Does Your Hotel Value Its Online Reputation?
According to research from TripAdvisor, 8 out of 10 people always read online reviews before booking a hotel, and users read an average of nine reviews before making a hotel or restaurant booking decision. Additionally, more than half (52%) say that would never book a hotel with no reviews.
As of January 2023, TripAdvisor had approximately 1 billion reviews and opinions about hospitality businesses around the globe, and that is only one travel review website. Most online travel agencies (OTAs) like Booking.com and Expedia also have their own review systems, and Google serves as a central repository for reviews of all kinds of organizations all over the world. Online reviews are really another form of the much-touted word of mouth; 91% of 18-34 year-olds even trust online reviews as much as personal recommendations.
Hospitality guests also appreciate when businesses respond to reviews online in a public form for everyone to read. 80% of respondents to a TripAdvisor survey believe a hotel that responds to reviews cares more about its customers, and 85% said that a thoughtful response to a review will improve their impression of a hotel.
The importance of online reviews and ratings even translates into daily rates. An Expedia study found that respondents would pay 35% more for a hotel with a 4.4 rating than one with a 3.9 rating. That means paying attention to online reviews and working to increase ratings (without encouraging fake reviews) from an “average” score of 3.9 to a “moderately high” score of 4.4 (out of 5) can lead to a 35% increase in revenue. The same survey found that there is a 72% chance a customer will place more importance on a hotel’s rating than its brand name, providing an incredible opportunity for independent hotels to compete with chains.
The Core Four
While online algorithms are often kept secret, TripAdvisor has shared its 4 popularity ranking components for hospitality businesses, and it is likely that other review sites use similar methods:
- Quality: Simply based on star or bubble ratings, a business that has a higher overall numerical average review will rank further up on a list.
- Recency: Recent reviews are seen as a more accurate reflection of the current business situation, so they are valued more highly than older reviews. This is beneficial as potential guests can see the efforts that a business is making to improve based on previous reviews.
- Quantity: This does not mean that businesses with more reviews will always rank higher than businesses with fewer reviews. There just needs to be enough reviews for the site to be statistically confident in the results in order to compare businesses.
- Consistency: The three above factors interact over time to determine a business’s popularity ranking. For example, a business that has had a higher number of consistently positive reviews over time will likely rank higher than another that has fluctuated in quantity or quality of reviews.
In spite of all this evidence showing the importance consumers place on online reviews, and the financial value of reviews to businesses, according to Skift Research, fewer than half of all hotels worldwide have a reputation and review management software system as a part of their tech stack. While some hoteliers and restaurateurs may manually read and respond to online reviews, close to half are likely ignoring online reviews altogether.
Listening to customers is one of the best ways to improve a hospitality business. While not every customer will respond to a request for completing a post-stay survey or leaving an online review, providing an excellent experience and encouraging guests to review and rate a business on popular online review sites can lead to more financial success in the long term.