By Mike Saul
More than one in ten hospitality and leisure operators now generate up to half of all sales through social media, but despite this the industry still questions its business potential.
Over 60% of the sector, which includes hotels, pubs, restaurants, travel and leisure operators, say that they only see ‘some’ or ‘limited’ opportunity in using social media tools to engage consumers. This comes in spite of the clear benefits emerging from these channels: nearly a third (29%) of respondents directly attribute up to 25% of all their sales to social media, and a further 13% state that these platforms generate up to half of sales. In addition, more than two thirds (68%) of those currently using social media report that they have had a ‘positive’ or ‘very positive’ experience, attracting new customers, and receiving positive recommendations.
Social media has taken significant strides in recent years, encouraged in no small part by increasingly sophisticated and popular mobile devices. With estimates suggesting that over half of UK consumers now own a smartphone, and almost one in five have access to a tablet device, consumers have come to rely on networks and sites such as Facebook, Twitter and TripAdvisor to not only provide peer to peer recommendations for everything from hotels to pubs, restaurants and even local attractions, but also as a convenient way to connect with businesses.
Social media is firmly ingrained in how consumers, and the next generation consumer in particular, behave yet the industry is still reluctant to embrace its potential. More than one in ten operators do not currently use social media, nor do they have any plans to do so, and state that this is because they do not see any value or return on investment.
The industry is missing a trick. Social media has blurred the line between personal and corporate communities – something that has been encouraged by consumers who now expect to be able to interact in an immediate and very personal way, not just with friends, but with their favourite – and not so favoured – brands.
This can create a very powerful feedback loop – if operators can successfully tap into these networks, both good and bad reviews can be used to their advantage. If a flight or dinner reservation is delayed for example, it’s easy for consumers to vent their frustration to the online world – the trick is being able to respond helpfully, turning a negative experience into a positive one. Getting the strategy right is key.
The research shows that the majority of those operators who use social media, are not maximising its full potential; 44% of operators interviewed have a presence on sites such as Facebook and Twitter, but rarely use it.
Concerns over the amount of time social media takes to manage, the risks of negative publicity, and the technical skills required are putting operators off using these networks and platforms. Although more than half (58%) of respondents believe the role of social media will increase in the sector over the next 12 months, responsibility for these channels is largely being placed on non-specialist in-house individuals (25%) or the general in-house marketing teams (24%) who do not necessarily have experience of handling these tools.
Social media is everywhere, and for many businesses it not only influences and directly generates sales, but provides a personal link with consumers, building loyalty and driving repeat footfall. This is vital when consumers are increasingly cost-conscious and discerning about where they choose to spend their hard earned cash.
Just having a presence on social media is not enough – there needs to be a strategy driving it. Consideration needs to be given to how the information generated through social media is used, and we’re already seeing canny operators merging such initiatives into their wider marketing campaigns, targeting potential customers in a more focused manner. However, the industry has a long way to go – social media has a lot of potential and ignoring it would be a mistake.
About the author
Mike Saul is Head of Hospitality and Leisure at Barclays.