The significance of tourism as an economic factor is sometimes underestimated. It is in fact one of the most dynamic industries in the world, and responsible for nearly 10 percent of the world’s GDP. Other figures related to tourism are even more significant, with the industry responsible for 30 percent of service exports and one in every 11 jobs worldwide.
Travel abroad expanding rapidly
This is only set to become more prominent in the future as the ability to travel abroad becomes more socio-economically feasible for millions more people every year. Just over half a century ago, in 1950, only 25 million people travelled the globe, and the overwhelming majority of these were drawn from the European and North American continents. Last year, the annual number of international tourist topped 1 billion; a forty fold increase in just 60 years. And these travellers are being drawn from an ever diverse range of emerging economies.
In conjunction with this growth of tourism, the unchecked rise of digital and mobile marketing methods has resulted in t the way consumers book and research travel evolving rapidly. The proliferation of online tourism-related content has ensured that companies in a wide variety of tourism niches have had to alter the way that they market and sell in order to attract customers.
A recent report produced by the United Nations World Tourism Organization (UNWTO) entitled “Online Guest Reviews and Hotel Classification Systems: An Integrated Approach” takes a particularly close look at the hotel industry, and provides a wealth of useful information for organisations in this line of trade. The report was prepared with the collaboration of the Norwegian Accreditation; an agency of the Ministry of Trade, Industry and Fisheries of Norway.
Traditional versus new wave
Those in the hotel industry will be aware that there are two primary ways that hotels can be assessed; hotel classification systems and guest reviews. The former of these is perhaps the more traditional way of grading a hotel's worth, with almost everyone on the planet familiar with the star system. But the latter has become increasingly important in recent years, especially as vast numbers of people are now using the Internet as their primary way of researching, planning and ultimately booking trips and hotels.
The UNWTO report assesses both of these key areas of information and attempts to draw conclusions based on the latest trends in the industry. This is really a critical report for anyone in the hotel industry to peruse in depth, but it is possible to sum up some of the most important assertions and trends recognised in the UNWTO report in this article.
Firstly, it is important that before making an online hotel reservation, the average consumer will visit 14 travel-related sites, roughly using each site about three times. They'll also carry out nine travel-related searches via Google and other search engines. This indicates that research is an important part of the online hotel booking experience.
However, as much as consumers carry out their own research before booking a hotel, reference to traditional ranking systems remains prevalent. Official hotel classifications are frequently used by consumers as a filter mechanism during their booking process, with the guest reviews then utilised in order to make a definitive selection. Thus, aiming for good reviews from customers is incredibly important, but hotels should not underestimate the importance of where they fit into the star rating system.
Star rating demographics
The report also indicates that the potential quality of guest reviews upon hotel classification increases with decreasing star levels. While three and four star hotels are more likely to attract excellent reviews and deliver what is perceived to be outstanding value for customer service, five-star hotels tend to find it more difficult to exceed, or even match, the expectations of consumers.
In order to measure the impact of customer reviews, the UNWTO reports carried out a complex research matrix which assessed the impact of reviews on revenue. Those who compiled the report acquired online reputation data from ReviewPro and hotel performance data from SmithTravel Research in order to draw the most accurate conclusions possible.
They found that a 1 percent improvement in review scores tends to translate directly into a 1 percent gain in revenue per available room. This information is displayed in a table contained within the report, and also broken down into various demographics. Again it should be noted that the more luxurious hotel is in terms of classification, the smaller this effect will be. The UNWTO report found that there was nearly a 1.5 percent gain for mid-scale hotels, while luxury hotels experienced a mere 0.49 percent increase.
Overall, the research collated in this extremely informative report indicates that both the traditional elements of hotel assessment as well as contemporary reviewing systems are important to consumers. But both customers and the hotel industry itself are interested in seeing a closer fit and collaboration between the two elements in the future, as well as the establishment of a common framework for guest reviews.