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Social Media Data and Revenue Management. How their interaction can provide benefits to the Hotel Industry
Language: English This thesis is written in English
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Author
Ania Venanzio, Università degli Studi di Palermo, 2016
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Ania Venanzio
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Academic area
Economics
Abstract
When social media appeared, not everybody immediately understood their relevance: some are still sceptical today, others learned how to use them in the following years and took actions.
Establishing a presence in the social media sphere as a brand means to be exposed and to dialogue with users, as well as listening to criticisms, create value with followers and build communities, which can contribute to enhance the brand’s image and identity and hopefully lead to customer loyalty, which is paramount.
Peer-to-peer communication is one of the most deep-rooted changes in the communication process brought about by Web 2.0: a firm cannot use a top-down communication paradigm on Twitter or Facebook.
Because of the above outlined elements, Social media have been adopted by a group of organizations’ integrated marketing plans, with the aim to produce a customer- focused message. Everyday, people buy things that are relevant to their needs: this certainly applies to the hospitality industry as well.
Through the evolution of revenue management, over the years hotels have developed a system of techniques and actions, leading to an overall optimization of the results. The objective of revenue management is selling the right inventory unit to the right type of customer, at the right time and for the right price (Kimes, 1989). This is made possible thanks to information tools, which allow to plan pricing and sales strategies in order to maximize profits on one hand, whilst conquering a specific market share on the other.
The purpose of this research is to investigate the interactions between social media and revenue management.
Both fields share the multi dimensional, multifaceted and perennially evolving human relations and needs: while social media give voice and amplify them, revenue management tries to pick them up and abstract valuable data, in order to meet customers’ need as accurately as possible.
The first chapter is an overall view of revenue management, starting from its origins in the airlines industry to its application on hotel industry. The chapter outlines tools and practices, also focusing on the pivotal issue of customer segmentation, to identify and manage distribution channels and be able to elaborate forecast to anticipate customer behaviour.
The second chapter is a comprehensive picture of the social media sphere, also analysing digital marketing features and subsequent social media marketing, the journey of customer engagement process and the new social media mindset, the dialogue entailed by social media networks and how brands’ objectives evolves around and through them.
The third chapter outlines the several point of views of social media and hotel revenue management to investigate the role of revenue manager as a function in the social media picture. From how social media can impact revenue outcomes, to how revenue management can leverage social media data proliferation and take social media - related opportunities – from a short and long-term perspective- and social media management ownership within the hotel departments.
The fourth and last chapter describes and analyses the implementation of social media strategy and management within the revenue management department of a 5 stars luxury international chain hotel located in Palermo, Sicily. It starts with a contextualisation of the property, its concept and business environment. The analysis has been conducted on the perception of the impact of social media strategy on ROI, on which departments deal with social media data and strategy and how strategic and operational decisions are made.