Earlier in hospitality domain, the pricing structures and decisions were majorly based on factors like supply and demand, local events, corporate/negotiated rates, event/group bookings, majorly because of the absence of hospitality technology tools. With the advent of hotel price intelligence tools, competitor rates became an important factor in pricing. However, in the current scenario, the focus is shifting to guest reviews and ratings. Now, the price that you can charge for your room is directly proportional to your hotel reputation, specifically online reputation.
Reputation Management touches the property as a whole and needs to be the responsibility of every department in the hotel working together. ORM should go hand in hand with Revenue Management. Your hotel reputation should also guide you to use reviews to influence your decision-making process and effect change where required.
Hence, Online Reputation Management is immensely important for hotels and travel companies because customer reviews have a direct correlation with demand and hence pricing, which is the holy grail of revenue management.
Working on your online reputation, reviews and rating includes improving guest satisfaction by enhancing operational effectiveness and efficiency and remembering all this pays off monetarily. As a smart strategy, hotels should make sure that the time and efforts invested in ORM improve their direct bookings, ADR and RevPar. Hence, by improving your hotel reputation and sharing the outcome with all other consumers, both revenue and guest perception improve.
A recent study from the Cornell School of Hotel Administration has also further established this finding, that guest satisfaction has a direct impact on the commercial performance of the hotels.
The study says that an increase of 1 point in the hotel’s review scores leads to an increase of 0.89% in price (ADR), a 0.54 % increase in occupancy, and a 1.42% increase in Revenue per Available Room (RevPAR). The research also verifies that the influence is across all distribution channels, whether online or offline.
