September 25, 2023
Reading time
4 min

The Role of Online Reviews in Revenue Growth for Hotels

The Power of Ratings

Picture this: you're planning a getaway, and you start your search by browsing through various hotel options online. What's the first thing you look at? The ratings, of course! It turns out that you're not alone in this approach. Consumers tend to shortlist hotels with better ratings, and for good reason.

Research conducted in the hospitality industry has shown that even a tiny one-star increase in a hotel's rating can result in a substantial boost in revenue. In fact, according to researchers who studied Yelp, one of TripAdvisor's main competitors, a mere one-star improvement translated to a remarkable 5-9% increase in revenue. Yes, you read that right – just one star!

The Influence of Previous Guests

But why do these star ratings matter so much? Well, it all comes down to human psychology. When potential guests are scrolling through hotel options, they're not just looking for a place to stay; they're looking for an experience. They want assurance that their upcoming stay will be comfortable, enjoyable, and hassle-free. And where do they find this assurance? In the opinions of previous guests, as shared through online reviews.

Imagine you're considering two hotels. One has a sparkling 4.5-star rating, while the other lags behind with a 3-star rating. It's highly likely that you'd lean towards the 4.5-star option, right? That's because positive reviews act as a kind of social proof – they reassure you that other travellers have had great experiences at that hotel.

On the flip side, bad reviews are the proverbial thorn in a hotelier's side. Negative feedback can deter potential guests and tarnish a hotel's reputation. In the era of information overload, one bad review can spread like wildfire, scaring away potential guests faster than you can say "room service."

In a world where consumers have a plethora of choices at their fingertips, first impressions matter more than ever. A hotel's online reputation, often reflected in its star ratings and reviews, can make or break its chances of attracting guests and driving revenue growth.

hotel reviews graphic

This is where reputation management steps into the spotlight, offering hoteliers a powerful tool to shape their online image. Effectively managing your hotel's reputation means responding to negative reviews in a constructive and empathetic manner while actively addressing any issues that may require attention. By doing so, not only do you make the guest feel valued and heard, but you also send a clear message to potential travellers that your hotel is guest-centric and takes proactive steps to improve the guest experience.

The beauty of reputation management is that it pays dividends. A study conducted by Cornell University School of Hotel Administration revealed that a mere one-point increase in a property's review scores on a five-point scale can lead to an impressive 11% bump in room rates while maintaining the same occupancy or market share. It's a testament to the fact that today's travellers are willing to pay more for a hotel that boasts higher review scores. In a survey by TrustYou, a whopping 76% of travellers expressed their willingness to open their wallets a little wider for a hotel with superior review ratings. So, take heed of the power of reputation management—it's not just about mitigating the negative but also about reaping the rewards of a stellar online image.

In the digital age, the role of online reviews in revenue growth for hotels cannot be underestimated. Consumers look to the experiences of others to guide their decisions, making star ratings and reviews essential factors in the booking process. Positive reviews can catapult a hotel to success, while negative ones can deal a serious blow to its reputation and bottom line.

Embrace the positive feedback, learn from the negative, and always strive to provide exceptional experiences for your guests. In the end, your commitment to guest satisfaction will not only earn you stellar reviews but also drive the revenue growth your hotel deserves.