UK Hotel market could be missing out on a £3.2bn opportunity, suggests recent report

Posted in Business, News on 24 May, 2016

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.

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 per cent) 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 per cent 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 per cent) of 18-24s and (27 per cent) 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 per cent of the over 65s.

In addition, nearly half (45 per cent) 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 per cent) or awareness of the importance of reviews (33 per cent). 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 per cent) 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 per cent are able to explicitly credit online customer feedback with increasing trade, reporting an average 12 per cent 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 per cent) or the identification of issues within the business (61 per cent ). However, the majority (63 per cent) 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 per cent ) expect the importance of online feedback websites to increase over the next 18 months. In response, 73 per cent of businesses plan to make changes over the next five years. More than a quarter (27 per cent) will be investing in specialist staff training to manage customer feedback, close to a quarter (22 per cent) expect to appoint a dedicated staff member or team and 13 per cent 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 per cent 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 per cent). Professional reviews by newspapers and magazines fare better, rated as relevant by a third (33 per cent) of the sector, rising to nearly half of bars and pubs (46 per cent).

Intermediary sites such as and OpenTable are also already seen as increasingly important in driving trade, with a majority (67 per cent) of all hotels and B&Bs and 28 per cent 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 per cent) or on Google (43 per cent) rather than to third party websites as helping to drive customers to their businesses.

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