The cost of a bad review, for hotels.
It’s no secret, your reviews and online reputation are your business credit score. If the price of a room is the most important factor for a reservation, then guest reviews and recommendations are second and play an increasingly important role. 79% of consumers consider guest reviews as relevant as recommendations from relatives. In addition, 90% of travelers say that they are influenced by review portal ratings before booking.
Taking a close look at these numbers, it is evident the impact reviews have on bookings and how important collecting positive reviews across the internet is to generate more hotel bookings.
But what about negative reviews?
According to an empirical study by the ITB more than 35% of Internet users would refrain from booking if they find more negative than positive reviews about a hotel online. 20% would even tell others about their findings.
It is estimated that an establishment risks losing 22% of bookings due to negative reviews. This figure climbs significantly when several negative reviews are posted across different portals and can result in up to a 70% loss of potential guests for a hotel. What this means for a hotel’s online reputation is pretty clear: If negative reviews dominate a hotel’s online presence, the number of bookings, and thereby their revenue, will decrease.
The message behind these numbers is that a bad review at the top of your TripAdvisor or Google pages can cost you numerous bookings. In peak season, a bad rating can quickly amount to several thousands of Euros lost when considering the traffic and bookings generated by these sites.
One negative review can cost you thirty customers.
A 2009 Convergys Corp. study found that a Single Negative Online Review can cost the average Hotel an average loss of 30 bookings. Using the Convergys research as the baseline, you can see how much one negative review costs a small resort hotel.
This translates at a staggering cost of $15,000 (4 nights @ $125 per booking x 30). Source: Zuberance estimates.
2011 Cone Online Influence Report: 80% say NEGATIVE online information changed mind about purchasing a product or service
To summarize, the financial impact of a negative review can not only be felt on your booking rate but also on the volume of reservations and therefore can drastically impacting your annual turnover.
We just analyzed the impact of your online reputation on your bookings and subsequent revenue, but what about your brand?
As you probably know, guest reviews are mostly requested from the guest after their stay. And with easy access to the Internet, millions of guest reviews are readily available to everyone.
Whilst traditional word-of-mouth could certainly be damaging if not effectively managed, today’s review portals, such as TripAdvisor, display reviews in a number of languages, increasing the potential of exposing a global community to negative feedback from poor guest experiences. For example, a negative comment in Dutch placed at the top of your page just before people start planning their summer vacations will inevitably lead to dozens of lost Dutch bookings. As with everything else online, nothing ever truly disappears, and these negative reviews can have potential long-lasting consequences.
As you can see, guest reviews are central to any hotel strategy. Whether positive or negative, they must be treated with the utmost care to avoid any financial damage. One could summarize the points raised in this article by the phrase “To take care of your reviews is to take care of your guests.”
Whether it is to retain guests or attract new ones, listening to your guest reviews is critical. Obviously, a negative review does not mean the end of your business, but on the contrary, it gives you the opportunity to improve your services, or even anticipate the expectations of your guests in the future.
The good news is that you can minimize the damage by understanding one simple concept:
The solution to pollution is dilution. Or in other words, you need to start accumulating as many positive reviews as possible to offset the effect of a bad review. Both the quantity of your reviews, combined with your overall rating or the quality of your reviews in the aggregate, are your secret weapon against the damaging effects of a bad review. A business with 20 reviews which include 5 poor reviews has a problem A business with 120 reviews and 5 negative reviews is insulated from a potential customer writing you off at a glance. And at the speed of search these days, a glance is about all you get!
A TripAdvisor study from early 2015 showed, that in Germany alone, 83% of hotel guests would book again if they received a “reasonable” response from management to their negative online review. If you keep in mind that another TripAdvisor study also revealed that a 1% rating boost increases a hotel booking potential by more than 11%, you see obvious opportunities as a direct result of managing your online reviews both for damage control and future revenue growth.
Managing your lost & found can take you there.
Lost & found is a frequent source of bad reviews. For Hotels the management of lost items is a constant menace. Although not at fault they are assigned the task to solve the problem. Among other things, they need to locate the item, match it to a specific guest, communicate with the guest, retrieve personal information, arrange for shipping and cover the cost. A time-consuming process especially in larger hotels when this process needs to be coordinated among members of different departments & shifts. In addition, the entire process is lacking automation and is running over emails and phone calls creating serious GDPR non-compliancy issues.
Hotels that efficiently handle misplaced items and turn lost into found, not only put a smile on their guest’s face but since this is done shortly after checkout they lay a solid foundation to capture this sentiment in a positive review & rating.
Deliverback uses technology to help hotels to efficiently deliver forgotten items back to their guests. Its hassle-free, easy to use, and free for the hotel. Take a close look to how managing your lost & found can take you there. Managing your reviews and online reputation is too important to ignore.
Nothing lost, just temporarily misplaced!
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