It's a word-of-mouth world, so where does technology live? | By Jérôme Destors

Social media would appear to be everywhere. Everyone is discussing it and debating it, in every industry, not least the hotel industry. There is plenty of anecdotal evidence suggesting that everyone should be ‘in’ social media. But could it – should it – apply to the hotel industry? And if so, what does the industry need to do to embrace this? How does the industry, and the technology systems which drive it, need to change?

It’s easy to make assumptions about the importance of social media. So let’s first look at the facts.

Firstly, and perhaps crucially, interest in social media is growing at an exponential rate. The number of searches in 2009 for the term ‘social media’ exceeded that for every preceding year. Clearly there is a mass of people online who regard social media as important simply because they are looking for information about it.

Secondly, there is rationalisation throughout social media. Bebo, once the darling of the social networking scene, is about to be discarded or even closed down by its owner, AOL. Meanwhile the bigger sites continue to grow: today, Facebook has over 400 million active users who between them have more than 5.3 billion fans; and latest estimates put Twitter’s user base at around 12 million people with explosive growth pointing to around 18 million registered users by the end of 2010.

Thirdly, there are the ‘new kids on the block’ that are attracting attention. Foursquare in particular has much to offer the hotel and travel industries with its location-based services. According to the company's data, check-ins hit an all time high of 382,000 per day in February 2010. This is a huge increase from Foursquare's last milestone of one million check-ins per week in February 2009.

It’s clear: there are lots of conversations online, and growing. They are driven by the simplicity and ubiquity of online social applications that tap into two primary behaviors: people’s desire to share; and people’s willingness to believe their peers ahead of what brands say about themselves. This is not a fad: it’s something that is causing deep behavioral change because it appeals to people’s deepest instincts. It is word-of-mouth marketing, not brand-led marketing. It implies that there are triggers everywhere, and different ways of reacting to those triggers that have profound implications for hoteliers. So what can they do about this?

Many industry players already understand this change, and are pioneering initiatives to engage with customers, promote products, build identity in a more personal way, build immediate loyalty or adherence to their brand, and respond to customers’ service issues. They already recognize that they need to be part of the conversations taking place online because people believe those conversations more than they do their own advertising. They realize that they can upsell and cross sell via social media tools.

For example, Marriott International Inc. held a “Deal of the Day” promotion via its Twitter feed and website, offering one discounted deal per day for a Caribbean, Hawaii or California hotel, in the first half of June 2009. That same year Westin Bonaventure in downtown Los Angeles created an online persona to tweet about the Los Angeles Lakers’ championship run, ingraining itself into the city’s culture.

But this is just the beginning. If social media is already rationalising and major players are taking over then there is much more that can, and should, be done. It just depends on what can be done now, and how systems need to change to embrace this potential.

Marketing depends on research, and research is monitoring – that is, listening to what people are saying online. Hoteliers commonly use rate comparison tools to get valuable information to feed their revenue management systems. However, there is no reason why they cannot be using keyword systems to pick up on broader conversations beyond their own branded and competitor branded terms, right now. Furthermore, they could be using these systems to alert their marketing departments and build on-the-spot promotions in their Central Reservation Systems to be available immediately on their web sites, advertised on Facebook and communicated via Twitter.

If marketing is talking online, then Property Management Systems (PMSs) could evolve with concierge applications enabling guests and hoteliers to communicate more easily prior to or during a stay, including links to Facebook. For example, after guests have checked-in, a message could be sent from the PMS to their Facebook inbox to welcome them to the hotel and provide them with more information or even offers at, or around, the hotel.

Social media can also help with sales. By harnessing the volume of conversations hoteliers can show, through what people are saying, why those people’s peers should consider them. Guest books used to do this on a one-to-one basis but now social media can do this many-to-many, instantly and globally. Imagine the power of enabling guests to post their comments, pictures and videos in an online resource, in much the same way they do now on TripAdvisor. This would necessitate changes to the hotel chain’s content management system, making them robust enough to host new content and the necessary workflow and security to accommodate that. Equally, the brand website needs to support this extra public content without disrupting the navigation and response time.

However, marketing also depends on raw information, and there is much that can be done in this area to make the information work harder.

For example, the Central Reservation System could be plugged into Facebook, so that confirmation of bookings could be notified on the guest’s Facebook inbox, with appropriate upsell and cross-sell offers as well as concierge services. The booking confirmation could also provide a link to a video of the property or any relevant information the hotel wants to communicate. And, because sites such as Facebook are designed to allow sharing, these videos could spread in a viral manner. The hotels would quite simply have to do less work, as their systems and their audiences do their marketing for them.

But none of these should be ‘islands of automation’. They should be linked with other business intelligence solutions so that integrated reports show how each program is performing at any technological touch point of the hotel.

And we’ve only just begun. While social media overtakes the web in size, mobile is around the corner. Geo-location is a whole new world of opportunity for hotels as people can be influenced simply by walking down the street. We’re already seeing how mobile can be tied into loyalty programs via Foursquare. For example the Doubletree Hotel Crystal City in Virginia gives 20 percent off an entrée to all who check in, with mayors (that is, people who have been there more often than anyone else according to Foursquare’s statistics) getting 20 percent off their total bill.

Still, it’s not yet clear how social media can help with loyalty, not least because it needs to be careful about spam. According to a new survey from the Chief Marketing Officer (CMO) Council, customers complain most that the value they get from loyalty programs is not worth the huge amount of spam they are sent. It’s a double-edged sword: reach them, but not too much.

So let’s answer the questions we started out with. What does the industry need to do to embrace social media? How does the industry, and the systems which drive it, need to change? The answer is that existing systems will have to be adapted, throughout all business functions from research to marketing to customer relations. Furthermore, to gain real value they need to be much more integrated, without damaging their current performance or their brand perception.

And to the question “Could social media – should it – apply to the hotel industry?” The answer is a resounding “Yes.”

There is a vast opportunity for hotel brands to benefit from social media. It is a new word-of-mouth world, in which marketing and merchandising can be truly creative, but only if they are enabled to do so by technology. For hoteliers to embrace social media they need to ensure that their entire technology systems infrastructure is not only ready, but that it will place them at the forefront of this new interaction.

Jérôme Destors is Director Hotel IT at Amadeus.

About Amadeus Hotel IT

Amadeus has served the global hospitality industry for over 20 years, supporting hotels' distribution and technology needs. Amadeus employs over 170 dedicated hotel specialists covering every aspect of development, delivery and support of hospitality technology solutions. Our comprehensive, scalable portfolio of advanced management systems includes: Amadeus Hotel Platform, an above-property single source solution for next generation hotel, reservations and distribution technology focused on single image inventory, single view of the guest and enhanced merchandising.

Amadeus also provides revenue management and global distribution systems, including the Amadeus Hotel Platform-Revenue Management.

Currently, Amadeus Hotel IT solutions are being used by 1,500 customers in 35 countries.
For more information, please visit www.amadeus.com/hotelit

About Amadeus

Amadeus is a leading transaction processor and provider of advanced technology solutions for the global travel and tourism industry.

Customer groups include travel providers (e.g. airlines, hotels, rail, ferries, etc.), travel sellers (travel agencies and websites), and travel buyers (corporations and individual travellers).

The group operates a transaction-based business model and processed 850 million billable travel transactions in 2010.

Amadeus has central sites in Madrid (corporate headquarters and marketing), Nice (development) and Erding (Operations – data processing centre) and regional offices in Miami, Buenos Aires, Bangkok and Dubai. At a market level, Amadeus maintains customer operations through 73 local Amadeus Commercial Organisations covering 195 countries.

Amadeus is listed on the Madrid, Barcelona, Bilbao and Valencia stock exchanges and trades under the symbol "AMS.MC". For the year ended 31 December 2010, the company reported revenues of EUR 2,683 million and EBITDA of EUR 1,015 million. The Amadeus group employs around 10,000 employees worldwide, with 123 nationalities represented at the central offices.

To find out more about Amadeus please go to www.amadeus.com.

To visit the Amadeus Investor Relations centre please go to www.investors.amadeus.com.