SAS: Customer reviews have the greatest impact on hotel consumers ' purchasing decisions

Content partners: @ Global Travel News

The author of this article is a business intelligence software provider SAS Hotel industry and Tourism Global business executive director Kelly McGuire and Penn State University http://www.aliyun.com/zixun/aggregation/12889.html " Dr. Breffni Noone, assistant professor at the Institute of > Hospitality Management.

Most people in the industry agree that social media has an impact on consumer buying behavior, especially on comments (a summary of the hotel occupancy experience) and ratings (based on the overall score of each consumer's score). But exactly, what kind of user generated content (hereinafter referred to as UGC) on the consumer's buying behavior has an impact? How much impact does this have on the user's decision-making process? How do they interact with hotel rates? These are issues that are often discussed by the industry.

SAS and Penn State recently collaborated on a survey that we intend to answer with this survey. Our goal is to help hotel managers through the "fog" of information, and to enable them to take effective action to enhance the hotel rankings and the consumer's buying behavior has a positive impact.

The results of academic studies tell us that consumers ' perceptions of quality and value are the initial driving forces that affect their purchase. In other words, if we can understand how UGC and house prices play a role in these drivers, that means we can see how these factors ultimately affect consumer buying behavior.

The consumers we studied, who would book their hotel rooms for the weekend to travel to the center of the United States, we told respondents: the average price of a four-star hotel in their preferred location was 235 dollars. Then we show them the information about the hotel and invite them to evaluate the hotel.

In the hotel's introductory information, we divided the prices into "low" and "high" two levels based on the determined reference price (USD 175/295), then divided the user's total score into "low" (2.8) and "high" (4.8) These two grades (total divided into 5 points), and finally came up with 10 very positive comments or very negative comments on the composition of the collection. With other factors remaining unchanged, we have reached the following 8 different scenarios (table I), where each respondent evaluates only one scenario.

(Table i)

We randomly sampled a representative sample of American consumers and then conducted an online survey of them, and our findings covered audiences of different ages, incomes, genders and education.

Most of the respondents pointed out that they would use the Internet for most of the time to book hotel rooms. In addition, they read UGC and are influenced by it.

Customer awareness of quality: We invite consumers to evaluate the quality of the hotel we have shown.

(Table II)

Table II shows the user's average (from highest to lowest) in terms of quality awareness based on different scenarios.

The blue bar represents a situation where the price is higher, and the red bar indicates a lower house price scenario. We can draw two conclusions from table two:

1. The four scenarios that contain positive reviews (code with "P" letters) have the highest score in terms of quality, and the data test results show that reviews are the most important driving force affecting the perception of consumer quality. From the data, the score and the quality of consumers have a strong correlation, but the relationship between the quality of the reviews and consumers is the strongest. This means that consumers rely mainly on reviews to assess the quality of a hotel.

2. Data test results show that in the case of higher house prices and lower house prices (assuming the same level of rating and comment, i.e. LHP and HHP scenarios), the hotel has little difference in the average quality score. This means that in the minds of consumers, house prices will hardly affect their perception of quality.

User perception of Value: "Value" is defined as the trade-off between your pay (price) and your access (hotel occupancy experience), so we think that consumers will consider price factors when measuring value.

(Table III)

Table III reflects the consumer's perception of value in different contexts, and the blue bar represents a situation where the price is higher, and the red bar indicates a lower house price scenario.

Interestingly, we may think that consumers feel the value of lower-priced room products is higher (that is, the red bar should be the highest score), but some of the higher prices of the situation in the consumer value perception of the score is higher than some of the lower prices of the situation.

This means that reviews and ratings do have an impact on consumer perceptions of value in some way.

Data analysis shows that there is a negative correlation between house price and value, that is to say, consumers ' perception of value decreases when house prices rise. However, house prices, reviews and ratings will interact with each other and have an impact on consumer perceptions of value. In other words, UGC changed the degree of negative correlation to some extent.

To analyze this effect in more detail, we divided the scenarios into "high house prices" and "low prices".

(Table IV)

The top half of table four refers to the situation of high housing prices, the lower part refers to the situation of low prices. After analyzing the data in table IV, we can draw three conclusions:

1. In the context of high house prices, consumers judge only the value of the products they buy through reviews, and the ratings do not have any impact on the relevance of the various factors.

2. In the context of low housing prices, only when the comments are positive reviews, the score can play an important role. Compared to stories with positive reviews and low scores, the level of consumer value awareness is higher for the scenarios that contain positive reviews and high scores, which means that high scores only convince consumers that they do have a "very good deal".

3. We can analyze the "worst scenarios" of different price levels, if the user's comments are mostly negative and the ratings are very low, then whether the situation is low or high house prices, the consumer's perception of value is not materially different from the data (the rightmost column bar in each chart). That is to say, even if a low rated hotel lowers the price, it will not be able to create any additional value in the consumer's mind.

Our research report draws some valuable conclusions:

1. For consumers, reviews are the most important factors that reflect the quality and value of a hotel. Our survey report reflects a clear phenomenon: consumers tend to develop a perception of quality and value through reviews compared to overall ratings.

The results, contrary to some theoretical conclusions, point out that consumers are unwilling to view a large amount of information, and they prefer to see information about indicators that are easy to receive (such as a user's total score) rather than content that contains rich information.

We assume that uncertainty about the hotel occupancy experience will allow consumers to gather as much information as possible to reduce this uncertainty. The hotel manager must understand the customer sentiment included in the comment information, and they should also understand the reviews of hotels that have a direct competitive relationship with them in order to successfully position themselves in highly competitive markets.

2. Competition by house prices alone is not a successful strategy, and while consumers are hoping to pay the lowest price, they will be keeping a close eye on the UGC of the hotel and its rivals in making their purchase decisions. This means that hotels cannot reduce (or raise) prices based solely on their competitors ' price movements, and hotel managers must understand whether their UGC have a competitive advantage in assessing the value of the hotel and its competitors.

3. When consumers see the content of reviews and ratings, they do not measure the quality of hotel rooms through price. This is good news for earnings managers, because it means they can flexibly adjust prices within a reasonable range to stimulate short-term demand without affecting consumers ' perception of the hotel's quality over time.

4. "Bad UGC" will pose a problem for the hotel, and our findings point out that even a low rated and rating-rated hotel will not create any additional value in the minds of consumers if it lowers prices. If a hotel is in this unfortunate situation, they should keep the house prices at a higher level, then accept the consumer's evaluation, from our survey results, consumers will not give a higher rating. We suggest that these hotels focus on solving the problems they face rather than worrying about pricing problems.

Our findings confirm the hypothesis that UGC has a significant impact on consumer buying behavior. The report points out that reviews are factors that have the greatest impact on quality, value and consumer buying behavior.

Compared to other data, these structurally weak text data are more difficult for hotels to access and analyze, which is critical to the hotel's understanding of consumer buying behavior and will be a key factor in hotel pricing and positioning strategies. Many hotels are investing in these data, so our findings further confirm the importance of such investments.

We still have a lot to dig into in terms of how consumers measure prices, quality and value perceptions. The presence of UGC clearly allows us to move from a price-transparent environment to a value-transparent environment where hoteliers must integrate their content into their strategy and strategic decision-making processes if they are to maintain a competitive edge. (Wing Compilation)

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This article is compiled from @socialbeta's content partner @ Global tour.