Adele Gutman Milne, CHBA, CHDM
The Relationship Between Reputation, Reviews, and Revenue on Hotels with Christoph Hütter
Updated: Jul 27, 2022
Welcome to Get Great Guest Reviews! In this week’s episode, Christoph Hütter, the non-traditional revenue manager, joins me to discuss the revenue-generating impact of excellence in Reputation, Reviews, and the Guest Experience.
Revenue Managers, General Managers, and Hotel Owners, you will want to pay attention to this because there is no revenue optimization without reputation optimization! That means creating a culture of caring, collaboration, and continuous improvement.
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Our favorite quotes from Christoph Hütter :
“We all know that review scores are directly linked to the ADR, and we’ve known that at least since Chris Anderson from Cornell University’s study came out, that proved that scientifically.”
“There is no question about that. The only question will be how much will it affect your specific property.”
“The fact is that higher review scores mean you can sell your room at a higher rate which obviously, goes to the bottom line…It will depend on the property, but IT WILL HAPPEN. It’s guaranteed.”
“You have a higher review score, and it’s not just that you can bring the room rate up…that’s a no-brainer, but there are so many other things that are linked to that. For example, your OTA ranking is impacted by (review scores).
Expedia will change its algorithm in August (2022) to bring the guest experience score front and center. That means hotels with more positive reviews will be rewarded over those with less positive scores.”
“The higher you rank, the more visibility you get, the more volume you will generate via that channel.”
“Reviews are one of the most important, if not the most important criteria today that people base their purchasing decisions on, once they have come to (determined) a location.”
Based on my personal experience, the statistics below underestimate the potential impact of a focus on kindness, compassion, and guest happiness. Remember that, as Christoph stated and discussed on the podcast, average statistics won’t tell the exact story of what your hotel can expect to achieve when you focus on elevating guest satisfaction. You can completely blow these statistics out of the water if you are ready to commit to excellence as the hotels I worked with did. But even if your implementation is imperfect as ours was, if you keep working at it, you will see a powerful impact. Increasing your enthusiastic, five-star reviews while diminishing guest pain points always elevates perceived value, consumer confidence, visibility, average rate, and RevPAR.
Before we post some stats from industry friends, let's hear some anecdotal evidence first.
On my last episode post on LinkedIn recently, my former colleague, Nalini Sullivan, the former General Manager of a hotel that regularly made Tripadvisor’s top 25 hotels in the USA list, said this about her experience.
“Being on the top of the list impacts every area of your hotel. The morale of our team was always so high as they were proud of seeing the effects of their hospitality in guest reviews. Increased RevPar and ADRs, increased media exposure, etc. I would say (high guest review scores) had nothing but positive impact, but you’ve got to put in the work!” - Nalini Sullivan, former GM of Hotel Giraffe
These were just a few of the comments from my interview with Sally Beck, of the Royal Lancaster London:
"My life is much easier because I’ve got a ton of people that want to fix stuff before I have to fix it. You need to look at (complaints) because they will keep going wrong unless you fix them and find the root cause."
If you look at your staff turnover as a general manager, my staff turnover is about 31 -32% In London it would normally sit at 50% or in some cases I’ve heard, properties that are at 70% turnover. If you look at the cost of that turnover, that’s huge.
(A great reputation)...brings definite profits to the bottom line. And when you are recruiting in the industry around you, everyone hears if you’re a good recruiter, and they think, I want to go to the Lancaster. If you get a good reputation as an employer who cares, then people are going to be queuing up for you and your staff.
- Sally Beck, General Manager, Royal Lancaster London
Revinate reported that according to a study by Cornell University, on a rating scale of 1-5, a 1 star or bubble increase makes travelers 13.5% more likely to book. Revinate
Trust You shared from that same survey that travelers are 3.9% times more likely to book a hotel with higher review scores, if pricing is similar. Trust You
Cornell University reported that the same 1 point out of 5 (20%) increase in review scores may result in a hotel’s ability to raise room rates up to 11.2%. Cornell University
TravelMedia reported that a 2019 Expedia survey of 900 responding travelers indicated that travelers were willing to pay 34% higher rates for a 4.4 rated hotel than for a 3.9 rated hotel. TravelPulse
They were also willing to pay 24% higher rates for a hotel with a 3.9 rating than a 2.4 rating. TravelPulse
Trust You and NYU reported a study that travelers are inclined to pay 5-9% more for a hotel with 5% higher review scores. Trust You
Highlights and tips from the podcast:
Different types of guests may respond very differently to the experience you offer
Christoph noticed where he worked that certain guest types were more likely to have negative reviews than others. “Why” is a revenue manager’s favorite question, so in researching this, he realized that different types of guests had different expectations before arriving.
Why? This could be because the guests’ needs are different depending on the purpose of their stay. Another common reason is that the information they had about the hotel before the stay comes from varying sources.
ProTip: Examine if there are trends among the complaints. Do everything you can to ensure that every source of information has the highest level of rich content to fully communicate to your guests what to expect when they arrive.
As Christoph said, if you exceed the guest’s expectations, you will likely have a delighted customer who will return and, hopefully, become a brand ambassador as well. It’s not cost-efficient to always look for new guests so retention and loyalty are key. Make sure the whole team is focused on making connections and turning every guest into a loyal customer for life.
Where can we sparkle some joy into our guest’s experience? Review the guest journey and take inventory of all the enhanced experiences available to your guests and how you might optimize revenue for these in peak or slow periods. Upselling isn’t just about the added revenue. It is the little extras that make your guest’s experience unique and memorable, creating a bond between the guest and the hotel.
Use every form of media to expand the reach of your hotel’s story:
Don’t underestimate the storytelling power of photography. Expressive photos with captions are a massive communication opportunity that is often underutilized.
It is wise to invest in an abundance of quality images and rich captions and descriptions Showcase the rooms and experiences with the help of an excellent hotel photographer. Ensure you have shared with the photographer the stories you want your photos to tell. Be sure whatever is in the photo is easily available to experience at your hotel. Use the captions to share details that are not in the photo, such as evening reception hours or details about the breakfast offered.
Attract the perfect audience for your hotel. Be excited to share all the experiences that make staying with you awesome. Attract your hotel’s perfect fit customer by being very expressive, comprehensive, and authentic when describing exactly what your hotel offers and what it doesn’t. Then, someone who is going to be very happy with you is going to be quicker to book.
If they aren’t a fit for what you have got, let them choose an experience that’s a better fit for them at this time. Hopefully, they will think of you when the circumstances change, and you are providing exactly what they need or what they would recommend to a friend.
When you overreach and pretend your hotel is a fit for a need you are not well suited for, you will attract customers who will be unhappy and drag down your review scores. Imagine your sales manager going on a sales call. After your sales manager leaves the call, the travel manager is likely to check your reviews and sees those complaints. Despite the Sales Manager’s excellence, you may have lost the sale because of the lack of thoughtfulness and commitment shown to previous travelers. This doesn’t need to happen. Even if you are not a five-star hotel, you can start right now and begin a reputation cultivation program by committing to being the kind of hotel that inspires five-star reviews.
Employee Retention: What’s even worse than losing business because of guest complaints? It is a negative impact on employee retention. If guest expectations are not a fit for the hotel, frustrated guests will often share their disappointment with your team. The staff may be demoralized by continually dealing with issues during their stay, and the reviews, ratings, and rankings might be damaged, along with your reputation.
ProTip: Listen to guest and employee feedback to collaborate with the team to find the root causes of the issues and make changes to diminish the root cause. This will make for more future guests wanting to experience your hotel and relieve the stress on your employees.
Want to attract a new audience? If you want to attract an audience that doesn’t love your current experience, you can change! Listen to feedback and adjust your services and product accordingly You can reposition your hotel to attract a new audience with small targeted modifications or dramatic renovations.
By adjusting training, product, processes, and communications, you may be able to expand your reach but never oversell it. Listen to the podcast episode with Sally Beck and how the Royal Lancaster London slowly repositioned and went from #272 in London to #3 in the UK on Tripadvisor.
Pre-Stay Communications can play a huge role in your success Christoph shared that the time between the reservation and the arrival is when your guest will be most open to receiving and consuming additional information, especially if you highlight opportunities to enhance their stay. This is the guests planning phase. It is the best time for marketing and upselling, an untapped revenue opportunity for many hotels.
Remember that you ultimately want to create a long-term relationship with your guests. A guest-centric approach to sharing options they may love will probably feel more welcoming and thoughtful to the guest than a heavy-handed hard sell approach. Be sure to include honest photos with descriptive captions in the gallery and on social media to give a clear understanding of how it would feel to enjoy these enhancements.
If you would love to see your hotel's guest reviews soar on Tripadvisor, Google, Expedia, Booking.com, and more, contact us, and I will be glad to chat with you about your unique situation and a customized plan forward for your needs.
Do you have any questions about how to inspire 5-Star reviews? Please send them to email@example.com so we may answer them directly with you or in a future episode of Get Great Guest Reviews, the podcast, blog or LinkedIn newsletter.
Thank you for listening! Have a great week, and reach for those stars!
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