Online Reputation Management For Hotels: How It Works
Why does online reputation management for hotels matter? Read on to discover the 3 fatal errors hotels are making with their online reputation management.
Hotel Online Reputation Management
Online Reputation Management (ORM) is essentially as simple as it sounds. For our purposes, it is a process by which hotels can monitor, influence and improve feedback that people leave about them on hotel review sites like TripAdvisor.
The internet has changed the way commerce works in the hotel industry in an innumerable number of ways, but most importantly, it has changed the dynamic of information between customer and hotel.
Previously, the flow of information was one way;
- the hotel would advertise and provide information about their business
- but the consumer had no viable means of providing feedback
- there was the old adage about a dissatisfied customer telling up to seven people
- but that was about as large scale as the feedback could get
The internet altered that.
eBay was the first company that made leaving feedback for sellers commonplace, but now it has grown to cover almost any kind of good or service that can be purchased over the internet.
For consumer services it has grown to become an industry in its own right; for such things as:
- hotel reviews and complaints
- financial services reviews and complaints
- home improvement providers reviews and complaints
- or car sales reviews and complaints
Online Reputation Management For Hotels Has Become An Integral Part of The Business Model
Because people are able to provide feedback on exactly the same service as someone else is actively shopping for, rather than merely the same product, it has become very common for people to leave feedback and it’s crucial for hotels to manage it.
The rest of this article demonstrates just how important online reputation management for hotels has become.
The impact it has on the core metric of the hotel industry, revenue per available room (revpar), cannot be overstated; the difference between a hugely successful hotel and one that is struggling can be found in what they do about the comments people leave about them online.
The Importance of the Internet to the Hotel Industry
It comes as a surprise to that the internet has revolutionized the hotel industry, but it is worth quantifying just how much it has changed, and drilling down into the particular ways that people research and make bookings, and where ORM (online reputation management) fits into that.
- In 2001 just 1% of all hotel bookings were carried out online
- Today, depending on the measure used, it is anywhere from 57% to 65%
What is more, the level of online bookings is climbing each year, and there are no signs of it slowing down.
However, there is more to these trends than a simple growth in online bookings.
It is worth noting that the percentage of people booking their accommodation through mobile internet sites, particularly since the launch of tablet PC’s like the iPad, has rocketed, now reaching more than 51.8% of the whole marketplace and often this comes through the ‘app’ of a booking site with feedback capability; meaning it is highly likely that they will consult reviews before booking.
More importantly from the point of view of managing online reputations:
- it is estimated that a minimum of 57-65% of hotel customers now research their stay online
- regardless of how they then go on to book their accommodation
Consequently, it is of vital importance that hotels have a strategy in place for managing what those researching customers see when they look at the reviews of their hotel.
Key Hotel Reputation Management Review Sites
In general, there is no one site that can be targeted with a hotel online reputation management strategy, since virtually any online travel agency has the ability for customers to leave feedback about hotels.
Nonetheless, there are a couple of larger sites that have particular sway in this market, and they provide a good picture of what to expect on other sites.
TripAdvisor is the largest site in the industry, and has comfortably the highest profile, receiving over 60 million individual visitors a month, according to their own statistics.
- TripAdvisor is by far and away the most powerful
- and is almost always the first site that people consult
Many hotel booking sites carry links through to the TripAdvisor page of individual hotels in order to help the customer do that.
However, they are not without problems;
- there have been well publicized accusations of false reviews being posted on the website
- both by people trying to raise the perception of their own hotel
- and by those trying to tarnish the image of rivals
- because of this, the reputation of TripAdvisor has become slightly dented
- but it still retains enormous power
The main category of other sites that hold sway in the industry are those that provide booking services.
- Orbitz, Travelocity and Expedia are the ones to be particularly concerned about
- because they have the largest number of users by some distance
- though their approach to feedback mechanisms does vary
The importance of these sites is people see hotel reviews at the point of booking, and a negative review profile can make them choose another hotel.
Also, social media sites like Facebook, Twitter and other social media sites are growing in importance.
People regularly post location based updates that other people can comment upon, and others can view, so it is vital that you remain aware of what is being said, and engaging with it in a positive way.
A final type of review site comes from providers of travel guides.
- the key sites are Frommers and Fodors
- though these sites tend to rely on their experienced staff rather than customer reviews
- but they should be borne in mind
Why does online reputation management for hotels matter?
You might think that online reputation management for hotels isn’t really a matter of importance. Even if you were to get a bit of bad feedback online, you could either let it blow over, or if you needed to, you could try and redress the balance with some discounts and marketing activity, right?
The global trade bodies for the hotel industry have researched this extensively, and they have found that reputation management could not be more important.
The first thing to note is that hotel rooms are entirely priced inelastic according to the latest research from The Owners Association. What that means is that a slowdown in bookings due to bad reviews cannot be countered with discounts.
Extensive research has shown that:
- any increase in the volume of sales driven by discounts
- is nowhere near enough to recover the lost original business
But it gets more important than that.
Market Metrix report that “past experience, reputation, recommendations and online reviews are now more important to hotel guests than either location or price.” Moreover, the World Travel Market report notes that 55% of hotel customers change their hotel selection after reading about them on social media sites.
Most hotels generate the largest profit margin from corporate customers and business travelers;
- in this instance, Forrester research indicates that over 85% of purchasers in this segment consult social media
- and reviews before making their purchase decision.
In terms of the impact on detailed financials, the evidence is compelling.
According to Expedia, a good review of 4.0 or 5.0 will deliver more than double the conversions of a review of 1.0 or 2.0. ComScore/Kelsey’s research found that when it came to hotels:
- customers were willing to pay at minimum 20% more
- but potentially up to 90% more
- for a property with five star customer reviews compared to four stars
The matter has been studied academically, with a postgraduate thesis at the University of Las Vegas demonstrating it in raw financial terms, and demonstrating the importance of online reputation management beyond any doubt.
These statistics demonstrate that the online perception of a hotel is absolutely crucial to its financial viability.
It therefore makes sense to invest just as much into hotel reputation management as you would into the facilities or the fixtures and fittings of your hotel;
- a good investment will always pay dividends
- and so spending on online reputation management for hotels should be seen in that light
Moreover, investing in ORM supports your investments in other areas.
Most hotels spend a substantial sum of money each year on advertising, marketing and promotional activities.
- if you aren’t managing what people read about your hotel online
- then much of this investment may go to waste when people read something negative about your establishment
- there is no point spending a budget on raising the profile of your hotel if that profile is tarnished
Best Practices For Hotel Reputation Management
1. Never ignore negative feedback. You can’t be perfect all the time, and you need to have a clear process in place for when people leave a negative review about your hotel. Engaging with the complaint in a clear, polite and positive fashion creates a much more favorable impression with potential customers than simply doing nothing.
- never react in an aggressive or impolite manner
- even if you feel the complaint or poor rating is unwarranted
2. Encourage your customers to leave positive reviews. The simple fact is that customers are much more likely (possibly up to seven times) to leave a review or share their opinion if they have had a negative experience.
So you need to be proactive in getting people to leave positive recommendations;
- if your customers say something nice to you then ask them to put it online
- at the point of check-in and check-out
- ask your customers to leave positive feedback if they have had a good time
3. Whatever you do, don’t be tempted to try and game the system. Above, it was noted that several hotels have tried posting false reviews on websites like TripAdvisor, and there is now a growing list of hotels that have been blacklisted from online travel agents for such activities. In addition, there are a variety of shady companies around offering to ‘swamp’ or otherwise defray negative remarks about companies on the internet, by underhand techniques. Don’t be tempted, you will be found out.
Can You Do Hotel Reputation Management Yourself?
In theory there is nothing to stop you trying to manage your online reputation yourself; you can register as a hotel proprietor on most sites, and address the customer interactions yourself. Similarly, you can manage your presence on Facebook and Twitter.
However, you should probably consider the following questions before you decide to do that:
1. Have you really got the time? Running a hotel is hard enough work as it is, and a realistic strategy for ORM could involve two to three hours a day. When you consider the amount of websites and social media channels involved, can you keep up with it all?
2. Do you know all of the channels that you need to manage? The scale of the online hotel industry means that there are literally thousands of sites online, and many new incarnations being created every week.
- Do you have the knowledge to find them
- and to track changes in the online industry?
3. Do you really know what to say and do for the best effect? There is an art to how to deal with people on line, and a range of techniques that can be deployed, like semantic analysis.
- Do you know what they are, or have the inclination to learn about them?
- How expensive and time consuming would it be to train your staff to do it?
You probably wouldn’t attempt to do your own accounting, or rewire your hotel by yourself; you would call upon the services of a professional. Online reputation management for hotels is just like any other technical service, it is far better carried out by a seasoned professional.
Given the importance of reputation management to your hotel, can you really afford to do this on an amateur basis?
- You should not look at it as an expense to be borne
- but view it as an investment in the long term vitality of your business
- that will have a positive impact on both the number of bookings you receive
- and the rates that you can charge
Like all major investments in your hotel, you need to get the best professionals in.
Partnering with an knowledgable, successful and ethical ORM company will pay huge dividends over time. The effects will not be instantaneous, but the long term return on your investment will far outstrip any physical upgrades that you can make to your hotel.
- engaging a professional reputation management firm will allow you to achieve a management strategy
- but at considerably less expense and time investment than training your staff to do it
The final thing to consider is this – The online reputation management for hotels industry is growing very rapidly, and the amount of hotel owners investing in the service is rocketing.
Can your hotel afford to be left behind?
How I Can Help Your Hotel
I can provide discreet, ethical and effective online reputation management services to the hotel industry.
I work directly with my clients to develop and implement actionable strategies that quickly enhance the positive reputation of your business online, while mitigating the effects of any negative feedback you may receive.
- I achieve this using a combination of customized software
- and proven social media and SEO tactics to help increase your bookings and bottom line
If you are concerned with your hotel’s online reputation and its effect on your business, oI would be happy to provide you with an in-depth analysis of your current online reputation – along with useful strategies for improving your rep and reversing the effects of negative feedback. If interested, contact me.