An In-Depth Analysis of Hotel Online Reputation Management

Introduction to Hotel Online Reputation Management

Hotel Online Reputation Management (ORM) is essentially as simple as it sounds. It is a process by which hotels can monitor, influence, and improve the feedback that people leave about them on the internet.

The internet has changed the way commerce works in an innumerable number of ways, but most importantly, it has changed the dynamic of information between customers and service providers.

Previously, the flow of information was one way; the service provider would advertise and provide information about their business. Unfortunately, the consumer had no generalizable 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. This practice now covers almost all goods or services consumers purchase online.

For consumer services it has grown to become an industry in its own right; for such things as financial services, home improvement providers, or car sales it has become an integral part of the business.

However, nowhere has online reputation become more important than with the hotel, restaurant, and travel industry.

Travelers are able to provide feedback about their stay and experience in real-time. This makes it crucial for hotels to manage and control the conversation.

The rest of this paper demonstrates just how important this process has become. The impact it has on the core metric of the hotel industry, revenue per available room (RevPAR). This cannot be overstated; the difference between a hugely successful hotel and one that is struggling can be found in how they address comments travelers leave about them online.

The Importance Of The Internet To The Hotel And Travel Industry

It comes as a surprise to nobody that the internet has revolutionized the hotel and travel industry. It is worth quantifying just how much it has changed. By drilling down into the particular ways that travelers research and make bookings, and where ORM fits into that.

In 2001 just 1% of all hotel bookings were carried out online, according to Buutique, an industry marketing company; in 2011, depending on the measure used, it is anywhere from 35% to 50%. When taking the travel industry as a whole, the percentage becomes even higher. What is more, the level of online bookings is climbing by around 5% 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 14% of the whole marketplace, according to research for the ITB travel industry event, 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 60% 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 Review Sites – Hotel Online Reputation Management

In general, there is no one site that can be targeted with an online reputation management strategy. The reason is 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. They provide a good picture of what to expect on other sites.

Travel Review Sites

TripAdvisor is the largest site in the industry and has comfortably the highest-profile visibility. They receive 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 travel agencies and booking sites use 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. Generally speaking these fall into 2 categories. First, people trying to raise the perception of their own hotel. Second, by those trying to tarnish the image of rival hotels. Because of this, the reputation of TripAdvisor has become slightly dented, but it still retains enormous power.

Booking Sites

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. They have the largest number of users, though their approach to feedback mechanisms does vary. The importance of these sites is that travelers will see the reviews at the point of booking, and a negative review profile can persuade them to choose another hotel.

Social Media Sites

Third, Facebook, Twitter, and other social media sites are growing in importance. People regularly post location-based updates that other travelers can comment on and view. It is vital that you remain aware of what is being said, and engage with it in a positive way.

Travel Guide Sites

A fourth and final type of review site comes from providers of travel guides. 2 of the most popular sites are Frommers and Fodors. These sites tend to rely on their experienced staff rather than customer reviews but are still important to hotel ORM.

Why Does Hotel Online Reputation Management Matter?

You might think that ORM isn’t really a matter of importance. Even if you were to get a bit of bad feedback you could either let it blow over or try and redress the balance by offering a discount, right?

Dead wrong.

The global trade bodies for the travel 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 un-elastic 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 35% of hotel customers in 2019/2020 changed 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.

Star Ratings Matter

In terms of the impact on detailed financials, the evidence is compelling. According to Expedia, reviews of 4 or 5 will more than double the conversions compared to 1 and 2 stars. ComScore/Kelsey’s research found that when it came to hotels, customers were willing to pay a minimum 20% more, but potentially up to 90% more, for a property with 5-star customer reviews compared to 4 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 online 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 reputation management 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 you online, then much of this investment may go to waste when people read something negative about your establishment; there is no point in spending a budget on raising the profile of your hotel if that profile is tarnished.

Best Practices For Online Reputation Management

There are a number of ways that you can go about managing your online reputation, but there are three golden rules that should be adhered to at all times:

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 favourable 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. Earlier in the paper, 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 ORM Yourself?

In theory, there is nothing to stop you from 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 travel 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 is just like any other technical service, it is far better carried out by a seasoned professional.

Why You Should Consider Hiring an Online Reputation Management Agency

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 established, 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 industry is growing very rapidly, and the amount of hotel owners investing in the service is rocketing.

Can you afford to be left behind?

How We Can Help Your Hotel

At Marketing Disty, we provide discreet, ethical, and effective online reputation management services to the hotel, travel, and tourism industry.

We work directly with our 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.

We achieve this using a combination of customized software and tested and proven social media and Hotel SEO to help increase your bookings and bottom line.

If you are concerned with your hotel’s online reputation and its effect on your business, our team 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.

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