Northern Ireland could share in the benefit from the ‘Feedback Economy’ – a £3.2bn opportunity for the UK hospitality & leisure industry
Graeme MacLaughlin, Relationship Director, Barclays Northern Ireland.
Improving how the UK hospitality and leisure sector manages and responds to online customers could contribute an additional £3.2bn to the UK economy over the course of the next decade finds the Barclays Feedback Economy report, as a more customer-responsive sector will attract more visitors, increase spend per head from its customers and have wider supply chain benefits.
In Northern Ireland, business owners recognise the value of customer feedback to the success of their business with almost three quarters (75%) able to explicitly credit online customer feedback with increasing trade, compared to 57% nationally.
At a national level, over the course of the next decade, a more successful hospitality and leisure sector has the potential to add an extra £2bn to the UK economy with the impact on the sector’s large supply chain contributing a further £1.2bn.
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 visitors and encouraging domestic visitors to stay longer and spend more.
Businesses in Northern Ireland see the value of feedback
A majority (84%) of the Northern Ireland hospitality industry say that feedback has been beneficial for their business and three quarters (75%) think it has been beneficial for the sector as a whole. 67% of the sector in Northern Ireland say that on the whole published customer feedback attracts more customers than it puts off and report an average 17% improvement in customer numbers over the past 18 months
Local businesses are deriving a range of benefits from online feedback such as more repeat business (50%) or the identification of issues within the business (75%). However, the majority (75%) of businesses are not currently managing feedback in the long term or maintaining records in a formal Customer Relationship Management system.
In addition, more than four fifths (83%) of the hospitality and leisure industry in Northern Ireland expect the importance of online feedback websites to increase over the next 18 months. In response, 50% of the industry plan to make changes to their businesses over the next five years. More than a third (33%) will be investing in specialist staff training to manage customer feedback, close to a fifth, (17%) expect to appoint a dedicated staff member or team and 8% anticipate working with an external consultancy or specialist feedback management agency.
Graeme MacLaughlin, Relationship Director, Barclays in Northern Ireland, said “It’s really encouraging to see that the majority of businesses (84%) in Northern Ireland say that customer feedback has been beneficial for their business. The use of feedback by customers is not only a growing trend, but a potentially incredibly valuable source of information for the business community. With 83% of businesses across Northern Ireland anticipating that not only will feedback become more important in its own right, but that it will also become more important to manage that feedback, businesses across the region would do well to consider their options and capability now.
“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 local 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. Our survey reveals that three fifths (59%) of UK consumers state that reading other peoples’ reviews plays an important role in helping them decide where to visit or stay. This rises to 70% 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%) of 18-24s and (27%) of 25-44s rated online reviews as one of the three most important factors influencing their decision as to where to stay – alongside more traditional factors such as value for money and customer service, as opposed to 18% of the over 65s.
In addition, nearly half (45%) 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%) or awareness of the importance of reviews (33%). This means that businesses need to put processes in place to avoid being left behind by customer expectations over time.
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% 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%). Professional reviews by newspapers and magazines fare better, rated as relevant by a third (33%) of the sector, rising to nearly half of bars and pubs (46%).
Intermediary sites such as Booking.com and OpenTable are also already seen as increasingly important in driving trade, with a majority (67%) of all hotels and B&Bs and 28% 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%) or on Google (43%) rather than to third party websites as helping to drive customers to their businesses