The influence of online reviews for hotels and other tourism businesses on the purchase decision has been accepted for some time.
Less known however is the financial impact of a bad review or, lack of response from a business to a negative review.
A study from Barclays entitled the Feedback Economy puts it a different way. UK firms could stand to gain more business and therefore more revenue by recognising the growing power of online reviews and dealing with them appropriately.
The company has put some figures on how much this could be worth in the next 10 years.
Barclays has looked at the potential growth of the hospitality sector and says economic modelling shows that a rise in the use of feedback sites by consumers, combined with the sector becoming more responsive on these sites, would be worth an additional £3.2bn to the economy.
The report says:
“Our model is based on sector growth forecasts for economic output (GVA) for the period 2015 to 2030. The baseline forecast, which assumes business-as-usual in regard to business and consumer behaviour, predicts that GVA will grow by an average of 2.6% over the next 10 years.”
It goes on to say that “greater responsiveness to the increase in feedback” means GVA could grow by an additional 0.07% annually.