As we have entered the second decade of the 21st century, our habits are changing significantly. The Internet is still on the rise and now is more than ever impacting virtually all the industries worldwide. The case is not different for the hospitality industry, where sites like TripAdvisor.com, Trivago.com or Oyster.com lead the way of new-age hotel reviewing. According to ReviewPro “The influence of online reviews and social media has now reached an unprecedented level within the hotel industry.” and therefore hoteliers must recognise the importance of these on their sales and reputation. This essay will be focusing on the hotels’ point of view to explain the significance of online reviews on hotel industry and how hotels can use them to their advantage.
How customers select hotels
To understand how the reviews affect hotels and their booking figures, we must first understand how customers choose where they are going to stay.
Research carried out by Market Metrix research company on January 13, 2010, shows that nowadays customers value guest experience factors in favour of location or even price. In previous years however, the location was the main criteria that potential customers looked at when selecting hotel. In the Exhibit 1, you can see this information. It must be said that hotels in different segments of the market are affected differently by positive and negative reviews as their GRI elasticity differs quite significantly. The mid scale hotels are by far most influenced by the online reviews (Anderson, 2012) where the elasticity for their ADR , Occupancy and RevPAR very elastic, meaning that they are easily influenced by positive or negative reviews. On the other hand, luxury hotels have very low GRI elasticity. This suggests that the cheaper and less luxurious hotel is, the more customers are influenced by online reviews.
Advantages of hotels’ active presence on online review sites.
There are several ways in which hotels can take advantage of this new channel of communication with clients. Main one of them is simply to monitor and control what is being posted about their hotel. For example, on TripAdvisor, hotels can respond to reviews, negative or positive. “As the hotelier, you can control the information you publish and distribute to most booking channels (except for sites such as TripAdvisor). And you have a real opportunity to create great content for those booking channels.” Says Connie Rheams in her article at hotelexecutive.com. This provides the hotels to create enticing content that is more visible than on their own website.
In a study done by PhoCusWright, 57 percent of respondents stated that they feel more likely to book accommodations in hotel that actively responds to online guest reviews and 84 percent said that their impression of hotel with negative feedback improved when the hotel was responsive. This alone shows how great impact on bookings can an active online presence mean.