Reputation management: its impact on hotel revenue

By. Serge Chamelian 06th Sep 2014

So firstly, what actually is Reputation Management? Reputation Management is the managing of a company’s reputation – most companies will implement it through three separate stages:

Building: forming or developing a good reputation for a new start-up company.

Maintenance: keeping the positive and already established image of existing companies which should be superior in the public eye.

Recovery: amending the company’s reputation when it goes bad through  self-promotion and marketing in order to reverse the negative and achieve a good reputation.

Customers now can say anything about a hotel wherever and however they choose; there is both a higher quantity and broader range of feedback online than there is collected through traditional channels. This intelligence, which comes from publicly available sources, allows millions of customers to share open and honest feedback about their hotel experiences.

Reviews as Key Performance Indicators

Hoteliers today must be engaged with reputation management. Responding to and monitoring online reviews conveys to their customers how much they care about them.  While this is a start, actively soliciting reviews encourages customers’ feedback and drives higher popularity rankings – and hence an increase in hotel bookings.

The advantage of customers’ reviews lies in the amount of information they contain, which helps hotels understand guest satisfaction. In fact, many hotels have turned the sentiment information in reviews into key performance indicators and changed their operational models. Thus, employees can use customers’ feedback to guide decisions, aid with service recovery and monitor satisfaction.

Customer experience, more than price and location, is now the major criteria that travelers use to select hotels. Customers are using hotel reviews or review sites at the point of purchase to make their final decision (plan, compare and purchase stages), so it is imperative that hoteliers actively manage their online reputation across the web, on every channel and in every language.

Review sites have a huge impact in the travel business. 53 percent of TripAdvisor users will not book a hotel that has no reviews, with 80 percent of them reading approximately between 6 to 12 reviews before making a decision.

Online management tools that help

Hotels can spend hours tracking their brand online by monitoring social media comments, advertising campaigns, blog comments and mentions across the Web at large. However, there are tools on the market, such as Review Pro, which can make managing a hotel’s online reputation more effective and efficient .

ReviewPro is a company that proposes the most complete global solution for online reputation and social media management for the hotel sector. ReviewPro started with the idea that if hotels could listen and respond to what customers are saying about them online, they could improve customer experience and drive revenue growth.

Indeed, the number of reviews received online affects a hotel’s revenue; gaining a higher volume of customer ratings will improve the hotel’s competitive online position and visibility – and most importantly, encourage potential customers to spend their money with this hotel because it appears reliable and trustworthy in comparison to competitors.

In a highly competitive environment where online reputation has a direct impact on sales, it is critical to have the right solution to take advantage of what many experts are calling the most important trend to impact the hotel industry in recent years. Thus, Review Pro launched Global Review Index (GRI), which is a general online reputation score for an individual hotel, group of hotels or chains, based on data taken from all major online travel agencies and review sites. It can be calculated for a given point in time (day, week, month, year etc.) GRI is used to benchmark a given hotel, make comparisons between properties, compare results with competitors, and track the evolution of a hotel’s performance over time.

Online reputation management has a huge impact on the hotel’s revenue per room. For instance, a one point increase in a hotel’s 100-point GRI leads up to a 0.9 percent increase in price (ADR), a 0.5 percent increase in occupancy, and a 1.4 percent increase in revenue per available room (RevPar). Moreover, research has proved that a positive online reputation not only provides higher pricing power for online sales, but it also correlates to higher group booking rates and corporate negotiated rates.

Managing online reputation – specifically improving guest satisfaction by increasing operational effectiveness and efficiency – pays off financially. Hotels want to make sure that the investment in time and effort will benefit their sales i.e. RevPar. Hence, by improving a hotel’s reputation and communicating the results to employees, both RevPar and employee satisfaction increase.

About Serge Chamelian

Serge Chamelian is the managing director of h-hotelier, a hospitality services firm that offers a holistic approach to business intelligence solutions, revenue management consultancy and training and development programs among many others. Serge Chamelian started his Hospitality Management specialization in Switzerland. After holding several managerial roles in the Swiss Hospitality Industry, Serge acquired his MBA degree from IMHI (ESSEC-Cornell),

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