Your online reputation can increase your ADR
What could be more powerful than your neighbor or friend giving you a recommendation. It’s unbiased, it’s trustworthy. And this is worth a premium price. Wouldn’t you pay a slightly higher price and in return minimize the risk of an unknown hotel?
This is exactly how most of the population thinks. Replace your neighbor or trusted friend with unbiased customer reviews and you’re right in the middle of social reputation management.
According to a study by Cornell University
“if a hotel increases its review scores by 1 point on a 5-point scale (e.g., from 3.3 to 4.3), the hotel can increase its price by 11.2 percent and still maintain the same occupancy or market share.”
And for those that get a bit intimidated thinking that a 1 point jump is hard to manage, here is another statistic:
A 1% increase in a hotel’s online reputation score leads up to a 0.89% increase in ADR, a 0.54% increase in occupancy and a 1.42% increase in RevPAR.
That’s no surprise as online reputation is long known as a demand generator. According to Tripadvisor, 93% of the people find reviews important when determining which Hotel they want to stay at. 53% of the people surveyed would not book a Hotel without having a guest opinion about it.
Reputation management is often sitting somewhere between social media, Ecommerce and the executive office with little ownership, strategy or proactivity.
The ironic thing is that once you’re on a downward trend you easily get caught in a downward spiral. Bad review management leads to lower rating leads to less demand. Less demand leads to lower rates and lower occupancy, ultimately a lower RevPar. Less money in the bank means cost cuttings means more bad reviews. Eventually the value of your hotel will diminish – not only in the customers’ eyes but also in the owners’ eyes.
This makes it very clear that the simple act of doing nothing can already have harmful effects on your public reputation.
The last thing you want is to purely manage your demand through price. Building and maintaining a good public reputation is key to building up the value proposition that will create trust and also allow for bigger margins.
Online reputation doesn’t happen overnight, and it is also an ongoing process. Updating and optimizing your profile once on Tripadvisor and OTAs is not enough!
Here are a few things to keep in mind when working on your online reputation.
1.Know the importance of online reputation management
I’ll go ahead and say we got this point covered just now.
2.Set up a tracking system
Get a clear understanding of the current perception of your property and set up mechanics to analyse the ongoing conversation and feedback. It’s impossible to have your eyes everywhere and spot every comment and reaction, so it’s important to set up a tool to help you manage and monitor the market and your progress.
There are little things worse than publicly open comments and questions that go unanswered by hotels. Got a comment on Instagram? Make sure to respond! Got a mixed review on Tripadvisor? Monitor if there are patterns (and if so of course do something about it) and let the guest know they’re heard!
And while you’re at it, keep an eye on what the competition is doing, how they are rated and how they are ranking on OTAs.
3.Strategy and accountability
Set up clear ownership of online reputation. If it is split between different teams, make clear that the responsibilities are clearly divided and expectations are clear. Set goals of how you want to be perceived, what feedback you want and make sure to clearly communicate this vision with your staff who is in guest contact day in and day out and brings your vision to life.
You might find that staff will be following closely as online reviews often name specific individuals for their good (or bad) experience. Use this to manage and motivate your staff.
4.Get going now!
The good news here is that you can take part in shaping the public reputation and image of your property. While it is a big task to work and keep working on it, the results definitely speak for themselves!