kelly mcguire - hsmai europe
TRANSCRIPT
Copyr igh t © 2014 , SAS Ins t i tu te Inc . A l l r i gh ts reserved .
KELLY MCGUIRE, EXECUTIVE DIRECTOR, HOSPITALITY AND TRAVEL GLOBAL PRACTICE, SAS
BREFFNI NOONE, ASSOCIATE PROFESSOR,
THE PENNSYLVANIA STATE UNIVERSITY
PRICING IN A SOCIAL WORLD
Copyr igh t © 2014 , SAS Ins t i tu te Inc . A l l r i gh ts reserved .
@bigredkelly
CONSUMER DECISION MAKING PROCESS
DEMAND
COMPETITOR PRICE
YOUR PRICE COMPETITOR PRICE
YOUR PRICE
REVENUE MANAGER CONSUMER
VALUE
Copyr igh t © 2014 , SAS Ins t i tu te Inc . A l l r i gh ts reserved .
@bigredkelly
PRICE & NON-PRICE INFORMATION AT THE POINT OF PURCHASE
VALUE?
Copyr igh t © 2014 , SAS Ins t i tu te Inc . A l l r i gh ts reserved .
@bigredkelly
ASSESSING VALUE: HOW DO CONSUMERS CHOOSE?
HOTEL BRAND
REVIEWS Sentiment, Content, Language
TRIPADVISOR RANK AGGREGATE RATING
AMENITIES CLASS OF SERVICE
LOCATION
PRICE
STUDY DEMOGRAPHICS: THE LEISURE TRAVELER
49% 51%
Average Age
49.3
1-5
6+
72%
28%
Trips per year
Book online more than 80% of the time
54% 55% Read Reviews
Influenced by Reviews
65% :
Copyr igh t © 2014 , SAS Ins t i tu te Inc . A l l r i gh ts reserved .
@bigredkelly
LEISURE TRAVELER STUDY: KEY TAKEAWAYS
LEISURE TRAVELER
Reviews Cri*cal Nega%ve reviews remove you from
the Leisure Travelers choice set. 1
2
3
Price Important Price becomes a factor when all
else is equal for Leisure Travelers.
Ra*ngs Influence It can’t just be OK – it has to be great
for Leisure Travelers to no%ce.
Copyr igh t © 2014 , SAS Ins t i tu te Inc . A l l r i gh ts reserved .
@bigredkelly
Copyr igh t © 2014 , SAS Ins t i tu te Inc . A l l r i gh ts reserved .
@bigredkelly
LOYALTY PROGRAM MEMBERSHIP: BUSINESS TRAVELER
Loyalty Program Brand% with card
Preferred Brand
Club Carlson 15% -‐Hilton HHonors 67% 34%
Hyatt Gold Passport 38% 12%IHG Rewards Club 21% 11%
Kimpton Hotels: InTouch Rewards 6% 2%Marriott Rewards 59% 29%
Starwood Preferred Guest 29% 7%Wyndham Rewards 18% 7%
I do not have any hotel rewards cards 8% -‐
2.38 Average cards held
Belong to non-brand program
45%
Copyr igh t © 2014 , SAS Ins t i tu te Inc . A l l r i gh ts reserved .
@bigredkelly
LOYALTY BEHAVIOR TOWARDS PREFERRED BRAND: BUSINESS TRAVELER
Actual Stay Behavior %I did not stay with my preferred brand 3%
Less than 25% of the time 13%25% to 49% of the time 32%50% to 74% of the time 36%
75% to less than 100% of the time 13%100% of the time 4%
HOW LOYAL
DO THEY FEEL?
HOW LOYAL
DO THEY ACT?
4.68 ON A 7 POINT SCALE
OVER 12 MONTHS
STUDY DEMOGRAPHICS: THE BUSINESS TRAVELER
34% 66%
Average Age
39.6
6-10
11+
47%
53%
Trips per year
Stayed 2+ nights per trip 93%
88% 80% Read Reviews
Influenced by Reviews
Copyr igh t © 2014 , SAS Ins t i tu te Inc . A l l r i gh ts reserved .
@bigredkelly
STUDY DEMOGRAPHICS: THE BUSINESS TRAVELER
Primary Industry % Communications, entertainment & media 5% Education 10% Energy & natural resources 5% Financial Services 11% Government/Public sector 4% Healthcare, pharma & biotech 6% IT & technology 18% Manufacturing 11% Professional Services 18% Retail/Wholesale 8% Transportation 4%
Copyr igh t © 2014 , SAS Ins t i tu te Inc . A l l r i gh ts reserved .
@bigredkelly
ATTRIBUTE IMPORTANCE
1. Review Sentiment 2. Price 3. Rating 4. TripAdvisor Rank 5. Brand
1. Review Sentiment 2. Brand 3. Rating 4. Price 5. Review Language
BUSINESS LEISURE
VALUE BY ATTRIBUTE LEVEL
Review Tone [Negative]*
Price [$195 -‐ $235]*
Price [$235 -‐ $295]
Rating [2.8 – 3.5]*
Rating [3.5 – 4.8]*
Review Content [Physical]
Review Language [Descriptive]*
Ranking [Low -‐ Mid]
Ranking [Mid -‐ High]
Brand [Unknown -‐ Known]*
Brand [Known -‐ Preferred]*
-‐0.5 -‐0.4 -‐0.3 -‐0.2 -‐0.1 0 0.1 0.2 0.3 0.4
Copyr igh t © 2014 , SAS Ins t i tu te Inc . A l l r i gh ts reserved .
@bigredkelly
ASSESSING VALUE
Positive + Preferred Brand + 2.8 + $195 + Descriptive = 0.87
Positive + Preferred Brand + 4.8 + $195 + Descriptive = 1.52
Positive + $195 + High Rank + 4.8 + Known Brand = 1.95
Positive + Preferred Brand + 4.8 + $295 + Descriptive = 1.25
Positive + $295 + High Rank + 4.8 + Known Brand = 0.46
Negative + Preferred Brand + 4.8 + $195 + Descriptive = 0.69
Negative + $195 + High Rank + 4.8 + Known Brand = 0.01
Positive + Unknown Brand + 4.8 + $195 + Descriptive = 0.91
BUSINESS TRAVELER LEISURE TRAVELER
Copyr igh t © 2014 , SAS Ins t i tu te Inc . A l l r i gh ts reserved .
@bigredkelly
Copyr igh t © 2014 , SAS Ins t i tu te Inc . A l l r i gh ts reserved .
@bigredkelly
BUSINESS TRAVELER STUDY: KEY TAKEAWAYS
Reviews Ma9er Business Travelers want to know what their experience will be.
Loyalty Ma9ers Business Travelers will put up with good enough for points.
Price Ma9ers Business Travelers s%ll recognize a good deal.
1
2
3
BUSINESS TRAVELER
Copyr igh t © 2014 , SAS Ins t i tu te Inc . A l l r i gh ts reserved .
@bigredkelly
LEISURE TRAVELER VS. BUSINESS TRAVELER
Reviews Ma9er Business Travelers want to know what their experience will be.
Loyalty Ma9ers Business Travelers will put up with good enough for points.
Price Ma9ers Business Travelers s%ll recognize a good deal.
1
2
3
LEISURE TRAVELER BUSINESS TRAVELER
1
2
3
IMPACT OF USER GENERATED CONTENT ON PURCHASE DECISIONS
KELLY MCGUIRE & BREFFNI NOONE
Reviews Cri*cal Nega%ve reviews remove you from
the Leisure Travelers choice set.
Price Important Price becomes a factor when all
else is equal for Leisure Travelers.
Ra*ngs Influence It can’t just be OK – it has to be great
for Leisure Travelers to no%ce.
THANK YOU!
@BIGREDKELLY
The Analytic Hospitality Executive Blog: blogs. sas.com/content/hospitality
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