The Review Effect
Having a good reputation alone is not enough. A hotel will generate more revenue per transaction when there are more reviews published about it.
post February, 2015
The rise of online reviews has done even more than shift the relation between hoteliers and their guests. Their importance has been growing to a point that they have even been drawing the attention of academic scholars. Dr. Edwin N. Torres and Dr. Dipendra Singh of Central Florida University recently conducted a search with the aim of scientifically analyzing the multifaceted impact of online reviews.
The review study took a sample of 178 hotels from across the U.S., including large, corporate-brand and independent hotels, in order to establish a conditional relation between reviews placed on TripAdvisor, and a hotel’s revenue per transaction. From July to August, 2013, the team collected data concerning the number of online booking transactions, the total revenue derived from online bookings, and the average value of each booking transaction for several hotel companies.
The study provided some interesting results.
While building a positive reputation on TripAdvisor is obviously an important factor, the sheer amount of reviews is even more relevant. This may include the length of stay, price for hotel room, as well as amenities. According to the study, a hotel will generate more revenue per transaction when there are more reviews published about it. Perhaps more reviews offer more opportunities for those reviews to be positive. But whatever the reason, it is clear that it is in a hotel manager’s interest to encourage guests to write about their experiences.
In line with that, the review study also deduced that a hotel’s ranking on TripAdvisor does not have a decisive impact on revenues. The professors could not prove that there is a relationship between a hotel’s ranking and revenues per transaction.
For hotel stars, in contrast, such a correlation was in fact verified. Thus, a five Star hotel will have a higher revenue per transaction than a hotel with less stars.
In conclusion, what we should take away from this study is that having a good reputation alone is not enough. According to the findings of this Central Florida University study, it is at least equally important to be visible to your guest across the relevant hospitality portals and have your good quality validated multiple times.
With that in mind, you should not miss the opportunity to take a look at our services. Customer Alliance not only provides you with more customer reviews, it also helps you increase your visibility by ensuring that they are distributed across the web. Learn more about this in a Free Demo.