While revenue management is very much a numbers game, the fundamentals are evolving fast. One key area of change is the impact a hotel’s online reputation has on revenue – something that affects all hotels, regardless of size.
In fact, one might argue that the smaller the hotel, the smaller the margin of error and the bigger the impact of online reviews.
Hoteliers are quickly discovering that guest feedback plays a crucial role when formulating a solid strategy to maximise hotel profits. Here’s why:
- The growth in online reviews has fundamentally changed the traveller’s path to purchase, and it stands to reason that revenue management approaches also need to adapt
- This is no longer just something managed by guest relations desk – reviews directly affect revenue
- This is backed up with more and more research, showing that:
- Travellers trust online reviews. So much so, that 96% of TripAdvisor users say reading hotel reviews is important when planning a trip
- 76% of travellers will pay more for a hotel if it has better online reviews
- Travellers are influenced by how well a hotel engages with online reviews. Four out of five TripAdvisor users believe a hotel that responds to reviews cares more about its guests
So what’s the bottom line? Travellers make decisions based on reviews, and hoteliers who want to maximise revenue must know and react to the demands of their guests. Analysing online reviews is the easiest and most effective way to do this.
Let’s take a closer look.
What can your reputation tell you?
#1: Are you value for money?
In essence, one of the core jobs of revenue management is to charge as much as possible per room. Using both rate and reputation tools, a hotelier can easily contextualise the correlation between the guest perception of value for money for that hotel or group, and the actual hotel rate to maximise revenue.
Consider this: if the hotel product and service is not up to par, the revenue manager cannot maximise the room rates as the value for money is not being delivered. If a revenue manager looks as the guest feedback and uses it to assist operations, improve service or plan around rooms out of order for repairs, the value for money offering will be maintained and the room rates can be maximised again.
