A few years ago, the Cornell Center for Hospitality Research published a study showing the connection between the Global Review Index – an online reviews quality score – and RevPAR, occupancy and ADR. Recently, Matt Carrier shared research conducted by Cornell professor Cathy Enz on the relationship between online reviews score and Net RevPAR, confirming and expanding this link:
“Happier guests not only translate to more revenue, but that revenue flows through to the bottom line and isn’t consumed by customer acquisition costs.”
While the notion of happy guests being good for business isn’t very controversial, quantifying the impact of reputation on revenue through studies like these has made online reputation management a key part in hotel ecommerce and revenue management today.
Creating demand through reputation
Online reviews differentiate your hotels in the eyes of consumers, with the corresponding financial results.
In a world with possible economic uncertainty on the horizon, focusing on improving reputation will not only boost pricing power and demand now, but also help you protect rates in the event of any future downturn. Let’s look at a few tactical ways you can use online reviews data as part of your revenue strategy.
1. Evaluate reputation across the web
Begin with understanding where your hotels are performing with some analysis:
- Overall rating across all OTAs and review sites
- How those ratings have changed over time
- Where your competitors are positioned on each site
In the example above, the hotel has moved down two spots versus its comp set on a significant distribution channel. Your potential guests are using these ratings as they shop these sites to select between your hotel and your competitors. It’s important to see what they’re seeing — and to understand where to focus efforts to improve.
2. Better understand key segments
Customer segmentation is foundational to revenue strategy, and online review analysis provides insight into segments such as trip type and country of origin to help you understand your happiest guests — those most likely to convert to bookings.
