For Hospitality, Social Media Is Too Little Too Late

Point of View | Social Media

When it comes to the hospitality industry, social media is really good for some things, and really bad for others.

Getting these things straight is awfully important if you want to take advantage of the power of social media, and avoid its potential pitfalls. Social media can be a useful channel for customer listening. But if you’re using social media to manage your reputation, you’re too late.

By the time a negative review is posted you’re doing damage control, not reputation management.

Authors

Dr. Jonathan Barsky, Ph.D.

Co-founder

and Chief Research Officer

Mike Waite

Vice President

POV | Social Media

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Can we talk? When it comes to the hospitality industry, social media is really good for some things,

and really bad for others. Getting these things straight is awfully important if you want to take

advantage of the power of social media, and avoid its potential pitfalls. A lot of people are trying to

use social media to manage their hotel’s online reputation. Some are even trying to use it in place of

their traditional guest feedback program to make important product and service decisions. These

people are missing the point.

The mistake these people are making is applying social media data where it can’t do the whole

job. Social media can be a useful channel for customer listening. But if you’re using social media to

manage your reputation, you’re too late. By the time a negative review is posted you’re doing damage

control, not reputation management. And when it comes to making product and service decisions,

social media alone isn’t representative, accurate or deep enough. In fact, some people believe as

many as 40% of online hotel reviews are made up! So while it’s important to monitor unsolicited

customer feedback and engage in online conversation, social media data alone can’t provide the

accurate, representative and rich data you need to run your business. Here’s why:

Bogus reviewsAs hospitality companies increasingly depend on positive reviews, a market for “promotional

reviews” has sprung up to buy and sell fictitious feedback. Many promotional reviews are obtained

through help-for-hire sites like Fiverr and Mechanical Turk. The demand for positive comments has

turned online reviews into an arms race. With more properties receiving five-star reviews, even more

five-star reviews are needed to stand out from the competition. So you buy them.

Long a concern in the hospitality industry, Gartner recently confirmed what many have feared. Their

report concluded that as many as 15% of online reviews will be paid for by 20141. Other estimates go

much further putting the frequency of fake reviews as high as 40%2! There is little to prevent made-

up reviews. Very few online review sites and virtually no social media platforms require any proof

that a reviewer actually visited the hotel or restaurant they’re reviewing. And research has shown

that there are more fraudulent postings on websites that don’t require purchase authentication3.

This vulnerability applies to the largest online review site as well as the largest social media websites.

1 Sussin, Jenny and Thompson, Ed, The Consequences of Fake Fans, ‘Likes’ and Reviews on Social Networks, Gartner, July 24, 2012

2 Schaal, Dennis, Hotelme Attracts $3M In Funding And USA Today As Partner For Unique Hotel Review Site, September 18, 2012

3 Ott, Cardie and Hancock. Estimating the Prevalence of Deception in Online Review Communities, WWW 2012 – Session: Fraud and Bias in User

Ratings. April 16–20, 2012, Lyon, France

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There are ways to game the system that are less egregious, but still reduce the authenticity of reviews.

For example, hotels offer discounts and incentives in return for a favorable review. A high-end English

hotel, The Cove in Cornwall, was recently accused of soliciting guests to post an “honest but positive

review” on TripAdvisor in exchange for a ten percent discount. Nearly all the recent reviews of the Cove

are glowing, except for the one headlined, “Sadly let down by overhyped reviews.”4

Thin dataTrip Advisor has collected, on average, about 10 reviews per hotel per year. If you include all top 10

review sites, the number of reviews per hotel goes up to about 15. That’s just not much information.

Certainly not enough to represent a clear and balanced view of customer experience. And nowhere

near enough information to look at important segments, like frequent guests vs. first-time visitors.

If you manage larger properties you can expect more reviews, but the numbers are still tiny

compared to a survey-based feedback program. We compared 650 larger properties in the US,

Europe and Asia with a minimum of 60 rooms per property. They received an average of 185 reviews

in the last year (October 2011 through September 2012) across all top 10 review sites. The same

properties during the same period received an average of 1,159 completed guest surveys!

4 The Pew Research Center’s Internet & American Life Project’s Tracking Survey conducted July 16-August 7, 2012

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No service recoveryThe time to fix a problem is when it occurs, not when it’s already been posted to the world. But with

feedback systems based on social media and online reviews, that’s when you learn about them. Most

online review sites don’t post guest reviews for four or more days, long after the customer has left.

And when you rely on social media for feedback, you don’t learn about problems until a customer has

already shared it with their network.

The best way to improve your online reputation is to prevent negative reviews in the first place.

Unresolved problems have a dramatic impact on guest loyalty, driving it down by 56% on average .

That means more than half those customers don’t come back. What’s worse, guests who experience

a problem are nearly three times more likely to write a review about it online. Market Metrix

Hospitality Index data indicate that guests who have a problem write a review about it 22.6% of the

time. Guests without a problem write reviews just 8.8% of the time5. Recovering from a problem

is critical. Almost two-thirds of the loyalty lost due to a problem can be regained if the problem is

addressed. Survey-based platforms can collect guest feedback at the point of experience. Negative

scores can automatically put service recovery steps into action, alerting the right person about the

problem so it can be fixed right away. That’s how you turn a negative review into a positive one, and

build your online reputation.

5 Market Metrix Hospitality Index, 2011 survey results representing 134,261 respondents

POV | Social Media

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Distorted viewWhen we read a mediocre book, we don’t usually tell anyone about it. The same is true of our

hospitality experiences. It takes an exceptional experience to motivate sharing. So opinions shared

through social media and online review sites are often extreme points of view and don’t represent the

complete spectrum of experience. Sadly, it seems like negative experiences are more motivating to

share than positive ones.

We compared TripAdvisor reviews against guest surveys for the same properties during the same

time period and saw radically different pictures. The TripAdvisor data showed nearly three times

more negative (1- and 2-star ratings) responses, while 5-star ratings were understated by 35%.

This disproportionate view of your business could mean millions of dollars spent to solve problems

that aren’t having a significant impact on your business. Likewise, sources of value, the things most

likely to attract guests and gain their loyalty, could go unnoticed.

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Important? Or just loudSome problems happen a lot. Others can really hurt your business. But they often aren’t the same.

Some very frequent problems, like a faulty TV remote, have very little impact on loyalty. Others, like a

rude desk clerk, may happen infrequently but are severe business killers.

With social media there’s no way to distinguish the most important problems from all the rest. The

only indication of significance is discussion volume on a particular topic. But volume is not the same

as importance. The only way to figure out how important a problem is requires looking at its impact

on loyalty or revenue. And that isn’t possible with social media.

Without any connection to loyalty or revenue, social media also fails to isolate the product and service

attributes that really drive business success. So you can forget about creating performance-based

incentives for employees because you have no way to establish what they ought to be focusing on.

No diagnostic detailOther than a few simple questions on review sites, social media content is entirely unstructured.

Consumers can tweet about their experiences in 140 characters, review hotels on TripAdvisor by

answering a few basic questions, or tell friends with a Facebook post. But other than posting a thank

you (or an apology), what can you do with this information to improve your service? None of these

offer a very clear or complete picture of the guest experience.

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But surveys can guide the respondent to consider the entire experience, not just the one thing that

stood out. Standardized questions make measurement more precise and consistent by allowing

uniform definitions. And because we know who the respondent is, feedback can be connected to

everything else you know about the guest. That means you can respond to guest input directly, and

discreetly, rather than posting anonymously to a social network.

Demographic BiasNot everyone participates in social media, at least not at levels that are commensurate with the

population. Younger people are over-represented and older segments are under-represented,

sometimes dramatically. To begin with, only 56% of the US population participates in social media6.

And for adults over 50, the number falls to just 20%! Do you really want to miss hearing from 80%

of the people who spend more money on hospitality than any other segment?

A survey-based approach, on the other hand, allows you to invite every single customer to

complete a survey. Most can be completed online. But the important thing is that everyone can be

accommodated – send a simple text survey to their phone, hand them an iPad with an open link, you

can even give them a paper comment card if you have to. The important thing is that you can hear

from everyone, not just those who happen to participate in social media.

6 The Pew Research Center’s Internet & American Life Project’s Tracking Survey conducted July 16-August 7, 2012

Online reviews and social media

feedback provide an extremely limited

view of the customer experience.

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About Market MetrixMarket Metrix is the leading provider of customer and employee feedback solutions for hospitality companies around the globe.

By connecting feedback with revenue, Market Metrix helps hospitality businesses make smart investment decisions that both

improve the guest experience and produce higher profits. Real-time feedback and action management drive timely service recovery,

turning potential negative reviews into online raves. And no other feedback program offers the detailed global benchmarking of

MMHI, allowing clients to spot gaps and opportunities in the context of key competitors. Market Metrix is essential to more than

14,000 businesses in over 70 countries, and has been helping forward-thinking executives profit from feedback since 1996.

For more information, visit www.marketmetrix.com.

POV | Social Media

ConclusionSocial media is a great way to tune into customer comments. It can also be the ultimate tool for

word-of-mouth promotion, allowing your best customers and strongest advocates to share their

experiences. But when it comes to your reputation, social media can’t create it, it can only perpetuate

it. Trying to mend your reputation after someone has posted a negative review is missing the point.

Your reputation, after all, is based on the experience people have when they visit your business.

That’s where survey-based feedback programs still have the advantage. On-premise surveys let you

respond to guest comments right away. You can fix problems before they become negative reviews.

But survey programs also provide the complete customer picture you need to surprise and delight

your customers in the first place.