- By improving how customer feedback is used, the UK hospitality & leisure industry could boost the UK economy by £3.2bn over the course of the next decade
- Managing customer feedback will become increasingly important. 59% of consumers say that online feedback already helps them in determining where they visit and 45% are more likely to leave a review today compared to 18 months ago
- Younger consumers use reviews the most, with 70% of millennials saying that they play a role in their decision making
- Businesses value feedback with nearly 60% reporting a boost to trade as a result of feedback left by customers
Improving how the UK hospitality and leisure sector manages and responds to customer feedback could contribute an additional £3.2bn to the UK economy over the course of the next decade finds the Barclays Feedback Economy report. A more successful hospitality and leisure sector has the potential to add an extra £2bn to the UK economy with the impact on the sector’s large supply chain contributing a further £1.2bn.
This economic benefit will be achieved by improving how businesses such as hotels, bars, restaurants, travel businesses, health spas, sports clubs and cinemas monitor, manage and respond to customer feedback. Putting processes in place to better manage customer feedback will create a more responsive sector, attracting more overseas tourists and encouraging domestic visitors to stay longer and spend more, increasing spend per head and benefitting the sector’s wide supply chain.
Mike Saul, Head of Hospitality and Leisure at Barclays, said:
“The rise of feedback sites has been a disruptive force within the hospitality industry over the past decade. Our research reveals that those working in the UK hospitality and leisure industry feel that these faster, easier and simpler feedback mechanisms are a good thing for the industry – resulting in more agile businesses better able to serve the evolving needs of consumers.
“However, there is even more that the hospitality industry can do to capitalise on this opportunity. Our research shows that being more responsive to customer feedback could increase the value of the UK hospitality and leisure industry to the wider economy by more than £3 billion over the next decade.”
Leaving feedback – a growing trend
UK consumers are more likely to use and leave feedback than ever before. Barclays’ survey reveals that three fifths (59%) of UK consumers state that reading other people’s reviews plays an important role in helping them decide where to visit or stay. This rises to 70% amongst 25-34 year olds.
Millennials are also significantly more likely to cite online customer reviews as being very important in determining which hospitality and leisure services to use. Close to a third (29%) of 18-24s and (27%) of 25-44s rated online reviews as one of the three most important factors influencing their decision on where to stay – alongside more traditional factors such as value for money and customer service, as opposed to 18% of the over 65s.
In addition, nearly half (45%) of all British consumers are more likely to leave a review today than just 18 months ago, citing factors such as ease of access through smartphones (42%) or awareness of the importance of reviews (33%). This means that businesses need to put processes in place to avoid being left behind by customer expectations over time.
Businesses see the value of feedback
A majority (82%) of the hospitality industry say that feedback has been beneficial for their business and two thirds (68%) think it has been beneficial for the sector as a whole.
Businesses also believe that feedback is leading to more trade – 57% are able to explicitly credit online customer feedback with increasing trade, reporting an average 12% improvement in customer numbers over the past 18 months.
Businesses are deriving a range of benefits from online feedback such as more repeat business (63%) or the identification of issues within the business (61%). However, the majority (63%) of businesses are not currently managing feedback in the long term or maintaining records in a formal Customer Relationship Management system.
Moreover, two thirds of the hospitality and leisure industry (66%) expect the importance of online feedback websites to increase over the next 18 months. In response, 73% of businesses plan to make changes over the next five years. More than a quarter (27%) will be investing in specialist staff training to manage customer feedback, close to a quarter (22%) expect to appoint a dedicated staff member or team and 13% anticipate working with an external consultancy or specialist feedback management agency.
TripAdvisor is the most relevant
Our survey of those working within the hospitality and leisure industry revealed that overall, TripAdvisor was seen to be the most relevant online feedback site, with 60% of respondents citing the website as being relevant to their business.
The traditional route of professional reviews in guidebooks is in decline, seen as relevant by less than one quarter of the sector (23%). Professional reviews by newspapers and magazines fare better, rated as relevant by a third (33%) of the sector, rising to nearly half of bars and pubs (46%).
Intermediary sites such as Booking.com and OpenTable are also already seen as increasingly important in driving trade, with a majority (67%) of all hotels and B&Bs and 28% of restaurants rating these sites as relevant to their business. By contrast health and beauty spas are more likely to cite reviews placed directly on their own website (57%) or on Google (43%) rather than to third party websites as helping to drive customers to their businesses.
The Barclays Feedback Economy report was produced by Barclays in collaboration with economics consultancy Development Economics and a bespoke survey on UK consumer and B2B attitudes towards customer feedback by Opinium Research. The report is based on a proprietary economic model to provide a perspective on the potential benefits of the UK hospitality and leisure industry increasing investment into the management of online feedback above current predicted levels of investment.
The report is based on modelling the economic contribution of the hospitality and leisure sector to the wider economy through Gross Value Added (GVA). The key findings within the report are based on a scenario which assumes continued increase in the use of feedback websites by consumers and a matching rise in the management of feedback by business, resulting in a more responsive sector, better aligned to customer expectations.
The research is supplemented by insight from Opinium Research into attitudes by UK adults (18+) and B2B decision makers in the hospitality and leisure industry. The total sample size was 2006 UK consumers and 541 B2B decision makers. Consumer fieldwork was undertaken between the 19th of February and 22nd of February, B2B decision maker fieldwork was undertaken between the 19th of February and the 16th of March 2016. Fieldwork for both studies was conducted online.