Social MEDIA in the hospitality and leisure industry
foreword We are delighted to share with you the insights from our survey undertaken across Senior Executives in the hospitality and leisure sector. It examines social media and the risks and opportunities associated with this rapidly developing technology. From a slow start just over a decade ago, when much was promised but little was delivered, social media channels have now become an integral part of modern society. Today, they encompass a whole host of networking tools, and are growing at such an extent that Facebook alone recently clocked up 500 million active users. There are social networks to share photos, videos, status updates, platforms for meeting new people and to connect with old friends, in fact networks for just about everything, including many consumer brands. In fact, according to industry sources, one in five tweets on Twitter is devoted to brands, while nine out of ten of the 38 million UK adults who went online in May 2010 visited at least one social networking site. With numbers like these it is no wonder that the hospitality and leisure sector is increasingly embracing social media. However, as this survey shows, while the vast majority believe social media are relevant to their business, only 55% are currently using them as a promotional tool. This apparent contradiction highlights that a significant proportion of the sector still regards social media as a nice to have rather than a must have. We believe this will change over the next 12 months. The big game changer is the overwhelming take-up of smartphones, such as the iphone, that allow immediate access to consumers at the point of service. This is enabling the sector to offer targeted promotions and the ability to gain instant feedback. What s around the corner? No one can say for sure, but social media is definitely here to stay. Karen Friebe Partner Global Co-chair, and Head of Hospitality & Leisure Group EMEA David Campbell Partner Head of Restaurants & Bars david.campbell@bdo.co.uk 02 Social Media in the Hospitality and Leisure Industry
Highlights Popular Social Media Channels Facebook (selected by 66% of respondents) and Twitter (selected by 55% of respondents) were chosen as the most useful social media channels for business purposes. Over half of respondents (55%) indicated that they use social media channels to promote their business services. LinkedIn was also popular despite mainly being a B2B channel. Surprisingly, smart phones were only viewed as useful by a relatively low proportion (38%). Social networking A change for future business practice? A number of respondents (68%) indicated that social networking has forced change in the way business is conducted in the hospitality and leisure industry. Social networking The emergence of new competitors? There were mixed views in respect of whether or not respondents felt social networking enabled the emergence of new competitors. 44% of respondents agreed with the statement but a further 43% disagreed. Social networking channels as a means of targeting your audience Many respondents reported that the two main objectives of social media were to promote our business externally and to engage with our target clients whilst informing existing clients of business activities. The business benefits to the hospitality and leisure industry There was a vast and interesting array of comments provided with regards to the benefits respondents identified in the use of social media. Free, direct, personal and effective were the key buzz words regularly referenced. The downside 28% of respondents reported that they had experienced negative feedback being publicly available on social networking sites. The general response to viewing negative feedback on the business, was to respond in a professional manner, addressing the problems raised to limit any damaging consequences to the business brand. www.dlapiper.com 03
Popular Social Media Channels 1. Which of the following do you think could be the most useful social media channels for your business? Facebook 66% Twitter 55% Social websites such as LinkedIn 46% Video sharing such as You Tube 40% Smart phones 38% Social news sites 37% Podcasts 15% I do not think social media is relevant to our business 10% Wikipedia 9% I do not know 9% Frequency 10% 20% 30% 40% 50% 60% 70% 80% Facebook (selected by 66% of respondents) and Twitter (selected by 55% of respondents) were chosen by respondents as the most useful social media channels. Recent reports suggest that the use of social media within businesses has five major purposes: creating brand awareness, as an online reputation management tool, recruitment, to learn about new technologies and competitors, and as a lead generation tool to intercept potential prospects. Facebook received the greatest overall response, which was not surprising considering the rise in popularity of this social networking website which currently has more than 500 million active users and over 900 million objects that people can utilise on the site. These include networking pages between members of the site, the ability to join business-related groups and post business updates. Facebook and Twitter are becoming increasingly recognised by business professionals looking to expand their current database of contacts and advertise their business activities for free. The ability to quickly penetrate a target audience has certainly been made easier by the emergence of web based applications. Surprisingly, a relatively low proportion (38%) viewed smartphones, and related apps such as Voucher Cloud and FourSquare, as useful. However, as this technology develops, particularly the located based apps, we believe operations will increasingly find them useful. 2. Do you actively promote your business services via social media channels? Yes 55% No 45% Percent 10% 20% 30% 40% 50% 60% 70% 80% Over half of respondents (55%) indicated they use social media channels to promote their business services. Along with broadcasting news about various business activities (webinars, seminars, annual dinner events), social media can play a key part in helping to introduce business practices, vendors, employees, and sales prospects. For instance, connecting with other like minded hospitality and leisure businesses who are not necessarily direct competitors but could give you advice on what works and what might not in your industry. Asking questions and getting recommendations from a network of other business owners can provide a whole host of ideas that you may not have considered and could really add scope to the development of the business. 04 Social Media in the Hospitality and Leisure Industry
Social networking A change for future business practice? 3. Do you agree or disagree with the following statement: Social networking has forced change in the hospitality and leisure industry Agree 68% Disagree 15% Do not know 15% Percent 10% 20% 30% 40% 50% 60% 70% 80% A number of respondents (68%) indicated that social networking has forced change in the way business is conducted in the hospitality and leisure industry. Indeed the growth and continued emergence of new social media channels has been quite overwhelming. Although social media remains a relatively new form of communication, it does seem to be rapidly becoming a major tool for promoting hospitality businesses, particularly in times of increased competition amongst consumers for discount deals or special offers. 4. Do you agree or disagree with the following statement Social networking has enabled the emergence of new competitors Agree 44% Disagree 43% Do not know 12% Percent 10% 20% 30% 40% 50% 60% 70% 80% There were totally mixed views in respect of whether or not respondents felt social networking enabled the emergence of new competitors. 44% of respondents agreed with the statement but a further 43% disagreed, with the remainder of respondents neither agreeing nor disagreeing. The adoption of new methods of communication MySpace, Facebook, YouTube, LinkedIn, personal blogs and websites, online message boards, has enabled businesses to reach new markets in ways that are very different from traditional advertising channels, opening up different options to get ahead of the competition. Hotel operators through the use of blogs or microsites can capture the attention of their customers in a personal way by informing them about special discounts on offer or general positive updates on changes to the business. These positive and informative statements can also form part of the indexing on search engines which will be important to those wishing to stay ahead of their competitors. www.dlapiper.com 05
Social networking channels as a means of targeting your audience 5. What channels do you use, what are your objectives and who are your audiences? This question in our survey allowed respondents to provide unlimited commentary regarding what social media channels they use as a business and their key objectives in using them. This unsurprisingly elicited some interesting answers illustrating the extent to which social media are now becoming embedded in business strategy. There were clearly some common trends amongst respondents, with a large majority of respondents, reporting Facebook and Twitter as the channels of communication they used regularly as a business with the two main objectives given as offering a way to promote our business externally and to engage with our target clients whilst informing existing clients of business activities. One respondent seemed to sum up the general thoughts expressed by a few others; We use Facebook and Twitter to engage with customers on a daily basis, to inform, engage and listen. Our audiences are our customers who are using these platforms daily we are now a part of their life when they are not in our restaurant. This comment reflects the high percentage of reference by respondents to the social networking sites Facebook, LinkedIn and Twitter with the business use of Facebook being largely seen as a way to engage with target clients. According to our respondents, Twitter is being used for the purpose of updates and LinkedIn for networking and promoting business expertise. The concept of social networking sites offering a personal touch to their customers demonstrates yet another dimension of social networking sites, with one respondent commenting we use Facebook to build an emotional link with the business and or leisure traveller. The business benefits to the hospitality and leisure business 6. What have been the benefits of the selected channel(s)? In order to highlight the overall benefits of the chosen social media channels, respondents were given the opportunity to provide their overall thoughts. There was a diverse and interesting range of responses. Free, direct, personal and effective was one comment which encompassed many of the thoughts from other respondents. The benefit of the social networking channels as a free marketing service could not be underestimated particularly given the costs associated with advertising and marketing campaigns which could be less effective in capturing the target market in comparison with the scale of exposure a social networking site can potentially achieve. For some respondents, the recent emergence of social media channels limited the visibility of business benefits with comments including it s too soon to see the benefits and only just started looking at using these channels so had little to date to feedback on. A few respondents were quite specific about which social channels they had used and the benefit of these to the business; we conducted a campaign via facebook which saw a very good return on investment and has shown there is potential to discover dedicated brand ambassadors online. In summary of the business benefits mentioned a source of communication, direct access to people, promotion of the business and increasing business connections were the key take-away thoughts. 06 Social Media in the Hospitality and Leisure Industry
7. Do you have any success stories demonstrating the business benefits of social media? Focusing on those respondents that use social media channels, we asked people to outline any particular success stories they had of using various social media. Respondents were keen to deliver their enthusiasm here on valuable and effective channels they had utilised. One comment read; Two weeks after posting our business on Facebook, we gained 5 separate holiday bookings from new customers who had not heard from us before. This further supports earlier suggestions which reported to the reach social networking sites can offer businesses a scale of communication which may not be available via other traditional marketing channels. THE DOWNSIDE 8. Have you had any negative experiences of social networking in relation to your business and if so have you been able to address it? No 63% Yes 28% Do not know 8% 10% 20% 30% 40% 50% 60% 70% 80% Interestingly 63% of respondents reported that they had not experienced negative feedback on social networking sites. The ability of users to add comments and feedback could lead to potential bad coverage for a business. However, only 28% reported negativity from the use of the channels. The website Trip Advisor (a free research website that assists customers in gathering travel information, posting opinions of travel related issues and engaging in interactive travel forums) was mentioned the most frequently with various comments including we are beginning to use and monitor Trip Advisor much more closely to ensure that we give as balanced a view as possible for potential clients whilst also gathering some useful and honest feedback, positive and negative, from past guests. The general theme in respect of Trip Advisor highlighted respondents knowledge of the site and also recognition that client reviews could allow for negative reporting but this should be managed in a professional manner to reduce any long-term damaging effects on the business. The general thought towards negative feedback was to be frank and honest always replying regardless of the content. Any feedback should be monitored and any problems/issues addressed to limit any damaging consequences to the business brand. A few respondents suggested that negative feedback could in some way enhance the future strategy of the business. One reported, I suggest you take the feedback and implement changes suggested, if commercially appropriate, and then review the business plan if necessary. Social networking websites have increasingly been recognised as a great equalizer, making it just as easy for an individual to build or break a marketing brand. The damage to the reputation of the recipient could be long lasting particularly if such posts are never deleted or addressed yet the risk and the financial and reputation cost to the anonymous party making them is negligible. www.dlapiper.com 07
Some closing thoughts The final question allowed for any further comments, which elicited some summary points that could be taken away from this market report. One comment suggested social media channels are more of a young persons thing, they are familiar with them but not in a business sense. Long-term business relationships are made through direct meetings, and there is no substitute for one to one meetings in person. This could suggest that the use of social media channels will not be taken up as a professional marketing tool by all businesses, particularly those who do not see the immediate value. In stark contrast to this another respondent summariés, I think our business is at the forefront by engaging in all these social media channels, we have 65,000 users on our websites a week and over 240,000 subscribers to our newsletter through launching it on Facebook this is certainly something worthy of reporting. In summary of all the points raised in this survey, there appear to be various and diverse thoughts on the use of social media channels for business purposes in the hospitality and leisure industry. However, in the words of one of the respondents, social media is something we cannot ignore whether we see the business benefits or not. Methodology In August 2010, DLA Piper and BDO distributed a survey via email to top executives within the hospitality industry, including CEOs, COOs, and CFOs and other Senior Executives, which was completed by 107 respondents. Owing to rounding up all percentages shown may not add up to 100 per cent. About DLA Piper From the quality of our legal advice and business insight to the efficiency of our legal team, we believe that when it comes to the way we serve and interact with our clients, everything matters. About BDO BDO is an award winning UK Member Firm of BDO International, the world s fifth largest accountancy network. For more information To learn more about DLA Piper, visit www.dlapiper.com To learn more about BDO, visit www.bdo.co.uk We would to thank all those who gave their time to provide us with their valuable insight, and hope the report provides some food for thought. If you have finished with this document, please pass it on to other interested parties or recycle it, thank you. www.dlapiper.com DLA Piper is an international legal practice, the members of which are separate and distinct legal entities. For further information please refer to www.dlapiper.com/structure A list of offices can be found at www.dlapiper.com Copyright 2010 DLA Piper. All rights reserved. AUG10 1902606