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Academic Year 2010/2011                                                 International Hospitality Management – Prepa MBA  ...
2
HOSPITALITY MANAGEMENT CENTER – PARIS                  - Submitted on November, 14th 2011 -    How Independent Hoteliers c...
ACKNOWLEDGEMENTS PAGE     This research project, realized within the framework of my Bachelor of Sciencein Hospitality and...
SUMMARYChapter 1: The Smartphones Evolution and the Impact on Business TravelersI - The Smartphone Development over the Ye...
GENERAL INTRODUCTION      In 2011, independent hotels and world hotel groups and chains were (and stillare) in competition...
This research paper consists of three chapters.      The study starts with an overview of the smartphone industry evolutio...
CHAPTER 1The Smartphones Evolution and the  Impact on Business Travelers                                    8
Introduction      The fast growing development of smartphones is a revolution for smartphoneusers. They proved to be a per...
I - The Smartphone Development over the YearsA- Smartphone Presentation      Smartphones are, as the name implies, mobile ...
According to the tables, people obviously make no difference between using asmartphone or a desktop computer for their dai...
This graph clearly shows the advantages of using an iPhone instead of anothersmartphone. Except for basic phone functions,...
Windows mobile Palm Treo 700w                            Contrary to what people may think, the first smartphones         ...
Google Android HTC Dream                                         It took only one year for Google to launch its           ...
Nokia N95Appendix 710Nokia, which was the world’s top cellphone maker for 15 years, started creatingsmartphones in 2007 an...
competitors. According to an expert from Business Week Magazine13, RIM is facingtwo problems: market saturation and the co...
The tables below shows the evolution of the most influential smartphone brandsduring 2010 and 2011.                 Worldw...
II - The Impact of Smartphones on Business Travelers     The mobile industry’s constant growth, since the arrival of smart...
by people between 18 and 24 years old who probably need smartphones for school orto start their career.      Recently, in ...
A study led by National Household Travel Survey20 between 2001 and 2002details the characteristics of business travelers i...
aged business travelers with high salaries and high skilled jobs. Smartphonemanufacturers have therefore succeeded in targ...
probably due to the experience of video conferencing, which appeared as a perfecttool to save time and money during the ec...
social networks in that they are communities of interest enabling people to connect toone another.      The tables below, ...
Google+, Facebook and Twitter’s direct competitor, is not mentioned in thetable because of its launch in July 2011. Howeve...
According to a survey made by Embassy Suite Hotel28 on 700 American businesstravelers, 50% ages 21 to 34 years old, consul...
and they enable businesses to get information for free about their business structure,which allows them to improve their s...
Conclusion     To conclude, the development of smartphones has created a revolution for bothbusiness travelers and their b...
CHAPTER 2The Impact of Smartphones in the      Hospitality Industry                                   28
Introduction      The development of smartphones contributed greatly to the development ofsocial media and mobile features...
I- Hotels’ Adaptation to Business Travelers of Today      The hospitality industry provides business travelers with more t...
Suites Hotel’s third annual survey33 led in April 2011, “business travelers remainbudget savvy about accommodations but th...
customers this year with hotel mobile applications, using advanced online reservationsystems or digital coupons, etc.Howev...
The table shows that multiple information sources are used by business travelersbefore booking a hotel. Most of them use s...
2- Reviews Involvement in the Booking Process      Another change concerning the booking process is the way reviews influe...
Source: How Travelers Use Online and Social Media Channels to Make Hotel-choice Decisions,             Cornell Hospitality...
booking this hotel. This is why some negative reviews can have positive effects forhotels.C- Smartphones: Business Travele...
for more and more older business travelers as well. In June 2010, according to theEmbassy Suites Hotel survey41 on 700 US ...
II- Hotels’ Adaptation to Smartphones in order to Entice                        Business TravelersA- The Use of Smartphone...
b- More and More Demand Every Year      Secondly, knowing that smartphones are winning over more and more peopleevery year...
2- Mobile Marketing: Two New Challenges for Hoteliers      Once mobile tools are all set up, hoteliers have to face two ot...
mobile websites. However, they usually are very expensive and have to be built fromscratch for each operating system (Appl...
gain market shares and increase hotel revenue. The most difficult part is to increasesales within the hotels via mobile te...
IQ index study, send an average of one email every two weeks to customers.However, 87% of email messaging has not been opt...
b- Hoteliers’ Lack of Skills in Social Media       The way hoteliers use social media has a direct impact on their custome...
A study on “How Travelers Use Online and Social Media Channels to MakeHotel-choice Decisions” conducted by Cornell Univers...
the latest promotional offers and customer reviews, which were not provided by travelagents. As a result, it is in the adv...
How Independent Hoteliers can Capitalize on the Smartphone Revolution through the Use of Social Media, to Entice Business ...
How Independent Hoteliers can Capitalize on the Smartphone Revolution through the Use of Social Media, to Entice Business ...
How Independent Hoteliers can Capitalize on the Smartphone Revolution through the Use of Social Media, to Entice Business ...
How Independent Hoteliers can Capitalize on the Smartphone Revolution through the Use of Social Media, to Entice Business ...
How Independent Hoteliers can Capitalize on the Smartphone Revolution through the Use of Social Media, to Entice Business ...
How Independent Hoteliers can Capitalize on the Smartphone Revolution through the Use of Social Media, to Entice Business ...
How Independent Hoteliers can Capitalize on the Smartphone Revolution through the Use of Social Media, to Entice Business ...
How Independent Hoteliers can Capitalize on the Smartphone Revolution through the Use of Social Media, to Entice Business ...
How Independent Hoteliers can Capitalize on the Smartphone Revolution through the Use of Social Media, to Entice Business ...
How Independent Hoteliers can Capitalize on the Smartphone Revolution through the Use of Social Media, to Entice Business ...
How Independent Hoteliers can Capitalize on the Smartphone Revolution through the Use of Social Media, to Entice Business ...
How Independent Hoteliers can Capitalize on the Smartphone Revolution through the Use of Social Media, to Entice Business ...
How Independent Hoteliers can Capitalize on the Smartphone Revolution through the Use of Social Media, to Entice Business ...
How Independent Hoteliers can Capitalize on the Smartphone Revolution through the Use of Social Media, to Entice Business ...
How Independent Hoteliers can Capitalize on the Smartphone Revolution through the Use of Social Media, to Entice Business ...
How Independent Hoteliers can Capitalize on the Smartphone Revolution through the Use of Social Media, to Entice Business ...
How Independent Hoteliers can Capitalize on the Smartphone Revolution through the Use of Social Media, to Entice Business ...
How Independent Hoteliers can Capitalize on the Smartphone Revolution through the Use of Social Media, to Entice Business ...
How Independent Hoteliers can Capitalize on the Smartphone Revolution through the Use of Social Media, to Entice Business ...
How Independent Hoteliers can Capitalize on the Smartphone Revolution through the Use of Social Media, to Entice Business ...
How Independent Hoteliers can Capitalize on the Smartphone Revolution through the Use of Social Media, to Entice Business ...
How Independent Hoteliers can Capitalize on the Smartphone Revolution through the Use of Social Media, to Entice Business ...
How Independent Hoteliers can Capitalize on the Smartphone Revolution through the Use of Social Media, to Entice Business ...
How Independent Hoteliers can Capitalize on the Smartphone Revolution through the Use of Social Media, to Entice Business ...
How Independent Hoteliers can Capitalize on the Smartphone Revolution through the Use of Social Media, to Entice Business ...
How Independent Hoteliers can Capitalize on the Smartphone Revolution through the Use of Social Media, to Entice Business ...
How Independent Hoteliers can Capitalize on the Smartphone Revolution through the Use of Social Media, to Entice Business ...
How Independent Hoteliers can Capitalize on the Smartphone Revolution through the Use of Social Media, to Entice Business ...
How Independent Hoteliers can Capitalize on the Smartphone Revolution through the Use of Social Media, to Entice Business ...
How Independent Hoteliers can Capitalize on the Smartphone Revolution through the Use of Social Media, to Entice Business ...
How Independent Hoteliers can Capitalize on the Smartphone Revolution through the Use of Social Media, to Entice Business ...
How Independent Hoteliers can Capitalize on the Smartphone Revolution through the Use of Social Media, to Entice Business ...
How Independent Hoteliers can Capitalize on the Smartphone Revolution through the Use of Social Media, to Entice Business ...
How Independent Hoteliers can Capitalize on the Smartphone Revolution through the Use of Social Media, to Entice Business ...
How Independent Hoteliers can Capitalize on the Smartphone Revolution through the Use of Social Media, to Entice Business ...
How Independent Hoteliers can Capitalize on the Smartphone Revolution through the Use of Social Media, to Entice Business ...
How Independent Hoteliers can Capitalize on the Smartphone Revolution through the Use of Social Media, to Entice Business ...
How Independent Hoteliers can Capitalize on the Smartphone Revolution through the Use of Social Media, to Entice Business ...
How Independent Hoteliers can Capitalize on the Smartphone Revolution through the Use of Social Media, to Entice Business ...
How Independent Hoteliers can Capitalize on the Smartphone Revolution through the Use of Social Media, to Entice Business ...
How Independent Hoteliers can Capitalize on the Smartphone Revolution through the Use of Social Media, to Entice Business ...
How Independent Hoteliers can Capitalize on the Smartphone Revolution through the Use of Social Media, to Entice Business ...
How Independent Hoteliers can Capitalize on the Smartphone Revolution through the Use of Social Media, to Entice Business ...
How Independent Hoteliers can Capitalize on the Smartphone Revolution through the Use of Social Media, to Entice Business ...
How Independent Hoteliers can Capitalize on the Smartphone Revolution through the Use of Social Media, to Entice Business ...
How Independent Hoteliers can Capitalize on the Smartphone Revolution through the Use of Social Media, to Entice Business ...
How Independent Hoteliers can Capitalize on the Smartphone Revolution through the Use of Social Media, to Entice Business ...
How Independent Hoteliers can Capitalize on the Smartphone Revolution through the Use of Social Media, to Entice Business ...
How Independent Hoteliers can Capitalize on the Smartphone Revolution through the Use of Social Media, to Entice Business ...
How Independent Hoteliers can Capitalize on the Smartphone Revolution through the Use of Social Media, to Entice Business ...
How Independent Hoteliers can Capitalize on the Smartphone Revolution through the Use of Social Media, to Entice Business ...
How Independent Hoteliers can Capitalize on the Smartphone Revolution through the Use of Social Media, to Entice Business ...
How Independent Hoteliers can Capitalize on the Smartphone Revolution through the Use of Social Media, to Entice Business ...
How Independent Hoteliers can Capitalize on the Smartphone Revolution through the Use of Social Media, to Entice Business ...
How Independent Hoteliers can Capitalize on the Smartphone Revolution through the Use of Social Media, to Entice Business ...
How Independent Hoteliers can Capitalize on the Smartphone Revolution through the Use of Social Media, to Entice Business ...
How Independent Hoteliers can Capitalize on the Smartphone Revolution through the Use of Social Media, to Entice Business ...
How Independent Hoteliers can Capitalize on the Smartphone Revolution through the Use of Social Media, to Entice Business ...
How Independent Hoteliers can Capitalize on the Smartphone Revolution through the Use of Social Media, to Entice Business ...
How Independent Hoteliers can Capitalize on the Smartphone Revolution through the Use of Social Media, to Entice Business ...
How Independent Hoteliers can Capitalize on the Smartphone Revolution through the Use of Social Media, to Entice Business ...
How Independent Hoteliers can Capitalize on the Smartphone Revolution through the Use of Social Media, to Entice Business ...
How Independent Hoteliers can Capitalize on the Smartphone Revolution through the Use of Social Media, to Entice Business ...
How Independent Hoteliers can Capitalize on the Smartphone Revolution through the Use of Social Media, to Entice Business ...
How Independent Hoteliers can Capitalize on the Smartphone Revolution through the Use of Social Media, to Entice Business ...
How Independent Hoteliers can Capitalize on the Smartphone Revolution through the Use of Social Media, to Entice Business ...
How Independent Hoteliers can Capitalize on the Smartphone Revolution through the Use of Social Media, to Entice Business ...
How Independent Hoteliers can Capitalize on the Smartphone Revolution through the Use of Social Media, to Entice Business ...
How Independent Hoteliers can Capitalize on the Smartphone Revolution through the Use of Social Media, to Entice Business ...
How Independent Hoteliers can Capitalize on the Smartphone Revolution through the Use of Social Media, to Entice Business ...
How Independent Hoteliers can Capitalize on the Smartphone Revolution through the Use of Social Media, to Entice Business ...
How Independent Hoteliers can Capitalize on the Smartphone Revolution through the Use of Social Media, to Entice Business ...
How Independent Hoteliers can Capitalize on the Smartphone Revolution through the Use of Social Media, to Entice Business ...
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  1. 1. Academic Year 2010/2011 International Hospitality Management – Prepa MBA Hospitality Management Center- Paris Research Project How Independent Hoteliers can Capitalize on the Smartphone Revolution through the Use of Social Media, to Entice Business Travelers.Submission date: November, 14th 2011 NICOLAS EmilieSupervisor: Lisa Wines MBA 1 B +33 6 03 05 09 49 em.nicolas@gmail.com
  2. 2. 2
  3. 3. HOSPITALITY MANAGEMENT CENTER – PARIS - Submitted on November, 14th 2011 - How Independent Hoteliers can Capitalize on theSmartphone 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
  4. 4. ACKNOWLEDGEMENTS PAGE This research project, realized within the framework of my Bachelor of Sciencein Hospitality and Luxury Brands Management at the Hospitality Management Centerof Paris, would not have been conceivable without the support and encouragementfrom my family and professional surrounding. I would like to thank Lisa Wines, Marketing Teacher at HMC-Paris, for herdirection and guidance in the elaboration of my outline. I also wish to thank Liz Craig, CEO and Founder of the web-marketing agencyOneglobe Network, who enabled me to get important studies and statistics in relationto the hospitality industry. Special thanks should be given to Sharon Bidaure, English teacher in SanFrancisco, who took time to review this entire research paper; and to Samuel Alba,Engineering manager at DotCloud, who guided me concerning the technical partabout the smartphone development. 4
  5. 5. SUMMARYChapter 1: The Smartphones Evolution and the Impact on Business TravelersI - The Smartphone Development over the YearsA- Smartphone PresentationB- Birth of the Smartphone: a Challenging Competition for Mobile ManufacturersC- General Statistics About Smartphone DevelopmentII - The Impact of Smartphones on Business TravelersA- Business Travelers’ ProfileB- How do Business Travelers Use Smartphones?C- The Services Provided by Social Media and Mobile ApplicationsChapter 2: The Impact of Smartphones in the Hospitality IndustryI- Hotels’ Adaptation to Business Travelers of TodayA- Business Travelers Attitude with Regards to Hotels in the Aftermath of theEconomic CrisisB- The Evolution of Online Reservation in the Hospitality IndustryC- Smartphones: Business Travelers’ Perfect AssistantsII- Hotels’ Adaptation to Smartphones in order to Entice Business TravelersA- The Use of Smartphones in the Hospitality Industry and the Development ofOnline and Social Media Tools.B- Social Media: Positioning Strategy and Efficient Marketing ToolsIII- Measurement Tools: an Evolution in Hospitality MarketingA- Digital Competence MeasurementB- Web Analytic Tools: a Growing Trend in the Hospitality IndustryChapter 3: Mobile and Social Media Strategies for Independent Boutique HotelsI- The Evolution of Independent Hotels since the Beginning of the Economic CrisisA- The Situation of Independent Hotels during the Economic DownturnB- The Situation of Independent Hotels in 2010/2011C- The Rise of Boutique HotelsII- Digital Involvement of World Hotel Groups and ChainsA- The Digital Strength of the Best World Hotels Groups and ChainsB- The Three Latest Digital Trends Developed by World Hotels Groups and ChainsIII- Digital Marketing Solutions for Boutique Hotels through the Example ofCitizenMA- CitizenM Boutique HotelsB- CitizenM: an Example of Smart Social Media Strategies for Boutique HotelsC- Smartphone Applications and Competence Measurement Tools 5
  6. 6. GENERAL INTRODUCTION In 2011, independent hotels and world hotel groups and chains were (and stillare) in competition to win over business travelers – back on the road after the harshand long world economic crisis. More technologically savvy than ever and hugelywork-oriented toward the success of their businesses, business travelers have newneeds and expectations, which oblige hoteliers to readapt their customer services andmarketing strategies. On one hand, the huge presence of business travelers on the Internet isbeneficial for world hotel groups and chains, which paid to get attractive websites andonline visibility on desktop computers and mobile devices. On the other hand, theinterest of business travelers for a unique experience within home-like hotels isbeneficial for independent hotels, especially boutique hotels. As a result, the only solution for independent hotels to compete with the “bigboys” is to turn digital. It represents a real challenge when it is a matter of course, toregularly follow the latest trends in new technologies when one has few skills in thedigital field and a limited marketing budget, while closely following the fast growingevolution of their competitors. This research project takes into account all the difficulties independent hotelsare facing, in its approach to provide themselves with efficient digital marketingsolutions. The situation of independent hotels brings one to wonder how independenthoteliers can capitalize on the smartphone revolution, through the use of social mediato entice business travelers. The objective of the research was to demonstrate that with the impact of socialmedia on local businesses and the fast growing evolution of smartphones, it isessential for the success of hoteliers to turn digital, and invest time and money tocreate effective online marketing strategies. To achieve thus said, this researchproject provides the essential basics and knowledge concerning the online, socialmedia and mobile tools in relation to the hospitality industry. The research also paints a portrait of today’s business travelers, so that hotelierscan adapt their products and services to the new needs and expectations of businesstravelers. In addition, an analysis of the digital competence of world hotel groups andchains will allow independent hotels to set up digital strategies, taking into accounttheir competitors’ strengths and weaknesses. Last but not least, the case study of“CitizenM”, a successful boutique hotel chain, will be an excellent example to followfor independent hotels, as far as social media strategies and online visibility areconcerned. This research project mainly sought to follow daily the latest trends in digitaltechnologies and the hospitality industry on new websites, and compare and analyzenumerous studies and statistics concerning the digital field, the hospitality industryand the activities of business travelers. 6
  7. 7. This research paper consists of three chapters. The study starts with an overview of the smartphone industry evolution, anddemonstrates how, with the influence of social media, mobile manufacturerssucceeded in responding to the needs of business travelers, and how they contributedin changing their habits and expectations, especially when traveling. The second chapter focuses on the impact of the profile of new businesstravelers and the economic crises in the hospitality industry, which naturally drovehotels to turn digital. This part highlights the difficulties of hoteliers in adapting theirmarketing to mobile devices and social media sites, and provides solutions to usethese digital tools for marketing purposes. The third chapter introduces the situation of independent hotels facing theconsequences of the economic crisis; and the will of world hotel groups and chains toacquire independent boutique hotels. This part also analyzes the way world hotelgroups and chains use mobile and social media for marketing purposes and provides,through the study of CitizenM hotels, social media and mobile marketing solutions tohelp independent boutique hotels remain in the market. 7
  8. 8. CHAPTER 1The Smartphones Evolution and the Impact on Business Travelers 8
  9. 9. Introduction The fast growing development of smartphones is a revolution for smartphoneusers. They proved to be a perfect alternative to desktop computers and laptopsdespite their smaller size. Used for leisure and /or business, they contributed inturning the world from offline to online. Business travelers, using them the most and for a longer time, have integratedsmartphones into their life, which contributed to changing their habits, needs andexpectations. As a result, the travel industry is facing a new type of customer thatthey have to approach in different ways. The new business travelers are more present online than offline and tend tounconsciously do the work of travel companies by simply using their smartphones.The hospitality industry is the most affected by smartphones given business travelersspend more time in hotels than in any other travel related companies such as airport,restaurant, etc. 9
  10. 10. I - The Smartphone Development over the YearsA- Smartphone Presentation Smartphones are, as the name implies, mobile phones with computers abilities,hence the attribution of the adjective “smart.” According to the Smartphone 1definition on businessdictionary.com , “Smartphones provide a one-stop solution forinformation management, mobile calls, email sending, and Internet access. They arecompact in size and often only slightly bigger than standard mobile telephones.” Smartphones are driven by operating systems that can be different according tomobile manufacturers. A mobile operating system (also called “Mobile OS”) is thesystem 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 idealcompromise for business travelers. They attract people via their size and immensequantity of features. The tables below introduce the most used functions ofsmartphones by basic users. Top Smartphone Activities Source: mobile.ecosystem.digital, Econsultancy, page 1, Appendix 11 http://www.businessdictionary.com/definition/smartphone.html, June 15th, 2011 10
  11. 11. According to the tables, people obviously make no difference between using asmartphone or a desktop computer for their daily needs. As a result, even ifsmartphones have a smaller screen and are less practical to use, people are satisfiedwith them as long as they have access to the information they need. The tables indeedshow 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 businesstravelers, see in smartphones a real “travel assistant.” All the functions provided by smartphones make it such that they are used moreon a daily basis than they used to be. As a result, people, especially businesstravelers, need comfortable, easy to use and good quality smartphones. In thesmartphone market, for a long time we could differentiate Apple iPhones and all theother smartphones whatever their brands. The arrival of iPhones in the marketcreated such a revolution that the brand “Iphone” was used more than the name“smartphone”. The graph below compares the iPhone with the other smartphonesaccording to their six most used functions. Smartphones and Iphones: many unused functions Source: http://www.test-achats.be/telephonie/smartphones-et-iphone-beaucoup-de-fonctions- inutilisees-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-inutilisees-s576103.htm, Surveys, Date not mentioned 11
  12. 12. This graph clearly shows the advantages of using an iPhone instead of anothersmartphone. Except for basic phone functions, music, web and emails functions aremore 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 competitionwith other manufacturers has become harder.B- Birth of the Smartphone: a Challenging Competition for MobileManufacturers The first smartphones for the general public were introduced in the market oneyear before the world economic crisis of 2008. Smartphone manufacturers had toface a double challenge: integrating the market and enticing potential customersdespite the recession period. However, according to the technology research centerGartner3, 38.14 million smartphones were sold in December 2008, which representsan increase of 3.7% compared to the same period the previous year. This increase in2008 is, according to Gartner, due to the development of the emerging markets. Forinstance, China went beyond the 600 millions sales of smartphones and became thefirst mobile market in 2008. The graph below, from Teleco4 shows the continuingincrease of smartphones through 2010. Teleco claims that “Smartphones were themain driver for the growth of cell phones sales in 2010.” 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 keptincreasing. This means that there was a real need in the market and it was time for themobile manufacturers to satisfy the consumers’ expectations.3 http://articles.economictimes.indiatimes.com/2009-03-12/news/28390664_1_smartphones-sales-fall-worldwide-sales News, March 12th, 20094 http://www.teleco.com.br/en/en_comentario/en_com404.asp, Surveys, February 8th, 2011 12
  13. 13. 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).Appendix 45 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. Appendix 56The success of the iPhone announces the beginning of a tough competition in themobile phone industry. The success of the brand was such that people started callingtheir smartphones iPhones, which can sometimes be confusing especially with thedevelopment of other smartphone brands.5http://www.newlaunches.com/archives/palm_and_microsoft_team_to_bring_healthcare_solutions_to_palm_treo_700w.php, News, February 17th, 2006, Appendix 46 http://knowyourgadgets.com/apple-iphone-2g/#.TqgV_Jyhnwg, News, February 2nd, 2011, Appendix5 13
  14. 14. Google Android HTC Dream It took only one year for Google to launch its own operating system known under the name of “Android”. 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 67One year later, on April 23, 2009, according to T-Mobile USA8, one million HTCDreams had been sold in the world. Android proved to be a success and other mobilemanufacturers such as Samsung, Motorola, Dell and LG became affiliated withGoogle Android and in April 2011, Google announced that 350,000 Android phoneswere sold per day along with three billion applications uploaded in the world everyday. Google has overtaken Apple in that it sold 18.65 million iPhones in threemonths 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 by2015.7 http://happy-qi-snoopy.blogspot.com/2009/02/htc-dream-or-google-android.html, News, 2009,Appendix 68 http://en.wikipedia.org/wiki/HTC_Dream9 http://www.telegraph.co.uk/technology/google/8013383/Android-to-be-most-popular-smartphone-brand.html, News, September 20th, 2010 14
  15. 15. Nokia N95Appendix 710Nokia, which was the world’s top cellphone maker for 15 years, started creatingsmartphones in 2007 and bought the Symbian operating system. Their firstsmartphone, Nokia N95, integrated a GPS, a 5 megapixel camera, 3G and Wi-Ficonnectivity and TV-out. Early in June 2011, according to analysts from NomuraResearch11, “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 surpassedby Samsung Android and Apple iPhone.RIM Blackberry ThunderAppendix 812Blackberry, from RIM, has a different but just as important story. Even if the deviceshave existed since 1999 with the Blackberry Thunder, the popularity of thesmartphone began in 2004 with two million subscribers worldwide. In April 2010, atthe WES (Blackberry world conference), Blackberry revealed that 90 millions phoneshad been sold so far, which is not much in a seven year period compared to its10 http://www.mobilefonereviews.co.uk/phone-reviews/Nokia-N95.aspx, News, No date mentioned,Appendix 711 http://www.bgr.com/2011/06/13/samsung-apple-to-overtake-nokia-in-smartphone-share-this-quarter/, News, June 13th, 201112 http://www.tecnocino.it/articolo/rim-blackberry-thunder-e-la-tastiera-virtuale/11031/, News, July14th, 2008, Appendix 8 15
  16. 16. competitors. According to an expert from Business Week Magazine13, RIM is facingtwo problems: market saturation and the company’s loss of credibility in creatinggreat products. However, Blackberry phones provide the main and most importantdevices 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 phonemanufacturer. Each of them are trying to stand out by satisfying the constant newneeds of the consumers - all this in the objective of gaining market shares andcustomer loyalty. Competition is tough between Apple, Samsung, Nokia and RIMand 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 fromone year to another. Gartner carried out a detailed analysis on the sale of smartphonesduring the years 2010-2012 and shared its estimation for sales in 2015. According toGartner14, 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 worlddomination of Google Android with a market share of 38%. Google Android actuallycollaborates with phone brands (Motorola, HTC, LG, Samsung, etc.) to help themcompete with Apple iOS, which explains their huge market share acquisitions.Symbian (used by Nokia) would hardly reach 19.2% and Apple iOS would only reach19.4%. Google Android would keep increasing to reach 49.2% of market share at theend of 2012. Such an evolution for Google is not surprising given its recent acquisition ofMotorola as a separate business. According to Larry Page15, SEO of Google, theacquisition of Motorola is the opportunity to create an even greater user experience.Google Android is obviously becoming a formidable challenger in the smartphonemarket, 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 in2015 with 0.1% of market shares because of its recent link with Windows.13 http://mobileopportunity.blogspot.com/2010/10/whats-really-wrong-with-blackberry-and.html, Blog,October 19th, 201014 http://www.planetoscope.com/electronique/156-ventes-de-telephones-portables-dans-le-monde.html,Statistics15 http://investor.google.com/releases/2011/0815.html, News, August 15th, 201116 http://www.planetoscope.com/electronique/156-ventes-de-telephones-portables-dans-le-monde.html,News, 2010 16
  17. 17. The tables below shows the evolution of the most influential smartphone brandsduring 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 forNokia and Motorola at the beginning of 2011; hence Google’s acquisition ofMotorola. As for Android phones such as LG, Sony, and HTC, they have beenincreasing so far (except for Motorola and Samsung which dropped a little). Applehas remained more or less constant, with a slight growth early this year. For the years coming, still according to Gartner, the sale of smartphones wouldreach 630.5 million in 2012 and 1.1 billion in 2015. As a result, it is in the interest ofany merchant company (the hospitality industry included) to invest in digitalmarketing in order to reach potential customers and keep in touch with loyalcustomers. According to research centers’ results, the priority for business companiesis to make their mobile platforms accessible from iPhone iOS and Google Android.By mobile platforms, it especially means mobile websites and applications. 17
  18. 18. II - The Impact of Smartphones on Business Travelers The mobile industry’s constant growth, since the arrival of smartphones in themarket, has created a shift from computer to mobile throughout the world. This shiftis improving the daily routine of smartphone owners, especially business travelerswho are on the road most of the time and are constrained to work remotely.A- Business Travelers’ Profile1- Business Travelers as Smartphones’ Users Business travelers belong to a category of professionals who benefit the mostfrom 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 businesstravelers, if not an addiction. A business travel survey made by Deloitte17 stated that 48% of the businesstravelers questioned owned a smartphone in November 2010. 84% of them werebetween 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 2010analyzed 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 arebetween 25 and 44 years old. Most of them are likely to be employed with acomfortable income as mentioned in the previous study. They are closely followed17 http://www.hospitalitynet.org/news/4049166.html, News, November 18th, 201018 http://www.comscoredatamine.com/wp-content/uploads/2010/09/Data-Gem_Smartphone-by-Age.png, Statistics, July 2010 18
  19. 19. by people between 18 and 24 years old who probably need smartphones for school orto start their career. Recently, in January 2011, Comscore19 analyzed smartphone owners accordingto their revenue. The tables below show that the higher the income is, the likelierthey are to have a smartphone. Their need is certainly linked to their executivefunctions at work. Source: http://www.onlinemarketing-trends.com, Statistics, April 10th, 2011, Appendix 11 The bar chart highlights the smartphones’ need by executive workers. Thisneed 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 matterwhether they are executive or lower income workers. This need for smartphoneswon’t stop growing because smartphones are more and more adapted to fit thebusiness travelers’ profile.2- Business Travelers’ Profile: a Perfect Target for SmartphoneManufacturers When thinking about business travelers, we may picture them as greying peoplehead down on their computers in a first class seat on a plane. They used to be likethis, and some of them still are today, but also imagine young people driving carsguided by a smartphone.19 http://www.onlinemarketing-trends.com/2011/04/us-smartphone-ownership-usage-top-5.html,Statistics, April 10th, 2011 19
  20. 20. A study led by National Household Travel Survey20 between 2001 and 2002details the characteristics of business travelers in the United States. This study isinteresting in that we can figure out how smartphones can make business trips easiertoday. Concerning transportation of 60,000 business travelers surveyed, 81% said theyused their personal vehicle instead of air travel (16%). It was not in an economiccrisis context, so we can guess that it is pretty much the same today. Computersbeing useless in vehicles, business travelers appreciate the GPS functions ofsmartphones but also geolocation services such as Google maps or applications thatcan indicate the closest services you need on the road. According to the survey, most of business travelers in general are attracted tothe West Coast (U.S.), and there were 7.5 million who came for business between2001 and 2002. As for the South, there were 7.7 million.In terms of jobs, among all the business travelers surveyed, 77% were men, andamong them: - 53% occupied a professional, managerial or technical position - 28% worked in sales or services - 4% had a clerical or administrative jobAs 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 oldBusiness people who traveled the most during the beginning years of the 21st centurywere those between 30 and 50 years old, which explains why in 2011, the highestnumber of smartphone owners are between 25 to 44 years old. They are peoplehighly involved in their companies and they are involved in the future of thecompany, which implies traveling to raise money, and working on contracts orbusiness 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 yearThese figures confirms the data in the tables « Smartphones ownership », whichshows 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 travelersarise out of a study made in the years 2000 and 2001, the sale of smartphones todaymatches the business travelers’ profile made 10 years ago. This means that thebusiness travelers of today have more or less the same profile. And basically, whattranspires from the survey studied is that smartphones are sold the most to middle-20 http://www.bts.gov/publications/america_on_the_go/us_business_travel/html/entire.html, Surveys,May 2002 20
  21. 21. aged business travelers with high salaries and high skilled jobs. Smartphonemanufacturers have therefore succeeded in targeting and responding to the needs ofbusiness travelers. This is important for companies targeting business travelers ascustomers such as those in the hospitality industry, in order to know their needs andanticipate 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 eachyear. People, not only business travelers, are obviously becoming addicted to theservices provided by smartphones; so much so that the use of smartphones hasbecome a priority in people’s lives on a daily basis and has changed people’s habitsand behaviors.1- General use of Smartphone by Business Travelers Small enough to phone but large enough to write an email, smartphones havemade business travelers’ lives easier, sometimes making work a priority even inprivate life. According to a recent survey by Ring Central Survey21 conducted March16-18, 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 newtechnologies, and they will keep using them because it has a positive impact on theirjob. Hotels being a home away from home for business travelers, these businesstravelers have to be able to use their smartphones as they do at home, which impliesgetting Wi-Fi access throughout the premises. New technologies make daily work easier, so much that people don’t have totravel to manage their business thanks to the Internet. Making a smooth-runningvideo conference is possible, and sharing business cards can be replaced by simplyadding contacts on LinkedIn. However, business travel still exists because face-to-face meetings remain an essential part in dealing with business partners. This is whatwas revealed in a survey by Wakefield research22 led between March 23-28, 2011 on709 business travelers ages 21 and older. 97% of them assume that face time isessential 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 is21 http://www.ringcentral.com/whyringcentral/company/pressreleases/051811.html, Surveys, May 18th,201122 http://phx.corporate-ir.net/phoenix.zhtml?c=88577&p=irol-newsArticleOther&ID=1554150&highlight, Surveys, April 26th, 2011 21
  22. 22. probably due to the experience of video conferencing, which appeared as a perfecttool to save time and money during the economic crisis but which, in the end, was notvery 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 thequestion: “Can apps, emails and video replace face time?”The future of the smartphone was guaranteed but this study announces a promisingfuture for the smartphone applications markets (travel applications turning out veryuseful on a trip) and all mobile features.2- Social Media and Smartphone Applications: Their Influence onBusiness Travels Social media and mobile applications are an actual trend with a potentialdevelopment that is guaranteed for the future. They are used everywhere and everyday at anytime, especially since access to the Internet through mobile devices hasbeen made easier by smartphones. However, even though they are used every day,understanding what is really social media, social networks (especially the differencebetween them) and mobile applications turns out to be complex. According to Business Dictionary 23 , a smartphone application is “a self-contained computer program (usually a commercially produced software) thatperforms a specific useful task. Called apps for short, application programs are themost familiar form of software and comes in a very wide variety of types (such asaccounting, database, graphic and illustration, and word processing programs).”Nowadays, social media and many companies, especially the hospitality and travelindustries, have developed mobile applications so that people can access their favoritewebsites in a simple and quick way through their smartphones. According to Econsultancy24, the leading source of independent advice andinsight on digital marketing and ecommerce, social media are websites allowing usersto participate in the creation of the content. Social media enables the communicationbetween B2C + B2B + C2B + C2C in every direction, the aim is to share and discussinformation. For example YouTube, Flickr, TripAdvisor and Foursquare are socialmedia in that they are tools used to share information that can be discussed.Social media also includes “social networks.” As explained by ComputingDictionary25, they allow users to publish content themselves. The information may beon any subject and may be utilized by (potential) friends, mates, employers,employees, etc. The sites typically allow users to create a "profile" describingthemselves and to exchange public or private messages and list other users or groupsthey are connected to in some way. For example Facebook, Twitter and LinkedIn are23 http://www.businessdictionary.com/definition/application-program.html24 http://econsultancy.com/us/about25 http://dictionary.reference.com/browse/social+network 22
  23. 23. social networks in that they are communities of interest enabling people to connect toone another. The tables below, from the slideshare "Social media in travel and hospitalitybusiness by Katrien Cattoor 26, explains the function of the actual most famous socialmedia websites and the number of users in 2011. As each site keeps evolving, thesefigure keep changing but the order tends to stay the same. However, these sites arehard to measure because there is a large quantity of accounts created that are nolonger 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 diversityof services it provides to its users. Facebook enables one to post photos and videos asFlickr and YouTube respectively do, and allows one to share reviews as TripAdvisordoes, provides the ability to check-in just like Foursquare and enables one to postpromotional offers like Twitter. As a result, Facebook is number one in terms ofusage by hoteliers for marketing purposes. However, Facebook monopoly was amotivation for the other social media websites to develop new attractive features forhoteliers in terms of digital marketing. For example, Twitter recently developed aphoto-sharing process.26 http://www.slideshare.net/kcattoor/social-media-in-travel-and-hospitality-business-8074238,Statistics, May 2011 23
  24. 24. Google+, Facebook and Twitter’s direct competitor, is not mentioned in thetable because of its launch in July 2011. However, Google+27 gathered 25 millionsusers in one month without having set up a business platform. As a result, the success of social media has created a harsh competition betweenthem, which forces them to always provide new services for users. Consequently, it isadvised for hoteliers to keep posted about the latest trends in social media services sothey 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 applicationsthey provide. Immediately accessible from a 3G connection or through Wi-Fi, theyguide, 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 onthe Internet either through a desktop computer or a mobile phone. Social media showthemselves very useful in that they enable users: - To make research and interaction easier: customer reviews are one of thelatest trends in terms of communication for a brand. Reviews are comments abouthotels for example, made by customers in order to share their experience on theInternet and to influence future potential buyers. They are becoming more and moreconsulted before reservations are made and are becoming more and more available onsocial media such as Facebook, Yelp, Yell, etc. Furthermore, more and more servicessuch as restaurants, car rentals, hotels and so on display interesting offers if thereservations are made through social networks. - To communicate about upcoming travels and scheduled meetings.Communication about business trips is usually made through Facebook, Twitter andLinkedIn between business travelers because they are the most used by people ingeneral. - To manage the trip (hotel bookings, itineraries, etc.): they are usually madefrom a computer and used from smartphones thanks to mobile applications. Forexample, the TripIt application is a travel organizer that enables one to put traveldocuments in one place, provides an itinerary, gives real time information fortransportation and alternative solutions, book hotel rooms and so on. Otherapplications enable social car sharing such as “Getaround” or enable access to dealssuch as “Zipcar” or “Autoslash.” Young business travelers seem more confident using social networks than olderbusiness travelers, which encourage them to consult these sites before planning a trip.27 http://www.searchenginejournal.com/google-plus-reaches-25-million-users-activity-declines/31500/,News, August 3rd, 2011 24
  25. 25. According to a survey made by Embassy Suite Hotel28 on 700 American businesstravelers, 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 frontdesk, etc. the first thing many business travelers automatically do is taking theirsmartphones out of their pockets. On a trip, mobile applications are both useful andentertaining. The most used applications by business travelers are weather forecast, maps,GPS, photo sharing and applications such as TripIt. In terms of social media, themost 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 hotelsbecause they highlight customer reviews and rate the services. To finish with,meeting applications are greatly being developed because the main reason fortraveling 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 shareplans 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 mediawhere you are. Nowadays, people can “check-in” from parks, bars, restaurants, hotelsand so on; each “check-in” awards points which deliver badges. This new funny wayof traveling is provided by applications such as Foursquare or Gowalla that in generalalso enable travelers to find services with reviews in a town or city they know nothingabout. More and more, check-ins are enabling one to get rewards such as freeproducts and reductions, and thus have become a marketing tool that enticescustomers 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 isconnect with people they have just met so they can maintain relationships. Theyusually use Facebook, Twitter and LinkedIn because these sites are the most used bypeople, and they enable one to update real time information and are available on anytype of smartphone. The other thing business travelers are getting used to doing is writing reviewsabout every place they have been to. Any positive or negative experience is shared onsocial networks. One of the most used by business travelers is TripAdvisor. This sitegives detailed information about places, including hotels, displays reviews that aresorted out according to the different types of customers, and ranks the placesaccording to the grades given by customers who have been there. Reviews are moreand more used because they are convincing sales arguments for potential customers28 http://www.inc.com/news/articles/2010/06/survey-says-half-of-young-travellers-use-social-media-for-business-trip-decisions.html, News, June 24th, 2010 25
  26. 26. 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 keepexpanding and maintaining relationships, which is the most essential thing for abusiness to work. Smartphones have become a tool business travelers cannot livewithout 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 tomaintain relationships with family members, especially for people on the roadthroughout the year. According to a global social media survey made by Studylogic29among 4204 business travelers in November 2010, more than 60% of respondentsreported 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 andfriends. Logging to social media has become a habit for the most active people on thesesites. Distance also tends to encourage people to log in to social media sites morethan they normally would when they are not traveling. They tend to consult theirprofile as much as they consult their mailbox, sometimes even more. The studymentioned 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 thatthe more someone is visible online the more it is beneficial for a business. Beingactive for business reasons on social media shows the real interest of this person forhis work and for his company, which conveys confidence and reliability. The surveystated 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 contacts’ social networking profile29http://wwww.askbte.com/RedlineNews/RedlineNews1/Sheraton_Survey_Outlines_Business_Travelers_Social_69510.aspx, Surveys, November 23rd, 2010 26
  27. 27. Conclusion To conclude, the development of smartphones has created a revolution for bothbusiness 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 smartphonedevelopment. Hotels actually have to adapt to business travelers’ 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 tothe development in mass use of social media websites. As a result, speaking ofsmartphone development in hospitality consists of dealing with social media andmobile strategies. However, the most difficult part for hotels is to introduce social media andmobile in their marketing strategies. Customers have turned digital, which forceshotels to get rid of the ancestral marketing methods to be where the customers are. 27
  28. 28. CHAPTER 2The Impact of Smartphones in the Hospitality Industry 28
  29. 29. Introduction The development of smartphones contributed greatly to the development ofsocial media and mobile features applications in that they could be consulted onmobile phones anywhere at anytime. Social media including social networks cantherefore be seen as a “word of mouth” extension, which is the most efficientmarketing and communication tool in the hospitality industry. Consequently, bothhotel chains and independent hotels have no other choice than to invest time andmoney in developing social media strategies in order to maintain relationships withloyal customers and reach potential ones. Furthermore, the year 2011 will be particularly crucial to revenue increase inthe hospitality industry because since the first quarter of this year, business travelersare back on the road. According to a survey made by Deloitte30 on 1001 businesstravelers, “80% of them are expecting to take more trips in 2011 than they did in2010 ». As a result, hoteliers will have to manage the increasing number ofreservations, more stressed and demanding business travelers with different needs andexpectations. To finish, the real challenge will be to take into account the aforementionedchange along with mobile and social media development. Turning digital will be aninvestment in time and money. However, once set up, digital marketing will cost lessthan the advertising campaign hoteliers used to run on the Internet. Moreover,business travelers will keep looking for good prices on the Internet. According to thesurvey made by Deloitte, it stated 79% of business travelers intend to spend as muchas they did in 2010 or more. As a result, when talking about marketing in thehospitality industry, hoteliers can no longer ignore mobile and social media strategies.30 http://www.gadling.com/2010/11/11/more-business-travel-in-2011-80-to-hit-the-road-more/,Surveys, November 11th, 2010 29
  30. 30. I- Hotels’ Adaptation to Business Travelers of Today The hospitality industry provides business travelers with more than anexperience; hotels contribute to the smooth progress of their stay, which is directlylinked to their business. This is the reason why it is essential for hotels to understandthe 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, andthe global economic crisis, which imposed budget limits.A- Business Travelers Attitude with Regards to Hotels in theAftermath of the Economic Crisis1- Business Travelers Hotel Booking Process Business and leisure customers travel differently and even book in a differentway according to the purpose of their trip. This is why hotels have to know who theircustomers are, where to reach them and how to entice them, especially in a recessionperiod. As far as business travelers are concerned, in terms of booking they first rely ontheir companies’ recommendations (leisure travelers first tend to userecommendations made by friends and family). According to a study made byCornell University31 on 2830 business travelers in December 2010, they found thatapproximately 40% of travelers select the hotel recommended by their company. Ingeneral, 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 profitagain, and a large number of business travelers claimed that their companies stillenforce travel policies. At the time of the survey made by Deloitte32 in November2010 on 1001 business travelers, 59% of the respondents revealed that their companywas 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 wereaccessible at lower costs. However, in 2011, business travelers seem to spend muchmore for flight and food than during the economic crisis. According to the Embassy31 http://www.hotelschool.cornell.edu/research/chr/pubs/reports/abstract-15359.html, How TravelersUse Online and Social Media Channels to Make Hotel-choice Decisions, Cornell Hospitality Report,Vol. 10, No. 18, December 201032 http://www.gadling.com/2010/11/11/more-business-travel-in-2011-80-to-hit-the-road-more/,Surveys, November 11th, 2010 30
  31. 31. Suites Hotel’s third annual survey33 led in April 2011, “business travelers remainbudget 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, whichrepresents a fall of 4% compared to 2010).”http://phx.corporate-ir.net/phoenix.zhtml?c=88577&p=irol-newsArticleOther&ID=1554150&highlight2- Business Travelers’ Expectation Development on Rewards During the economic crisis, hotels also took measures to entice the mostcustomers, including business travelers, as much as possible. The best solution theyfound was to launch loyalty programs such as points or room upgrades makingcustomers gain points and providing reward and value in return. On top of keepingloyal guests connected with the hotel, this strategy was beneficial in bringing peopleinto the hotel, which provides more spending in the different services of the hotel.However, customers got accustomed to these services and kept expecting a gesturefrom the hotel as a thank you for booking. According to the Embassy Suites Hotel’sthird annual survey led in April 2011, 27% of the business travelers surveyed (against24% in 2010) are still looking for value in 2011 when it comes to booking hotels. Inan article published by Lodging magazine34 website and based on a survey made inthe hospitality industry in December 2010, it is said that “Business travelers who werepaying premium prices were thinking beyond loyalty points and expecting addedvalue and more complimentary services.” As a result, most business travelers expect to get the basic services (a cleanroom and a comfortable bed) along with additional incentives (such as free Wi-Fi orfree parking) as well. This trend is becoming a problem this year with the return ofbusiness travelers. Basically, it was the reduced demand that permitted hotels toprovide reward to the customers. For example, they could easily offer an additionalnight stay for a certain amount of points given there were available rooms. To solvethis problem, in an international study on “Hotel Revenue Management in aneconomic downturn” made from February 4 to the end of March 2009 by Eye forTravel 35 , customer relationship managers suggested rewarding guest with statusrewards rather than pure discounts.B- The Evolution of Online Reservation in the Hospitality Industry Advanced communication technologies such as smartphones, social media andmobile applications are essential tools to maintain relationships with customers andreach other potential customers. More and more hotels are implementing digitalplatforms and tools to target business travelers. The best time to turn digital was inthe last two years, when there was a slow down in business traffic, by impressing33 http://www.examiner.com/global-travel-in-national/new-business-travel-statistics-released, Statistics,June 16th, 201034 http://www.lodgingmagazine.com/Blogs/Blogs/A-Look-at-the-New-Business-Traveler--39.aspx,Blog, December 2nd, 201035 http://events.eyefortravel.com/tdsasia/docs/Special_Report.pdf, Study, Hotel Revenue Managementin an Economic Downturn, March 2009 31
  32. 32. customers this year with hotel mobile applications, using advanced online reservationsystems 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 allkinds of digital marketing strategies. Even if these measures don’t request a highamount of money, it requests time and knowledge. This is why many hotels recentlyhired community managers or web marketing managers. They need their services toanswer the evolving needs and expectations of the customers.1- Business Travelers’ Online Reservations: a Change in the HotelBooking Process One of the most impressive changes is the booking process. The first thoughtthat usually comes to one’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 AbouTourism statistics36 from March 2011 (an international destination development andmarketing consultancy), among the business travelers surveyed, more than one thirdplan 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 choiceand 25% would appreciate watching videos before booking.However, as far as business travelers are concerned, we have seen that 40% of themselected hotels recommended by their company but a Cornell University37 studypreviously mentioned revealed that the others were using search engines or onlinetravel agents. The table below sums up the information sources business travelers usewhen 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 1336 http://www.relevanceweb.com/blog/online-tourism-marketing-smart-marketing-with-smartphones.html, Statistics, March 22nd, 201137 http://www.hotelschool.cornell.edu/research/chr/pubs/reports/abstract-15359.html, How TravelersUse Online and Social Media Channels to Make Hotel-choice Decisions, Cornell Hospitality Report,Vol. 10, No. 18, December 2010 32
  33. 33. The table shows that multiple information sources are used by business travelersbefore booking a hotel. Most of them use search engines and hotel search websitessuch as Expedia. It may be surprising to see that they don’t consult social networks asmuch when making bookings. Actually, social networks are used more by leisuretravelers 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 withtheir friends and family when they are abroad. Furthermore, when studying the phases of a hotel purchase decision, deeperanalysis shows that customers visit different websites according to the stage of theirresearch. In other words, the more they reach their departure date, the more they willfocus their research on selected websites. The table below shows the websitesconsulted 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 consultsearch engines (Google, Bing, Yahoo, etc.), as it is a way to have a broader idea ofwhat 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 atsome hotel websites they have selected. During the middle stage, they tend to focusmore and more on hotel websites, while consulting online travel agencies and gettingother information from search engines. At this stage, we can see that they keepconsulting TripAdvisor in parallel, probably to read reviews and see the gradesattributed to the hotels. During the final stages of research, they are close to makingtheir reservation and many of them are going to do it online. This is why the twomost consulted websites are hotel websites and online travel agencies. At this stage,TripAdvisor is still visited a lot because the online information and especiallyreviews, are going to determine the choice of the hotel. 33
  34. 34. 2- Reviews Involvement in the Booking Process Another change concerning the booking process is the way reviews influenceboth potential customers in choosing a hotel and hotel improvements, if negativecomments have been written by customers. Social media and more particularly socialnetworks “naturally” gave birth to reviews. The movement has been inspired fromblogs, where people could leave a comment about any subject. Then, it wasdeveloped with Facebook as business pages were set up by companies in order todirectly interact with potential and loyal customers. But the real concept of reviews comes from TripAdvisor, the world’s largesttravel site enabling travelers to get information, and plan and book all the necessaryservices regarding their destinations. TripAdvisor has considerably developed thereview concept, so much so that more and more hotel customer relationship managersanswer to reviews made by their customers to show that they stay tuned to theircustomers’ recommendations, whether they are positive or negative. Thiscommunication strategy is utterly relevant all the more so as, in an article38 aboutmobile growth in travel companies, Eye for Travel reported that six million visitorsnow 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 byconnecting through social networks like Facebook or Foursquare, integrated thepossibility for customers to post a review. Reviews are all the more important in the hospitality industry because hotelsprovide a service in relation to the individuals’ primary needs along with anexperience. This is why, according to a Cornell University study39 about “businesstravelers’ use of online and social media channels in order to make hotel choicesdecisions” they realized that hospitality guests were writing more reviews than ratingthe hotels they stayed at. As reviews became popular, doubt started increasing aboutthe authenticity of the comments or simply on what criteria the comments had beenapplied. To solve this problem, professionals or experts in hospitality started postingcomments assuming the authenticity of the fact in order to give a more reliable pictureof 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 customerreviews in that they have different impacts on business travelers. For instance, thestudy reveals that businesswomen tend to read both types of reviews, whereasbusinessmen tend to rely more on professional reviews. However, the studydemonstrates that both men and women are equally as likely to eliminate hotels withnegative reviews as to select hotels with positive reviews. The two tables below showthe likelihood for business travelers of booking a hotel according to negative andpositive reviews.38 http://www.eyefortravel.com/news/europe/why-travel-industry-needs-wake-mobile, News, July 7th,201139 http://www.hotelschool.cornell.edu/research/chr/pubs/reports/abstract-15359.html, How TravelersUse Online and Social Media Channels to Make Hotel-choice Decisions, Cornell Hospitality Report,Vol. 10, No. 18, December 2010 34
  35. 35. 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 theyhave a negative review, men and women will stay away and turn toward hotels withpositive reviews. However, it is interesting to see that there is still a small quantity ofpeople that would select hotels with negative reviews. This happens when reviewerswere not satisfied with a hotel because the atmosphere did not match their way ofliving. It is all the more the case when business travelers book a hotel more adaptedfor 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 won’t prevent a leisure traveler from 35
  36. 36. booking this hotel. This is why some negative reviews can have positive effects forhotels.C- Smartphones: Business Travelers’ Perfect Assistants1- Mobile Applications and Social Media Influence When traveling, business travelers use and hugely appreciate the most, all thefunctions of smartphones. On the road, smartphones are the most unique, mostpractical and quickest way to access all the information they need. Especially intravel environments, mobile applications – whether social media or for localbusinesses – catch their interests and are very appreciated especially in the hospitalityindustry. Business travelers recognize that mobile applications and social media are veryuseful 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 OmniHotels and Resorts in June 2010, 61% of respondents admitted managing theirpersonal life online at night in their hotel room.For entertainment, business travelers tend to use social media the most for thefollowing activities: - Checking-in with personal contacts - Updating their Facebook profile - Looking for the nearest coffee spot - TweetingHowever, 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 travelassistants throughout a trip for a business traveler and an essential tool to gain andmanage time on the road. To go further, smartphones are used the most for theircomputer 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 isclearly an influence in hotel decision making for many young business travelers but40 http://mobile.channelinsider.com/c/a/Spotlight/Business-Travelers-Relying-on-Social-Networking-Tools-Survey-Finds-849431/, Surveys, June 28th, 2010 36
  37. 37. for more and more older business travelers as well. In June 2010, according to theEmbassy 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 decisionsnaturally 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 isthe most accessible and quickest way to display information, especially from asmartphone. According to a KRC study42 on 200 business travelers mentioned above,Twitter and Facebook are social websites or applications most used to share a travelexperience. As far as Twitter is concerned, 55% of travelers never tweet during businesstrips. However, 11% of the respondents tweet often and many of them claimed thatthey would tweet about free room upgrades if they were upgraded and about free Wi-Fi. As a result, for some people satisfied with a service or an offer, it is important forthem to share this positive experience on social networks. Regarding Facebook, 65% of the 200 business travelers surveyed mentionedupdating 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 businesstravelers surveyed love surfing the web randomly, and 34% contact their friends andfamily through Skype or through an instant messaging system. Six out of 10mentioned requesting a car service to the airport using their mobile application, and48% are influenced by ordering things as soon as they are available through multi-touch devices.This study reveals that social networks naturally contribute to the reputation of ahotel. The traveler experience displayed on Facebook and Twitter is authentic, whichmakes social networks one of the best tools to consult before choosing a hotel. Withthe social media development, hotel guests experience starts and finishes with digitaltools.41 http://www.examiner.com/global-travel-in-national/new-business-travel-statistics-released, Statistics,June 16th, 201042 http://mobile.channelinsider.com/c/a/Spotlight/Business-Travelers-Relying-on-Social-Networking-Tools-Survey-Finds-849431/, Surveys, June 28th, 2010 37
  38. 38. II- Hotels’ Adaptation to Smartphones in order to Entice Business TravelersA- The Use of Smartphones in the Hospitality Industry and theDevelopment of Online and Social Media Tools. With the smartphone development, the hospitality industry is turning mobile. Alarge part of potential customers and loyal customers are indeed active on theirsmartphones, so hotels have no other choice than to position themselves on thischannel. World hotel groups and chains have already invaded the mobile space tosatisfy their customers’ needs as fast as possible. However, as the whole hospitalitysector is being impacted, it is becoming urgent for independent hotels to be accessibleon smartphones. This is a real challenge; all the more so as turning mobile warrants aperfect 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 aconsiderable number have even started prioritizing mobile technology at the top of thelist. In a survey by TripAdvisor43 on new UK accommodation owners, among 800hoteliers and bed and breakfast owners, 72% of them reported that mobile visibilityand marketing strategies were the most important for their business. The potential ofsmartphones along with the growing number of smartphone users are indeed amotivation for hoteliers to adapt. This motivation is essential because turning mobilerevealed 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 thecommunication and marketing strategies to be adaptable and steady enough. On thatsubject, in a recent interview44, the Vice President of e-commerce of MandarinOriental Hotel confessed “The problem is that the mobile device is always changing,something new is always coming, but the mobile strategy needs to be consistentacross platforms and outlets.”One example is the “check-in” strategy. It was first introduced by Foursquare, thenextended 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 themost used by their customers. If they want to plan a “check-in promotion” for asecond time, they have to do the same research work in case a new check-in versionwas rolled out or if other check-in platforms were recently launched.43 http://www.tripadvisor.co.uk/PressCenter-i4764-c1-Press_Releases.html, Surveys, June 29th, 201144 http://www.luxurydaily.com/consistency-is-integral-to-maintaining-mobile-consumer-interaction-mandarin-oriental/, News, July 1st, 2011 38
  39. 39. b- More and More Demand Every Year Secondly, knowing that smartphones are winning over more and more peopleevery 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 MarketingBudget Planning and Best Practices of July 2011, 1.5% to 3% of visitors to hotelwebsites 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 mobilesearch engines like Google and Bing. The challenge is all the more difficult for smalland independent hotels because world hotel groups and chains have content andenough skill to appear first whether on mobile or computer search engines. Small andindependent hotels, on the contrary, already have trouble being visible in computersearch 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 preventhoteliers from efficiently using all the potential of smartphones. The competitionbetween hotels being tight on the Internet, some hotels have to hire people with skillsin online, mobile and social media tools or delegate digital work to intermediariesspecialized in this field. For example, Pacific Hotel Group and Mandarin OrientalHotel Group46 recently hired a social media marketing manager to efficiently run thedigital field. Small and independent hotels need cheaper solutions to compete; theyare advised to turn towards a third party company such as ReviewPro, specialized inonline reputation management. Hoteliers are aware that they can’t afford to lag behind when it is a matter ofmobile technologies. However, the difficulty is such that many of them who tried toadapt to smartphones last year did not achieve their objectives. According to the FifthAnnual Benchmark Survey47 on Hotel Digital Marketing Budget Planning and BestPractices of July 2011, 41.7% of respondents missed their mobile marketing objectivein 2010. Hoteliers have to keep adapting and improving in the digital field, especiallysmartphones, because the Forrester research study of July 201148 estimates that by2013, smartphones and traditional websites will be “the two most importanttouchpoints in travel.” In addition, an older study by Forrester research49 estimated that by 2020, morethan half of travel providers expect to offer virtual reality services to enhance thecustomer experience. Hotels will be the first concerned, especially as customers willwant to virtually experience the hotel to make their purchase decisions.45 http://www.4hoteliers.com/4hots_nshw.php?mwi=8885, Surveys, July 26th, 201146 http://www.mobilemarketer.com/cms/news/advertising/10365.html, News, July 1st, 201147 http://www.4hoteliers.com/4hots_nshw.php?mwi=8885, Surveys, July 26th, 201148 http://www.tnooz.com/2011/07/13/mobile/forrester-smartphone-mobile-travel-strategy-means-immediacy-push-alerts-and-video/, News, July 13th, 201149 http://www.tnooz.com/2011/06/02/mobile/can-mobile-change-the-way-travellers-feel-about-ancillary-products/, News, June 2nd, 2011 39
  40. 40. 2- Mobile Marketing: Two New Challenges for Hoteliers Once mobile tools are all set up, hoteliers have to face two other considerablechallenges 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 presenton the Internet to smartphones, is aimed at enhancing the travelers’ experience andincreasing sales. So far, hoteliers have been focusing on the three following majortools: - Mobile websites: Mobile websites provide the most important information andwidgets concerning the hotels in order to enhance customer experience and end upwith a sale. Managing a mobile website turns out more difficult than a desktopcomputer base website because of the platform fragmentation of mobile devices,operating systems, and browsers and because of the small size of the screen whichlimits the content resolution. Developing mobile websites is becoming a priority for hotels along withredesigning their computer-based websites. Actually, mobile websites are made fromthe computer-based websites, so hoteliers have to start with displaying professionaland user-friendly websites before creating mobile websites. In 2011, according toEdigital Research50, computer-based websites are not user-friendly enough, are ingeneral more adapted to business travelers than to leisure travelers, and do not includecustomer reviews. Another study by Compuware Gomez 51 added the lack ofdelivering enough speed when loading the home page and during customer’stransactions. Actually, many hotel sites take more than two seconds to load a homepage whereas, according to a Forrester research52 of 2009, 40% of shoppers abandonwebsites when they need three seconds or more to appear. As a result, before turning mobile, hoteliers have to work on their actual computer-based websites, and correct the mistakes made in the past. This year, 37.5% ofhoteliers have planned to develop a mobile website. They were 25.9% in 201053 (seefigures on the table below) - Booking engines: whether on the hotel computer-based websites, on Facebookpages or on mobile devices, these booking engines can bring considerable revenueincrease to the hotel. They indeed enable the hotel to get reservations without passingthrough an intermediary that usually keeps a percentage of the reservation. Mobilebooking engines are all the more useful for people on the go such as businesstravelers. This year, 37.5% of hoteliers have planned to set up their own mobilebooking engines. They were 22.4% in 2010. (see figures on the table below) - Smartphone applications: They are interesting tools but not essential for everyhotel. Well-made apps have the advantage of providing a better user experience than50 http://www.travolution.co.uk/articles/2011/07/07/4849/hotel-chains-score-low-for-online-customer-usability.html, News, July 7th, 201151 http://abcnews.go.com/Travel/travel-websites-fastest/story?id=13739017, News, June 2nd, 201152 http://abcnews.go.com/Travel/travel-websites-fastest/story?id=13739017, News, June 2nd, 201153 http://www.4hoteliers.com/4hots_nshw.php?mwi=8885, Surveys, July 26th, 2011 40
  41. 41. mobile websites. However, they usually are very expensive and have to be built fromscratch for each operating system (Apple, Android, RIM, etc.). Recently, many large hotel groups have developed smartphone applications foreach of their brands. It is best to provide the customer with selected and clearerinformation about the hotel and its surroundings. Single property hotels, independentand franchised hotels and resorts or smaller and mid-sized hotel chains can largely besatisfied with mobile websites that actually can provide pretty much the sameinformation for a much cheaper cost. As a result, hoteliers prefer focusing on setting up or improving their mobilewebsites, and working on mobile marketing instead of wasting money on apps.Consequently, the smartphone applications industry has seen a considerable decline in2011. Only 8.9% of hoteliers have planned to invest in a mobile application this yearagainst 24.1% in 2010. (see figures on the table below)The table below shows the latest trends in mobile marketing taken by hoteliers the lasttwo 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 enginesand the decrease of smartphone applications. SMS Text marketing is decreasingbecause they are slowly being replaced by Push Notifications, which are free. As forMobile banner advertising, their fall can be explained by the increase in social mediastrategies (which are successful in terms of communication and are far much cheaper)and by links towards offers strategically placed around the hotel websites. On theother hand, many hoteliers are not planning mobile marketing in 2011 – many ofwhom must have been trying the previous year without success and who preferinvesting in computer-based websites redesign and social media strategies.b- Finding Marketing Strategies Adapted to Mobile Technology and MakingThem Appear Like a Service to Customers instead of a Sale Concerning the second challenge, which is related to mobile marketingstrategies, it consists of hoteliers distinguishing themselves from direct competitors to 41
  42. 42. gain market shares and increase hotel revenue. The most difficult part is to increasesales within the hotels via mobile technology while appearing only as a provider ofvaluable services for customers. To be efficient, the main mobile marketing strategies, according to a Forresterresearch 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. Thisservice is valuable especially for business travelers who may be constrained to modifya reservation for professional reasons. Currently, according to the Forrester studyfrom July 2011 previously mentioned, already 55% of US business travelers are usingsmartphone devices. - Send Push notifications: They are the free alternative of SMS messages and areappreciated by customers because when downloading the applications, they agreed toreceive notifications, especially offers. The best time for hotels to reach customers iswhen the customer is most likely to need a service, for example when they first enterthe building. The aim for the hotel is to sell a product at a reduced cost that thecustomer would not have bought without the push alert. - Videos: Whether on computer or mobile websites, videos of the hotels areextremely important before, during and after the stay. Consumers who are satisfiedwill want to share the video of the hotel to their contact in order to share theexperience they are living. Too many hotels don’t provide videos but it is a channelto invest in, especially as more and more hotels mainly draw in customers thanks tovideos. Moreover, according to Cisco’s Fifth annual “Visual Networking IndexForecast”56, one million minutes of video will be available on the Internet everysecond by 2015. - Augmented reality: as previously mentioned, customers will get used to usingaugmented reality for shopping, then they will require the same service for hotels inthe near future. Even though augmented reality is early in the game, hotels shouldconsider 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 atNew York University, “high-tech concierge services enable hotels to differentiatethemselves, to add a service that usually ranks among the highest for guestsatisfaction and to achieve higher rates.” To achieve these goals, Mintier Hotel uses adigital concierge offering restaurant recommendations, flight arrivals and departures,and driving directions via smartphones and other electronics. Another example is theHyatt Hotel chain, which invites its customers to send requests on Twitter with agentsavailable 24 hours a day to take care of the online customers. - Adapt emailing to smartphone devices: Email marketing programs keep beingemployed in the hospitality industry. 90% of the travel brands surveyed in the Digital54 http://www.tnooz.com/2011/07/13/mobile/forrester-smartphone-mobile-travel-strategy-means-immediacy-push-alerts-and-video/, News, July 13th, 201155 Study, L2 Digital IQ Index: Travel, by Scott Galloway, April 26th, 201156 http://russswan.com/?p=410, News, June 1st, 2011 42
  43. 43. 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. Emailadaptation to smartphones will probably increase sales insofar as 63% of customersreceiving 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 toenhance their customers’ experience. However, before turning mobile, they have toensure that they provide the right online and social media strategies. If thesestrategies remain superficial or not relevant enough, then they are not ready to turnmobile yet.B- Social Media: Positioning Strategy and Efficient Marketing Tools1- Social Media Development in the Hospitality Industrya- Social Media Evolution: a Challenge for Hoteliers After the large development of websites in the hospitality industry, hoteliersstarted realizing the importance of social media for their marketing strategies and forenhancing the traveler’s experience. According to the Fifth Annual BenchmarkSurvey57 on Hotel Digital Marketing Budget Planning and Best Practices published onJuly 2011, 43% of hoteliers believe that social media is one of the Internet marketingstrategies 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 amonghoteliers. 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. Andaccording to a survey conducted on 600 hoteliers during a TravelClick webinar in2011, 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 haveseen 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 positionthemselves without knowing the potential of this new social tool. As a result, manyhoteliers position themselves at random; where they think potential customers mightbe, without really considering how large the social media space is. Many of them alsodon’t realize that social media marketing requests daily work in terms of searching thelatest trends, thinking how to use them to differentiate from competitors, maintainingwebsite and blog updates, interacting with the most interesting and potential contactsin social networks and measuring the evolution and the impact they have on theInternet.57 http://www.4hoteliers.com/4hots_nshw.php?mwi=8885, Surveys, July 26th, 2011 43
  44. 44. b- Hoteliers’ Lack of Skills in Social Media The way hoteliers use social media has a direct impact on their customers andon the reputation of the hotel. This is why social media has to be controlled and usedin a professional way. However, when talking about social media, today manyhoteliers mention only Facebook, others add Twitter, which means that most hoteliershave a narrow view of social media and how to manage it. The tables below drawsthe list of the social networks websites used by independent hotels and hotel chains in2011, according to a survey conducted by Flexis Hospitality Solutions58 in 2011. Social Media Usage in the Hospitality Industry Social Media Hotels (May-June 2011) Facebook 90% Twitter 65% YouTube 27% Flickr Less than 10% Foursquare Less than 10% LinkedIn Less than 10% TripAdvisor No mentions* Couponing (Groupon, Living Social, etc.) 10% No social media at all 8% 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 Dont 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 usingsocial media because most of them have integrated Facebook and Twitter into theirmarketing strategies. However, the fact that they don’t use them regularly (87%spend less than two hours a week on social media) indicates their lack of skill in thisfield. Even worse, there are only 48% who plan to use social media as a key part oftheir customer marketing plan next year, which means that more than half of hotelsdon’t know where to target their loyal and potential customers.58 http://linkd.in/nlEe2X, News, 2011 44
  45. 45. A study on “How Travelers Use Online and Social Media Channels to MakeHotel-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 mainsocial networks: Facebook, Twitter, YouTube and Flickr. The figures above confirmthis fact but it also shows that six months after the Cornell University study, nothinghas changed. Furthermore, the Flexis study states that independent hotels are making thesame mistake of not using at least the four main social networks. Only the hotelsbelonging to the chain “Great Hotels of the World” and a few others are now usingthese four social networks, and in a very efficient way.2- The Advantages for Hoteliers to Use Social Mediaa- The Impact on the Customer’s Decision Making Process Facebook, Twitter, YouTube and Flickr altogether contribute to the success ofsocial media strategies of hotels. They have existed for several years and have gainedthe user’s confidence. Also called “word of mouth” electronics, these four socialnetworks 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 customersthan travel agents do. They even provide more information about a hotel than travelagents 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 TravelersUse Online and Social Media Channels to Make Hotel-choice Decisions, Cornell Hospitality Report,Vol. 10, No. 18, December 2010 45
  46. 46. the latest promotional offers and customer reviews, which were not provided by travelagents. As a result, it is in the advantage of hoteliers to use social media than to gothrough the sales rooms at travel agencies because social media is free and has abetter impact on potential customers’ decision making process.b - How to Use Social Media The use of the following social networks requires a good knowledge of theirmain functions in terms of marketing. However, as social media tools are constantlybeing developed and improved, hoteliers have to regularly find out about the latesttrends 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 activeusers through mobile devices, which represents a huge source of potential customersfor hoteliers. Facebook for business requires hoteliers to create a Facebook page. It 46

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