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Value of brand shrinking as reviews and price dominate

Price and guest ratings carry more weight than brand as key attributes to accom selection, says a new study, with consumers happier to pay more for a top-rated property than a brand name.

The data from Unabashed Research and Expedia Group found price to be the most influential driver of hotel selection, consumers prioritising value above all else when allocating their travel budgets.

“While consumers want the best deal on travel bookings, their individual selections ultimately reflect their values,” said Abhijit Pal, head of research for Expedia Group.

“The consumer searching for a budget accommodation will look for the best value within their constraints, while someone with more disposable income may prefer a luxury option and be willing to pay more per night, but not more than they have to.”

Guest ratings have a strong influence on selection, with a 72 percent chance that any consumer will value guest ratings higher than hotel brand according to the study.

It found consumers were willing to pay more for higher guest reviews – and considerably more so than for more premium brands. Participants overall were willing to pay more for a hotel with higher guest ratings: 24 percent more for a 3.9 rated hotel versus a 3.4 rated hotel, and 35 percent more for a 4.4 rated hotel versus a 3.9 rated hotel.

“Peer, or guest ratings have essentially levelled the playing field for independent hotels, as more potential guests seek out third party endorsements for hotel properties they are considering,” said Jamie Griego, director of market management at Expedia Group.

Hotel brand did carry a slight advantage over other attributes, including remodel callouts, room image and star ratings, according to the study. Premium brands showed more influence on selection, with shoppers rewarding those brands with some average daily rate premium, albeit not to the same extent as high guest ratings.

Bradley Woods, acting CEO of Tourism Accommodation Australia, agreed that an increasing reliance on technology and peer view platforms has led to guests placing “more importance on other people’s experience”.

“Hotel brands still can, however, play a substantial role in the guest’s review, particularly where a brand standard has a focus on guest experience,” he argued.

“There is now a greater imperative on delivering outstanding service, as the influence of a positive or a negative online review is now far more influential than it was a decade ago.

“The results of the Expedia research demonstrate that hotels should maintain a focus on providing the best guest experience possible and ultimately ensure positive guest reviews, but it does not eliminate the importance of brands and brand standards.”

A recent Cornell University study of some 95,000 reviews and ratings for independent high-end properties found that “the key drivers in customer satisfaction remain service and room”.

It concluded: “Hoteliers should therefore focus on the operational areas that speak volumes about service and room, such as appropriately friendly service throughout the property, as well as the quality of beds and ensuring a good night’s sleep for the guest.

“The traditional lodging service that delivers a good night’s sleep in a clean, well-functioning room, together with availability of an excellent breakfast, remains central to customer satisfaction.”

Although the Expedia study is based on feedback from US travellers, the online travel agent argues its insights are important to Australian hoteliers as America remains one of our top feeder markets, accounting for almost 800,000 arrivals annually and contributing $3.8 billion to local tourism in 2018.

“The research results are telling,” said Mr Griego.

“As guest ratings carry more weight than brand when it comes to making a booking, hoteliers, especially those independent ones who don’t have huge budgets on marketing, should focus on providing best services to guests during their stay so as to gather more positive reviews.

“This ultimately help hoteliers increase conversion and drive revenue.”

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Kate Jackson

Kate Jackson is the editor of Accomnews. You can reach her at any time with questions or submissions: [email protected]

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