Reviews Play Critical Role in Defining Value

Paul Wood, VP of revenue management at Greenwood Hospitality, sat back and thought about how his company would best handle monitoring and responding to user-generated content, such as online reviews.

The owner-operator, which has a mix of ownership and operating responsibilities at 11 hotels in the U.S., decided the best idea would be to create a new position to handle the reputation at each of the hotels.

“At first, I thought, ‘How can I afford having someone to take care of our social media?’” Wood said. “The fact of the matter is I had to change my perception. And instead I said, ‘How can I not afford to do this?’”

So Greenwood created the position of Portfolio Reputation Manager and tasked the new hire with taking care of the social media responsibilities across the entire portfolio.

Wood knew proving the return on investment for the additional salary was not going to be easy. “It was not going to come from generated bookings, I already knew that,” he said. “My proof in the pudding was if my (revenue per available room) sees an increase and then I can cross overlay that with our reputation as an aggregate score.

“I’m confident now that how my properties have moved up is proof,” he continued. “We’ve had a really good summer.”

Wood and other hoteliers today understand more that guest reviews play a critical role in helping guests define value. As many guests are first-time visitors to a given hotel, reviews help them preview and visualize their on-property experience. Reviews frame guest perceptions of the value they’ll receive on-property and what that value is worth in terms of price, said Tim Peter, managing director of Tim Peter & Associates, an Internet marketing consulting firm.

“Probably the largest single adaptation (of user-generated content) is the increasing frequency of reviews on brand.com,” he said. “While OTAs have offered reviews for some time—some verified, some not—many major brands now offer reviews from services.”

Amy Severson, senior director of industry relations at Expedia, said traveler opinions are “critically important” to consumers. Data from global hotel transactions in December 2012 suggests hotels with more than 50 reviews had a 1.4% higher take-up than all hotels for the same period, she said.

“If a hotel has a small number of reviews, that hotelier may want to offer guests a small incentive for completing an online customer review,” she said. “In terms of how different distribution channels are adapting to this, the most natural place for reviews is a third-party site, so that there is no conflict of interest and a variety of branded hotels and independents are also compared.”

At Google, executives are finding that more and more people base their buying decision on reviews, said Rob Torres, managing director of travel. “We are also seeing a big shift to social networks when searching for reviews,” Torres said. “Travelers want feedback from friends and family, those who they trust.”

Brand.com inclusion
Peter argued that, given the frequency with which guests consult reviews prior to making a booking decision, it’s safe to call adding reviews to brand.com sites a “best practice.”

“Some argue that posting reviews on brand.com highlights flaws and risks the brand’s image. Be aware that your guests likely find those reviews already today,” he said.

That’s the stance Choice Hotels International takes. Brian Garvan, director of sales for Choice Hotels International U.K., said the company’s decision not to place guest reviews on Choice-branded site was a complex one.

“We do collect reviews and content from consumers, and we conduct surveys with guests that have actually stayed,” he said. “We’re looking at whether it would be valuable to put that on our own (point of sale system). We don’t want to tie ourselves up with one of those UGC sites.”

However, popular user-generated content sites such as TripAdvisor are able to capitalize on a proven link between positive user reviews and the ability to boost average daily rate. TripAdvisor, said Michelle Grant, travel and tourism manager at Euromonitor International, will continue to grow, as the company has “first mover advantage.”

“They lead the field in the industry for that and they’re pretty dominant,” Grant said. “They’re starting to do a little bit more mass marketing; they have ads on TV now.”