Tourism Industry: A Good Reputation Matters

Vacationers prefer trustworthy agencies

A good reputation pays off for any tour agency. This is the central conclusion of a study conducted by Leuphana University of Lüneburg.  According to the study, vacationers prefer to book their travel with businesses that are perceived as trustworthy, competent and consumer-friendly because they score especially high on customer review websites in other words, Eric Horster, the Lüneburg tourism expert and former fellow at the Innovation Incubator, warns tour operators, however, against using fake internet reviews to improve their image: these deceptions are easily detected and can ruin a business’ reputation for years to come. 

In the past consumers typically made their decisions based on a handful of test reports and a single business conversation, today consumers are guided increasingly by the evaluations of other customers. These are located either directly on the business’s homepage or can be found through various price search engines.  A product’s, or even an entire business’s reputation is an increasingly decisive factor in purchase decisions. The travel industry is no different, especially given that travel portals offer travelers the opportunity to evaluate hotels, vacation spots or even the tour operator.  These reviews have a direct influence on the tour company’s reputation. “Reputation has in turn a very strong influence on the consumer’s decision whether to make a booking with a particular business or not,” Eric Horster stressed. 

Horster knows what he is talking about. Working with the marketing research firm eResult, he collected data from over 3,000 travellers to investigate the relationship between a tour operator’s reputation and the likelihood consumers would book a trip with them. 

The participants were asked to look at different internet sites offering hotel rooms or travel destinations, several of which included reviews made by other travelers. Afterwards they were asked to evaluate the websites on a sliding scale:  How risky did they think it was to book a trip with each site?   How high did the potential customers rate the response of the tour operator to travelers’ complaints?  How closely did the internet descriptions correspond to reality? Finally, the survey participants were asked whether they would take a given offer and recommend it to others?

The result: In deciding to book a vacation, survey participants focused not only on the quality of the offer, but also on the “soft” factors such as the trustworthiness or customer orientation of the provider.  Potential customers even considered how the travel agency treated its employees: operators who had a bad reputation in this regard scored lower both in terms of potential customers or recommendations to friends.

Tour operators should not underestimate the importance of their online reputation, Eric Horster stressed. He warned business against bolstering their reputation by dishonest means.  There have been cases in which travel operators wrote up their own positive testimonials for online review sites  “There are in the meantime many examples of such deceptions being exposed.” Many websites now let users report reviews that seem questionable.  “If a user considers an online testimonial to be fake, he now can indicate that on the web page,” Horster explained.  The repercussions could be fatal:  “The reputation of a provider can sustain serious damage –often for years to come.” 

His recommendation to the tourist industry: Respond promptly and openly to customer complaints.  “If a tour operator takes customer complaints seriously, the word gets around, --thanks to the internet’s ever increasing speed.”