Brits swayed by online reviews- study

In fact, nearly half of those who research online reported deciding not to book a hotel because of a negative online review, according to research revealed by American Express.

Despite the potential negative impact of negative online reviews, 77% of UK hotels and 80% of restaurants reported viewing the growth in consumer generated content as an opportunity for their businesses.

The findings were part of the second annual American Express Hospitality Monitor, a barometer of business trends and issues affecting the hotel and restaurant industries across Europe.  This year, the industry research was supplemented with UK consumer research to assess how well the industry was responding to customer preferences and behaviours in key areas.

The research, conducted by independent research company Loudhouse on behalf of American Express, found that 83% of UK consumers are now researching online before booking a hotel and 62% before booking a restaurant. 

Of those consumers who do research online, almost half (48%) said they have decided not to book a hotel because of a negative online review on sites such as Trip Adviser and TopTable.  The figure was slightly lower (42%) amongst consumers searching online for information about restaurants.

“Online communities can be a powerful player when it comes to influencing consumer behaviour, and with so many consumers turning to the Internet when considering bookings, these sites can have a significant impact on decisions to visit a hotel or restaurant,” said Kathryn Pretzel Shiels, hotel and restaurant director for American Express. “The industry is clearly taking steps to better understand this channel.  In fact, 67% of UK hotels and 77% of UK restaurants say they actively monitor content posted on independent review sites, and 78% overall say these sites provide an opportunity for their businesses.”

Although many hospitality businesses are actively monitoring consumer generated content on online review sites, only 7% of hotels and 17% of restaurants said they respond directly to online reviews that are posted.

UK Hospitality Industry Embraces Online Technology

Monitoring websites with consumer reviews is an example of one way hoteliers and restaurateurs are becoming more sophisticated in the way they increasingly leverage the Internet. In fact, the industry’s focus on increasing website functionality has developed significantly this year, with 82% of hotels and restaurants now tracking web hits, an increase from 28% in 2006. 

In many cases today’s website functionality has exceeded projections, with far more businesses implementing changes than anticipated. Customers are now finding it easier to check availability (60% of businesses offering this compared to 32% in 2006), and make reservations (40% compared to 26% in 2006), whilst 75% of those businesses with a website are now offering a virtual tour online.

In terms of the breadth of online marketing tools businesses are using, affiliate marketing - using other websites to drive traffic to their own site - is now a core part of their marketing strategy (57% of hotels and 50% of restaurants). Search marketing (43%) is used by both hotels and restaurants, whilst e-direct mail is being used far more by hotels (70%) than restaurants (17%). 

Despite the influence online reviews have on consumers, the American Express Hospitality Monitor 2007 found that direct feedback (57%) was still the most popular channel amongst consumers to communicate with hotels and restaurants about a positive or negative experience.

When asked if they had ever posted their own opinions via a blog or online review, 21% of the respondents had done so following a hotel visit, and 13% after eating at a restaurant. This suggests that consumer ‘e-pinions’ are provided by only a limited number of customers, though their influence appears to be wide reaching.

The American Express Hospitality Monitor 2007 was conducted by Loudhouse Research, an independent market research company based in the UK.

Fieldwork was carried out during April 2007. A total of 300 detailed, quantitative telephone interviews were conducted with senior level operations contacts across European hotels and restaurants (UK, France, Germany, Spain and Italy).  These 5 markets are in the world’s top ten tourism destinations by arrivals (European Travel Commission 2007).