The Power of Online Reviews in Boosting Hotel Revenue
ONLINE REVIEWS SIGNIFICANTLY IMPACT HOTEL REVENUE. UTILIZE POSITIVE REVIEWS TO BOOST YOUR REVPAR AND OUTPERFORM COMPETITORS.
In the digital age, planning a trip and choosing a hotel has become easier. Guests no longer rely solely on personal recommendations or guidebooks. Now, they can pull up reviews in seconds, making informed decisions based on the experiences of previous guests.
This shift is beneficial for consumers but presents both challenges and opportunities for hotel commercial teams. Happy customers are crucial for business success, especially when they share positive feedback online. This article delves into recent research by Lighthouse on the influence of online reviews on hotel bookings and revenue.
The Direct Link Between Reviews and Hotel Revenue
A 2023 study by Expedia highlights the significance of online reviews. While price remains a key factor, hotel guests prioritize ratings and reviews more than other travelers. According to the report, 30% of hotel guests consider reviews as a top five factor in their booking decisions. Better reviews also improve a hotel’s search ranking on Google, review sites, and OTAs.
Additionally, 61% of hotel guests check an OTA before booking directly on a hotel’s website. This shows a direct correlation between online reputation and hotel revenue. The Journal of Modern Hospitality confirms that online reviews influence booking decisions and perceptions about hotels. Therefore, hoteliers should use reviews strategically to boost performance.
Competitive Edge Through Reviews
Research from the Journal of Marketing studied a leading hotel chain across six U.S. markets. The findings showed that both a hotel’s and its competitors’ reviews impact booking performance. Guests value online reputations and reviews, which affects their booking choices. A study by Cornell University’s School of Hotel Administration further revealed that TripAdvisor reviews could cause rate swings of up to 10%. Properties with better reviews can charge 10% more than those with lower ratings.
The impact of positive reviews on Revenue Per Available Room (RevPAR) is significant. For example, a hotel with negative reviews charges $400 per night, while a competitor with positive reviews charges $440. With 100 rooms, the hotel with better reviews can earn $28,000 more per week. Over a year, this could amount to $1.456 million more in revenue.
Encouraging Guests to Leave Reviews
Getting customers to leave reviews can be challenging. People often post reviews when their experiences are extreme, whether good or bad. However, research using Tripadvisor data shows that encouraging guests to leave reviews results in more, and typically better, reviews.
Building a Strong Online Reputation
Here are actionable tips to enhance your hotel’s online reputation and RevPAR:
1. Encourage Reviews: Ask satisfied guests to leave reviews on major platforms like Booking.com and Expedia. Use follow-up emails, social media, and signage at the front desk.
2. Analyze Feedback: Use guest review analytics to refine your marketing and distribution strategies. Test new ideas and adjust based on feedback.
3. Respond to Negative Reviews: Constructive responses to negative reviews can improve your online ratings more than just acknowledging positive comments.
4. Update Online Presence: Ensure that photos and descriptions on your website and OTAs are current and appealing.
5. Monitor Feedback: Use market managers to gather feedback and inform your review-generating efforts.
6. Address Common Complaints: Turn frequent complaints into advantages. For instance, offer a lower-priced takeaway breakfast if guests find your breakfast expensive.
7. Match Guest Expectations: Ensure your hotel description aligns with guest expectations to increase repeat visits and positive reviews.
8. Focus on Properties with No Reviews: Prioritize properties without reviews to improve their appeal to potential guests.
Leveraging Positive Reviews for Hotel Revenue
Word-of-mouth marketing remains powerful. Integrate positive reviews into your website, promotional materials, social media, and email campaigns. Benchmark your review scores against competitors using tools like Rate Insight. This helps you identify opportunities for price adjustments based on your online reputation.
A comprehensive approach ensures your pricing strategy remains competitive and profitable, enhancing your RevPAR and overall revenue.
About Lighthouse
Lighthouse, formerly known as OTA Insight, is a leading provider of business intelligence solutions tailored specifically for the hospitality industry. With a rich history of empowering hotels worldwide, Lighthouse offers innovative tools and analytics to optimize revenue management and drive business growth. Their comprehensive suite of products enables hoteliers to unlock actionable insights from their data, streamline operations, and make informed decisions with confidence. By harnessing advanced technology and industry expertise, Lighthouse empowers hotels to stay ahead of the curve in a competitive market landscape, delivering tangible results and maximizing profitability.
Article credit: LightHouse
