Are swimming pools worth it?

pool  hotel resortManagement Summary:

For rural hotels, building a swimming pool has only a negligible or nonexistent effect on customer satisfaction, price and likely customer acquisition. Instead, brand recognition, star rating and current customer satisfaction are the key factors in determining price and customer acquisition, especially if hotel’s brand is well established. Building a swimming pool is expensive, requires high maintenance and hiring additional staff. Next to financial insecurity, a swimming pool also poses major health risks (drowning, contamination etc.). Thus, we find little evidence for a high return on investment but clear risks for building a swimming pool at a rural hotel location.

Web-Mining Analysis:

Over 1800 reviews where gathered from Tripadvisor and Booking.com for 9 hotels (with pool:  Emmen, Spier, Landhotel Legemeer, Golden Tulip Tjaarda Oranjewoud; Without Pool: Fletcher Steenwijk, Haje Hotel Joure , VdValk Emmeloord, VdValk Sneek, VdValk Wolvega). Every review written before a pool was build at a given hotel, counted towards the group without a pool. Averaging the rating per category, we observed no differences between hotels with or without a swimming pool. There was a small but non-reliable trend (p = .06) for higher value rating when a Hotel had a pool. However, the difference in overall rating between hotels with and without a pool was not significant. We therefore conclude that having a pool has no measurable effect on overall satisfaction.

Swimming Pool analysis 01

Literature Review:

The impact of facilities and services (e.g. having a  swimming pool) on guest satisfaction and room prices has been studied extensively (Andersson, 2010; Danziger, Israeli, & Bekerman, 2006; Dolnicar & Otter, 2003; Öğüt & Onur Taş, 2012; Öğüta & Cezara, 2012). Comparing the importance of all facilities and services a hotel has to offer, Andersson, (2010) reports on a model which predicts the guest’s importance rating and buying decision. Having a swimming pool was a marginally significant factor in determining both perceived value and buying decision. However, a 4 or 5 Star rating and high room standard where almost 4 times as important as having a pool. Likewise, Dolnicar and Otter, (2003) studied which factors guests actually appreciate, using data from multiple studies and conducting his own on-site survey. They found people’s perceived value of a swimming pool was far outranked by the convenience of location, service quality and reputation (see graph).

Similarly, when trying to estimate the value of a hotel room, it was not important for people to know about the swimming pool. To illustrate, Danziger et al., (2006) asked people to estimate a hotel’s room price based on limited information (Hotel Brand, Star rating etc.). Participants could ask for more information (e.g. pool size or restaurant) but only at a cost to their overall performance score. They found that on average, only 7.6% of all people checked whether a hotel had a swimming pool, whereas 39% looked at competitor prices or considered star rating and brand name. Interestingly, when estimating price for a brand hotel (I.e. Van der Valk), swimming pool information was even less important to people (less than 5% accessed the information).

Together, these findings suggest that a swimming pool has a low effect oncustomer satisfaction or perceived hotel value. Thus, compared to room price, brand name and star rating, having a swimming pool appears to have little additional value.

Risks:

Next to a swimming pool’s initial investment and subsequent maintenance costs, a big space filled with liquid water poses multiple additional risks. For example, about 10% of children drowning do so in Hotel Pools (Brenner et al., 1995). While the risk of people drowning can be reduced by hiring staff to monitor guests’ safety, other hazards such as infectious diseases and moulds can still negatively affect guest well being and satisfaction (CDC, 2000; Barna & Kadar, 2012). Such risks are difficult and often very expensive to control and may lead to bad press and additional mitigation costs.

 References:

Andersson, D. E. (2010). Hotel attributes and hedonic prices: an analysis of internet-based transactions in Singapore’s market for hotel rooms. The Annals of Regional Science, 44(2), 229–240.

Barna, Z., & Kádár, M. (2012). The risk of contracting infectious diseases in public swimming pools: a review. Annali dell’Istituto superiore di sanità, 48(4), 374-386.

Brenner, R. A., Trumble, A. C., Smith, G. S., Kessler, E. P., & Overpeck, M. D. (2001). Where children drown, United states, 1995. Pediatrics, 108(1), 85-89.

CDC (2000) Pseudomonas dermatitis/folliculitis associated with pools and hot tubs – Colorado and Maine, 1999-2000. MMWR 49(48);1087-1091

Danziger, S., Israeli, A., & Bekerman, M. (2006). The relative role of strategic assets in determining customer perceptions of hotel room price. International Journal of Hospitality Management, 25(1), 129–145.

Dolnicar, S., & Otter, T. (2003). Which hotel attributes matter? A review of previous and a framework for future research. Retrieved from http://ro.uow.edu.au/commpapers/268/

Öğüt, H., & Onur Taş, B. K. (2012). The influence of internet customer reviews on the online sales and prices in hotel industry. The Service Industries Journal, 32(2), 197–214.

Öğüta, H., & Cezara, A. (2012). The Factors Affecting Writing Reviews in Hotel Websites. Procedia – Social and Behavioral Sciences, 58, 980–986.

 

 

 

 

 

Dr. Jonathan MallAre swimming pools worth it?

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