November 21, 2012

Social media provides inaccurate measure of hotel customer satisfaction

Hotel customer feedback based on social media is inaccurate when compared to statistically significant survey research, according to an analysis by Market Metrix. Among the findings: online reviews from the leading travel review site are severely skewed toward the negative.

The Market Metrix research reports 300 percent more negative responses (one- and two-star ratings) when compared to survey research and positive responses (five-star ratings) were underrepresented by 35 percent.

“Our concern is that many hotels are using customer feedback from social media to make important business decisions when it simply can’t provide an accurate picture of guest satisfaction,” said Dr. Jonathan Barsky, director of research for Market Metrix. “Millions of dollars are at stake as hotel executives make resource allocation decisions based on faulty information. These expenditures may not have any impact on satisfying customers and growing the business, and the things most likely to attract guests and increase loyalty may go unnoticed.”

Social media data is questionable for several reasons. First, the pressure to have positive online reviews has created a market for “promotional reviews,” where bogus feedback is bought and sold. A recent third-party study concluded that as many as 15 percent of online reviews will be paid for by 2014. Other estimates go much further putting the frequency of fake reviews as high as 30-40 percent.

Second, the number of reviews produced for a given property on social media is low. An aggregate view of the top 10 review sites produces an average of only about 15 reviews per property per year, not enough data to represent a clear and balanced picture of the customer experience, according to Dr. Barsky.

Finally, only 56 percent of the US population participates in social media. And for adults over 50, the number falls to just 20 percent. Although social media
participation may be strong with younger demographics, the large majority of older adults – the biggest hospitality spenders -- aren’t posting reviews.

Social Media Is No Management Tool

The problems with social media don’t end there. It’s not only that the data itself is flawed, but also that it’s not useful or actionable, according to Dr. Barsky. Most travel sites take four or more days to post a review and, at that point, it’s too late for the hotel to recover. “The best way to manage online reputation is to prevent negative reviews in the first place,” said Dr. Barsky. “The time to fix a problem is when it occurs, not when it’s already been posted to the world. “

Real-time feedback programs can help solve problems and recover guest loyalty before the guest leaves. This is a critical point, according to Dr. Barsky, because unresolved problems drive down guest loyalty by an average of 56 percent.

Also, social media doesn’t allow hotels a way to distinguish the most important problems from all the rest. The only indication of significance is discussion volume on a particular topic. But volume is not the same as importance. “Some very frequent problems, like a faulty TV remote, have little impact on loyalty. Others, like a rude desk clerk, may happen infrequently but are severe business killers,” said Barsky. “Hotel managers need data that will illuminate these connections and social media just doesn’t do that.”

Download the white paper "For Hospitality, Social Media Is Too Little Too Late" at Market Metrix