ManagementMarketingNews In Brief

Why investing in your hotel’s online reputation matters – now more than ever

The Australian hotel industry has never faced more challenging operating conditions. With travel bans in place worldwide and a general directive to limit activities out of the home, hotel occupancy and revenues have declined significantly.

While many hotels are experiencing tangible challenges related to the COVID-19 crisis, it is essential that planning is also undertaken over this period for when the market begins to recover. Hoteliers should be asking themselves how they can position their property as a desirable accommodation provider to the first wave of post-COVID-19 travellers as the market begins to stabilise.

Importantly, what is being said about a hotel on social media and a property’s peer-review score has never been more influential. These channels are where the reputation of a property can either be enhanced or damaged, and given that online website traffic and social media usage has reached record-high levels[i] as a result of COVID-19 stay-at-home directives – all hoteliers need to be listening and taking action.

Why does what is said online matter?

Hoteliers have so many competing priorities to work through, so why is giving attention to a property’s online reputation important? Because beyond any online ‘feel-good’ factors, recent research conducted by TrustYou showed there are real financial risks for hotels rated poorly online:

In order to drive up your rate, which is a key goal of rate-setting, you have to create demand for your product. In our research, 88% of travellers would automatically sort out hotels with review scores under three stars, and 33% would sort out hotels under four stars. This means, regardless of the price, one-third of all travellers would only see hotels with higher reputation scores,” said Valerie Castillo, VP of marketing at TrustYou.  

If a hotel has a poor reputation and is rated negatively online, a property risks limiting the number of guests it can attract and revenue it can generate. Given the huge volume of guests who book via OTAs, and those who do online research before making decisions, to not be featured as at least a three-star hotel means potential guests won’t even see your hotel as an option to consider.

Review and act

Australian hoteliers often find their staff fully occupied with day-to-day operations. Now, at a time when activity may be lower across many properties, this may be a good opportunity for hoteliers to review and monitor what has been said about their hotel online over recent months and act where appropriate. For example, if common feedback on social media has been that the check-in process at a property has been arduous and unnecessarily time-consuming, the operations team should review their practices now, retrain staff and create a better guest experience. In the same way, if a hotel is rated highly, and most comments relate to tastefully decorated rooms – or in the case of operating through COVID-19, highly visible cleansing protocols and effective social distancing measures; the marketing department will have the opportunity to build on these positive reviews as the market recovers.

Just as negative online sentiments can have an unfavourable impact on a hotel’s ability to attract guests and grow revenue, positive online commentary and review scores can directly support a hotel’s bottom line. In fact, it has been reported that for every point increase in a hotel’s online reputation score, bookings increase over 14% and average daily rate goes up over 11%. [ii]

Carefully implement cancellation policies

In a time where not only is the hotel sector facing significant disruption, but also its customers – how brands engage with guests and the policies they enforce can have lasting reputational impacts. Given the travel restrictions put in place, many guests may be unable to physically reach a property they have booked with, or not want to travel due to health concerns.

Different hotels are approaching the issue of COVID-19 cancellations in a different manner, illustrating that there is no one, ‘right way’ for how best to address the issue. Even within the same hotel groups, different policies exist to best match the conditions in different geographies. For example, a hotel group in Europe have stated: “For a stay between March 1st, 2020 and prior to September 15th, 2020, guests may cancel their reservations and receive a credit voucher for the full value of their reservation for use within 18 months.” Where for the same hotel group, the policy differs slightly in Australia, stating: “Guests scheduled to arrive prior to April 30, 2020 may cancel (or modify) their reservation by contacting the hotel directly.”[iii]

While losing short-term revenue is generally not advised and standard cancellation policies should normally be enforced to support a hotel’s financial position, these exceptional circumstances are also a critical time to drive brand loyalty by treating your guest with ease and flexibility in your cancellation process. Any property not offering cancellation flexibility to guests – whether they booked directly, or through an OTA and even those with non-flexible bookings, can expect a spike in negative online sentiment that can impact on future guest recruitment activities. 

Compete on reputation, not price alone

Today, hoteliers need to consider how reputation and consumer sentiment can support smarter revenue management decisions. With the abundance of online commentary being generated on social media channels and rating sites, user-generated content can act as a signalling mechanism for hoteliers that communicates the true value of a product or service from a customer’s perspective. Technologies exist today that integrate online reputation into pricing analytics, empowering revenue managers to keep up with their guest perceptions and turn them into dynamic revenue-optimising inputs.

When seeking to convert potential guests into paying customers as the market recovers from COVID-19, simply competing with rival properties on price alone is the wrong strategy. It is critical that revenue mangers integrate the impact of guest ratings and reviews into their offerings to reflect the additional value the hotel’s services and attributes drive beyond just price. Hotels must ensure positive guest experiences are amplified and negative feedback is actioned so that all revenue opportunities can be maximised.

 

Mike Chuma

Mike Chuma is the Vice President of Global Marketing, Engagement and Enablement, at IDeaS.

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