Are you in the tourism industry? Or are you planning a vacation? If you said ‘yes’ to either (or both), chances are you’re intimately acquainted with online travel agencies and review sites. They’re central to the leisure travelers’ decision journey – and frankly, they’re rife with potential pitfalls.
Before we dive in, here are two things to consider about the average leisure traveler.
- They’re worriers: Almost 70% of leisure travelers have anxiety around whether they’re making the best possible decision when booking their trip. (The trip is often the traveler’s largest annual discretionary purchase and that results in enormous FOMO).
- They trust reviews online: More people trust “reviews or opinions posted online, when making a decision” than advertising, company websites, or brand social accounts.
Online travel agencies (ex. Expedia, Orbitz, Priceline, Travelocity, Trivago), review sites (ex. Yelp, Trip Advisor), and recommendation sites (ex. Fodors) all overlap in some way – and are central to the process of buying and selling tourism related products.
Consumers rely heavily on review sites – and that reliance translates directly into dollars and cents for businesses. We know that the recommendations on these sites can really sway what visitors decide to do. A University of California at Berkeley study showed that a half-star increase on Trip Advisor resulted in a 13% - 34% increased chance in a dinner-time sell-out for a restaurant. Similarly, a Harvard study showed that a 1-star increase could improve revenues by up to 9%.
For business owners, you need to be visible on these sites and have great ratings. For advertisers, getting your message on Trip Advisor means you’re getting in front of people who are very likely interested in travelling. And for consumers, you’re getting some assurance that you’d otherwise have trouble getting. It feels like a win-win-win.
But with so much riding on this, how are the ratings developed? And is the data actually that reliable?
The answer, worryingly, is that the ratings and offers aren’t really that reliable, for many reasons:
- Very few people write reviews. And those who do, tend to fit certain demographics: In some studies (related across industries), it’s been found that only about 1.5% of people write reviews regularly. Other studies have found that about 35% of Americans have written an online review about a product or service at least once. The people who DO provide reviews tend to over-represent certain segments of the population. For instance, Yelp’s average reviewer skews female, are significantly more likely to have attended college or grad school and are much wealthier than the average person. That’s not to say that their intentions are nefarious – merely that there’s a bias that the reader ought to consider (ex. one person’s “affordable” meal may be another’s weekly grocery budget).
- When people write reviews, they tend to be on the extremes: Most people are prone to write reviews only if things are extraordinarily good or tremendously bad. This inverted bell curve means that outliers can skew results dramatically, particularly if there’s a small sample size.
- Reviews with no experience: While the numbers are difficult to verify, one study has shown that about 5% of product reviews are submitted by people who have not purchased the product. Bots and paid comments are rife within the tourism industry, though the sites have been working diligently to stay ahead of them for ages. We also know that there are often errors made in providing reviews. For instance, many hotels get “poor service” ratings because of issues customers had in (unaffiliated or affiliated) restaurants in the building. Skepticism is warranted.
The Sites: Online travel agencies are businesses that make their money through advertising and/or booking fees (which often reach 15% or higher). They’re incented to entice certain behaviours from the users. That has led to two potential issues:
- False claims: While it’s been difficult to prove, there have been many studies, including an investigation of Bookings.com and Expedia.com (which owns Trivago and Hotels.com) by the UK’s Competition and Markets Authority, in which the Authority claimed the sites seek to "create a false impression of room availability" and "rush customers into making a booking decision.”
- “Glitches” happen: Recently, a lodge near Victoria, BC found that Expedia had been listing their property as ‘sold out’ for 2-years, even though they had rooms available. While Expedia says it was a “glitch”, the owners of the lodge imply that it was intentional because they’d chosen not to pay extra fees for the promotion of their site (while some of their competition in the area had).
So what do we recommend?
If you’re a consumer heading away on your much-needed vacation, just keep your head. Check out multiple sources and reviews before relying too heavily on any one endorsement. Don’t be too swayed by the hard-selling tactics. Other deals will come up. You may also want to simply pick up the phone and call the hotel or restaurant you’re considering. You could find that you can get a more suitable offer and you can ask a human for the answers you seek.
If you’re a tourism-related business, you have to be present on these sites. It’s where your customer is and they’re far enough down the decision journey to be ready to make some choices about travel. If you’re providing a great service, your rating will likely reflect that. When you know a customer has particularly enjoyed their experience, ask them to give you a positive review; it could make a huge difference.
And, if all else fails – agree to disagree. Sometimes, one person’s dream vacation is another’s nightmare – as was brilliantly captured in this ad for a ski resort, celebrating their 1-star rating.