Hotels urged to do something with connection between online reputation and revenue
Ever since Cornell University established a link between online reputation and revenue per room in hotels it was only matter of time before technology came along to make the most of it.
Step forward ReviewPro (partner with Cornell in the original study), which is this week launching Review Optimizer to try and leverage a property’s online reputation with tools to increase revenue.
Well, ReviewPro says the tool will take reputation management and its impact on a property’s commercial interests to a new level.
Developed in collaboration with Meliá Hotels International, Optimizer allows a hotel to track average daily rate (ADR), occupancy and RevPAR data from its competitors to better understand and take action, based on the relationship between guest satisfaction and price optimization.
The tool essentially produces two outcomes:
All hotels in a group will be visually mapped to one of the four quadrants based upon the level of revenue optimization.
- Problematic – Both the revenue and guest satisfaction score is low. Needs attention.
- Revenue Risk – Price is high, but the guest satisfaction is low. When compared to competitors, it poses a risk in revenue.
- Revenue Opportunity – Price is low, but guest satisfaction is high. So, there is an opportunity to boost revenue.
- Optimized – This is the ideal state to achieve/aim for. Both the revenue and guest satisfaction are high.
2. Next action
The tool also displays various parameters (with scores) related to the operation and service of the hotel.
Depending on the parameters, next steps can be taken to not only increase customer satisfaction, but also to hopefully increase the revenue for the property.
You own a 45-hotel chain, so map all properties to one of the four quadrants (see grab below). So, 20 hotels are marked Problematic, 14 as Revenue Opportunity, eight as Revenue Risk, and three are Optimized.
Looking at the quadrant, a group gets a view of where each of their hotel stands in terms of revenue optimization.
In the example, there are three hotels that are already “revenue optimized”, 14 hotels have scope for revenue improvement, eight hotels are at potential revenue loss and the remaining 20 hotels show a clear red flag and probably need immediate attention.
Next, Revenue Optimizer tells the hotelier about various parameters in each of the hotel that needs attention or action in order to improve customer satisfaction and boost revenue.
The Cornell study has started to push the idea of online reputation management into new areas, not least when married to the vast reams of data hotels are now able to collect or monitor, covering both revenue and online feedback.
The research suggested that for each 1% increase in GRI (global review index), revenue managers can expect an ADR (average daily rate) increase of up to 0.89%, an occupancy increase of up to 0.54% and a RevPAR increase of up to 1.42%.