Two new publications from the Cornell Center for Hospitality Research (CHR) at the School of Hotel Administration outline technology issues and the effects of social media on the hospitality industry. A study by Cornell's Chris Anderson confirms what hospitality operators have long suspected—social media reviews drive hotel reservations. The many aspects of social media and technology in the hospitality industry are also the focus in the first of a series of proceedings from the Cornell Hospitality Research Summit (CHRS), summarizing seventeen presentations from the October 2012 conference.

Cornell Study Documents Effects of Social Media on Lodging Industry

The hotel industry's belief that social media are driving bookings and revenue has been demonstrated in a new study published by the Cornell Center for Hospitality Research. The study, "The Impact of Social Media on Lodging Performance," by Chris K. Anderson, examines the effects of online reviews on consumers' lodging purchase decisions and the hotels' pricing power. The report is available from the CHR at no charge at this link.

"Anecdotally, we suspected that good reviews would allow hotels to sell more rooms at better rates, other things being equal," said Anderson, who is an associate professor at the Cornell School of Hotel Administration. "I analyzed hotel-related data from ReviewPro, STR, Travelocity, and TripAdvisor to quantify the effects of social media reviews and reputation on the hotel industry. The results showed that social media commentaries do move markets, and it makes sense for hotel operators to pay attention to their online reputation."

Anderson's study is the first comprehensive effort to quantify the impact of social media upon lodging performance as measured by bookings, occupancy, and revenue. First, he documented the increasing influence of TripAdvisor, as the number of reviews consulted by consumers prior to booking a hotel room has steadily increased over time. Second, an analysis of transactional data from Travelocity illustrated that a 1-point increase on Travelocity's 5-point scale allows the hotel to increase its price by 11.2 percent and still maintain the same occupancy or market share. Third, by matching ReviewPRO's Global Review IndexTM with STR's hotel sales and revenue data, Anderson's analysis finds that a 1-percent increase in a hotel's online reputation score leads up to a 0.89-percent increase in a hotel's average daily rate (ADR), as well as an occupancy increase of up to 0.54 percent and up to a 1.42-percent increase in revenue per available room (RevPAR).

CHRS Proceedings Highlight Technology and Social Media Strategies for the Hospitality Industry

Advances with analytics, identifying "best customers," building loyalty, improving operations using customer reviews, and social media as a management tool—these are just a few of the seventeen social media and technology presentations summarized in the first proceedings from the 2012 Cornell Hospitality Research Summit. The proceedings, "Moving the Hospitality Industry Forward with Social Media and Technology," by Glenn Withiam, is available at no charge from the Center for Hospitality Research, which produced the conference. The CHRS drew more than 230 industry practitioners and academic researchers to the Cornell campus in October 2012 to exchange research-based ideas to advance industry strategy. The proceedings are on the CHR's website.

About the Center for Hospitality Research

The purpose of the Center for Hospitality Research is to enable and conduct research of significance to the global hospitality and related service industries. CHR also works to improve the connections between academe and industry, continuing the School of Hotel Administration's long-standing tradition of service to the hospitality industry. Founded in 1992, CHR remains the industry's foremost creator and distributor of timely research, all of which is posted at no charge for all to use. In addition to its industry advisory board, CHR convenes several industry roundtables each year for the purpose of identifying new issues affecting the hospitality industry.

Center Members: Accenture • Access Point Financial, Inc. • Barclaycard US • Cvent • Davis & Gilbert LLP • Deloitte & Touche USA LLP • DerbySoft • Four Seasons Hotels and Resorts • Fox Rothschild LLP • Hilton Worldwide • Host Hotels & Resorts • Hyatt Hotels Corporation • IDeaS Revenue Solutions • InterContinental Hotels Group • Jumeirah Group • Marriott International • NTT DATA • Preferred Hotels & Resorts • priceline.com • PwC • The Rainmaker Group • RateGain • ReviewPro • Revinate • Sabre Hospitality Solutions • STR • Taj Hotels Resorts and Palaces • Tata Consultancy Services • Wipro EcoEnergy • Wyndham Hotel Group

Jane Henion
607.255.9780
CHR