Have Location-Based Social Media Stalled?
I first wrote over a year and a half ago on how hoteliers could use Foursquare, a network experiencing exponential growth at the time. As a rising star, it was critical that hoteliers know the playing field and be ready to anticipate marketing tactics for this new channel.
A lot has happened in the online realm since then, and yet it doesn't seem as though location-based social media services have flourished into the omnipotent customer influencers as previously purported. Yelp has reached critical mass. Then there are other emergent geo-social networks like MyTown, Loopt, Hotlist, Geomium, Socialight and many others either active or now defunct.
There's movement, but the hype engine has stalled. However, just because location-based services aren't getting a boatload of press coverage to tout their business successes does not mean that web companies aren't hard at work to refine functionality and develop a more alluring end user experience.
One bright light: Facebook. It has "Places" with its own check-in system, now fully operational and integrated into the main platform. No doubt this friend-connecting behemoth is also making good use of the Gowalla team's wisdom – a Foursquare competitor which saw key members join the Facebook banner in January 2012. One experiment in June was Facebook's Friendshake, which allowed users to find other online friends close by using the GPS technology in smartphones. This attempt was met with scorn over its privacy-invading potential and was quickly squashed, although it might reappear in another form.
Elsewhere, in a rather bold move in July, Foursquare has launched their Promoted Updates services, enabling corporations to advertise to nearby customers. Like its social media brethren, Foursquare is seeking a means to monetize. It's a double-edged sword – money lets them pay more programmers to build more applications features and enrich the user experience, but advertising-laden pages may alter consumer perceptions and detract from the user experience.
The bottom line: location-based services are a work in progress, but should hotels care?
It depends entirely on your existing consumer base, and for the most part I can't bestow a positive endorsement for this geo-social media niche. As of now, their significance is marginal, not mainstream. Yes, location-based services are a way to reach out to new customers, but on a minute-by-minute comparison, your time would be better spent elsewhere.
Going by the numbers, Foursquare (the largest geo-social network independent of any internet flagship like Google or Yahoo) currently lists over 20 million active users – big by anyone's standards, except for Twitter and Facebook which both have over 500 million. If you are scrounging for the time to manage your social media campaigns, this simple number comparison should tell you how best to allocate your resources.
Second, you have to factor in the stigma associated with location-based services. Friendshake was deemed a 'stalker app'. It was toxic, highlighting people's innate aversion to making their present locations public knowledge without consent at every occasion. If geo-social networking is viewed as one more step towards decreasing personal privacy, is this something you want to wholly embrace?
Next, ask yourself whether your current clientele are the types who might use location-based services. Has Facebook Places caught on amongst the baby boomers or is it more an outlet for harried, money-strapped GenXers and Millenials? Is Foursquare still primarily a tool for urbanites seeking local tips and restaurants? Your use of these avant garde technologies has to be congruent with your target audience.
For instance, I don't foresee geo-social networks aligning with business trips. That is, would a surge of activity on Foursquare sway a corporate traveler to stay at one hotel versus another? Pre-established loyalty programs and company deals are two far weightier decision factors. Then again, fortune favors the bold and the creative. Perhaps Foursquare or Facebook Places could be harnessed as fun tools to revitalize a conference venue, directing businesspeople to various meetings and breakout rooms via the check-in system depending on whoever is already there.
Location-based services can, however, be adequately leveraged for your F&B portfolio, as has already been demonstrated by international chains and by independent restaurants. Offer a coupon with check-in at one of your outlets. Use said coupon to highlight one or two exceptional menu items.
A well-distributed article by Fast Company in tandem with APT, a research firm, cited the average revenue bump for corporate geo-social activity as hovering around 2%. So, if your goal is to marginally increase restaurant foot traffic, this strategy will work, but does this translate into increased room revenue? I'm skeptical.
Location-based services haven't reached the critical mass where they're imperative marketing tools for hotels. Stay in the loop though, and I'm sure good things are coming.
About Hotel Mogel Consulting Limited
Hotel Mogel Consulting Limited works exclusively with investors/owners/operators to help solve critical investment, management and marketing issues in the luxury segment. We also undertake public speaking at corporate and association events, where an independent point of view is desired.
