Today, social media impacts consumer buying decisions in a way few people would have ever imagined. This is particularly true for the hotel industry. A recent study conducted by Pennsylvania State University sheds light on how user-generated reviews and ratings impact individuals looking to book a trip out of town.
The research posed the hypothetical of a weekend get away and quizzed study participants on what would influence their selection of an unknown hotel. Overall, the study concluded that the written reviews mattered more than the aggregate rating of the property. However, there was a distinction between those looking for an affordable hotel and those for whom money was no object. According to the research, with customers looking for a lower priced hotel the number of stars in a rating mattered more than a written review. For guests searching for higher priced accommodations, the actual ratings did not weigh nearly as heavily as the written review.
The study also explored the price/value relationship of a hotel room. It concluded that if the review was negative and the rating was low, both the low-price seeker and the high-price seeker were equally turned off. It also indicated that once a property is poorly rated, even lowering the price is ineffective for conversions. Even though people prefer a lower price, competing on price alone is not likely to be a winning strategy. Because of hotel price aggregators like Expedia, hotels can no longer simply undercut their competitors. The hotel seeker always has the big-picture view and knows how your price compares with the hotel down the block.
Another interesting conclusion generated by the study is that once a consumer is confronted with good reviews and ratings, lower pricing no longer suggests lower quality. If the review is good, the hotel is good. This insight provides hotel revenue managers the opportunity to play with pricing to generate short-term demand without negatively effecting quality perceptions.
However, once a hotel has received negative reviews and low ratings, dropping the price has no leverage. The hotel is better off keeping the price where it is. The best hope for these sorts of low-rated properties is to put more attention to training, upgrading and instituting better quality control.
It is clear that social media in general and consumer-generated reviews have changed the hotel selection process. Hotels that monitor these reviews will have an edge. Today, more than ever, hotel managers that vigilantly monitor guest satisfaction and provide early restitution will have a shot at heading off a bad online review.
Looking to book a branding agency with a wealth of hospitality experience? Contact us today toll-free at 866.642.7559.