The value of word of mouth and personal referrals has always been “gold-standard” material in the lodging industry. This is particularly true now that the practice of checking, evaluating and analyzing guest reviews and rankings of lodging properties before making reservations is almost de rigueur for savvy consumers in today’s web-centric world.
Prospective guests rely more and more on others’ input, feedback and comments. The Internet-driven communications of today assure that this data moves quickly and deeply throughout a prospect’s information network, and becomes a major factor in the prospect’s decision- making.
In fact, hotels have fostered this phenomenon of shared information through the incorporation of online guest feedback mechanisms into their web sites and reservation systems. Suddenly, through the ratings, rankings and reviews that tightly couple to reservations systems and revenue management strategy, consumers are actively participating in the actual creation and shaping of the hotel’s brand.
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When consumers can significantly affect a brand in this way, through commenting and sharing their personal experiences, “brand management” becomes a broader, more encompassing function. Even five years ago, revenue and general management might have been able to afford ignoring online “chatter” about their property. Now, as prospective guests rely more and more on others’ input, feedback and comments, doing so is the equivalent of ignoring a major component of revenue management. It also is ignoring a significant challenge, and opportunity, to be intricately involved in brand management.
Ten to fifteen years ago, technology was the fuel for the evolution of the revenue manager’s function away from basic inventory management and toward the more strategic role it plays today. Now, an increasing role in online brand management is the next step in the evolution of the revenue management function.
The 4 Rs
To simply illustrate the growing role of brand management in revenue management, take the example of two hotels offering similar features, locations and prices. If one has better rankings and reviews, that hotel will be in a much better position to raise rates in order to try and up revenue. Revenue managers must understand that guests are looking at price today, but not exclusively. They also are looking for the best trip, the best overall feature set, the best experience—the best value. Approaching revenue management from the guest’s perspective will lead to the best rates—those that fit the customer’s perception of his/her coming experience.
The direct connection between the “4 Rs”—rankings, reviews, reputation and reservations—thus extends to the fifth “R,” revenue management. “Perception is reality” becomes a new norm for the revenue manager with online brand management. A property’s brand is worth only as much as guests and prospective guests think it is, or perceive it is.
Understanding and acting on those perceptions to manage the brand is especially important as the economy recovers. Revenue managers who can figure out how price-conscious consumers perceive value through the filter of quality data, combined with changing rate structures and disappearing discounts, will be revenue managers who effectively manage online brand.
Direct line to the bottom line
In reality, who does bear responsibility for online brand management today? At a few large hotels, chains and corporations, a reputation manager is on board. Other organizations have dedicated teams or individuals with responsibility for online reviews or social media.
However, most properties rely on personnel with other job titles to monitor the volume of online rankings, review and feedback, and then take responsibility for acting on that information—in other words, to assume the role of online brand manager. Whether assigned or not, these functions most often fall to the revenue manager, and that can make great sense. After all, the line from guest review to prospect to revenue is a direct one.
Even if monitoring and responding to online reviews falls to another department, revenue management must be involved as an active participant. When it comes to online brand management, the task goes far beyond monitoring and individually responding to reviews or comments. The pressing issue becomes how revenue managers can – in fact, must – use this information in room and service pricing, promotions and other demand-creation activities.
For example, some hotels have noted consistent online comments from guests unhappy about paying for services they expected to be included in the room rate – services such as Internet access, certain phone calls and parking. Understanding that negative comments online spread quickly and can cause significant and real damage to a property’s brand, proactive revenue managers have taken the input and either made changes to the rate structure or created specials or packages that include specified services.
Thinking alone along these lines, smart revenue managers will become smart brand managers simply by recognizing that guests and prospects can do a good part of the marketing for their properties online. Once a revenue manager starts to work in this manner, he she or she he then can work cooperatively with others in the organization to implement strategic initiatives and tactics in key operational areas. With the marketing, sales and communications departments, the revenue manager can make sure that the property’s public knows that the organization has paid attention to their input and taken action based on that input. Revenue managers can work with these other departments to produce and promote additional specials or packages.
The basic idea is not only to monitor online information, but also obtain strong analytics and then act on them in a proactive, creative manner. In effect, the process is textbook marketing at its best: listening to what consumers want and need, and responding accordingly. In this manner, brand management is inextricably linked to revenue management. And in the process, revenue management becomes much more dynamic, interesting and ever more vital to the organization.
Role of social media
How to monitor, respond to and act on the wealth of online input from guests and prospects remains a challenge. Manually tracking the growing numbers of ratings sites is now impossible. TripAdvisor®, just one of the major review sites, alone contains more than 30 million reviews. Hoteliers need to rely more than ever on their price intelligence systems to provide more than prices alone; they need solid qualitative information.
Monitoring rankings and reviews is the first step; providing the results of the monitoring as useful information is the key next step. Fortunately, today, more companies in the price intelligence industry are providing extracted data results online with simple browser-based access. It is important to look carefully at the results, and make sure easy-to-read dashboard reports are available to support strong decision-making.
It is worth noting the source of this online qualitative information. There is no question as to the importance of social media. However, while the hotel industry has widely accepted – with gusto in many cases – social media, revenue managers focused on building brand would be wise to evaluate the true role of social media tools.
Sites such as Facebook and Twitter can be helpful to get a read on guest comments, and to spread the word quickly on a targeted promotion. But in general, consumers go to review sites, such as TripAdvisor or Yelp, to make their decisions on lodging. In fact, up to 30 percent of travelers switch hotels on which they have already made a decision after looking at TripAdvisor scores. As such, the revenue manager (a.k.a. online brand manager) will want to pay attention to what type of qualitative input she or he truly needs, carefully evaluating priorities as they relate actual booking decisions for their properties.
Rate parity and online brand management
One of the most important areas affecting a property’s brand is rate parity – which also happens to be one of revenue management’s most important responsibilities. Ensuring rate parity, and managing violations, has a more-than-direct link to online brand management.
One of the biggest detriments to enhancement of brand is a wide variation of rates across the web. When a consumer learns that she or he can find a better rate at an online travel agency (OTA) booking site than at the property’s own site, that consumer’s perception of the brand is likely to fall. The property will face a challenge in getting the consumer to come back to its site and in developing (or re-developing) brand loyalty.
To combat the problem, many revenue managers rely on advanced price intelligence systems to monitor the situation and issue rate violation notices. Many others work with OTAs (who themselves rely on sophisticated intelligence systems) to monitor thousands of properties, rates, reviews and rankings online. By systematically catching each rate parity violation, an OTA can help hoteliers manage their rates – and brands – more conscientiously online.
Today, hotel guests are directly responsible for creating and shaping a brand through easily accessible ratings, rankings, reviews and comments. Harnessing that information and working with it is what online brand management is all about. Revenue management’s role in online brand management no longer is a choice or a future possibility. With the power and speed of the Internet, the time is now. Online brand management is revenue management.
