Guest Reviews and Feedback: The Path to Increased Revenue

Today the guest journey largely occurs online, from research, inquiry, booking, and even the check-in and check-out experience can occur digitally. With so much happening digitally, hotels need to maximize their customer channels as much as possible. One of the most powerful channels for hotels to invest in is guest feedback, both online guest reviews, and additional feedback collection mechanisms.

Guest feedback is a powerful asset that can directly shape a hotel’s reputation, define operational strategy, and ultimately, lead to its financial success or potential failure. Given this, collecting, analyzing, understanding, and actively implementing data-backed decisions is no longer optional, it's essential for driving revenue in the hospitality market.

Guest reviews have a lot more influence on bookings than is widely thought. This is backed up by these stats:

• 96% of travelers say reviews are important when researching accommodation.
• 79% of travelers typically read between 6 and 12 reviews before making a booking. Another study found 85% of short-term rental guests read at least five reviews before making a booking decision.
• 88% of travelers filter out hotels with less than a three-star average rating, and 80% of short-term rental guests typically filter for at least a 4-star rating.
• 20% of travelers will not book properties without reviews in at least the past 6 months.

This highlights a direct link between positive guest reviews and revenue. Specifically through the following relationships:

1. Increasing Pricing Power: Positive reviews are seen to enhance perceived value of a property, allowing properties to charge higher rates. A common datapoint that reflects this is a one-point increase in review scores (on a five-point scale) allows hotels to increase prices by up to 11.2%. In the short-term rental space, 83% of guests would be willing to pay more for a property with a higher number of positive reviews compared to a similar one with lower reviews.
2. Higher Revenue per Available Room (RevPAR): A 1% increase in a hotel's online reputation score has been found to lead to a 1.42% increase in RevPAR. Similarly, a one-point increase in guest satisfaction can result in a 1.3% increase in RevPAR.
3. Improved Conversion Rates: Positive reviews are social proof for other travelers, thereby boosting booking conversion rates. Travelers are 3.9 times more likely to choose hotels with higher ratings. In fact, when prices are similar, 80% of travelers find reviews extremely or very important in their decision.
4. Enhanced Property Visibility: Whether owners and managers like it or not, travelers utilize Online Travel Agencies (OTAs) when making booking decisions. Properties that have a higher review score rank better on OTAs, and therefore receive more traffic and bookings.

Guest reviews offer more than just a revenue benefit, they are also a real-time audit of your property operations, providing valuable insights into:

• Identify Improvements: Reviews and feedback can pinpoint specific areas that need attention, allowing you to make a data-backed decision.
• Foster a Guest-Centric Culture: Taking guest feedback seriously is extremely important in fostering a long-term hospitality culture. Collecting feedback embeds a focus on guest satisfaction across the organization, especially if you are seen to act on the feedback.

This is why actively managing reviews and feedback is the key to long-lasting success. Guest feedback data isn't just superficial commentary, it is a crucial lever for optimizing pricing strategies, boosting booking conversions, enhancing property visibility, improving day-to-day operations, and ultimately driving significant revenue growth. By embracing reviews and feedback as actionable data points and implementing robust management strategies, properties in the hospitality and short-term rental sectors can harness the voice of the guest to build a stronger reputation and achieve sustained financial success.

About Customer Alliance

Customer Alliance makes it easy to capture, understand, share and act on guest feedback. Each day, our platform empowers thousands of hoteliers to manage reviews and feedback in a smart and simple way. Get a full view of satisfaction at every touchpoint and build your online presence by putting review collection on autopilot.

Adam Haugh
Marketing Lead
Customer Alliance