If you’re in the hospitality business, one star can lead to one major headache.
For owners and managers of hotels, motels, condos, cabins, and all manner of tourist-targeting businesses, review websites and apps like TripAdvisor, Travelocity, and Yelp have become a critical concern. New research continues to emerge that validates the importance of good online reviews to those in the travel and tourism industry.
One reason these sites have become so critical is their tremendous popularity with users and within the hospitality industry itself. A glance at some basic TripAdvisor site statistics provides a picture of the scope:
A study released this month titled “The Effect of Reviews on Hotel Conversion Rates and Pricing,” highlighted three major findings:
- Travelers are 3.9 times more likely to choose a hotel with higher review scores when the prices are the same.
- When hotel prices are increased for hotels with better review scores, travelers are more likely to book the hotel with the higher score even if it costs more.
- 76 percent of travelers were willing to pay more for a hotel with higher review scores.
The report, co-authored by Donna Quadri-Felitti, academic chair and clinical associate professor at New York University’s Preston Robert Tisch Center for Hospitality and Tourism, and Margaret Ady of TrustYou, is available online for further review.
An earlier study from the Cornell University School of Hotel Administration found a direct link between the rise or fall of revenue per available room (or RevPAR as it’s commonly known) and improvements or declines in ratings on sites such as TripAdvisor and Travelocity.
The report concluded that if a hotel increases its review scores by one point on a five-point scale, then the hotel can increase its price by 11.2 percent and still maintain the same occupancy or market share. When the researchers factored in multiple review sites, they found that a one percent increase in the hotel’s “online reputation score” boosted RevPAR by slightly more than one percent.
The study was large, including more than 31,000 monthly observations over two-and-a-half years on midscale, upscale, and luxury hotels in 11 major metropolitan markets in the North America and Europe: London, Milan, Rome, Madrid, Berlin, Prague, Chicago, Los Angeles, New York, San Francisco, and Miami.
What all of this means to hospitality professionals is this: It’s past time to start paying attention to online reviews, particularly the ones on popular sites such as TripAdvisor. If you think that your property or business isn’t on these sites because you haven’t set up a profile, you’re probably mistaken. It’s likely that someone has established a listing for you and it’s time for you to go claim it.
TripAdvisor has teamed with other research organizations to gather some of their own data about the importance of online reviews.
When you’re ready to tackle the online review challenge, you may need some professional help to be sure your efforts pay off. If you’re interested in learning more about managing and improving online reviews and review website profiles, contact CJRW's Digital team at 501-975-7250 or firstname.lastname@example.org.