Reputation Management

Reviewpro webinar

Briefing

This webinar aims to clarify what is the impact of a hotel reputation management on sales and performance.

The studies of Travelocity and ReviewPro demonstrate that online reputation has an impact on customer’s purchase decision and hotel’s performance.

An increase in review score of 1 point increases the odds of being booked by 13.5% and can increase price by 8% and maintain probability of purchase/market share.

The impact of online reputation is also translated into pricing power (occupancy index), demand (ADR index) and overall performance (RevPAR index).

UGC elasticity means that a change of percentage in UGC (or online reputation)leads to a percentage change in demand, pricing power or performance.

The conclusion of this part is that it is in the best interest of hotels to make efforts in monitoring reviews as reputation drives revenues.

There is a new synergy between marketing (demand creation), sales (demand capture) and revenue management (demand management).

The new generation of revenue managers has to be able to leverage technology and use all the tools at disposal as well as dominating online marketing and sales functions. They are the ones who are responsible for analysis of pricing changes based on quality index changes.

Meliá Hotels noticed that demand is not growing but stagnating in Europe (whereas in Northern Africa and in the Middle East supply is rocketing as infrastructures are built).

The traditional key performance indicators are the market penetration index (MPI) or occupancy index, the average rate index (ARI) and the revenue generator index (RGI) or RevPAR index.

But Meliá Hotels put in place a new measurement to measure quality scores to revenue performance: the quality penetration index (QPI) or competitive quality index (CQI for ReviewPro) that is calculated dividing the hotel global review index by the competitor average global review index.

The webinar concludes that reviews drive revenue, the role of revenue managers must become even more strategic and analytical, review metrics must b integrated as a key component of revenue management strategy and to maximize revenue and stay ahead of competition compare the hotel’s review index with rate, occupancy and revPAR indexes to find optimal rates and positioning in the marketplace.

Questions thought and conclusions.

Is this applicable to any country and to any kind of hotel (hotel brand, boutique hotels or independent hotels)?

ORM is a revenue maximization of the future but not THE one. It is clear that good reviews produce revenue. But to have good reviews, the hotel has to concentrate in providing the best guest experience, the best service and the best quality. This is for me the revenue maximization of the past, the present and the future. This is what makes a hotel unique.

Please, click here to see Les Jardins du Marais slideshare