Influences of Social Media on the

TourismandHospitalityIndustry

Bachelor Thesis for Obtaining the Degree

Bachelor of Business Administration

Tourism and Hospitality Management

Submitted to Prof. Arno Scharl,

Department of New Media Technology

Ioana Alexandra Benea

1111551

Vienna, 22.06.2014
Affidavit

I hereby affirm that this Bachelor’s Thesis represents my own written work and that I
have used no sources and aids other than those indicated. All passages quoted from
publications or paraphrased from these sources are properly cited and attributed.

The thesis was not submitted in the same or in a substantially similar version, not
even partially, to another examination board and was not published elsewhere.

22.06.2014

Date Signature

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Abstract
The potential influence of social media on the tourism and hospitality industry has
attracted considerable interest in academia and industry alike. However, most of the
research that has been conducted has been from the customers’ and not from the
service provider’s perspective. There is limited research on the methods implemented
by hotels for measuring the influence social media have on their respective goals and
the different perspectives, namely financial or other, taken into consideration when
doing so. By conducting semi-‐structured interviews with hoteliers in Vienna, Austria,
the current research investigates how Viennese hotels measure social media
influence on their business goals. The results reveal that marketers in Vienna do not
look at financial figures when using social media marketing, rather consider customer
satisfaction, engagement, and brand awareness as the primary Return on Investment
(ROI).

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Table of Contents

Affidavit ...................................................................................................... 2

Abstract....................................................................................................... 3

Table of Contents ........................................................................................ 4

List of Tables................................................................................................ 6

List of Figures .............................................................................................. 6

List of Abbreviations.................................................................................... 6

1 Introduction .......................................................................................... 7
1.1 Presentation of the Problem..................................................................... 7
1.2 Aims of the Bachelor’s Thesis.................................................................... 8

2 Literature Review .................................................................................. 9

2.1 Tourism and Hospitality Industry .............................................................. 9
2.2 Social Media & Social Media Marketer ................................................... 12
2.3 Online communication goals................................................................... 15
2.4 Social Media Contribution to Stakeholder Goals..................................... 17
2.5 Social Media Tools.................................................................................. 19
2.6 Measuring Social Media Influences......................................................... 21

3 Methodology....................................................................................... 27
3.1 Overview ................................................................................................ 27
3.2 Description of the Population Sample..................................................... 29
3.3 Limitations ............................................................................................. 29
3.4 Interview Guide Design........................................................................... 30

4 Analysis, Result & Interpretation ......................................................... 32

4.1 Candidate Description ............................................................................ 32
4.2 Social Media Marketing Goals ................................................................ 32
4.3 Social Media Marketing Tools................................................................. 34
4.4 Online Communication Target Market.................................................... 36

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 4.5 Hoteliers Satisfaction with Social Media ................................................. 37
4.6 Social Media Contribution to Stakeholder Goals..................................... 38
4.7 Measuring Social Media Influence.......................................................... 40
4.8 Challenges of Measuring Social Media Impact........................................ 41
4.9 Overall Assessment and Suggestions ...................................................... 42

5 Conclusion and Further Research......................................................... 44

6 Bibliography ........................................................................................ 46

7 Appendices.......................................................................................... 50
7.1 Appendix 1 ............................................................................................. 50
7.2 Appendix 2 ............................................................................................. 51
7.3 Appendix 3 ............................................................................................. 54

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List of Tables
Appendix 1 – List of Tourism and Hospitality Industry Stakeholders

Appendix 2 – List of Social Media Marketing Tools Appendix 3 –

Sample Hotels for Interview

List of Figures
Figure 1 -‐ Tourism Stakeholders (Holloway & Taylor, 2006)

Figure 2 -‐ Main Source Market Performance 2012-‐2013 (Tourisminsider.com, 2014)

Figure 3 -‐ Top 10 European Cities -‐ Number of Bednights (Tourisminsider.com, 2014)

Figure 4 -‐ Usage of Top 10 Social Platforms by Region (Lunden, 2014)

Figure 5 -‐ Changes in Active Usage of Top 20 Social Media Platforms(Lunden, 2014)

Figure 6 -‐ Conversation Prism (Solis, 2013)

Figure 7 -‐ Percentage of investment in Social Media Marketing (Verma &

McGill, 2011)

Figure 8 -‐ Engagement Food Chain (Sterne, 2010)

Figure 9 -‐ Statistics February 2014

List of Abbreviations
ROI – Return On Investment

UNWTO – United Nations World Tourism Organization

F&B – Food & Beverage

KPIs – Key Productivity Indicators

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1 Introduction

1.1 Presentation of the Problem

The last decade has seen a significant increase in the use of both social media and the
general development of new technology worldwide. The tourism and hospitality
industry has seen an impressing development since the beginningalthough over the
past few years, due to the recession, people have started cutting down on vacations
and sales have decreased, further leading to lower revenue, lower payoffs and
decreasing work segment. Today, the industry is on the rise again and has changed
dramatically with the overwhelming appearance of social media platforms creating
new opportunities to progress and attract the customer through facilitated
communication and empowered guest engagement.

It can only be seen as something positive for the tourism and hospitality industry as it
has so much to offer. It is still on a rise and provides a way to increase profits.
Nevertheless, one of the most essential problems that service providers have
encountered is how to engage in social media marketing and how to validate whether
it is profitable for their business to use it or not. Therefore, some of the most
challenging aspects include the considerations of how one measures these results;
how one determines the business value of social media, how one realizes the
importance of social media to any organization, how one makes use of social media
for a business in order for it to be accepted by the community whilst enhancing the
brand and lastly how one measures the value of the accomplished efforts (Sterne,
2010).

It is commonly perceived that social media’s return on investment in the tourism and
hospitality industry cannot be measured, because of the perishable and intangible
character of the tourism product, additionally because the return on investment is
not always considered a concrete aspect. For example, business reputation or
associations of a brand with specific characteristics are not features that can be
measured, but are still important for a stakeholder and can be easily achieved with
the help of social media marketing. Of course financial aspects cannot be foreseen,
but in the end “the relationship is apparent and significant: Socially engaged
companies are in fact more financially successful” (Sterne, 2010).

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As mentioned above, it is vital for a company already operating for a while to have an
online presence and be able to observe and measure the social engagement
attentively in order to succeed in financial terms. Therefore theunderlying research
question of this thesis is “How do stakeholders in the tourism and hospitality industry
measure the success of social media in their business?”

1.2 Aims of the Bachelor’s Thesis

The purpose of this thesis is to answer the research question mentioned above by
first identifying who these stakeholders are; second, determine their online
communication goals and finally to establish how social media contributes to these
goals. Anderson (2012) mentions in a Cornell Hospitality Report, “Hotel operators
have suspected that the effect of social media and user generated content on hotel
performance has been strengthening.” Therefore, measuring these effects is vital for
the hospitality industry.

Berkowitz (2009), for example, has put together a list of “100 ways to measure social
media”, which would facilitate things and no research would be necessary on the
topic, but eventually he concludes as follows, “Ultimately, you need to start figuring
out your business objectives and then apply these metrics accordingly”. The idea is
that each business has different goals that need to be defined before putting a plan
into action. The same applies for social media goals. They need to be specified before
any measurements can be taken.

Paine (2009) mentions “the need to know what problem you need to solve, you need
to not do anything in social media if it doesn’t add value […] you can’t manage what
you can’t measure – so set measurable goals”. As emphasized, goal setting is of great
importance in this matter. Therefore, a closer look has to be taken at the research
problem. The research method chosen is empirical. First literary resources are cited,
analyzed and interpreted, and then a qualitative interview is conducted. The findings
are compiled and analyzed and finally, the conclusions and further research
suggestions are going to be stated.

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2 Literature Review

2.1 Tourism and Hospitality Industry

UNWTO defines tourism as “a social, cultural and economic phenomenon, which

entails the movement of people to countries or places outside their usual
environment for personal or business/professional purposes”. For some tourism
represents relaxation and fun, a trip during the holiday weeks away from work, and
some doubt the need for study and research. But for others, tourism is asource of
employment; it is a business that brings revenue to millions of people around the
world; it is a source of living. Therefore it is important to research it, analyze it and
study it more attentively.

“Tourism has emerged as a major economic sector and source of social and
environmental change since the 1950s. It has also become a field of serious research
and scholarship in many academic disciplines since 1970s. The patterns of tourism
development in different parts of the world reflect the histories and cultures of those
regions and nations, but tourism is a nearly universal phenomenon […] it is an
important source of wealth for many nations […] (it) becomes a high priority for
many people” (Robinson, Lück and Smith, 2013).The statement emphasizes on the
importance of tourism, which highly increased over years, and the diverse functions
of tourism in the world.

For a better understanding of the term, its characteristics should be defined:

intangibility – it is a service, not a product, and as a result it cannot be touched, just
experienced; heterogeneity – each customer experiences a service in a different way;
inseparability – it cannot be taken home like a product and has to be consumed at
the place of the destination; perishability – once the opportunity of selling a service
at a certain point has forgone, it cannot be resold at a later point in time; lack of
ownership – a service that cannot be owned, due to the previously mentioned
characteristics.

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 Figure 1 -‐ Tourism Stakeholders (Holloway & Taylor, 2006)

This research paper emphasizes on specific tourism stakeholders and Figure 1 is an

illustration of these stakeholders in the industry. The illustration is also called a chain
of distribution or marketing channel and describes “the system by which a product or
service is distributed from its manufacturing/creative source to the eventual
customers” (Holloway and Taylor, 2006). For a better understanding, the
stakeholders have been sorted in a table according to their characteristics – Appendix
1.

Special emphasis has been set on the hospitality sector of the tourism industry. The
reasoning behind it will be further explained later in this research paper. The
hospitality industry is “the very essence of tourism, involving the consumption of
food, drink and accommodation in an environment away from the normal home
base. The very nature of hospitality involves hosting and hospitality, provided by a
host and involving a guest” (Page, 2009). In early stages, hospitality wasnot seen as a
commercial industry, as people hosted and were hosted on the basis of reciprocity.

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Nowadays, “hospitality has become a commercialized experience, where the guest
pays for the services/goods they consume via a bill” (Page, 2009).

Hospitality as a subsection of tourism “is a fundamental part of the domestic and

inbound leisure market. Consistent demand for tourism allows the hospitality
industry to forecast demand and identify opportunities to increase consumer spend,
creating a wave of secondary financial impacts” (Robinson, Lück and Smith, 2013).
The hospitality industry has 2 sectors: the accommodation sector and the Food and
Beverage (F&B) sector. This research paper is focused on the accommodation sector,
with an emphasis on hotels. The reason behind this choice is that the hotel business
has been an increasing industry in the past few years and it has received a lot of
attention from researchers regarding its development and customer behavior. To
strengthen the choice made, it can be seen below according to TourismInsider.com
(2014), that the total foreign and domestic bed nights on a global perspective have
increased by 3.6% from 2012 to 2013 – Figure 2 is a graphical representation
highlighting the leading markets around the world.

Figure 2 -‐ Main Source Market Performance 2012-‐2013 (Tourisminsider.com, 2014)

Europe is keeping up with the global increase and as shown infigure 3 below, the top
10 European cities have also seen an increase in bed nights within thesame time
period i.e. 2012-‐2013. Only exceptions to the rule are Paris, with a decrease of 0.7%
and Madrid, with a decrease of 4.3%. Theresearch was undertaken by the European
Cities Marketing.

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 Figure 3 -‐ Top 10 European Cities -‐ Number of Bednights (Tourisminsider.com, 2014)

“The tourism industry had high expectations of the Internet from the outset of it.
Tourism as an intangible service product is perfectly adaptable for electronic data
transfer. Online travel communities and online ticket sales were said to have a bright
future due to the fact that the presentation of necessary information for purchasing
products on the Internet is easy, and the costs for daily updates are comparatively
low” (Amersdorffer et all, 2012). This explains the great connection between tourism
industry and social media marketing, and how well they could work together due to
similar characteristics. This connection is subject of research of this thesis and will be
analyzed into detail in the following sections.

Therefore, the hotel industry is a relevant target due to the growing trend seen in the
past years, the considerable amount of accessible data regarding the topic and the
interest it has created. Rauch (2013) mentions that one of the trends in hospitality
forecasted for the year 2014 is social media and mobile communication and considers
that “keeping an eye out for authentic ways to make use of emerging social/mobile
applications will be of great value to those in hotel marketing.” Taking into
consideration all the factors mentioned above, this thesis is going to analyze whether
social media is indeed efficient in reaching the companies’ goals and whether there
are downfalls to the effectiveness it is claiming to achieve.

2.2 Social Media & Social Media Marketer

In order to better understand the focus of this thesis, an overview of the concept of
social media is given in the following section. There are various books, articles and
online sources that try to define social media, but each has a different perspective on
it.

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A.M. Kaplan, M. Haenlein (2010) offer a more technology savvy definition, stating
that ”Social Media is a group of Internet-‐based applications that build on the
ideological and technological foundations of Web 2.0, and that allow the creation and
exchange of User Generated Content”. “Web 2.0 refers to the principles and practice
of facilitating information sharing and social interaction by users generating, altering
and uploading web-‐based content” (Liburd, 2012). Mashable.com (2010) states,
“social media is real life.”

Levinson and Gibson (2010) define social media from a marketer point of view as “a set
of tools that are free or nearly free and allow marketers and the community to create
content and meaningful conversation online”. Some examples of social media are “blogs,
photo-‐sharing sites, video-‐sharing sites, social networks, audio podcasts, Internet radio
[…] mobile social sharing and communication tools” (Levinson & Gibson, 2010). Sterne
(2010) explains social media in a clear and uncomplicated way
– “That which allows anybody to communicate with everybody […] consumer-‐
generated content distributed through easy-‐to-‐access online tools”.

Solis (2011) has his own way of defining the concept of social media,managing to
combine the above mentioned definitions and seeing it as “many things to many
people and represents much more than technology […] a societal renaissance that
spawned a vibrant ecosystem supported by flourishing cultures and lifestyles […] a
platform for socialization of media; the online tools that facilitate conversations;
connections between friends, peers and influencers; collaboration; the redistribution
of influence; a call for humanizing personas and audiences, and the stories that link
them together; compassionate; an opportunity and a privilege […] the
democratization of information, transforming people into publishers; it is the shift
from a broadcast mechanism, one-‐to-‐many, to a many-‐to-‐many model, rooted in
conversations between authors, people and peers”.

According to Levinson and Gibson (2010), a social media marketer should have the
following characteristics; first they should not be caught up in the enthusiasm of a
new service or product before testing the tools and analyzing the results they are
actually bringing. Second, a marketer should always be curious and interested in
trying new options; he should “combine different elements of marketing and strategy
in a creative fashion”. In a fast paced communication world, social media

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marketers should always be prepared for new opportunities and challenges. Another
important trait of a marketer is transparency.

By being given access to a high range of information that customers have nowadays,
it is almost impossible to fool them without being noticed. Therefore, it is suggested
to be open, honest and have integrity. It is common knowledge that the customer is
king, which is why a marketer should always be community focused: make
connections with customers, help and listen to them, see what their values and
expectations are and then exceed these expectations. Marketers should always strive
for quality not quantity; a high number of followers or likes represents popularity, but
not necessary profitability. Technology savvy is how a marketer should mostly be.
Being up to date with the latest products and innovations will bring profit to the
business. Last, it is essential to have great leadership skills to strive for continuous
good results.

Levinson and Gibson (2010) also identify some attributes marketers have to be
careful about when involving themselves in social media marketing strategies. These
are: Name – the company’s name should be distinctive and impossible to duplicate, it
should create interest and most importantly, it should be easy to pronounce in any
language. Strong ongoing branding strategy – it is essential for a brand to have a
good strategy, which should be implemented in the long term with commitment.
Positioning through listening and dialogue – refers to always making yourself
distinguishing compared to your competitors by listening to your customers’ stories
and testimonials. Quality – is all about the service you offer to your customers;
satisfied customers are happy customers who may return benefits through positive
word of mouth. Distribution – is all about the location, being active on all online
distribution channels and having the possibility to work from remote locations.
Freedom and variability – free giveaways are always an efficient way to attract
customers. Referral and rewards program – most companies nowadays have rewards
programs, making it evident of how much they value their returning customers and
the referrals of these customers, by rewarding them with different incentives.
Likeability – the way a marketer sells his product is just as relevant as the other
attributes.

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Therefore, being liked by the community is a key to success. This can be done through
small but significant gestures like saying thank you, answering rapidly to private or
public questions, not using over reactive arguments in response to criticism, rather
build bridges between them and their customers, and finally not being insistent. In
the end, all these attributes contribute to a business’ reputation. The foundations of a
good reputation are truth, promises, feedback, customer experience, brand
monitoring, conflict management and association. These attributes will help in
defining the goals marketers set when engaging in online communication goals,
which is decisive for this research paper.

“The rise of social media dramatically challenges the way firms manage their brands.
Key features of this social media environment with significant effects on branding are
a shift from the firm to consumers as pivotal authors of brand stories in the branding
process; a high level of interactivity manifested in social networks of consumers and
brands; and a multitude of channels and brand stories that cannot be easily
coordinated” (Gensler et all,2013). This issue will be better analyzed on the basis of
the empirical finding in thelater sections of the research paper.

2.3 Online communication goals

Like any other goals, online communication goals should be S.M.A.R.T.: (i) Specific
goals reflect the objectives of a marketer, when deciding what social media tools to
use; (ii) Measurable goals are essential in order to be able to see if the objectives set
have been achieved in the end. Goals that sound impossible to reach will not be
taken seriously by anyone; hence (iii) Achievable goals should be chosen. Similarly,
(iv) Realistic goals refer to taking into consideration all the external factors that could
influence the final result. Finally, goals should be (v) Time-‐based which means a
specific target should be attained within a specific time period. Goals are a way to
make people more persistent in what they are doing by putting more effort into their
actions. As managers do not always have the ability to motivate their employees,
setting goals is an alternative to this issue. They provide a vision of what has to be
achieved in order to succeed. As Sterne (2010) mentions that goals keep you focused
and help answering questions like “Are we there yet? Are we still going in the right
direction?”

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Paine (2009) emphasizes that in order to measure a result, specific goals should be
defined and depending on the goal, different measurement types should be used. If
improvement of relationship with customers or reputation of the company is the
goal, then “relationship scores, recommendations, positioning and engagement”can
be measured. On the other hand, if sales are the objective, “engagement index, cost
per customer acquisition, web analytics, sales leads and marketing mix modeling” can
be measured. It is ought to be discussed in the results section what are respondents
actually measuring in terms of online communication.

Sterne (2010) believes that there are 3major goals in business, which are relevant in
the long run: (1) increased revenue, (2) lowered costs and (3) improved customer
satisfaction. Lim (2010), in agreement with Sterne, mentions the following concepts
that could be considered online communication goals: “increase brand awareness,
increase sales, educate and inform customers, improve customer service, monitor
brand recognition”. Having a great product that you market online is not asefficient
as having a brand that your customers are talking about. A brand is a “name, term,
design, symbol, or any other feature that identifies one seller's good or service as
distinct from those of other sellers” (Ama.org, 2014).

Branding has been constantly put in connection with social media marketing. A brand
that stands out means an idea which customers will talk about and share. Therefore,
it is relevant to have a brand that is authentic, up-‐to-‐date, easy to understand, easy
to share, distinct from others, accessible, consistent across all social media platforms
used and it should give the customer the feeling of being heard. All these
characteristics will lead to brand awareness and consequently to loyal customers.
Nevertheless, it is not enough to create a strong brand without keeping an eye on the
reputation, also called brand monitoring. Increasing sales whilst keeping the costs as
low as possible is what defines any business and the tourism and hospitality industry
is not an exception to the norm. “If the things you are measuring cannot be connected
back to income, then you need to be very clear of why you are taking the time to
measure them. […] As soon as you connect the dots to arrive at income, everybody
knows what you are talking about and has a standard, consensual means of evaluating
the righteousness of your social marketing programs” (Sterne, 2010).

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Social media is indeed a cost effective way of enlarging your customer range, monitoring
your brand and improving the customer’s satisfaction. Therefore, making revenue should
not be the only concern addressed, but should also include lowering marketing costs.
Additionally, the shift from a product concentrated business to a customer concentrated
business has been more visible in the past years. It is crucial to have satisfied customers,
and then to increase revenue and lower costs through this approach. The more a
company informs and educates its customers, the more the customer service will
improve and the better the business will run.