Our friends at Cornell University School of Hotel Administration just released the The Impact of Social Media on Lodging Performance report that covers 2,5 years studying midscale, upscale, and luxury hotels in 11 cities in the North America and Europe.

This report is conducted by Chris K. Anderson, Ph.D., an associate professor at the Cornell University School of Hotel Administration.

This report uses the unique position of Cornell’s Center for Hospitality Research to combine data from three research partners ReviewPro, STR, and Travelocity, and two other data providers comScore and TripAdvisor in a first attempt at determining Social Media ROI.

The Guest Experience Tipping Point

Over the years, there has been a steady increase in consumers consulting TripAdvisor reviews before making a booking decision. And the data verify that reviews have a high impact on the consumers’ booking decision.

The interesting factor here is that in 2010 the guest experience mentioned in customer reviews became the dominant factor in hotel selection.

And the report focus on Reputation Management Metrics from ReviewPro Global Review Index ™. This data shows that the Hotel’s reputation in Social Media Channels has a direct impact on Hotels performance.

  • 1-percent increase in a Hotels online reputation score leads up to a 0.89-percent increase in price as measured by the Hotels Average Daily Rate (ADR)
  • 1-percent increase in reputation leads to demand creation with up to a 0.54-percent increase in occupancy
  • 1-percent reputation improvement leads up to a 1.42-percent increase in revenue per available room (RevPAR)

The report reveals the importance of Social Media and user-generated content. And consumers are getting more engaged across several Social Networks in their booking decision process.

Now it is not a big surprise that a large base of Hotel guests has made their booking decision based on TripAdvisor reviews. And the number of consumers visiting TripAdvisor is increasing.

One interesting finding here is that consumers are visiting TripAdvisor more often, and view more pages overall. This is believed to come as a result of TripAdvisor has created a more efficient consumer experience, and better search abilities.

Another important finding is that as much as 26.5% of TripAdvisor visits occur in the last five days before reservation. This indicates that reviews are one of the final criteria in the Hotel booking process.

Pricing Points of the Social Factor

Price is understood as combining the effects of price and review scores.

If there is an increase in the Hotels review score from 3.3 to 4.3 the Hotel could increase its price of about 11.2-percent. The positive increase in the review score will offset the negative odds of a price increase.

This shows clearly that better reviews lead to higher pricing while lower reviews force the Hotel to lower pricing to achieve similar occupancy under both settings.

Remarkable Guest Experiences

With ReviewPro Global Review Index ™ the data verify that Reputation Management results in increased pricing power and occupancy for the Hotel.

TripAdvisor provides the opportunity for the consumer to connect their account with Facebook. This allows the consumer to collaborate with their Social Network when making a booking decision. And it provides an element of trust when the consumer reviews a Hotel where Network connections have provided valuable insight.

Facebook also has a TripAdvisor app that gives more insight for the consumer.

Since consumers, today emphasize the guest experience Hotels should focus on collaborating on various reference points that will add value to the booking decision. Collaboration is the glue that will tighten the Social Media Gap between anticipation and real results.

The Hotel has to focus on building trust, and it needs to be trustworthy. By collaborating with consumers and address concerns this will result in more positive reviews. To achieve this result it is crucial to have a proper Reputation Management system in place.

Understand that Social Media is a channel to Serve, listen, engage, create awareness, build trust and establish a network of advocates for your Hotel. You don’t arrive at the party to sell. Focus on providing a remarkable experience at every reference point.

The Impact of Social Media on Lodging Performance shows what Hotels can achieve when Social Media is put in a system.

Cornell University – School Of Hotel Administration

Cornell University - School Of Hotel Administration

Cornell University – School Of Hotel Administration – The premier hospitality management school, where they educate the next generation of leaders for the world’s largest and most dynamic industry. Build your business knowledge and skills under the most accomplished faculty in the field.

Follow @TheHotelSchool on Twitter.


ReviewPro – Customer Intelligence For Hotels

The rules of the game have changed in the hotel sector. At center stage of this change are the hotel guest and the growing trend for individuals to share their hotel experiences with others on the Internet. Today, online reviews and other user-generated content (UGC) is having a significant impact on individual hotels and multi-property chains.

ReviewPro was started with the idea that if hotels could listen and respond to what customers are saying about them online, they could improve the guest experience and drive revenue growth.

Follow @ReviewPro


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About the author

Are Morch is the founder and owner of Are Morch – Hotel Marketing Coach. Get more from Are on Facebook | Twitter | LinkedIn | Pinterest | Instagram| Podcast