eWOM Marketing in Hospitality Industry

Introduction

While planning to visit an unfamiliar place and need to avail hospitality services there, a tourist will definitely think about how to make a decision of an accommodation unit. He may seek help from his friends, check out a travel agency, or perhaps do an exploration on internet. All these strategies have in common is that people often seek the advice of others as part of their decision-making. Through recommendations or warnings obtained from friends or family members, Word-of-Mouth provides the opportunity for potential customers to learn about the positive and negative aspects of services offered by certain organizations before an actual purchase takes place.

Word of Mouth (WOM) has been described as person-to-person oral communication between a receiver and a communicator, whom the receiver perceives as non-commercial, regarding a brand, organization, product or service (Arndt, 1967). It represents the power of personal referral on consumer decision-making. The advance into the internet age has brought some changes to this description. For instance, the presence of virtual WOM in bulletin boards is not face-to-face, oral and ephemeral. This form of WOM is usually referred as (Internet) iWOM or (electronic) eWOM in numerous studies.

The internet has transformed the way information flows across social circles and customers can use it to gather, distribute and publish information (Cakim, 2010). Virtual communities are becoming very influential in the hospitality business. The consumers trust their peers rather than marketing messages and therefore people exchange ideas/experiences through media channels. A virtual travel community makes it easier to obtain information and make decisions. By creating an understanding of these communities and their users, hospitality businesses can facilitate consumer centric marketing or relationships (Buhalis & Laws, 2008). Some types of e-Word of Mouth connect one consumer with another consumer, such as emails. Other marketing channels connect one consumer to wide range of consumers, such as web pages. E-mail and instant messaging is an asynchronous, one-to-one medium. The advantage of eWOM marketing is that it gives possibilities to create mailing lists and does not correlate with e - mailing costs. Once a list is obtained, it becomes a highly efficient means of communication between a hospitality provider and its past and potential guests.

However, recent increase of m - commerce and development of cheap and easy smart phone technology appears the next stage of electronic word of mouth (eWOM) to share hospitality experiences. With the rise of internet, visitors are using internet to talk about their brand experience on practically every available website. People do blog, write reviews on brands’ or even independent websites; flushing their experiences they had with a certain product or service, a type of discussion also called as electronic word of mouth (eWOM). One form of Electronic Word-of-Mouth (eWOM) is online reviews generated by internet users regarding travel destinations, hotels, and tourism services, which has become an important source of information for decision making for other travelers (Pan, Mac Laurin, & Crotts, 2007).

Tourism industry is spending an increasing effort to monitor the eWOM in digital business environments, in order to respond to messages collected from customers shared on internet. These data are used to improve products and services, monitor brand image and competitors and adapting marketing strategies (Litvin et al., 2008). Some companies even have positions not only to monitor the shared content but also to manipulate eWOM to generate revenues, by creating and spreading positive WOM, and reinforcing existing desirable opinions.