A recent TripBarometer by TripAdvisor states that 93% of people booking travel are influenced by online reviews. 1

Another study by Cornell University 2 has found that a 1% increase in online reputation leads to a 0.89% increase in ADR and a 0.54% increase in occupancy. This represents a 1.42% overall increase in revenue per available room (RevPAR).

By comparison, adverse reviews contribute to the ever-declining position of poorly managed hotels. Lightspeed Research 3 concludes that reading anywhere from 1-3 negative reviews can turn off 67% of potential customers. Other reports suggest that getting 3-4 stars (on a 5 star scale) is the equivalent of hitting a tipping point, making it three times more likely that a reservation will follow.

50% growth per annum

The market for online travel reviews is constantly growing, requiring all players to continually innovate.

TripAdvisor has 100M reviews, which have been increasing by 50% annually. Just in the last few months it has:

  • Concluded an agreement with Tom Tom to pinpoint accurately location-based applications
  • Concluded a pre-installation agreement for the new Samsung Galaxy S4 (mobile unique users of the site have increased 190% from 2011 to 2012)
  • Announced a new widget that will be included in the hotel site
  • Implemented a delayed ad-call, only invoicing for the advertising that is actually seen by the client
  • Acquired Tiny Post, Jetsetter.com and Niumba
  • Announced Review Direct, an integrated option where the hotel can ask for reviews via TripAdvisor

Competitors have not stood still. Hotel Me is a new online travel review site, which claims to authenticate reviews. Travelocity has a Green Hotel Directory. Booking.com now has 21M reviews, and a network of 312,000 hotels. And the list goes on, and on.

Part of the changing market resulted from action by the European Commission. Google has agreed to eventually increase the prominence of links to competitors like Yelp and TripAdvisor etc. in Europe.

The social gene

Social is the new gene in the Internet, especially since the direction of traffic has so dramatically changed. Once upon a time, five or ten years ago, corporates pushed content to consumers. Now consumers and non-consumers alike push social content up to the Internet. The man and woman in the street, in their lounge, at their desk, on their mobile, at school, or on the road, are the new rulers of the Internet. This trend will only get stronger with time.

This social content uploaded to the Internet offers both risk and opportunity to your hotel business. Organized action can cheat the system for a while. A blackmailing client may try to get refunds, extra discounts or upgrades on review extortion. A vengeful person, or even a competitor, may attack your reputation, and these actions may all impact your results.

A great example of how this works is the one of a homeless hostel in the UK. The Bellgrove Hotel was named a top hotel by TripAdvisor after five fake 5 star reviews. Following the alert of fraud the reviews were removed, a BBC exposeé called the hostel a "dumping ground" for the poor and Trip Advisor thanked The Sun for making it aware of the situation. 4

Trust is the key asset for online company reviews and as such techniques and procedures are being developed to detect fraud. At this stage some authenticating procedures are based on algorithms and others on confirmations of stay by the hotels.

Your set of tools

As stated earlier, regardless of your opinion, online reputation affects your business. It is a subject to be taken seriously whether you believe the reviews can inform business processes improvement, or whether you think prospective clients will be influenced.

A recommended set of tools is:

  • Honesty, values and goals:Only an honest approach will win in the end and you will need your values and goals to be real to be able to react quickly and in the right direction.
  • Use tools properly to answer reviews in a caring but assertive way.Surveys show 84% of TripAdvisor users say an appropriate management response to a bad review "improves my impression of the hotel".
  • Identify advocate clients who are your real ambassadorsprepared to spread their view, and help them do so.
  • In case of threat, contact the online company and let them know.Not many threats come true ultimately, and if even if they do, it is good to have announced the threat suffered in order to help remove the review.
  • Train staff to care for the guest's wellbeing.Caring staff inspire guests and are appreciated by the online opinions.
  • Review the basics,because the basics add value here as elsewhere. What and how you deliver, what expectations are created and how you match them, will eventually reach the online world.
  • Include online reputation as an area to review, manage and report on.Monitor and "measure" your reputation and also the reputation of your direct competitors. Apply targets that will help you assess performance. This will focus your team in specific goals on online reputation.

Hotel Solutions Partnership offers specialist hotel consultancy services to hotel owners, operators, brands, developers, lenders and investors around the World. Hotel Solutions Partnership is a hand-picked network of experts. Between us, we have expertise in more than 75 disciplines, covering all the elements involved in running a successful hotel or hospitality business in today's globally competitive and evolving environment. Click here to learn more.

Ian Graham
+44 (0) 845 481 2628
The Hotel Solutions Partnership