10 Reasons Why Hotels Can't Afford to Ignore Online Reviews

Online bookings are becoming a major source of revenue for hotels across the world. These are the bookings made over the internet through a hotels own site or through review sites such as TripAdvisor and Online Travel Agencies (OTAs) such as Booking.com, Expedia, MakeMyTrip, ClearTrip, etc. Online reviews are your customer feedbacks on the internet about your hotel. More positive reviews tend to imply strong online reputation while fewer reviews or higher number of negative reviews imply a weak reputation on the internet. As a part of reputation management efforts, hotels need to constantly monitor their online reviews.

Below are 10 reasons why hotel managers and owners cannot afford to ignore their online reviews.

1. Potential customers read reviews before making an online booking

   Research has shown that 81% of travelers find user reviews important while making an online booking. About 49% of your potential customers won't choose hotels with no or less reviews. Online reviews are key drivers of bookings on the internet. Better reviews usually lead to higher booking volume. Hence the need for hotels to monitor and manage their online reviews. (More about Review Management)

2. Negative reviews affect your immediate booking volume

   A few negative reviews in a row tend to affect sales in the short run. Can you change the trend? Absolutely! While you cannot completely prevent negative reviews from being posted against your hotel, you can reply back with a positive attitude and answer customer concerns. Addressing customer issues shows the hotel's willingness to listen to the customers and change and fix problems. Research has shown that potential customers are more likely to book with such hotels than with hotels that completely ignore negative guest feedbacks.

3. Online reviews help you identify problems

   Online reviewers leave blunt feedback about your business. They highlight the service gaps in your business. You must identify areas where you need to improve. Property owners must fix issues as soon as possible. Failing to do this could drive away even your most loyal customer base.

4. Strong online reputation means higher RevPAR

   A positive online reputation could lead to higher Revenue Per Available Room (RevPAR). Research by the Cornell University's School of Hotel Administration has shown that a stronger online reputation provides hotels with higher pricing power for online sales. Hotels tend to get not only better clients but also higher group bookings rates and negotiation power with corporate clientele. This is true irrespective of whether bookings are made online or over the phone.

5. Better Branding

   You don't need to own a Hilton, Marriott, Taj or Leela to build a brand. Even a small family owned hotel like the Pousada Touma, Goa can build a strong online presence among 425 hotels in Goa on TripAdvisor. The hotel is ranked #1 among all the Goa hotels and ranked #1 among 100 hotels in Calangute. Why does it have a strong brand? A detailed look at the hotels review on TripAdvisor reveals that many high end tourists include people that usually stay at a Taj or a Leela have preferred this hotel instead. Millions of visitors to Goa's page on TripAdvisor see this hotel at the top of the list. Strong positive reviews helps Pousada Touma create a great brand image.
   
   

6. Online reviews will define the future of your business

   In 2013, there was a 14% worldwide increase in online hotel bookings. Researches by reputed firms predict that percentage to continue to grow. The growth will be much higher in many developing countries such as India, China & Brazil. Developed countries such as USA & European nations see about 57% of all travel reservations being made online. Many hotels in these countries receive up to 75% of their bookings from online sources. Similar trends can be seen in India and other emerging countries where growth in internet usage has been the highest among nations worldwide. With growing online bookings, your current & future reviews will play an even more important role towards your future sales.

7. Your competitors are being more responsible

   Many of your competitors are starting to learn & understand online reputation management. They are taking actions that will set them up for a strong positive online presence. This will help them in gaining critical market share from other nearby property owners. Staying competitive means making sure you have enough positive reviews with respect to your competitors. This will ensure that your property gets its fair share of bookings from online channels.

8. Higher profit margin with lower commissions to Online Travel Agencies

   OTAs tend to favor two types of hotels. These are the hotels that pay higher TACs (Travel Agent Commissions) and hotels with higher conversion rate (number of bookings for every 100 views). Such hotels are usually listed at the top of the search results on sites such as Booking.com, Expedia and ClearTrip. Customers usually prefer hotels with better reviews (both quantity and quality) and hence such hotels have higher conversion rate. Bottomline: Better online reputation leads to higher conversion rates which in turn provides top listings without paying higher commissions.

9. More Reviews = Higher Credibility

   Customers tend to feel more comfortable booking hotels that have higher number of reviews than with those with fewer reviews. More reviews usually imply that a hotel is popular and more online guests have already experienced their services. More, in this case, is relative. For example, if there are two hotels in the same price range and locality and one has 200 online reviews while the other has 50 reviews, then 50 is considered as a low. As a part of managing a hotel, operators can request reviews from their guests. Review requests features are becoming an important part of many Review Management tools.

10. It takes a long time to build a strong online reputation

    Online reputation cannot be grown overnight. It needs time (up to several years) to build a strong & positive online presence. It requires continuous hard work and dedication from the entire organization, starting with the top level management. It needs continuous monitoring and service improvement. With online reviews playing a major role in your revenue growth, your current efforts towards maintaining a positive presence will set you up for a stronger future. There is no better time than right now to act on it.

About Review Management

There are many online tools that allows hotels and restaurant managers to actively manage their online reviews. TrackNGrow provides one such easy to use tool. Features and functionalities include review monitoring, customer sentiment analysis, competition analysis and review request options. Many of the technologies we use are new and some are proprietary. These tools are being widely adopted by hotel and restaurant industries globally.

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