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International Journal of Research
Available at https://edupediapublications.org/journals
e-ISSN: 2348-6848
p-ISSN: 2348-795X
Volume 04 Issue-17
December 2017
Available online: http://edupediapublications.org/journals/index.php/IJR/ P a g e | 3893
Impact of Digital Marketing on Hospitality Business Performance
Sree Vinnakota
Lecturer Tourism and Hospitality Academics Australasia Polytechnic
Abstract:
The service sector contributes to the overall GDP
of the country as this sector holds significant place. The
research paper is based on studying the impact of Digital
marketing on hospitality business performance. The
analyst has considered surveying 200 employees of the
hospitality sector in Australia that are questioned by the
help of online survey via Likert scale questionnaire. The
results have explained a positive impact of digital
marketing on hospitality business performance because it
has affected the marketing activities of the firm and also
results in increasing frequent customer visits. This has
also helped in building a favorable image of the business
and also boosts sales level.
Keywords
Marketing, Hotels, Media, performance
1. Introduction
The recent information technology surge and its
easy accessibility to common people have instigated every
business organization or sector to shift towards digital
paradigm. According to Leeflang, et al. (2014), the dawn
of internet has redefined the marketing conventions across
the world. On the contrary, Çizmeci & Ercan (2015) stated
that the internet has completely transformed the way
consumers used to engage with a brand. The Internet has
revolutionized the marketing economics and has made the
traditional marketing arrangements superseded. As a
result, digital marketing has emerged as the new focus
arena for businesses across the globe (Çizmeci & Ercan,
2015).
In the viewpoint of Hajli (2013), digital
marketing commenced as a communication medium, but it
has now evolved as a mode of creating and sustaining
enduring relationships with different parties. The chief
facet of the Internet is interactivity, which has allowed a
novel aspect of association between different participants
in the market (Hajli, 2013). Madasu (2013) stated that
nowadays digital consumers not just interact with each
other, but also with their favored brands. The current
augmentation of the Internet has substantially transformed
the operating milieu of the hospitality sector. Digital
marketing is regarded as an innovative marketing
apparatus for providing an assortment of details to
customers.
Marketing plays a unique role in the hospitality
sector because it is concerned with promoting both
tangible products (such as restaurant food, hotel room) and
intangible products (such as, quality service).
Nowadays, digital presence is not exclusive to large hotel
chains, rather independent hotels are rapidly moving
towards digital marketing to maintain a potent connect
with customers and other significant parties (Alex-
Onyeocha & Iwuagwu, 2015). The intent to include digital
marketing in the overall marketing strategy of the business
is to better attain the business goals by obtaining of
consumer behavior (Fuxman, et al., 2014). Digital
marketing has allowed hospitality businesses to reach to
large customer base through mobile and internet, and thus,
hospitality firms are exploiting digital marketing
incredibly to associate, engage and prolong their target
customers (Yasmin, Tasneem & Fatema, 2015). In
Australia also, hospitality businesses are relying heavily
on digital marketing approaches for connecting
maintaining relationships with customers. With this
respect, this research focuses on determining the impact of
digital marketing on hospitality business performance in
Australia.
The intent of this research is not to quantify how
hospitality businesses are actively using digital marketing,
rather explore the impact of digital marketing on their
business performance. In this regard, the main focus of
this research is enumerated how digital marketing is
actually affecting the performance of hospitality, whether
it has made marketing uncomplicated for hospitality
businesses or has generated a new impediment for them.
The reasons for selecting this topic is the escalating
popularity of digital marketing amongst hospitality sector
and the rising use of the internet by the sector for reaching
to customers. The intensive usage of digital marketing in
the sector has made it prominent to research the impact
digital marketing makes on business performance of
hospitality. In this regard, the main objectives of this study
are to determine the role of digital marketing in the
hospitality sector, to discover ways of using digital
marketing in the hospitality sector and to identify the
impact of digital marketing on business performance of
hospitality sector.
2. Review of literature
The information concentrated nature of the
hospitality industry points to a vital role for the internet
technology in the marketing area.
2.1. Digital Marketing
Digital marketing is a form of marketing utilized
extensively for promoting offerings and reaching to
customers with the help of digital mediums. Digital
marketing moves beyond internet marketing because it
International Journal of Research
Available at https://edupediapublications.org/journals
e-ISSN: 2348-6848
p-ISSN: 2348-795X
Volume 04 Issue-17
December 2017
Available online: http://edupediapublications.org/journals/index.php/IJR/ P a g e | 3894
comprises of mediums that do not demand the exploitation
of Internet (Kaur, 2017). It comprises of social media
marketing, search engine marketing, display advertising,
mobile phones (MMS and SMS), as well as, several others
types of digital media. With the help of digital media,
consumers get accessibility to information at any place
and anytime. any time and any place where they want
(Alex-Onyeocha & Iwuagwu, 2015). In this manner,
digital marketing is a wide term that indicates a variety of
promotional methods used to get in touch with customers
through digital technologies.
Digital marketing exemplifies a wide range of
product, service and brand marketing strategies that
principally rely on Internet as a vital promotional medium
other than the conventional TV, mobile and radio (Al-
Msallam & Alhaddad, 2016). The key distinctive aspect of
digital marketing is that communication is bidirectional in
this, where customers also have the liberty to post
suggestions and queries related to products or services
(Shuai & Wu, 2011).
2.2. Business Performance
Business performance is primarily determined by
the level of rivalry in the marketplaces, in which a firm
select to function. A company can attain better business
performance by putting in markets that have low
competition or by attaining positional benefits in the
marketplace. The business performance also has a central
role in the enduring performance of a company as a
company with strong business performance is likely to
sustain for a long period of time (Fuxman, et al. 2014).
The significance of marketing in elucidating the business
performance of a company has gained vital attention all
through the history of the marketing area. The requirement
to connect marketing with business performance has
become more imperative as marketers have been required
to protect the worth of their actions, in the current era
(Morgan, 2012). Thus, it is required to have a conceptual
understanding of the way marketing is related to business
performance and the way it affects business performance.
2.3. Importance of Digital marketing
Businesses are these days utilizing digital
marketing extensively for the purpose of leaving their
opponents behind. Digital marketing is important for
businesses because it enables two-way communication
between companies and their customers. Digital marketing
allows companies to serve their customers as speedily as
possible (Çizmeci & Ercan, 2015). Moreover, through
digital marketing companies can anticipate guidance from
their customers to perk up their offerings in a better way.
In digital marketing, companies do not attempt to alter the
views of their customers, like they used to do in traditional
marketing; rather they try to interact with them in a more
vigorous manner (Al-Msallam & Alhaddad, 2016).
With the help of digital marketing, customers can
effortlessly and rapidly get information about any product
or service. They can have an outlook about products and
service by evaluating them against similar products
(Madasu, 2013). Further, digital marketing is significant
because of its cost-effective nature as small businesses
with low or no resources can utilize digital marketing as a
financially savvy method of marketing (Kaur, 2017).
Apart from this, companies that are utilizing digital
marketing as the ideal method are able to calculate the
conversion rate of customers in real time. They can
determine the number of spectators who get transformed
into leads, then subscribers and finally end consumers.
Methods like, Social media marketing, E-mail marketing,
and SEO have an elevated conversion rate in comparison
to traditional marketing means (Salem, El-Said & Nabil,
2013).
2.4. Network theory
Network theory is concerned with all sorts of
relationships, whether it is between things, people or an
animal. It is an overlapping means for getting acquainted
with prototypes that generate within social networks and
the way they affect customer behavior (Leeflang, et al.
2014). According to this, the victory of entertainment
products cannot be predicted on the basis of conventional
factors. As per Miller & Christakis (2011) digital
marketing mediums, like Twitter, Facebook, Groupon are
constructive for this purpose, as they enable marketers to
pay attention to what consumers are saying, and at the
same time, they enable marketers to utilize the supremacy
of influential consumers in order to widen messages all
across their networks.
Network theory implies that the most influential users are
the ones who have most persuasion over a range of
distinguished networks. This theory is related to the
associations between people. Network theory details out
that humans are all knots in a network of associations in
which they interact. Some knots are more persuasive than
others and become centers to which a lot of others link
(Salem, El-Said & Nabil, 2013). Individuals create clusters
with whom they feel connected, and thus, they create a
network. In this way, network theory provides a unique
approach to digital marketing by elucidating the way
influence can be created amongst people (Iansiti &
Lakhani, 2017).
2.5. Digital Marketing in Hotel Industry
Hospitality firms are proactively communicating
with their customers by using creative tailored solutions,
as well as, much receptive and rapid customer service. In
the viewpoint of Salem, El-Said & Nabil (2013),
hospitality industry participation in digital marketing can
be regarded as a cost-effective method for engagement and
interaction with potential customers. According to
Lončarić & Radetić (2015), reliance on social media
International Journal of Research
Available at https://edupediapublications.org/journals
e-ISSN: 2348-6848
p-ISSN: 2348-795X
Volume 04 Issue-17
December 2017
Available online: http://edupediapublications.org/journals/index.php/IJR/ P a g e | 3895
websites offers hotels direct accessibility to active users
devoid of including any extra software or hardware.
As per the research of Durmaz & Efendioglu
(2016), online consumer reviews have a vital role in
influencing the selection of travel and hotel consumers.
With the growth of a variety of websites, such as
TripAdvisor, Expedia, and social networking sites, like
Twitter and Facebook, potential customers get a chance to
see reviews of real consumers. In this regard, developing
an exclusive social network that enables customers to
develop a profile and share their feelings, views, photos,
stories, etc. can be a form of competitive benefit or
drawback for hotels.
The website is often regarded as the tool of
digital marketing in the hotel industry (Yasmin, Tasneem
& Fatema, 2015), but there are various other tools, which
the hotel industry is using. Fuxman, et al. (2014) stated
that small hospitality organizations utilize five digital
marketing tools, like e-mail marketing, internet marketing,
intranet and extranet marketing and mobile marketing.
Today's consumers search online prior to buying any
product, whether it is tangible or intangible. If a hospitality
firm has a well-managed website or a hospitality brand can
be searched easily on Internet, then customers are more
likely to refer it.
With respect to the execution of digital marketing in
hospitality Hajli (2013) mentioned that the approval of
digital marketing is driven by manifold components, like
skills of the owner, availability of resources to an
organization, organisational culture, digital marketing
adopting expenses, ease of usage, size of organization,
market trends and cultural orientation towards digital
marketing by organisation's customers.
Leeflang, et al. (2014) asserted that hospitality
firms face certain impediments also while adopting digital
marketing techniques. Yasmin, Tasneem & Fatema (2015)
investigated the suitable obstacles making contribution to
the non-adoption of digital marketing practices by small
and medium firms and discovered that they comprises of
incompatibility of technology with target audience, lack of
understanding, unreadiness of stakeholders, and so on. The
research of Salem, El-Said & Nabil (2013)concludes that
organizational features are a most significant component
that driven the usage and adoption of digital media, even
though the environmental background of hotels,
managerial traits, and professed attributes characteristics
of Internet all have certain effect.
Presently, Australia has biggest digital ad
expenses per user all over the world and as per forecasts
by 2018 above 50% of the total advertising budgets in the
country will be dedicated to online and mobile customers
(Burbury, 2017). This points towards the increasing focus
on digital adverting in Australia by businesses. Australian
consumers spend more time on the internet to seek the best
suitable product. In light of this, marketers are making an
attempt to utilize digital advertising in a better manner and
influence the lifestyles of consumers. Hotel industry of
Australia is one of the booming sectors in the country and
it is rapidly advancing its focus on digital mediums for
better associating with current and prospective customers.
2.6. Research Gap
The existing literature has well documented the
usage of digital marketing by the hospitality industry. It
has highlighted about digital marketing and its
significance in the existing business era. The literature
review has indicated that there are various studies, which
have generated knowledge about business performance
and use of digital marketing in the hospitality industry.
However, from the review of the literature, it has not been
found that how digital marketing influences the business
performance of hospitality businesses with specific
reference to Australia. Alex-Onyeocha & Iwuagwu (2015)
have conducted their research to identify the impact of e-
marketing in the hospitality industry in Nigeria. On the
contrary, another study by Lončarić & Radetić (2015) is
based in Istria County to discover the execution of e-
marketing in the hotel industry. However, there exists a
research gap about the impact of digital marketing on
hospitality business performance in Australia and this
research study will cover the gap.
3. Research Hypothesis
H1: Digital marketing affects hospitality business
performance in Australia
H0: Digital marketing does not affect hospitality
business performance in Australia
4. Conceptual Model
Figure : 1
5. Research methodology
This study is a quantitative research and
positivism research philosophy has been used in this
research. This philosophy is based on the scrutiny that
knowledge buds from human experience, and thus
information gathered through computation and observation
is relevant and reliable. Positivism philosophy has enabled
the researcher to eradicate any form of human interest
from the research and adopt an ontological viewpoint of
the world. Moreover, a deductive approach has been
referred in the study to examine the link between digital
marketing and hospitality business performance; thus
moving from particular to the general. Through, deductive
International Journal of Research
Available at https://edupediapublications.org/journals
e-ISSN: 2348-6848
p-ISSN: 2348-795X
Volume 04 Issue-17
December 2017
Available online: http://edupediapublications.org/journals/index.php/IJR/ P a g e | 3896
research approach, the study will explore the theory of
digital marketing and validate if it is valid for hospitality
businesses or not. Explanatory research design has been
used in the research so that the topic in question can be
explained in detail, rather than merely describing facts or
information.
Empirical research was performed using the
survey method. For this purpose, a five point Likert scale
questionnaire has been used and used for an online survey.
The sample size considered for this survey is of 200
employees from Australia’s hospitality sector. The reason
for selecting employees is that they will be better able to
provide information that is how digital media influences
the performance of hospitality businesses.
6. Results
6.1. Regression
Table : 1
From the tables above, the impact among the
given variables of the study can be proven. The study is
based on examining the impact of digital marketing on
business performance of hotels in the Australia. The
findings indicated that there is an impact of digital
marketing on business performance as R-square has a
value of 0.771. This means any change that is likely to
occur in hospitality business performance is due to digital
marketing. The value of Adjusted R-square is also given.
However, it is also mentioned that the regression
model is created for the study which explains any
variations in the dependent variable are due to the
independent variable that is digital marketing. The
regression equation for the current study is described as:
Y= B0 + B1 +E
Y (Hospitality business performance) = B0 + B1 (Digital
marketing) +e
Y (Hospitality business performance) = B0 (-0.026) + B1
(1.055) +e (0.104)
The error in the entire regression model is
highlighted as well which is found to be 0.104. In addition
to it, the model shows that any change in digital marketing
will directly impose an influence on the hospitality
performance. The variations found in the model are 77.1%
6.2. Descriptive frequencies
Table : 2
The descriptive statistics table above explains the
mean and standard deviation of the data set used in the
following study. The question which discusses the use of
digital media is the essential part of our marketing activity
has a mean value of 2.22 with a standard deviation of 1.41.
According to Saunders (2011), mean is the average of the
entire data set, however, the standard deviation is how
much the data deviates from mean position. For the
question regarding the presence of hotel over social media
International Journal of Research
Available at https://edupediapublications.org/journals
e-ISSN: 2348-6848
p-ISSN: 2348-795X
Volume 04 Issue-17
December 2017
Available online: http://edupediapublications.org/journals/index.php/IJR/ P a g e | 3897
sites including FaceBook has a mean value of 2.52 and is
backed by the standard deviation of 1.21. Similarly, the
hotel has a plan to increase activities related to digital
marketing in the next year possess mean=2.36, SD= 1.41.
In addition, Online reservations results in increased sales
of the firm have mean= 2.5 and SD= 1.20. However, the
hotel is now entertaining more guests by the consideration
of digital media tools holds mean= 2.79 and SD= 0.911.
Digital marketing leads to boosting our hotel image owns
a mean= 2.49 and SD =1.21. Customers trust the hotels in
Australia because of the authentication of information they
offer has a mean = 2.36 and SD=1.414.
6.3. Analysis of Responses
During the collection of primary data, employees
who have been surveyed includes 51% of male
respondents and 49% were female. In addition, 49%
employees fall in the age bracket of 30-39, 31% belonged
to 40-49 age interval and remaining fits in other
categories. 48% were having Master’s degree, 34% had
bachelor’s degree and remaining were having a doctoral
degree which makes a total of 19% respondents.
Employees were agreed to the point that their
customers prefer booking online because it mostly offers
availability. To this 36% were agreed and 18% disagreed
with the statement and remaining hold moderate views. In
addition, customers trust the hotels due to the authenticity
of the information offered to them which also serves as the
key to retain them. To this question, 62% were agreed and
28% negated with the statement. Moreover, 67%
employees were supporting the point that digital media is
the essential part of their marketing strategy. On the other
hand, 17% employees remained neutral as they think
digital media has affected the rating of their hotel. 40%
respondents have strongly agreed that their hotel has a
plan to increase to digital marketing in the coming years.
58% respondents were agreed and thus supported the fact
that digital media has to lead to a boost in their
performance and image of the hotel. However, to this
particular statement, 22% were negated which means
digital marketing does not affect the image of the hotel. In
contrast to this, as mentioned by the employees, their hotel
now entertains more guests as compared to the prior usage
of traditional media. This is the result of technological
advancement, to this statement 36% respondents were
agreed, 46% were neutral and remaining 18% were
disagreed.
On the other hand, the bookings are being done
online as well. The question which sheds light on online
reservations has lead to an increased in the sales, 22%
were strongly agreed, 36% were just agreed, 20% were
neutral and remaining disagreed. 29% respondents were
strongly agreed to the fact that their hotel has launched
mobile App for offering ease to the customer and allow
them to access 24/7 and make reservations. However, to
this statement, 14% disagreed and remaining 31% were
neutral.
7. Discussion of Results
The results have found that the digital marketing
does affect the performance of hospitality business in the
Australia. Moreover, the findings also shed light on the
fact that digital marketing leads to build positive image of
the hotel. With the consideration of digital marketing, a
noticeable difference has been observed in the number of
guests visiting the hotels as the number of people making
reservations have increased. Similar to this, it is also
indicated that hospitality businesses in Australia will
increase their digital marketing efforts as the performance
of the businesses has been significantly affected. Due to
this, the hospitality businesses are even being compared on
the social media as it is evident by the rating given by the
visitors on the social media sites like FaceBook, Instagram
etc. This, thus pinpoints the importance of technology
usage from the end of hospitality businesses. In addition to
this, the employees’ also highlighted digital media is one
of important part of their marketing strategy that has
resulted in an increase in the customer base. However, the
accessibility to website, offering customers the access to
Mobile App and social media presence has enabled
hospitality business to grow and experience favorable
business performance.
8. Conclusion
From the findings, it is to be concluded that there
are various factors which need to be considered when it
comes to managing customers in the service sector.
Services are intangible in nature and thus, the hospitality
industry in Australia seeks to take efforts in terms of
opting digital marketing for the sake of satisfying their
customers. The results have shown that online reservations
for offering ease to the guests are being contemplated by
the Australian hotels. Moreover, the use of mobile
Application which allows the guests to reserve anytime
and anywhere is the best proof of opting technological
advancements that come from digital marketing. In
addition to it, consumers also review the ratings of the
hotels with the help of social media in order to select the
best possible as consumer never compromise on the
service which eventually affects the performance of hotels
in the Australian hospitality sector.
9. Recommendations and Future Research
The following section offers recommendations to
the hospitality business in the Australia. It is thus proven
that digital marketing is important but few suggestions are
given to opt this concept in a far more comprehensive
manner. It is recommended that:
International Journal of Research
Available at https://edupediapublications.org/journals
e-ISSN: 2348-6848
p-ISSN: 2348-795X
Volume 04 Issue-17
December 2017
Available online: http://edupediapublications.org/journals/index.php/IJR/ P a g e | 3898
Hospitality business in Australia should consider
more options and consider extensive marketing on the
social media platforms to increase their ratings and
also which enhances their brand image
They should also hire such personnel that have
complete know how of SEO and digital marketing
that will contribute to their business and its
profitability.
They should devise more creative digital marketing
campaigns which increase and attracts more
customers
By taking in considerations the aforementioned
recommendations and results, it is suggested that the
future researchers can consider their study on similar topic
by making few amendments. They can consider large
sample size, by increasing number of regions surveyed and
also by the help of contemplating the collection of
qualitative data by the help of interviews from the
managers in hospitality industry. Future researchers can
also consider more variables that will serve as independent
variable of the study.
10. Acknowledgement
I’m thankful to my all those best companions
especially Dr Mohan Dass for his compassion during long
hours of work when I became distressed and tired; He
supported me and offered assistance. And special thanks to
all those fellow partners for their assistance in being a part
of my research paper who made this possible for me.
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