The Implications of Social Media on Customer Relationship Management and the Hospitality Industry

Abstract

With the emergence of social media, consumers now have more control over how information is generated, created, organized and shared (Trackeray et al. as cited in Zhang, Mattila, & Cranage). Consumers use new media to participate in social networks, which enables them to create and share content, communicate with one another, and build relationships with other consumers (Hennig-Thurau et al., 2010, p 312). As consumers today spend a lot of time creating user generated content and posting it on the Internet, it behooves the business community, and hotels specifically, to take note and keep track of what is being done in order for them to market themselves correctly. While travel consumers in the past relied heavily on travel journalism and traditional media to help guide them to the best places to go and the most exciting things to do, the Internet has now taken over that role as information provider (O’Connor, 2008). According to the US Travel Association, the Internet was used by approximately 90 million American adults to plan travel during 2008 with 76% of those people using it for planning leisure trips (USTA, 2009). A 2010 study published by Deloitte titled ‘Hospitality 2015’ states that social media and new technology trends will play the key role over the next five years towards the growth in the hospitality industry; the study further points out that with millions of consumers having internet access around the globe, that the study’s numbers are expected to increase by 50% in 2015 (as cited in Lee, 2010, p 7). Given the potential impact of social media on online tourism, knowledge about the role of social media in travel information search is important in order to better inform tourism marketing practices (Fesenmaiser, 2007; Gretzel, 2006; Xiang & Gretzel, 2010, p 181). Social media is changing the ways that business are going about marketing themselves to their consumers, as it forces a rethink of traditional marketing methods. 81% of surveyed executives expect to increase investment on social media projects and reduce traditional marketing (Value of Social Media, 2010 as cited in Zhang et al., 2011). Moving through this paper, we will look at past literature and use it to break down the effect that social media has had customer relationship management and on marketing for hotels specifically. No