Hospitality industry slow to adopt the internet and ecommerce
21 March 2012
Survey – Hospitality industry slow to adopt the internet and ecommerce
A survey of the Australian hospitality industry shows that although the boom of online, ecommerce and digital media are well on their way to being powerful business strategies, the hospitality industry is still wary of online business and ecommerce.
The survey conducted by GoHospitality.com.au of more than 850 businesses highlighted that almost a third of the respondents don’t have a website for their business and more than 52 percent do not feel the need to buy or sell any products or services online.
The survey revealed that many businesses in the hospitality industry have been reluctant to adopt an online business strategy.
The survey, however, did show an increase in interest toward the utilisation of online marketing. Although more than half of those surveyed do not use the internet to buy or sell, 82 percent stated they would begin to engage in online buying and/or selling in the future.
Additionally, while 85 percent of business owners surveyed believe that a website is important for their business, a quarter of them do not believe their customers find them online. Furthermore, more than one fifth of business owners in the hospitality industry believe they are unaffected by the internet and mobile commerce.
GoHospitality.com.au Account Manager Kylie Tabrett said, “Although there is indication of attitude changing towards the internet and digital strategies in the hospitality industry there is still very little action going on. Although the internet is the preferred source of information for the hospitality industry their actions just aren’t matching their needs.”
“There seems to be something stopping business owners in the hospitality industry from integrating more with the internet. More than half of those surveyed claimed not to shop online for hospitality products and yet 96 percent believe it’s a viable channel – it’s very contradictory,” said Ms Tabrett.
When business owners were questioned about the internet and an increase to global competition via online businesses and ecommerce:
· Just over one third did not believe the internet helped their business to compete globally in any way.
· 73 percent do not believe their business will be negatively affected by customers going online to shop with overseas suppliers.
· One fifth were unsure whether or not their website helped them to compete with global competition.
“Although businesses in the hospitality sector appear confident about global competition only 26 percent surveyed said their business can compete with overseas pricing. The majority stated they believed they could only sometimes compete,” said Ms Tabrett.
Almost 40 percent of business owners shop online from overseas businesses with 86 percent of those online shoppers claiming to have saved money.
“We see business owners in the hospitality industry shopping online because it saves them money and yet those same business owners are claiming they do not believe their customers will go the same way,” said Ms Tabrett
Australian made products were said to be much more expensive with 74 percent of the surveyed business owners stating overseas products were cheaper but when questioned on quality vs. price 57 percent were confident that their customers would opt for quality even if it meant spending more money.
However, when asked whether the business owners themselves would opt for Australian made over price just over half stated they would in fact go with the cheaper option.
Ms Tabrett said, “The flood of coupon sites offering discount deals in accommodation, dining, and entertainment are signs that the industry is responding to a competitive local market with price conscious consumers. Naturally, businesses are branching out overseas to buy cheaper supplies in order to compete and increase profitability.”
“In addition to leveraging the internet to source products for their business, it seems the hospitality industry is yet to realise the real potential of the internet as a tool to future-proof their business and build on the engagement and loyalty of each customer. Otherwise a discount will trump quality every time,” said Ms Tabrett.
Business and non-business owners in the hospitality industry were surveyed about the effects of major issues in their sector including financial, environmental issues and cost of resources.