according to the Cornell University study. They indeed saw the customers return in January 2009 and even experienced a rise in occupancy at this period. This situation can be explained by their affordable and reasonable prices in an economic crisis. As a result, they took market shares from luxury and upscale hotels. However, when the crisis started, they also experienced price drops that went up to $0,90. Consequently, the hotels that suffered the most from the economic recession were obviously independent luxury and upscale hotels. World hotel groups saw a business slow down in their luxury and upscale hotels but the fact of belonging to a group saw to it that they did not lose market shares. Loyal customers kept booking hotels belonging to the group they were used to; they only booked inferior categories of hotels.
2- Digital Marketing Strategies as a Solution to Face the Economic Crisis When the economic crisis started, digital marketing strategies were more and more experienced by hotel groups. However, most independent hotels did not have the budget to set up relevant digital marketing strategies. Even if they were the least affected by occupancy slow down and price drops, the crisis weakened them even more.
http://www.travel-impact-newswire.com/2011/02/upmarket-u-s-hotels-worst-hit-by-two-big-shocksof-last-decade-cornell-study/, Study, February 27th, 2011
In December 2008, the Big Agency66, a marketing agency from London, looked at the problem encountered by independent hotels and wisely recommended that they set up digital marketing strategies, for the main reason that they would get a faster return on investment than with other marketing strategies. At this time, digital marketing was already considered â€œthe most important distribution and marketing channel in the hospitality industryâ€? according to the managing director of the Big Agency. In addition, the agency revealed that online booking was quickly growing in use. They estimated that at the end of 2010, online booking would reach 45%. Hotel brands were already registering 40% of bookings via their websites. Given that independent hotels were behind in terms of digital marketing strategies, the crisis was an opportunity to make them aware of the importance of turning digital. Most of them had a website and the first advice they were given was to redesign their websites and improve the performance on their websites, especially in terms of page loading and reservation loading. In the previous chapter, studies show that the performance of many hotel websites are still low today, even if these hotels have introduced social media and mobile strategies. Independent hotels were also advised to implement booking engines in their websites. The next step (once website redesign and booking engines set up), was to gain visibility on the Internet. In order to achieve this, they were advised to invest in marketing strategies such as pay per click, search engine optimization and user-generated content. Then, they had to realize that digital marketing had to be maintained on a day-to-day basis via social networks, search engine positioning, online travel agent listings and mobile platforms. The situation of independent hotels was such that they were running a business affected by both the economic crisis and a fast growing, new technology industry. Though the crisis was expected to slow down, more time and money were continually required to manage online presence. In front of these two challenges, there was reason for independent hotels to worry about the future of their business.
B- The Situation of Independent Hotels in 2010/2011 1- The Monopoly of World Hotel Groups and Chains in the Hospitality Market Two years after the beginning of the recession, independent hotels felt economically steadier and more comfortable with the use of the Internet. In addition, travelers were back, especially business travelers. However, world hotel groups and chains also benefited from the improvement of the situation, and unlike independent hotels, they also made the most of their huge online presence and digital marketing strategies. Consequently, since 2010/2011 independent hotels have suffered more than world hotel groups and chains in the economic crisis. The latter have invaded the international market so much so that the number of small independent hotels is
http://www.eturbonews.com/6649/digital-marketing-help-independent-hotels-prosper-duringfinancia, News, December 9th, 2008
declining. According to the French national statistical office INSEE67, in 2008, 45% percent of hotel rooms were available in France, which is 11% less than ten years ago. The reason why a growing number of small independent hotels are closing down or only a few number dare opening every year is due to the impressive presence of world hotel groups and chains. Most of them are American groups or brands that are interested in the European market. According to Otus & Co68 (strategic analysis experts of the hospitality industry), in June 2010, Four Seasons hotels, Starwood Hotels and Resorts and Marriott International were already stepping up their expansion effort in Europe. The Internet essentially contributed to world hotel groups and chainsâ€™ expansion. They first invaded the digital space, reaching top ranking in search engines and online travel agent listings, as well as fully managing online advertisements and using social media websites. As a result, they were the most visible on the Internet among all hotel categories and started to target Europe. European countries have been affected a lot by the economic downturn and are still trying to recover. Consequently, in Europe the domestic traffic drove more revenue than the international traffic. For example, according to PRS Oberoi69 (CEO of East India Hotel Limited), in May 2011, international guests contributed to 70% of the demand in luxury hotels, whereas for mid-market hotels, domestic travelers contributed to nearly 90% of the demand. With competitive prices and high visibility, world hotel groups and chains are attractive for European travelers with limited budgets. As a result, the Internet contributed much more to the success of large hotel groups and chains than it did to independent hotels. With bigger budgets they set up strong digital marketing campaigns that enabled them to expand abroad.
2- Solutions of Independent Hotels to Remain in the Market With the competition of world hotel groups and chains becoming harder and harder for independent hotels, they have to make a decision whether to close down their business or collaborate. Given the growing demand in the hospitality industry, independent hotels are reconsidering their status in order continue their activity. Independent hotels have several possible solutions. All of them require losing a bit of independency in exchange for joining forces in this tough competition. According to the independent hotelâ€™s size and requirements, they can choose to join a referral chain, an affiliation group, an independent organization, or take part in an independent loyalty program. With so many possibilities, the entire hospitality industry is changing. Nowadays, with no recognized brand names, hotels canâ€™t survive for a long time. The table below sums-up the different groups or chains that exist for independent hotels.
http://independent-hotels.info/small-hotels.htm, News, 2011 http://nishithsblog.wordpress.com/2010/06/16/small-mid-sized-european-hotels-can-still-increasetheir-online-bookings/, Statistics, June 16th, 2010 69 http://articles.economictimes.indiatimes.com/2011-05-30/news/29598841_1_occupancy-averageroom-rates-hotel-industry/2, News, May 30th, 2011 68
Branded group/chain Referral/ voluntary chains
Examples - Logis de France - Inns of Tradition (UK)
- Gain worldwide exposure - Gain marketing and sales support
- Autograph (Marriott) - Ascend Collection (Choice Hotels) - Luxury Collection (Starwood)
- Small Luxury Hotels of the World - The Kiwi Collection
- Recognized brand name - Services: sales, marketing, technology and distribution. - Travelers sign up for the program, earn points that can be redeemed for room nights
Benefit Brought - Recognized brand name - National and International advertising (offline and online) - Access to millions of loyaltyprogram travelers - Marketing resources - The association with worldwide hospitality player without strict standards and operational obligations - Afford more freedom than traditional branded asset do
- Leading Hotels of the World - World Hotels - Design Hotels - Voilà Hotel Rewards - Stash Hotel Rewards Independent loyalty programs
*IH=Independent Hotel * SLHW= Small Luxury Hotels of the World * ROI= Return on Investment
Results Chosen by many IH* but the competition is still hard
- Marriott expects 120 to 130 autograph hotels in the next 4 years. - Starwood has 73 luxury collection properties in more than 30 countries (franchised or managed branding options) - More and more hotels are joining even if they have to meet some standards and criteria. - SLHW* increase members’ revenue (+15%) and reservation (+18%) - Kiwi Collection has 2,100 hotels in 127 countries - 73 hotels ( a record) joined World Hotels in 2010.
- Voilà: 250 members since 2008 + 300 to 400 ROI* - Stash: 107 members since 2010
The table shows the development of hotels’ affiliation with brands whether they are affiliation groups, marketing-oriented groups or independent organizations. The hotels affiliated with referral chains benefit from a brand name but they are still less visible than hotels affiliated with renowned hotel groups or organizations. However, even if these affiliation groups or organizations attempt to win over independent hotels by providing ways for them to maintain their independence, the latter have to meet certain criteria and standards, adapt to different operating strategies, and face financial pressure. According to Linda Bruno, managing director of Consultcare International Limited, affiliation groups and organizations don’t understand that independent hotels are appreciated for the guest experience they provide, which requires a lot of involvement in the process. As a result such pressure and changes for independent hotels can affect their business. The table also highlights the growing success of independent loyalty programs. These programs are valued because they enable independent hotels to benefit from an affiliation without the negative points mentioned above. Belonging to such programs allows hotels to enhance the guest experience through rewards and to keep running their business as they used to do. However, these reward programs are only beneficial to mid-scale and upscale hotels, because many of them maintain their online presence and are able to communicate about their products and reward programs on their own.
C- The Rise of Boutique Hotels 1- The Growing Development of Boutique Hotels The economic crisis and the fast growing evolution of the new technologies did not spare boutique hotels, whose strengths are their independence and unique styles. The success of boutique hotel began in the 80’s at a time when world hotel groups and chains were dominating the hospitality market. Like many independent hotels, boutique hotels are small establishments with usually less than 100 rooms, have limited marketing budgets, and have their own booking system. However, they differentiate from independent hotels by their unique charm – usually pretty chic and quirky. Steve Rubell, co-founder of the first boutique hotel “Morgans” on Madison Avenue, was inspired by these characteristics when he characterized these hotels as “boutique.” According to him, these hotels were more like boutiques than department stores. As time passed, the term “boutique hotel” expanded and was attributed to small luxury establishments with a modern and elegant edge, and slick and personalized services. They also have innovative designs in relation to the hotel theme. Nowadays, boutique hotels are not only in local areas but can also be found in any fashionable or inspiring locations, whether in the city or countryside. Since about two years ago, they started to target business travelers and extended their range of services to include a “relaxation” theme in cities – spa treatments and technological features such as WiFi connection in every room to start with. Targeting business travelers was a clever idea, especially as business travelers are more and more looking for a home away from home, with personalized and speedy services for customers. However, during the economic crisis, among the independent hotels in general, boutique hotels suffered the most. As explained in Chapter One, during the economic crisis business travelers shortened their stays and 64
could no longer book luxury and upscale hotels. According to the article “boutique hotel deeply affected by crisis” on cpp-luxury.com70, during the first six months of 2009, boutique hotels, and especially recently opened hotels with less than 20 rooms, lost up to 60% of their sales. Concerning luxury and upscale boutique hotels, they could hope to survive the crisis but were widely advised to adjust their rates, be more flexible, and keep offering high quality and personalized services. Last but not least, boutique hotels had to keep developing the unique experience they offered to guests, especially through digital technologies and the Internet.
2- The Solution of Boutique Hotels to Face Economic Downturn Boutiques hotels, despite the fact they are becoming more and more attractive for business customers, have been facing so much unsteadiness since the economic crisis that they especially have to take measures to keep their independence and remain in the market. The current success of boutique hotels, especially in Europe, developed the ambition of big hotel groups and chains to acquire properties in economic difficulty and, in addition, encouraged boutique hotels to join chains. Therefore, boutique hotels’ owners have the choice between two solutions to remain in the market: - Become affiliated with a hotel group or chain: This solution is interesting for boutique hotels in real economic difficulty. This measure enables properties to keep running their activity but in exchange they have to adopt the hotel group procedures. One example of affiliation is the Wyndham Hotel group that announced its future franchise with Chatwal Hotels and Resorts’ Night and Dream boutique brands. - Join a chain of boutique hotels. It is a way for boutique hotels to join forces together and stay out of the hotel groups’ target. In order to keep their independence the most, these chains of boutique hotels put their priorities on keeping each property individual and display a discreet branding. For example, the Stein Chain has now 10 boutique hotels in Europe. However, the craze for boutique hotels is such that it created a rush among hotel groups and chains to acquire boutique hotels. In order to benefit the most from boutique hotels, hotel groups and chains decided to convert existing hotels into boutique hotels. In a post crisis situation, it is a much better solution than building boutique hotels from scratch. For example, Hyatt Hotel, Inc.71 is looking to double their 34 joie de vivre properties in the USA by acquiring independent hotels.
3- The Success of Boutique Hotels since 2010 Created in the 1980’s, the boutique hotel’s concept started flourishing only in 2010 for two reasons.
http://www.cpp-luxury.com/en/boutique-hotels-deeply-affected-by-crisis--eastern-europe_362.html, News, August 24th, 2009 71 http://www.ttgnordic.com/news/item/439-boutique-hotel-brand-race-is-on, News, April 6th, 2011
First, despite the economic crisis, these independent hotels had to invest in digital marketing. They had a website but needed to provide customers with online booking. Then they started showing their presence on online travel agencies in order to directly compete with big hotel groups and chains. Secondly, the concept of boutique hotels matched with todayâ€™s guest expectations, especially business travelers. Typical customers of boutique hotels indeed are creative and innovative young people who are most of the time technologically savvy with mid-upper income revenue. According to an expert in the hospitality industry interviewed by the New York Times72, they appreciate boutique hotelsâ€™ unique styles, and would pay more for the experience enhanced in boutique hotels. Consequently, according to experts in the hospitality industry, boutique hotels are expecting to rise to 10% in urban areas by 2025. As a result, with the return of business travelers on the road since the beginning of the year, 2011 is obviously a favorable period to launch new boutique hotel concepts, raise prices and develop already existing properties, especially in the digital field.
http://www.ttgnordic.com/news/item/439-boutique-hotel-brand-race-is-on, News, April 6th, 2011
II- Digital Involvement of World Hotel Groups and Chains World hotel groups are the first concerned with digital developments, especially in terms of marketing strategies. They indeed have marketing budgets to adapt to digital platforms and hire social media managers. Moreover, they survived the economic crisis better than small and independent hotels and are currently investing in digital space to differentiate from other competitive groups and chains. Furthermore, being luxury and business brands for most of them, they have to satisfy guests who are familiar with advanced technologies and are used to using them for personal and professional reasons. These are the three main reasons that explain the rapid digital involvement of world hotel groups. However, turning digital requires time and specific skills to have new digital platforms, such as mobile websites or applications developed, to get informed of the latest trends in social media tools, and to set up updated and relevant marketing strategies. This is why in 2011 there are very few hotels using the entire potential of mobile platforms and social media websites to implement relevant marketing strategies.
A- The Digital Strength of the Best World Hotels Groups and Chains Turning digital is currently the most important priority for independent hotels’ success. One of the first steps to take is to follow what is being done in terms of digital marketing in the hospitality market. For world hotel groups and chains, being currently the most digital savvy, it is essential to regularly follow and analyze the development of their digital strategies. The table below compares world hotel groups according to their mobile and social media strength. The basic usage of a mobile platform and social media by a hotel group is not mentioned in the table because it is not related to digital performance. For instance, if a hotel has created a YouTube account only to differentiate from competitors but never maintained or updated it, then it’s not considered digital competence. Some hotel groups even admitted operating as amateurs on some social media websites. In an article on 4Hoteliers.com73, according to the hotel reviewer and expert on luxury travel Malanie Nayer, “Hyatt is one of the most active hotel groups on Twitter but considers itself an "enthusiastic amateur" on Facebook.” Acting as an “amateur” on a mobile platform or on a social media website is actually the main weakness of most hotel groups. Thus, by highlighting the world hotel groups’ digital strength, the table shows the disparity of the use of mobile and social media among the brands.
http://4hoteliers.com/4hots_fshw.php?mwi=6087, News, June 8th, 2011
Hotel groups/chains Marriott International
Starwood Hotels & Resorts
Hyatt Hotel Corporation
Mobile Strategy - SP* app: • Make and modify reservation, corporate rate via codes - "App-like" mobile website • Find nearby hotels, book a room, check upcoming reservations • Enroll in Marriott Rewards, check their point balance - Tablet PC: • Virtual concierge (JW Marriott Hong-Kong) Giant Marriott Hotel: top performing hotel booking site (less than 2 sec homepage loading) - Unique site platform for all brands - SP app: • Make and manage reservation - Personalized app for each brand: • Order room service, request housekeeping service, steaming music player (W Hotel app) • Virtual concierge (SLS Hotel app) - Digital check-in + door opening from SP: for business travelers at Sheraton, Le Meridien, W Hotels. - SP app: • Check-in and check-out remotely • Corporate / group rates. - Mobile platform (for Gold Passport members)
Social Media Strategy
- Twitter: • Centralized growing account • Ritz-Carlton (12.2 tweets per day) - 4SQ**: • World Concierge (Ritz Carlton) - Ritz Carlton’s “Let us stay with you” (digital global campaign)
Recruited people on social media sites to be mystery guests so they can share a review
- Personalized social media websites for each brand - Personalized Website pages and tabs in mobile applications for each brand. - Facebook Like button: used to start conversation with customers 24/7. - 4SQ check-in loyalty program (1000 Starwood hotels)
Link@Sheraton: Internet lounge + social networking hub in 400 hotels 360° customer experience - Twitter: • 10.4 tweets a day (ranked 6th among hotels) • Twitter concierge service 24/7 - YouTube: ranked 1st among hotels - Facebook: growing account (ranked 3rd among hotels)
Intercontinental Hotel Group
- 1st app for iPhone, iPad, iPod: provides virtual vacations to UK and US users at Hilton around the world for the “Stay Hilton, Go Everywhere” campaign. - SP app: • Make and modify reservation • Order meal before arrival
Great Hotels of the World
- Website: removal of booking and credit card fees
- Ipad: Concierge Insider Guide App - iPhone: booking apps for 7 of the hotel brands - Priority club reward app for iPhone, Android, Windows Phone: loyalty points, offers, special rates, click-to-call option… - Virtual Itinerary on Website: videos about each property amenities, dining, local attractions - Mobile booking system + digital key (holiday inn) - iPhone mobile website + classic mobile site: promotion, hotel location, booking engine - iPhone app: promotion
Mandarin Oriental (hotel chain)
- Mobile site: • Compatible with 95 percent of smartphones • Check availabilities and call for reservation • Geotargeting system to find the nearest Mandarin Oriental hotel
- Facebook Reservation System (Embassy Suites Hotels, Waldorf Astoria, Conrad H&R, etc.) - Twitter: 24,6 tweet a day (ranked 1st among hotels)
Tweetup event (July 2011): from 6-9pm, guests were encouraged to share their 1st impression at the hotels on Twitter (red carpet entrance, massage, Twitter-themed food and cocktail, prizes…) - Twitter: online customer service - Facebook: • Booking engine system • Online customer service
- TripAdvisor “write a review” widget: offer reviews of the properties on Accor hotels sites + TripAdvisor - Twitter + Facebook: Online Virtual concierge Sofitel LA: Twitter customer service Sofitel Washington DC: ask Facebook fans what DC tips they would prefer - “Niche content hub” sites according to each property services that are present and active on Facebook, Twitter, YouTube, Flickr - Active on Facebook, Twitter, YouTube and Flickr: • Social media campaigns • Customer interaction • Reputation management
Four Seasons Hotel
- Smartphone app: • Real time reservation possible • Send digital post cards, photos… • Geotargeting to find nearby restaurants, bars and attractions. - iPad: • Real time reservation possible • Geotargeting (underway) - QR codes in bedrooms leading to the brand app - iPhone & Android App: • Express booking • Personalization option • “Explore Destination” link - iPhone app: (English version only)
*SP = Smartphone ** 4SQ = Foursquare
• Support, etc.
- Facebook Reservation System (Radisson Edwardian Hotel, Park Plaza H&R)
- Twitter: • 11.1 tweets a day (ranked 5th among hotels) • Active customer service (every staff member is empowered to answer) - Facebook and Twitter accounts for each property + a centralized account - YouTube account - “Have Family Will Travel” blog + blog tab on Facebook
By highlighting the world hotel groupsâ€™ digital strengths, the table shows the disparity of the use of mobile and social media among the brands and brings out three distinctive trends that are being developed. B- The Three Latest Digital Trends Developed by World Hotels Groups and Chains 1- Combining Mobile and Social Media Platforms First and foremost, we can notice that hoteliers want to recapture lost grounds in the use of digital tools and mobile platforms. Hotel groups have realized the importance of mashing social media and mobile tools to fully satisfy their guests and be more visible to potential customers. Combining different tools and platforms, also known as the mashing process, is a clever solution to create original marketing strategies and to enhance guest experience even before their arrival at the hotel. When talking about the mashing process, we can distinguish three steps: Using and linking together several social media websites (Facebook, Twitter, YoutubeYouTube, Flickr) Linking hotel websites and blogs to these social media websites Ensuring Websites, blogs and social media websites are compatible with several various mobile devices (iPhone, Android, iPadâ€Śetc.) In the end, the mashing process can provide customers with a complete range of digital services through the use of mobile devices. As a result, mobile devices are no longer only used to make sales, but to also enhance guest experience with digital services provided. The hotel group analysis shows the hoteliersâ€™ awareness of the necessity to use mobile tools to provide both services (virtual concierge, hotel service requests, geolocation) and make sales (making and modifying reservations). All hotel groups use nearly the entire potential of mobile devices. They provide a complete range of services (booking system, geolocation, promotional offer, virtual concierge) through mobile apps or mobile websites or both. Starwood H&R and Hyatt Hotels distinguish themselves from the others by providing mobile check-in and check-out, which are highly appreciated by business travelers. On the other hand, no hotel group or chain fully uses the entire potential of social media websites. Most of them use Twitter for customer services and have a Facebook account, only a few use YouTube (Hyatt, Great Hotels of the World, Mandarin Oriental, Four Seasons) and have set up a Facebook Reservation System (Carlson, Hilton, IHG). To finish with, only Great Hotels of the World and Mandarin Oriental Hotels uses the four main social network websites (namely Facebook, Twitter, YouTube and Flickr). As a result, hotels groups use in a more diversified way mobile platforms to provide sales and services to customers rather than social media websites.
2- Personalized Platforms and Services to Entice Customers Secondly, we can notice a personalization trend for platforms and services dedicated to customers. Hotels started personalizing mobile platforms and social media tools to enhance the customer experience and differentiate from others. According to Stephen Gates, senior creative director for Starwoods New York, “The overall thing to remember when creating a digital and mobile strategy for a luxury brand is that each consumer is expecting something new and innovative that not everyone gets to experience.” This personalization trend starts at a digital level on mobile platforms and social media tools and can be done according to two ways. First, hotel groups can decide to differentiate each of their brands by creating customized websites and applications. This is what Starwood decided to do. They had different smartphone applications, website pages and social media websites created for each of their brands. Secondly, hotel groups may choose to give the possibility to guests to customize their app or website pages. For example, Carlson’s smartphone app has a personalization option, which enables customers to set up the app as they wish before using it. Hotel groups are probably developing digital personalization in order to satisfy the interests of leisure customers. Hotel websites in general have been more businessoriented than leisure-oriented so far. As a result, digital tools make it easier for hotels to attract both business and leisure customers. However, personalization is not a priority; we can indeed see from the table that the majority of hotel groups prefer putting their time and money into mobile websites, applications and social media strategies, which is a more relevant investment for now.
3- Enhancing the Customer’s Participation Thirdly, mobile and social media developments are increasingly enhancing customer’s participation. At the time when hoteliers were at 100% for customer service, today customers want to be autonomous as much as possible, especially business travelers in order to gain time. To answer this need, more and more hoteliers are setting up widgets on mobile devices and social media. First we can notice a growing trend to display booking engines on smartphone apps and websites with the additional ability to modify reservations. On social media websites as already mentioned, only Carlson, IHG and Hilton provide booking systems. The other hotels might not trust social media abilities to take care of reservations, or they simply don’t want their customers to do transaction activities on social media websites, or they have other higher priorities. Another appreciated widget especially for business is mobile check-in and check-out. Customers can either check-in alone on mobile tablets within the hotel or from their smartphone on the way to the hotel. Among all the hotel groups analyzed only Starwood and Hyatt have set up this service. Hyatt even went further by enabling to check-in and check-out remotely (for example, on the way to the hotel). It is a smart positioning strategy given mobile check-in and check-out is one of the three must-have functions for business travelers. To conclude, customers are taking part more and more in the hotel’s communication through the review process and the social media customer services. 72
Many hotels are working at finding new ways to encourage their customers to write reviews on social media websites. It has become common for hotels to use intermediaries such as TripAdvisor and Yelp to display customer reviews. As for social media customer services, hotel groups prefer Twitter to Facebook, probably because Twitter allows fewer characters than Facebook for comments and are consulted more by professional and older people than Facebook. Out of the 10 hotel groups analyzed six are dealing with online customer services. Hotels either answer customers’ requests online or act as a concierge service. Online customer services are ways for hotels to both answer the customers’ need while communicating about customer care, which moreover enhances positive feedbacks and reviews. To sum up, this world hotel group analysis shows that still recently, the hoteliers’ priority was to adapt to smartphones by creating mobile websites and applications. They took care to provide the ability for customers to make and modify their reservation and to set up mobile customer services. For now, they are moving to social media websites, mainly using Facebook and Twitter. Their priority is again to set up social media booking systems and enhance online customer services. Hoteliers are obviously aware that the most important thing is to be where the customers are. Customers being everywhere on social media, hoteliers have to enlarge their social media space. Twitter and Facebook have become familiar to most hoteliers; they are active on them and use them for marketing purposes. However, customers are also on YouTube and Flickr, unlike many hoteliers. In the months coming, customers will also be using Google+ and Foursquare much more than today. Instead of following customers, hoteliers should anticipate where their customers will be and surprise them by being there first. Starwood, with the highest Digital IQ index level, has a position of leader. The group keeps innovating, with the use of digital tools to differentiate from competitors with the personalized platforms, to satisfy the customers’ needs and to anticipate future needs (with the digital door opening system for example). The other hotel groups, especially IHG, Hyatt, Accor and Marriott have scored high Digital IQ Indexes but should develop their presence on social media websites. By enlarging their social media space, they could easily and rapidly achieve a higher Digital IQ Index.
III- Digital Marketing Solutions for Boutique Hotels through the Example of CitizenM Relevant digital marketing strategies are a considerable strength for independent hotels to gain market shares and compete with world hotel groups and chains. However, web-marketing strategies have to be adapted according to the hotels’ needs and the type of targeted customers. This part is devoted to introducing the main steps independent hotels should take to set up strong social media and mobile strategies. Through the CitizenM case study, solutions to problems encountered by small and independent hotels will be covered. Many possible alternatives will be developed in order to satisfy the different needs for hotels.
A- CitizenM Boutique Hotels 1- Presentation
CitizenM is an independent hotel chain founded in 2005. This brand introduced the new concept “Affordable luxury for people”, which is totally based on the new global needs of customers. The concept is the perfect solution for people both affected by the new technologies evolution and economic crisis, such as business travelers on a limited budget. CitizenM doesn’t target business travelers only, even if their products and services are totally adapted for them; they target individual and mobile travelers with average budgets, which represents a large segment. They are all mobile citizens; hence the name of the hotel chain on their behalf.
The previous chapters highlighted the new type of business travelers: young, modern, technology savvy, and independent. They like stylish designs and expect great value for a good price, which includes a comfortable bed, a workspace and free Wi-Fi network. They also want to live a unique experience away from home and benefit from all the advantages home provides. CitizenM hotels got rid of useless services and hidden costs to provide the customers with all that they wanted at affordable costs.
http://www.citizenmglasgow.com/glasgow-lodging-photos.php, Appendix 24
2- CitizenM Concept and Development CitizenM hotels provide simple and original products and services. The rooms are only 14 square meters but offer an extra large bed (2m x 2m), a rain shower, a TV with free movies, complimentary Wi-Fi and a large window. The differentiator element is the Moodpad, which controls the TV, the shower and the general atmosphere of the room. By general atmosphere, they mean lighting. Customers can select “a mood” (business, party, relaxed, romantic) and the light intensity and colors of the rooms change. CitizenM Rooms
Source: screenshot, http://www.citizenmglasgow.com/, September 2011, Appendix 25
As the schema shows, rooms are actually prefabricated modules that are placed in the acquired buildings. It is part of a development strategy that enables CitizenM to expand rapidly all over the world. They started in 2005 with two hotels in Amsterdam. Another hotel was acquired and transformed to a CitizenM hotel in Glasgow in 2010. In 2012, two others will open in London and one in New York. Another is planned in New York for 2013. The CitizenM team is currently working on hotel businesses for Paris and Milan, with the objective to open 20 hotels during the next five years75. To accomplish its mission, CitizenM is interested in acquiring freehold development sites, long-term leases and is even considering working in partnership or with third parties for individual projects or regional portfolios, even if it implies investment joint ventures. The hotel development is not only successful for tourism purposes but also for environmental protection because it is in agreement with sustainable construction processes. The project ensures minimum construction waste and on-site energy usage. CitizenM’s modular building system makes it flexible for building acquisition; however, they have restricted location criteria. Still for customer satisfaction, they demand either prime urban location near: 75
http://www.hotelchatter.com/story/2011/1/18/105829/988/hotels/CitizenM_to_Open_in_New_York_an d_London_By_2012_Hong_Kong_Paris_and_Zurich_Are_in_the_Works, News, January 18th, 2011
- City centers, business districts, night life - Public transportation stops, routes accessible by car and taxi - Urban amenities and entertainment (restaurants, bars, etc.) or prime international airport location near: - Direct connections to airport terminals
3- Design and Amenity The entire hotel concept was designed by an award winning Dutch firm “Concrete Architectural Associates” but the brand also calls on local architects to adapt the concept according to local regulations. The Lobby
CitizenM Living Room76, Appendix 26
As far as the interior design is concerned, CitizenM offers a modern, cozy and contemporary atmosphere especially in the living room so that guests can feel at home. In the lobby, they can rest, meet people or work, just like they would do at home. The combination of modern art design and digital technologies create the unique atmosphere that is an entertainment in and of itself. An unlimited free Wi-Fi network is available in the lobby and in each room to fully satisfy the customers’ needs. To save time, guests can check-in on their own on touch screen terminals with the assistance of a CitizenM Ambassador at any time of the day or night.
CitizenM Check-in Terminals77, Appendix 27
Canteen M, Appendix 2878 76
http://www.citizenm.com/images/masthead/hotel-lobby.jpg, Appendix 26 http://www.citizenm.com/images/inset/lobby-body.jpg, Appendix 27
Concerning food and dining, CitizenM offers a 24-hour self-service with a large choice of food and drinks, which looks like a huge modern house kitchen. Hotel guests can even order or pre-order a “grab and go” bag or eat at a table. In the evening, there is a bar that offers fine spirits, cocktail, champagne and beer as a luxury hotel would do. To sum up, the experience provided by CitizenM hotels is a home-like comfort with the amenities of a luxury business hotel in a gallery-like atmosphere for the price of a mid-scale hotel. These characteristics make CitizenM a full boutique hotel that differentiates from usual boutique hotels as described at the beginning of the chapter. All the efforts provided by the brand have been rewarded by their customers. Actually, the CitizenM Hotel Amsterdam City received the title of “trendiest hotel in the world” for the second consecutive time by TripAdvisor traveler’s choice awards. On top of being trendy, the CitizenM hotel concept helps to avoid a problem that independent and world hotel groups are facing: customers’ reward expectation. Less people ask for discount rates because the price is affordable, they don’t ask for room upgrades because all the rooms are the same and they don’t ask for complimentary Wi-Fi because it is already free and available. If business travelers are used to tweeting about these rewards in usual hotels, at CitizenM hotels they tweet about the unique experience they are having. The unique experience conveyed at CitizenM hotels is obviously one of the main strengths of the brand. However, the chain also relies a lot on digital marketing strategies to communicate about its products and services. Just like they do with the hotels, they use social media and mobile platforms in a very simple and original way and prove that being visible on the Internet does not always require high-level digital marketing skills and a huge budget. “Simplicity” and “Originality” seem to be the brand’s magic words.
B- CitizenM: an Example of Smart Social Media Strategies for Boutique Hotels CitizenM chain has fully integrated social media websites within their digital strategies, unlike most independent hotels. Their online presence makes them very visible, even more visible than some world hotel groups or chains. The previous part highlighted the fact that social media was not among world hotel groups’ strengths. They generally have two or three social media websites but their priority is given to mobile strategies. However, CitizenM chain is present and active on up to eight social media websites (Facebook, Twitter, Flickr, YouTube, Vimeo, Foursquare, Gowalla, and LinkedIn) and on approximately seven review websites where they appear at the top. Their skills in social media strategies is obviously part of their current success, but also proves that the priority might not obviously turn to mobile, especially when hotels are budget limited.
http://www.citizenm.com/images/masthead/canteenM.jpg, Appendix 28
1- CitizenM’s Skills in Social Media Strategies Since 2005, CitizenM is physically and virtually invading the world. They indeed started with building hotels in Europe and plan to arrive in the United States in a couple of years. Such a success is partly due to excellent skills in communication through the use of social media strategies for three reasons: a- Social Media Websites are Used in a Simple Way First, they use social media in a very simple way. They don’t look for using all the possible functions on each social media website but attribute different functions to each of them. For example, they only use Facebook functions to introduce the hotels.
Source: Screenshots of CitizenM’s Facebook accounts79, Appendix 29
As we can see on the screenshot above, making a simple use of Facebook gives a clean appearance and highlights the harmony between each hotel page. By using Facebook, their purpose is clearly to draw people in and make them want to be part of the CitizenM community. To achieve this they give information about the hotels, display photos and make it possible for potential customers to directly contact them either via the discussion application or via the wall. They probably don’t want to upload videos of the hotels because they are already displayed on YouTube, Vimeo 79
http://www.facebook.com/citizenMhotels - http://www.facebook.com/citizenMglasgow http://www.facebook.com/citizenMamsterdamcity, Appendix 29
and on their website. However, uploading their two high quality and professional videos would not be too much to ask for – rather, even advised. Concerning the CitizenM discussion tab, even if people prefer using the wall, they might use the tab in the future when there are thousands of fans. Discussion tabs are mainly used by global brands such as BMW. This global brand has so many fans that they only interact via the “discussion” tab, which appears like a visible mail box and makes it easier for companies to answer. Global brands also allow fans to post comments on their wall and interact with each other, but they don’t take part in any comments on the wall. As far as CitizenM is concerned, it is important for them to interact with their fans on the wall because they are building their community. When they become a global brand, they will have no other choice than to manage their Facebook page as global companies do. All that said, it is important to take note of the way global brands use social media, but it is essential to know how to adapt and make good use of social media websites when it comes to small or medium-sized business. Regarding the other social media websites, they only use a centralized Twitter account for customer relationship management so that people are not confused about which platform to use to reach them. It also makes it possible to have only one community management team for all the hotels. However, if the chain keeps expanding as planned, it will be better to create one Twitter account for each property. It would enable hotels to tweet about local community events and about special deals. They also use Foursquare and Gowalla only for check-in functions so that it is easier to manage the associated social reward strategies within the hotels. b- CitizenM Website and Social Media Websites are Linked Together According to the Mashing Up Process Secondly, they put into practice the mashing up process according to three different ways: - By setting up social media applications: on CitizenM Facebook accounts and websites, people can access what is being said on Foursquare and Twitter via their applications without leaving Facebook. CitizenM takes care to not install too many apps because it would ruin the lightness and cleanliness of their Facebook pages. It is important to limit oneself to the main social media applications. Another good example is their LinkedIn account, where people can access what is being said on Twitter. It is a good way to display an image of their activity either for recruiting people or attracting investors or partners. - By installing “follow us” buttons: on CitizenM’s website, people can access Facebook and Twitter centralized accounts by clicking the buttons. Here again, it is important to limit oneself to a small quantity of buttons to not overcharge the pages. However, it is also possible to set up to four or five buttons because they are small and people are getting used to use them. CitizenM would not ruin its page by adding the Flickr and YouTube buttons in order to display the four must-have social media websites on their website. Adding LinkedIn would not be too much as well. - By displaying links: CitizenM devotes a part of Facebook and its website to display in only one place all the links towards its social media websites. It is a discreet way to give access to all their platforms and show the different services the brand offers online for potential and loyal customers.
When done correctly, the mashing up process enables people to virtually visit the business, go from one social website to another, learn more and more things about the company and in the end, end up making a reservation. This is why it is important to display booking reservation systems wherever it is possible. For example, CitizenM provides customers with the ability to book via their website, Facebook, many online travel agencies and from smartphones. In addition, the mashing up process, which implies linking every websites in relation to one brand, is a good way to achieve high ranking on search engines and better online visibility. c- CitizenMâ€™s Activity and Frequent Usage of Social Media Websites Thirdly, CitizenM is active on all of their social media websites and uses them in a regular way. This involvement on social media websites shows CitizenMâ€™s real interest in customer relationships. Interacting with people influences them to join the community and take part in the communication process by commenting about the hotels on review sites for example. It also convinces people to make reservations, given they have no doubts whether they will have perfect service during their stay. In case of any trouble, they must be sure they will be able to reach someone in the company to solve it. In addition to being active with customers, they also are active in research and development. They regularly get informed about the latest trends in digital marketing and update their websites. For example, they set up new Facebook check-in features launched in September 2011 that can now display the number of customers who checked-in at the hotel. Some world hotel brands such as Mandarin Oriental Manilla have not installed it yet (see the aside picture).
Mandarin Oriental Manilla80, Appendix 30
Another example is Twitter. CitizenM installed the brand new photo-sharing feature launched in August 2011 on their Twitter account. Most of the world hotel groups installed this feature as soon as it was launched but many independent hotels (such as the Huntington Hotel group didnâ€™t), which made them competitive with world hotel groups. We can see the difference between a Twitter account with the photo sharing feature and a Twitter account without it.
http://www.facebook.com/MandarinOrientalManila, Appendix 30
CitizenM Twitter account81Appendix 31
Huntington Hotel Twitter account82, Appendix 32
The example of CitizenM shows that managing social media websites can be done in a simple way without requiring high-level skills in the digital field; however, it requires times and involvement with the community. It also implies regularly watching what direct competitors are doing in their social networks and getting informed about the latest trends in digital developments. To sum up, independent hotels have to adapt to using digital tools according to their needs, which takes into account guestsâ€™ expectations as well. In order to help independent hotels get informed about the latest news in the industry, many blogs such as Hotel Marketing, Ehoteliers, Hospitalitynet, DDIH â€œDigital Developments In Hospitalityâ€? publish articles and newsletters about this subject on a daily basis.
http://twitter.com/#!/citizenM, Appendix 31 http://twitter.com/#!/huntingtonhotel, Appendix 32
2- How CitizenM Manages Social Networks CitizenM’s success in term of social media strategies is due to the diversification of the platforms they use. The secret is not to use as many different platforms as possible but to be where the potential and loyal customers are; this is why CitizenM uses both Foursquare and Gowalla for check-in services or YouTube and Vimeo to display videos. a- Twitter Twitter is primarily used for customer services. CitizenM takes care to reply to each comment posted by customers. They inform guests about the hotel organization, advise them about local activities and events, and display good deals and promotions. They don’t use former strategies that encouraged the community to tweet about the hotel. Guests do it spontaneously, which is what the CitizenM Twitter account83 was created for. Each independent hotel is free to use Twitter as they wish as long as the strategy encourages guests to be active on it. In addition, Twitter displays its “TripAdvisor Travelers’ choice 2011” title as a trust guarantee, which encourages guests to interact with CitizenM. b- YouTube and Vimeo YouTube and Vimeo are the two best online video platforms. CitizenM uses them both84 because each has advantages the other doesn’t. In the end, they complete each other and both YouTube and Vimeo users are satisfied. The table below shows the advantages of using the two of them. YouTube - Free + unlimited video upload - 10 min limited videos - 2 GB space - Gather videos by professionals and individuals + advertisement -
View count + customer comments No aesthetic design
Vimeo - Not free to increase upload - No time limit for videos - 5 GB space - No advertisers + partner programs + video posted by individuals: only professional videos - No view count + no comments possible - Nice designed platform
YouTube offers the advantage to allow guests and media to share their videos about the hotels on the channel. However, CitizenM professional videos are hard to find there. Vimeo can display only CitizenM’s professional videos for people who don’t want to lose time on YouTube. By using the two platforms, CitizenM answers different customers’ needs, and increases its chance to gain higher ranking in search engines and get more visibility.
http://twitter.com/#!/citizenM http://www.youtube.com/citizenmobile / http://vimeo.com/citizenm
d- Foursquare and Gowalla Foursquare and Gowalla are the best location-based social networking services. CitizenM uses both of them for its check-in reward program, which consists of offering free coffee or CitizenM water after the first check-in and offering the CitizenM cocktail “bender mender” after each subsequent check-in. CitizenM uses the two platforms to satisfy people using either Foursquare 86 or Gowalla87, thereby covering a larger customer segment. It also enables CitizenM to make the most of the advantages provided by each platform as they do on YouTube and Vimeo. They also interact with customers on both platforms: posting tips on Foursquare and photos, places on Foursquare and Gowalla. The table below shows the advantages of using the two of them. -
Foursquare Users can post their check-ins on Twitter and Facebook X* Less accurate with location from iPhone and Android “Friends recent check-in”
More attractive design and colors Reward check-ins with points (expire at the end of each week) Reward special check-ins with badges
Gowalla Users can post their check-ins on Twitter and Facebook Incorporate the logo of actual business More accurate with location from iPhone and Android “Friends activity” + maps showing friends venue. Less attractive design and colors
Reward check-ins with badges
Reward people with the title of mayor when they checked-in more than anyone else
Reward special check-ins with special badges when the location has been newly created by someone. Display people who checked-in the most on a leaderboard
X*: function not provided Foursquare and Gowalla provide more or less the same functions. As a result it is beneficial for CitizenM to incorporate the two of them in their check-in strategies.
e- LinkedIn CitizenM being a fast growing independent hotel chain, it is to their advantage to maintain a LinkedIn account. CitizenM’s profile on LinkedIn88 works to: - Inspire confidence in the brand for potential customers: CitizenM hotel’s presentation and the number of followers are factors that might encourage people to make a reservation - Find employees, prospective clients or investors through the network of the people added (years of experience, employee’s degree, university attended, annual company growth, etc.) through CitizenM’s information CitizenM could be more active on LinkedIn by joining groups and associations to take part in, but its objective remains simple in that they just want to provide essential information to their customers. CitizenM took care of installing a Twitter application on LinkedIn. It displays all the tweets in real time, which gives an idea of CitizenM’s activity, the quality of their work and their involvement to gain customer’s satisfaction. As a result, maintaining a LinkedIn account doesn’t require time investment; it just requires an update from time to time. The LinkedIn account is not mentioned on their website, which is a shame given it also contributes in gaining higher ranking in search engines and better visibility. Independent hotels are advised to set up a simple, not overcharged LinkedIn account similar to what CitizenM did. f- CitizenMag Online Magazine The CitizenMag is a quarterly online magazine whose topics are linked to travel, new technologies, events, cities and so forth. They are both business and leisure-related in order to capture all their guests’ interests. Creating a magazine is a way to differentiate from hotels in general, which usually create a blog in parallel to running their website. It is also a smart way to avoid the negative points of running a blog. The main problem when running a blog is being able to be active on it regularly and being inspired by posting articles able to attract guests’ attention without the blog being a copy of the website. Rolling out a magazine every four months, as CitizenM does, allows for work on a different topic anytime and when time permits. Moreover, a magazine provides a more thrilling approach in guests’ mind than a blog does.
The table below lists the different impacts between an online magazine and a blog to the reader: -
Online Magazine Keeps the readers in suspense until the launch of the next magazine The arrangement of articles, photos, videos, etc. is more attractive because the templates enable to diversify their position People have the impression of staying on the hotel website
Blog If not maintained every day, readers get bored to see nothing new regularly Templates don’t put out photos, articles, and videos in a diversified way.
People realized that they are sent on another website and might be confused between the blog and the original website.
People can’t comment but can share information and like the magazine
People can comment on each post, share them on social networks and like them.
- Doesn’t require the readers’ interactivity such as comment, likes, etc.
Must encourage readers to interact with the blog administrator
Recent articles are crawled more often in search engines, thus positioning them higher in search engines
Hoteliers who can regularly devote time to guest online entertainment will do well by running a blog. The question is not whether an online magazine is better than a blog, the question is the quality of the content and the impact it has on the readers. Four Season hotels is running a blog called “Have a Family Will Travel”, the “family” and “travel” topics are large enough to have different and interesting articles to post regularly. Moreover, each guest can interact by commenting on articles because “travel” and “family” are part of life experience. As a result, this blog is a success among Four Seasons hotel guests.
3- What about CitizenM Mobile Strategy? As strange as it may seem, CitizenM doesn’t provide a smartphone application, and the hotels’ websites are not optimized for mobiles either. However, they succeed in competing with world hotel groups and independent hotels that are turning mobile and who give priority to mobile strategies to get market shares. CitizenM is going the other way; they give priority to online and social media strategies and prove that the success of the company does not depend on the investment in mobile strategies.
a- CitizenM Website Just like its social media websites, the CitizenM website is simple, original and not overcharged. These three characteristics see to it that even if they don’t have either a mobile optimized website or a smartphone application, CitizenM still has a leg ahead on other independent hotels even on some world hotel groups. The previous chapter showed that many hotels that are turning mobile are also redesigning their desktop website to make it attractive for both leisure and business customers and to improve the loading page time. CitizenM, by creating a simple website with a simple logo, succeeded in creating an original, well-designed website that perfectly fits both leisure and business customers and only takes three seconds to load on a desktop and five seconds on mobile platforms. Here is a screen shot of CitizenM’s desktop website: CitizenM’s Desktop Website
Source: screenshot of CitizenM’s websites, http://www.citizenm.com/, October 2011, Appendix 33
Furthermore, if the website is not optimized for mobile devices, its simplicity enables the website to be accessible from mobile devices. Mobile websites being a light version of desktop websites, the CitizenM desktop website already not being overcharged doesn’t require a mobile adaptation for now. The only thing people can’t access from iPhones are the interactive flash videos, but people using the website from their smartphone just need last minute information and won’t pay attention to the flash videos. As of date, flash videos are viewable only from Android phones. The website doesn’t display customer reviews but CitizenM hotels already appear on the top of rankings with not less than four ratings on numerous review websites such as TripAdvisor, Yelp, booking.com, and easytobook.com. In a few years, if the brand keeps being expanded, CitizenM will have to turn mobile because their website will gather more information. They will have to adapt their website for mobile devices or create a smartphone application. However, even if CitizenM shows that investing in a mobile website can be avoided with a simple and not overcharged website desktop, some independent hoteliers may want to invest in a mobile application. Mobile applications are well appreciated by business and leisure travelers; thus, it can be a plus for hotels. Moreover, nowadays, more and more marketing and technological firms are joining together to create applications for hotels. 87
C- Smartphone Applications and Competence Measurement Tools Though CitizenM has not decided to invest in a smartphone application yet, it is important to point out how relevant it can be for independent hotels. The Smartstay 2 application is the object of the following analysis because the app has been made especially for the hospitality industry. Concerning competence measurement tools, ReviewPro was selected because it is one of CitizenM’s partners that contributes a lot to the hotel chain’s success.
1- Smartstay 2 Application Independent hoteliers who wish to invest in a mobile application have to go through a professional specialized in both the mobile application and hospitality industry. Decare System, a software development company joined its expertise with O’Rourke Hospitality, a marketing firm specialized in the hospitality industry, to create the Smartstay application for hotels. Decare System and O’Rourke hospitality usually work for independent hotels but they also have world hotel brands (such as Shangri-La, Marriott Spring Hill Suites (Florida) or Radisson Fert McDowell Resort) as clients. Recently, they launched the latest version of their application: Smartstay2, a 24/7 mobile concierge. Smartstay 2 is a ready built mobile application that hotels can customize (on their own or with Smartstay assistance) with their hotel brand content. Then the application can be downloaded for free by hotel guests and thereby have access to general hotel information, make reservations and receive real-time updates. The Smartstay booking engine doesn’t allow for modifying reservations, which can be annoying for business travelers. However, any mobile optimized booking engine can be incorporated into the Smartstay app. Smartstay app is a smart solution for hotels in that its product and services are accessible at affordable prices89, namely: - $200 for the single application without optional assistance + $180/month subscription fee for hotel featured on individual app - $400 for the simple application with optional assistance + $180/month subscription fee - Additional optional features (multilingual functionality, Google analytics, etc.) requires a monthly payment ranging from $10 to $50 Independent hotels without skills in digital technologies can also add the services of external web-marketing firms specialized in hospitality. It is a good solution to invest in because they can deal with what the Smartstay assistance does, namely entering the hotel information (logos, images, maps, offers, promotions, etc.) in the Content Management System, for a cheaper price. Moreover, these companies work as consultants and can give independent hoteliers solutions to improve their online digital competences. One example is Oneglobe Network90, which works for independent hotels and small hotel chains so they can achieve maximum web revenue and compete with world hotel groups and 89 90
chains. They have the expertise to determine hotels’ digital IQ index and the score they can reach by applying Oneglobe Network web marketing and revenue strategies. They keep hotels posted on the latest technological trends, tools and platforms that could be used in the hospitality industry through the help of the “Digital Developments In Hospitality” brand 91 they are developing. Oneglobe network’s community strategists take care of scrawling the web on a day-to-day basis to provide hotels with accurate and recent information. Furthermore, to ensure hotels’ online success, Oneglobe Networks partners with experts in the mobile industry, online marketing and reputation management and design expertise (Trek Wireless, ReviewPro, Avvio, Smartstay, etc.). Among this expertise, online reputation management through web-analytic tools as provided by ReviewPro92. The latter provides hotels with accurate information on the website’s online visibility. Therefore, online reputation management allows hotels to efficiently organize and manage their online visibility and presence on social media websites.
2- CitizenM and ReviewPro Partnership CitizenM’s success in social media management is largely due to ReviewPro expertise. In an article 93, Diego Sartori, CitizenM’s Social Media and Internet Strategist claimed “I had demonstrations from many different tools, and ReviewPro was the one that fit our needs best: it is the most complete and has shown more reliability than the others. That’s the reason we started working with ReviewPro. It’s a great product that offers exactly what we need, and has some helpful features like social media tracking, task assignments, and so on.” Since the beginning of the partnership, CitizenM got positive results. The number of active Facebook Fans has increased four times as much, their Twitter followers doubled in three months and CitizenM hotels appeared in among the top best ranking hotels on review sites like TripAdvisor and Yelp. ReviewPro’s analytic tools that contributed to CitizenM’s success mainly focuses on: - knowing everything about the hotel at all times: it notifies any mentions on Twitter and Facebook, all the photos and videos posted by hotel guests and new online reviews so hoteliers can intervene rapidly if a response is necessary. - Identifying problems and providing efficient solutions: it provides web-analytic data about the hotel’s online performance and compares it with direct competitors. Then, ReviewPro tool tracks the evolution of the hotel progress, sends automatic email reports and assigns tasks to improve the online reputation. ReviewPro expertise is a good investment for hotels, it is a trustworthy tool whose quality seal is integrated on the website of their hotel partners. For the most budget limited hoteliers who can’t offer web-analytic tools, they can start with Klout and Vrank online services that provide altogether more or less accurate information about brands’ online influencers and visibility.
http://ddih.wordpress.com/ http://www.reviewpro.com/ 93 http://www.reviewpro.com/citizenm-chose-reviewpro-4257 92
Conclusion In 2011, independent boutique hotels are still facing a complicated situation. They are recovering from the economic downturn, while physically fighting against world hotel groups and chains to remain independent, and are doing their best to invade the digital space. In addition, boutique hotels have to manage a fast growing demand in the market along with a harsh competition against world hotel groups that are trying to take market shares from them. Independent hotels and world hotel groups want to entice business travelers, who have been back on the road since the beginning of the year. Business travelers are especially attracted by the unique experience boutique hotels provide and are more technologically savvy than ever. What makes the situation critical is the fact that boutique hotels have the advantage of providing a unique experience while world hotel groups have marketing budgets to set up mobile strategies and get visible online. This situation is to the advantage of boutique hotels all the same; it is indeed easier to turn digital than to set up an entire hotel concept in order to provide a unique experience. The independent hotel chain CitizenM currently demonstrates that it is possible for an independent hotel to be both successful online (with efficient digital marketing and communication strategies) and offline by creating a unique experience by simply focusing on customers’ needs. CitizenM’s secret is before all, to make things simple but original. Within their hotels, they provide customers with a simple room but equipped with cutting edge technology that travelers are expecting nowadays. Online, they show originality by remaining simple and listening to the customer. CitizenM’s strength is obviously its online performance, realized with the help of ReviewPro web analytic tools. As a result, CitizenM excels where world hotel groups are struggling, namely in social media management. In addition, CitizenM demonstrates that the priority has to be given to online and social media strategies instead of mobile strategies. The CitizenM case study is nothing else but the proof that independent hoteliers can be successful by turning digital. The time invested in social media and taking good care of potential and loyal customers is money gained. The most important thing to remember is that they have to adapt according to their customers’ needs and what they are able to give. If independent hoteliers don’t have a big enough budget to get a mobile adapted website or mobile application, then they have to invest in a basic website and be active on social networks with their customers. As a result, by focusing on online and social media strategies, CitizenM is doing the reverse that world hotel groups are doing.
GENERAL CONCLUSION The hospitality industry is the travel sector most affected by the smartphone revolution because hotels are more and more frequented by tech savvy guests, whose reservations can range from one to several nights. On top of managing the world economic crisis, hoteliers were constrained to take up two challenges: - Adapt to new types of customers, especially business travelers - Turn digital in terms of online, social media and mobile marketing The smartphone industry, one of the rare sectors not affected by the economic crisis, contributed in first changing the life of business travelers and now the general public’s way of living. Whether for work or family purposes, smartphones – with rapid access to the Internet and mobile applications – have become real traveler assistants. As time went on, the craze for smartphones naturally influenced the social media development. Furthermore, the economic crisis played an important role in the new needs and expectations of hotel guests. They realized that they could get hotel rooms for a cheaper price and got used to the “rewards” highly distributed during the recession. In 2011, with the return of business travelers, hotels have no other choice than to turn digital, which turns out to be more difficult for independent hotels with limited budgets and who lack skills in the digital field. World hotel groups and chains, having the budget to set up attractive websites and appear among the firsts in search engines, show weaknesses in managing social media activities – most of them only use Twitter for communication and Facebook for online presence. Independent luxury and upscale hotels, including boutique hotels, suffered the most from the recession, and are currently struggling to keep their independence in front of world hotel groups and chains attracted by the boutique hotel concept. As a result, the economic crisis was an opportunity to make independent hotels realize the importance of digital marketing in gaining revenue and winning business travelers back. This research paper finally demonstrates that, depending on the marketing budget allocated, world hotel groups and chains and independent hotels can have different digital marketing approaches. World hotel groups and chains give priority to mobile – setting up mobile websites, mobile applications, mobile booking engines, check-in devices and so on to enhance guest experience. Independent hotels can bet on social media along with the help of external webmarketing agencies specialized in the hospitality industry. CitizenM, which partnered with ReviewPro, proved – by making simple, original and regular use of a large number of social media websites along with online customer service – that giving priority to online and social media activities enables hotels to gain online visibility whether on desktop computers or mobile devices, which is a smart solution for saving money and increasing revenue. 91
As far as online visibility is concerned, independent hotels should also give priority to geolocation processes. As digital maps are more and more accurate on smartphones, and hotel guests more prone to augmented reality, the future of hoteliers is being oriented toward last minute reservations from mobile devices.
WEB REFERENCES Chapter 1 I- A http://www.businessdictionary.com/definition/smartphone.html
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II- C http://www.bizzy.com/about http://www.inc.com/business-travel-2011/how-social-media-has-changed-business-travel.html
Chapter 2 Introduction http://lhonline.com/news/kimpton_reaches_51_hotels_30_years_0616/ http://www.inc.com/news/articles/2010/06/survey-says-half-of-young-travellers-use-social-media-forbusiness-trip-decisions.html http://phx.corporate-ir.net/phoenix.zhtml?c=88577&p=irol-newsArticleOther&ID=1554150&highlight
I- A http://lhonline.com/news/kimpton_reaches_51_hotels_30_years_0616/ (reward) http://phx.corporate-ir.net/phoenix.zhtml?c=88577&p=irol-newsArticleOther&ID=1554150&highlight
I- B http://aboutourism.wordpress.com/2011/02/page/2/ http://lhonline.com/news/kimpton_reaches_51_hotels_30_years_0616/
I- C http://www.htrends.com/trends-detail-sid-56275-tWhy_the_Travel_Industry_Needs_to_Wake_Up_to_Mobile___By_Gina_Baillie.html
II- A-1 http://mashable.com/2011/03/08/foursquare-3/ http://seventhartmedia.com/social-media-success-stories-how-mandarin-ori http://www.panpacific.com/en/Seattle/Overview.html?override_form=35
II-A-2 http://www.mediapost.com/publications/?fa=Articles.showArticle&art_aid=151673 http://www.tnooz.com/2011/06/02/mobile/can-mobile-change-the-way-travellers-feel-about-ancillaryproducts/ http://en.wikipedia.org/wiki/Mobile_Web http://www.inc.com/guides/2010/07/how-to-design-and-build-a-mobile-website_pagen_2.html http://www.netaffinity.com/mobile-hotel-booking-engine.html http://mashable.com/2011/02/24/mobile-app-dev-cost/ http://blog.mobileroadie.com/2011/06/best-practices-on-push-notifications/ http://www.nebraskabb.com/blog/2011/07/hotels-turning-to-digital-concierge-services/
II-B-2 http://www.prnewswire.com/news-releases/one-quarter-of-hotels-not-using-social-media-to-helpincrease-occupancy-and-revenue-123740159.html http://www.facebook.com/press/info.php?statistics http://blog.golden-tech.com/website-design-and-marketing/the-difference-between-twitter-andfacebook-why-you-should-use-both/
III-B http://crowdbooster.com/ http://www.peerindex.net/help/scores http://www.spinsucks.com/social-media/peer-index-vs.-klout/ http://blog.eloqua.com/4-tools-social-media-influence/ http://www.socialmediaexaminer.com/is-klout-a-good-judge-of-your-social-media-influence/ http://venturebeat.com/2011/08/04/klout-foursquare-youtube/ http://www.psfk.com/2011/08/special-treatment-based-on-a-guest%E2%80%99s-social-influence.html http://www.tnooz.com/2011/06/29/news/hotel-guests-to-get-late-check-outs-for-social-media-checkins/ http://www.scribbal.com/2011/06/facebook-pages-can-now-reward-fans-based-on-klout-score/ http://blog.tigglobal.com/index.php/uncategorized/klout-hotels-and-social-media-three-things-to-keepin-mind/ http://www.inc.com/business-travel-2011/get-socially-rewarded-for-business-travel.html http://www.scribbal.com/2011/06/facebook-pages-can-now-reward-fans-based-on-klout-score/ http://www.pressking.com/press-releases/Can-you-measure-a-brand-s-online-visibility-Vrank-comtakes-a-shot-at-it-003365 http://www.vrank.com/en
Chapter 3 I-A-2 http://nishithsblog.wordpress.com/2010/06/16/small-mid-sized-european-hotels-can-still-increasetheir-online-bookings/
I-B-2 http://independent-hotels.info/small-hotels.htm http://www.hotelchatter.com/story/2010/6/23/94038/8314/hotels/What_is_The_Kiwi_Collection_ http://www.hotelnewsnow.com/Articles.aspx/4942/Independent-hotel-segment-shows-resiliencystrength http://www.hotelnewsnow.com/Articles.aspx/4948/Independent-hotel-development-slow-moving http://www.hotelnewsnow.com/Articles.aspx/4943/Independents-team-up-with-brands
I-C-1 http://www.independent.co.uk/travel/news-and-advice/the-complete-guide-to-european-boutiquehotels-469352.html http://scarver.hubpages.com/hub/How-To-Choose-A-Truly-Boutique-Hotel PDF: Boutique Hotel: Fashionable and Inspiring
I-C-3 PDF: Boutique Hotel: Fashionable and Inspiring
II- A http://www.usatoday.com/tech/news/2011-06-01-travel-websites_n.htm Digital IQ Index Study http://www.luxurydaily.com/experiential-currency-drives-digital-and-social-landscape/ http://www.ausbt.com.au/w-hotels-now-offer-room-service-via-an-iphone-app http://www.nytimes.com/2011/04/19/business/19hotels.html?_r=4 http://www.hospitalitynet.org/news/154000320/4052346.html http://www.eyefortravel.com/news/technology/ihg%E2%80%99s-bookings-mobile-devices-1000percent-12-months http://lhonline.com/technology/Sheraton_Link_computers_Microsoft_renovation_0616/ http://www.global-blue.com/merchant-services/corporate/news/social-networking-should-you-takenotice/ http://www.traveldailynews.com/pages/show_page/39460-Great-Hotels-of-the-World-introducesinnovative-%22Niche-content-hubs%22 http://www.luxurydaily.com/consistency-is-integral-to-maintaining-mobile-consumer-interactionmandarin-oriental/ http://www.apple.com/webapps/travel/marriottmobileforiphone.html http://www.hotelnewsnow.com/Articles.aspx/3000/Social-media-marketing-at-the-Marriott http://hotelinsight.wordpress.com/2011/06/25/starwood-adopt-foursquare-strategy-to-promote-hotelcheck-ins/ http://blog.suitcaseinteractive.com/2011/05/starwood-engagement-loyalty-digital-marketing/ http://www.hotelnewsnow.com/Articles.aspx/2862/Mobile-friendly-sites-essential-as-usage-grows http://www.4hoteliers.com/4hots_fshw.php?mwi=6087 http://www.slideshare.net/socialmediasolutions/hotel-guide http://www.marketingweek.co.uk/sectors/travel-and-leisure/hotel-owner-turns-mobile-phones-intoroom-keys/3024804.article http://www.virtual-strategy.com/2011/07/29/hilton-anaheim-plans-first-ever-tweetup-social-mediaevent http://www.hotelindustryonline.com/the-latest-news/182-ihg-applies-new-mobile-strategy.html http://itunes.apple.com/us/app/priority-club-rewards/id368217298?mt=8# http://www.ihgplc.com/index.asp?PageID=116&NewsID=2658 http://www.4hoteliers.com/4hots_fshw.php?mwi=6140 http://www.flyertalk.com/forum/accor-club/1201117-sofitel-us-reveal-their-social-media-strategy.html http://www.haiku-corp.com/ln/en/pdf/HK_Accorhotel_shows_ambition_on_the_mobile.pdf http://www.ghotw.com/mediapage.aspx?id=12845 http://www.eyefortravel.com/news/hotels/great-hotels-world-eradicates-all-booking-and-credit-cardfees http://www.businesstravelnews.com/Travel-Management/Options-Expanding-For-Mobile-HotelBookings/ http://www.mandarinoriental.com/social_media/ http://appsandwidgets.fourseasons.com/ http://lhonline.com/features/marketing_technology_apps_iPhone_BlackBerry_loyalty_printing_0602/ http://www.travelagentcentral.com/rewards/carlson-debuts-new-hotel-loyalty-program-launchesmobile-app-27650 http://www.eyefortravel.com/news/marketing/how-do-customer-service-twitter
http://hotelmarketing.com/index.php/content/article/marriott_upgrades_mobile_apps_supports_now_an y_web_enabled_device http://www.4hoteliers.com/4hots_nshw.php?mwi=9040 http://ddih.wordpress.com/2011/09/01/la-clef-d%E2%80%99hotel-reutilisable-et-la-clef-virtuelle-serepandent-dans-les-chaines/#more-855 http://adage.com/article/digital/ritz-carlton-embracesdigital/229963/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+advertising Age%2FDigital+%28Advertising+Age+-+Digital%29 http://www.4hoteliers.com/4hots_fshw.php?mwi=6306
III-A http://www.citizenm.com/rollout/roll-out-strategy.php http://www.citizenm.com/ http://www.citizenm.com/about-hotel-group.php http://www.tripadvisor.co.uk/Hotel_Review-g188590-d1372848-Reviews-CitizenM_Amsterdam_CityAmsterdam_Noord_Holland.html#REVIEWS http://www.citizenm.com/citizenm-awards.php http://www.citizenm.com/about-hotel-group.php http://www.citizenm.com/rollout/location-criteria.php http://www.citizenm.com/rollout/development-specifications.php http://www.citizenm.com/rollout/transaction-structures.php
III-B 1/2 http://www.bullseyehub.com/blog/2011/06/how-can-hotels-use-twitter/ http://blog.videohive.net/general/youtube-or-vimeo-pros-cons/ http://mddt.wordpress.com/2011/03/04/foursquare-vs-gowalla-big-differences/ http://blog.linkedin.com/2010/04/12/linkedin-small-business-tips/ http://www.smallbusinesssem.com/articles/marketing-on-flickr/ http://www.citizenm.com/hotel-concept-questions.php http://www.smartstayapp.com/ http://www.eyefortravel.com/news/asia/responding-expansion-facebook%E2%80%99s-location-basedcheck-ins-hotelier http://techcrunch.com/2011/08/22/five-years-later-twitter-rolls-out-image-galleries/
III-B-3 http://www.reviewpro.com/citizenm-chose-reviewpro-4257 http://www.hotelchatter.com/story/2011/1/18/105829/988/hotels/CitizenM_to_Open_in_New_York_an d_London_By_2012_Hong_Kong_Paris_and_Zurich_Are_in_the_Works http://www.citizenm.com/citizenm-concept-movie.php http://citizenmag.citizenm.com/issue-06/phone-guides http://www.studio1c.com/blog/25-blogs/95-part-i-why-you-must-have-a-blog-if-you-own-abusiness.html http://www.reviewpro.com/citizenm-chose-reviewpro-4257
LIST OF APPENDICES Appendix 1: Top Smartphone Activities Appendix 2: Smartphones and iPhones: many unused functions Appendix 3: Smartphones in the total of sold cell phones Appendix 4: Windows mobile Palm Treo 700w Appendix 5: Apple iPhone 2G Appendix 6: Google Android HTC Dream Appendix 7: Nokia N95 Appendix 8: RIM Blackberry Thunder Appendix 9: Worldwilde Top-10 SMartphones Brand Ranking Appendix 10: U.S. Smartphone vs. Non-Smartphone Penetration by Age Appendix 11: Smartphone Ownership/usage (by income) Appendix 12: Social Media: usage by web surfers Appendix 13: Hotel information sources for business travelers Appendix 14: Information sources consulted in the all three phases of a hotel purchase decision Appendix 15: Likelihood of booking a hotel that has negative reviews Appendix 16: Likelihood of booking a hotel that has positive reviews Appendix 17: Mobile Marketing Trends in the Hospitality Industry Appendix 18: Social media Usage in the Hospitality Industry Appendix 19: The Impact of Social Media Websites on Customers Appendix 20: The Four Main Social Media Websites Appendix 21: Average Digital IQ and percent of booking online by category Appendix 22: Digital IQ dispersion Appendix 23: Top 10 Hotel Brands: Online and Social Media Management Appendix 24: CitizenM Glasgow Appendix 25: CitizenM Rooms Appendix 26: CitizenM Living Room Appendix 27: CitizenM Check-in terminals Appendix 28: The CanteenM Appendix 29: Screenshots of CitizenM's Facebook Accounts Appendix 30: Screenshot of The Mandarin Oriental Manilla's Facebook Account Appendix 31: CitizenM Twitter account Appendix 32: Huntington Hotel Twitter account Appendix 33: CitizenMâ€™s Desktop Website
APPENDICES Appendix 1
Source: mobile.ecosystem.digital, Econsultancy, page 1, Appendix 1
Source: http://www.test-achats.be/telephonie/smartphones-et-iphone-beaucoup-defonctions-inutilisees-s576103.htm, Surveys, Date not mentioned, Appendix 2 Appendix 3
Source: http://www.teleco.com.br/en/en_comentario/en_com404.asp, Surveys, February 8th, 2011, Appendix 3
Appendix 4 Windows mobile Palm Treo 700w
http://www.newlaunches.com/archives/palm_and_microsoft_team_to_bring_healthca re_solutions_to_palm_treo_700w.php, News, February 17th, 2006, Appendix 4 Appendix 5
http://knowyourgadgets.com/apple-iphone-2g/#.TqgV_Jyhnwg, News, February 2nd, 2011, Appendix 5
Appendix 6 Google Android HTC Dream
http://happy-qi-snoopy.blogspot.com/2009/02/htc-dream-or-google-android.html, News, 2009, Appendix 6 Appendix 7
http://www.mobilefonereviews.co.uk/phone-reviews/Nokia-N95.aspx, News, No date mentioned, Appendix 7
http://www.tecnocino.it/articolo/rim-blackberry-thunder-e-la-tastiera-virtuale/11031/, News, July 14th, 2008, Appendix 8 Appendix 9
Source: HIS Isupply May 2011, Appendix 9
Source : http://www.comscoredatamine.com/, Statistics, July 2010, Appendix 10 Appendix 11
Source: http://www.onlinemarketing-trends.com, Statistics, April 10th, 2011, Appendix 11
Source: slideshare "Social media in travel and hospitality business, Katrien Cattoor, Statistics, May 2011, Appendix 12 Appendix 13
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
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 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 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 Appendix 17
Source: http://www.4hoteliers.com/4hots_nshw.php?mwi=8885, Surveys, July 26th, 2011, Appendix 17
Hoteliers probably did not consider TripAdvisor as a social media marketing tool Source: http://linkd.in/nlEe2X, News, 2011, Appendix 18 Appendix 19 The Impact of Social Media Websites on Customers
Source: Plate of the author, Appendix 19
Appendix 20 The Four Main Social Media Websites
Source: Plate of the author, Appendix 20
Study, L2 Digital IQ Index: Travel, by Scott Galloway, April 26th, 2011, Appendix 21
Source: Study, L2 Digital IQ Index: Travel, by Scott Galloway, April 26th, 2011, Appendix 22
Source: By the author, made from Study, L2 Digital IQ Index: Travel, by Scott Galloway, April 26th, 2011 Appendix 23 Appendix 24 CitizenM Glasgow
http://www.citizenmglasgow.com/glasgow-lodging-photos.php, Appendix 24
Appendix 25 CitizenM Rooms
screenshot, http://www.citizenmglasgow.com/, September 2011, Appendix 25 Appendix 26 CitizenM Living Room
http://www.citizenm.com/images/masthead/hotel-lobby.jpg, Appendix 26 Appendix 27 CitizenM Check-in Terminals
http://www.citizenm.com/images/inset/lobby-body.jpg, Appendix 27
Appendix 28 The Canteen M
http://www.citizenm.com/images/masthead/canteenM.jpg, Appendix 28 Appendix 29 Screenshots of CitizenMâ€™s Facebook Accounts
http://www.facebook.com/citizenMhotels http://www.facebook.com/citizenMglasgow http://www.facebook.com/citizenMamsterdamcity, Appendix 29
Appendix 30 Screenshot of The Mandarin Oriental Manilla's Facebook Account
http://www.facebook.com/MandarinOrientalManila, Appendix 30 Appendix 31 CitizenM Twitter account
http://twitter.com/#!/citizenM, Appendix 31
Appendix 32 Huntington Hotel Twitter account
http://twitter.com/#!/huntingtonhotel, Appendix 32 Appendix 33
Source: screenshot of CitizenMâ€™s websites, http://www.citizenm.com/, October 2011, Appendix 33
TITLES - Research Project Title -
How Independent Hoteliers can Capitalize on the Smartphone Revolution through the Use of Social Media, to Entice Business Travelers.
- Main Subsections Titles Chapter 1: The Smartphones Evolution and the Impact on Business Travelers I - The Smartphone Development over the Years II - The Impact of Smartphones on Business Travelers
Chapter 2: The Impact of Smartphones in the Hospitality Industry I- Hotelsâ€™ Adaptation to Business Travelers of Today II- Hotelsâ€™ Adaptation to Smartphones in order to Entice Business Travelers III- Measurement Tools: an Evolution in Hospitality Marketing
Chapter 3: Mobile and Social Media Strategies for Independent Boutique Hotels I- The Evolution of Independent Hotels since the Beginning of the Economic Crisis II- Digital Involvement of World Hotel Groups and Chains III- Digital Marketing Solutions for Boutique Hotels through the Example of CitizenM
TABLE OF CONTENTS SUMMARY'..........................................................................................................................................'5! GENERAL'INTRODUCTION'...........................................................................................................'6! CHAPTER'1'........................................................................................................................................'8! I'8'THE'SMARTPHONE'DEVELOPMENT'OVER'THE'YEARS'...............................................'10! A#!SMARTPHONE!PRESENTATION!................................................................................................................!10! B#!BIRTH!OF!THE!SMARTPHONE:!A!CHALLENGING!COMPETITION!FOR!MOBILE!MANUFACTURERS !............................................................................................................................................................................!12! C#!GENERAL!STATISTICS!ABOUT!SMARTPHONE!DEVELOPMENT!...........................................................!16! II'8'THE'IMPACT'OF'SMARTPHONES'ON'BUSINESS'TRAVELERS'....................................'18! A#!BUSINESS!TRAVELERS’!PROFILE!.............................................................................................................!18! 1"#Business#Travelers#as#Smartphones’#Users#................................................................................#18! 2"#Business#Travelers’#Profile:#a#Perfect#Target#for#Smartphone#Manufacturers#.........#19! B#!HOW!DO!BUSINESS!TRAVELERS!USE!SMARTPHONES?!.......................................................................!21! 1"#General#use#of#Smartphone#by#Business#Travelers#................................................................#21! 2"#Social#Media#and#Smartphone#Applications:#Their#Influence#on#Business#Travels#.#22! C#!THE!SERVICES!PROVIDED!BY!SOCIAL!MEDIA!AND!MOBILE!APPLICATIONS!....................................!24! 1"#Before#Making#a#Reservation#..........................................................................................................#24! 2"#During#a#Trip#..........................................................................................................................................#25! 3"#After#a#Trip#..............................................................................................................................................#25! 4"#The#Influence#of#Social#Media#on#Business#Travelers#...........................................................#26! CHAPTER'2'......................................................................................................................................'28! I8'HOTELS’'ADAPTATION'TO'BUSINESS'TRAVELERS'OF'TODAY'...................................'30! A#!BUSINESS!TRAVELERS!ATTITUDE!WITH!REGARDS!TO!HOTELS!IN!THE!AFTERMATH!OF!THE! ECONOMIC!CRISIS!............................................................................................................................................!30! 1"#Business#Travelers#Hotel#Booking#Process#................................................................................#30! 2"#Business#Travelers’#Expectation#Development#on#Rewards#..............................................#31! B#!THE!EVOLUTION!OF!ONLINE!RESERVATION!IN!THE!HOSPITALITY!INDUSTRY!...............................!31! 1"#Business#Travelers’#Online#Reservations:#a#Change#in#the#Hotel#Booking#Process#..#32! 2"#Reviews#Involvement#in#the#Booking#Process#..........................................................................#34! C#!SMARTPHONES:!BUSINESS!TRAVELERS’!PERFECT!ASSISTANTS!........................................................!36! 1"#Mobile#Applications#and#Social#Media#Influence#....................................................................#36! 2"#The#Impact#of#Social#Media#Development#on#Hotel#Reputation#......................................#36! II8'HOTELS’'ADAPTATION'TO'SMARTPHONES'IN'ORDER'TO'ENTICE'BUSINESS' TRAVELERS'.....................................................................................................................................'38! A#!THE!USE!OF!SMARTPHONES!IN!THE!HOSPITALITY!INDUSTRY!AND!THE!DEVELOPMENT!OF! ONLINE!AND!SOCIAL!MEDIA!TOOLS.!............................................................................................................!38! 1"#Mobile#Development:#Three#Difficulties#Hoteliers#Have#to#Adapt#...................................#38! 2"#Mobile#Marketing:#Two#New#Challenges#for#Hoteliers#.........................................................#40! B#!SOCIAL!MEDIA:!POSITIONING!STRATEGY!AND!EFFICIENT!MARKETING!TOOLS!............................!43! 1"#Social#Media#Development#in#the#Hospitality#Industry#........................................................#43! 2"#The#Advantages#for#Hoteliers#to#Use#Social#Media#................................................................#45! 3"#Facebook’s#Success#in#the#Hospitality#Industry#.......................................................................#48! III8'MEASUREMENT'TOOLS:'AN'EVOLUTION'IN'HOSPITALITY'MARKETING'.............'50! A#!DIGITAL!COMPETENCE!MEASUREMENT!................................................................................................!50! 1"#The#Digital#IQ#Indexes#in#the#Hospitality#Industry#.................................................................#50! 2"#Digital#IQ#Measurement#and#Classification#of#World#Hotel#Groups#...............................#51! 3"#World#Hotel#Groups#and#the#Use#of#Social#Media#by#Brands#.............................................#53!
B#!WEB!ANALYTIC!TOOLS:!A!GROWING!TREND!IN!THE!HOSPITALITY!INDUSTRY!..............................!54! 1"#The#Importance#for#Hoteliers#to#Use#Analytic#Tools#.............................................................#54! CHAPTER'3'......................................................................................................................................'58! I8'THE'EVOLUTION'OF'INDEPENDENT'HOTELS'SINCE'THE'BEGINNING'OF'THE' ECONOMIC'CRISIS'..........................................................................................................................'60! A#!THE!SITUATION!OF!INDEPENDENT!HOTELS!DURING!THE!ECONOMIC!DOWNTURN!......................!60! 1"#The#Different#Impacts#of#the#Economic#Crisis#on#Independent#Hotels#..........................#60! 2"#Digital#Marketing#Strategies#as#a#Solution#to#Face#the#Economic#Crisis#.....................#60! B#!THE!SITUATION!OF!INDEPENDENT!HOTELS!IN!2010/2011!............................................................!61! 1"#The#Monopoly#of#World#Hotel#Groups#and#Chains#in#the#Hospitality#Market#............#61! 2"#Solutions#of#Independent#Hotels#to#Remain#in#the#Market#.................................................#62! C#!THE!RISE!OF!BOUTIQUE!HOTELS!............................................................................................................!64! 1"#The#Growing#Development#of#Boutique#Hotels#........................................................................#64! 2"#The#Solution#of#Boutique#Hotels#to#Face#Economic#Downturn#.........................................#65! 3"#The#Success#of#Boutique#Hotels#since#2010#...............................................................................#65! II8'DIGITAL'INVOLVEMENT'OF'WORLD'HOTEL'GROUPS'AND'CHAINS'........................'67! A#!THE!DIGITAL!STRENGTH!OF!THE!BEST!WORLD!HOTELS!GROUPS!AND!CHAINS!...........................!67! B#!THE!THREE!LATEST!DIGITAL!TRENDS!DEVELOPED!BY!WORLD!HOTELS!GROUPS!AND!CHAINS!71! 1"#Combining#Mobile#and#Social#Media#Platforms#......................................................................#71! 2"#Personalized#Platforms#and#Services#to#Entice#Customers#................................................#72! 3"#Enhancing#the#Customer’s#Participation#...................................................................................#72! III8'DIGITAL'MARKETING'SOLUTIONS'FOR'BOUTIQUE'HOTELS'THROUGH'THE' EXAMPLE'OF'CITIZENM'...............................................................................................................'74! A#!CITIZENM!BOUTIQUE!HOTELS!................................................................................................................!74! 1"#Presentation#............................................................................................................................................#74! 2"#CitizenM#Concept#and#Development#............................................................................................#75! 3"#Design#and#Amenity#.............................................................................................................................#76! B#!CITIZENM:!AN!EXAMPLE!OF!SMART!SOCIAL!MEDIA!STRATEGIES!FOR!BOUTIQUE!HOTELS!........!77! 1"#CitizenM’s#Skills#in#Social#Media#Strategies#..............................................................................#78! 2"#How#CitizenM#Manages#Social#Networks#...................................................................................#82! 3"#What#about#CitizenM#Mobile#Strategy?#......................................................................................#86! C#!SMARTPHONE!APPLICATIONS!AND!COMPETENCE!MEASUREMENT!TOOLS!.....................................!88! 1"#Smartstay#2#Application#....................................................................................................................#88! 2"#CitizenM#and#ReviewPro#Partnership#..........................................................................................#89! GENERAL'CONCLUSION'...............................................................................................................'91! WEB'REFERENCES'.........................................................................................................................'93! LIST'OF'APPENDICES'...................................................................................................................'97! APPENDICES'....................................................................................................................................'98! TITLES'............................................................................................................................................'116! TABLE'OF'CONTENTS'................................................................................................................'117! TABLE'OF'ILLUSTRATIONS'.....................................................................................................'119!
TABLE OF ILLUSTRATIONS Top Smartphone Activities…………………………………………………………..10 Smartphones and iPhones: many unused functions……………………………….....11 Smartphones in the total of sold cell phones………………………………………...12 Windows mobile Palm Treo 700w…………………………………………………..13 Apple iPhone 2G…………………………………………………………………….13 Google Android HTC Dream………………………………………………………..14 Nokia N95…………………………………………………………………………...15 RIM Blackberry Thunder……………………………………………………………15 Worldwilde Top-10 SMartphones Brand Ranking………………………………….17 U.S. Smartphone vs. Non-Smartphone Penetration by Age………………………...18 Smartphone Ownership/usage (by income)…………………………………………19 Social Media: usage by web surfers…………………………………………………23 Hotel information sources for business travelers……………………………………32 Information sources consulted in the all three phases of a hotel purchase decision...33 Likelihood of booking a hotel that has negative reviews……………………………35 Likelihood of booking a hotel that has positive reviews…………………………….35 Mobile Marketing Trends in the Hospitality Industry……………………………….41 Social media Usage in the Hospitality Industry……………………………………..44 The Impact of Social Media Websites on Customers……………………………….45 The Four Main Social Media Websites……………………………………………...46 Average Digital IQ and percent of booking online by category…………………….51 Digital IQ dispersion………………………………………………………………...52 Top 10 Hotel Brands: Online and Social Media Management……………………...53 CitizenM Glasgow…………………………………………………………………..74 CitizenM Rooms…………………………………………………………………….75 CitizenM Living Room……………………………………………………………...76 CitizenM Check-in terminals………………………………………………………..76 The CanteenM……………………………………………………………………….76 Screenshots of CitizenM's Facebook Accounts……………………………………..78 Screenshot of The Mandarin Oriental Manilla's Facebook Account………………..80 CitizenM Twitter account……………………………………………………………81 Huntington Hotel Twitter account…………………………………………………...81 CitizenM’s Desktop Website………………………………………………………...87