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Kelly McGuire - HSMAI Europe

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Kelly McGuire - HSMAI Europe

  1. 1. Copyright © 2014, SAS Institute Inc. All rights reserved. KELLY MCGUIRE, EXECUTIVE DIRECTOR, HOSPITALITY AND TRAVEL GLOBAL PRACTICE, SAS BREFFNI NOONE, ASSOCIATE PROFESSOR, THE PENNSYLVANIA STATE UNIVERSITY PRICING IN A SOCIAL WORLD
  2. 2. Copyright © 2014, SAS Institute Inc. All rights reserved. @bigredkelly CONSUMER DECISION MAKING PROCESS DEMAND COMPETITOR PRICE YOUR PRICE COMPETITOR PRICE YOUR PRICE REVENUE MANAGER CONSUMER VALUE
  3. 3. Copyright © 2014, SAS Institute Inc. All rights reserved. @bigredkelly PRICE & NON-PRICE INFORMATION AT THE POINT OF PURCHASE VALUE?
  4. 4. Copyright © 2014, SAS Institute Inc. All rights reserved. @bigredkelly ASSESSING VALUE: HOW DO CONSUMERS CHOOSE? HOTEL BRAND REVIEWS Sentiment, Content, Language TRIPADVISOR RANK AGGREGATE RATING AMENITIES CLASS OF SERVICE LOCATION PRICE
  5. 5. STUDY DEMOGRAPHICS: THE LEISURE TRAVELER 49% 51% Average Age 49.3 1-5 6+ 72% 28% Trips per year Book online more than 80% of the time 54% 55% Read Reviews Influenced by Reviews 65% :
  6. 6. Copyright © 2014, SAS Institute Inc. All rights reserved. @bigredkelly LEISURE TRAVELER STUDY: KEY TAKEAWAYS LEISURE TRAVELER Reviews  Cri*cal     Nega%ve  reviews  remove  you  from   the  Leisure  Travelers  choice  set.   1   2   3   Price  Important     Price  becomes  a  factor  when  all   else  is  equal  for  Leisure  Travelers.   Ra*ngs  Influence   It  can’t  just  be  OK  –  it  has  to  be  great   for  Leisure  Travelers  to  no%ce.  
  7. 7. Copyright © 2014, SAS Institute Inc. All rights reserved. @bigredkelly
  8. 8. Copyright © 2014, SAS Institute Inc. All rights reserved. @bigredkelly LOYALTY PROGRAM MEMBERSHIP: BUSINESS TRAVELER Loyalty Program Brand % with card Preferred Brand Club  Carlson 15% -­‐ Hilton  HHonors 67% 34% Hyatt  Gold  Passport 38% 12% IHG  Rewards  Club 21% 11% Kimpton  Hotels:  InTouch  Rewards 6% 2% Marriott  Rewards 59% 29% Starwood  Preferred  Guest 29% 7% Wyndham  Rewards 18% 7% I  do  not  have  any  hotel  rewards  cards 8% -­‐ 2.38 Average cards held Belong to non-brand program 45%
  9. 9. Copyright © 2014, SAS Institute Inc. All rights reserved. @bigredkelly LOYALTY BEHAVIOR TOWARDS PREFERRED BRAND: BUSINESS TRAVELER Actual Stay Behavior % I did not stay with my preferred brand 3% Less than 25% of the time 13% 25% to 49% of the time 32% 50% to 74% of the time 36% 75% to less than 100% of the time 13% 100% of the time 4% HOW LOYAL DO THEY FEEL? HOW LOYAL DO THEY ACT? 4.68 ON A 7 POINT SCALE OVER 12 MONTHS
  10. 10. STUDY DEMOGRAPHICS: THE BUSINESS TRAVELER 34% 66% Average Age 39.6 6-10 11+ 47% 53% Trips per year Stayed 2+ nights per trip 93% 88% 80% Read Reviews Influenced by Reviews
  11. 11. Copyright © 2014, SAS Institute Inc. All rights reserved. @bigredkelly STUDY DEMOGRAPHICS: THE BUSINESS TRAVELER Primary Industry % Communications, entertainment & media 5% Education 10% Energy & natural resources 5% Financial Services 11% Government/Public sector 4% Healthcare, pharma & biotech 6% IT & technology 18% Manufacturing 11% Professional Services 18% Retail/Wholesale 8% Transportation 4%
  12. 12. Copyright © 2014, SAS Institute Inc. All rights reserved. @bigredkelly ATTRIBUTE IMPORTANCE 1. Review Sentiment 2. Price 3. Rating 4. TripAdvisor Rank 5. Brand 1. Review Sentiment 2. Brand 3. Rating 4. Price 5. Review Language BUSINESS LEISURE
  13. 13. VALUE BY ATTRIBUTE LEVEL Review  Tone  [Negative]* Price  [$195  -­‐  $235]* Price  [$235  -­‐  $295] Rating  [2.8  –  3.5]* Rating  [3.5  –  4.8]* Review  Content  [Physical] Review  Language  [Descriptive]* Ranking  [Low  -­‐  Mid] Ranking  [Mid  -­‐  High] Brand  [Unknown  -­‐  Known]* Brand  [Known  -­‐  Preferred]* -­‐0.5 -­‐0.4 -­‐0.3 -­‐0.2 -­‐0.1 0 0.1 0.2 0.3 0.4
  14. 14. Copyright © 2014, SAS Institute Inc. All rights reserved. @bigredkelly ASSESSING VALUE Positive + Preferred Brand + 2.8 + $195 + Descriptive = 0.87 Positive + Preferred Brand + 4.8 + $195 + Descriptive = 1.52 Positive + $195 + High Rank + 4.8 + Known Brand = 1.95 Positive + Preferred Brand + 4.8 + $295 + Descriptive = 1.25 Positive + $295 + High Rank + 4.8 + Known Brand = 0.46 Negative + Preferred Brand + 4.8 + $195 + Descriptive = 0.69 Negative + $195 + High Rank + 4.8 + Known Brand = 0.01 Positive + Unknown Brand + 4.8 + $195 + Descriptive = 0.91 BUSINESS TRAVELER LEISURE TRAVELER
  15. 15. Copyright © 2014, SAS Institute Inc. All rights reserved. @bigredkelly
  16. 16. Copyright © 2014, SAS Institute Inc. All rights reserved. @bigredkelly BUSINESS TRAVELER STUDY: KEY TAKEAWAYS Reviews  Ma9er     Business  Travelers  want  to  know  what   their  experience  will  be.   Loyalty  Ma9ers     Business  Travelers  will  put  up  with   good  enough  for  points.   Price  Ma9ers     Business  Travelers  s%ll  recognize  a   good  deal.   1 2 3 BUSINESS TRAVELER
  17. 17. Copyright © 2014, SAS Institute Inc. All rights reserved. @bigredkelly LEISURE TRAVELER VS. BUSINESS TRAVELER Reviews  Ma9er     Business  Travelers  want  to  know   what  their  experience  will  be.   Loyalty  Ma9ers     Business  Travelers  will  put  up  with   good  enough  for  points.   Price  Ma9ers     Business  Travelers  s%ll  recognize  a   good  deal.   1   2   3   LEISURE TRAVELER BUSINESS TRAVELER 1   2   3   IMPACT OF USER GENERATED CONTENT ON PURCHASE DECISIONS KELLY MCGUIRE & BREFFNI NOONE Reviews  Cri*cal     Nega%ve  reviews  remove  you  from   the  Leisure  Travelers  choice  set.   Price  Important     Price  becomes  a  factor  when  all   else  is  equal  for  Leisure  Travelers.   Ra*ngs  Influence   It  can’t  just  be  OK  –  it  has  to  be  great   for  Leisure  Travelers  to  no%ce.  
  18. 18. THANK YOU! KELLY.MCGUIRE@SAS.COM @BIGREDKELLY The Analytic Hospitality Executive Blog: blogs. sas.com/content/hospitality *  

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