How to Budget for Hotel Reputation Management

It’s budget season again, and as online reviews are seen to be playing an increasingly important role in their business, the question is where and how to budget for reputation management for hotels.

What we’re seeing is that online reviews have a clearer link to revenue than any other form of social media. This is because different phases of travel planning involve different types of information. While someone may be using Facebook or Flickr in the early stages of the planning process to decide on a destination, hotels reviews are typically consulted immediately before the accommodation purchase takes place. Because of the timing, reviews have a direct link to hotel sales. If you want to demonstrate ROI and higher sales through social media activity, this is easiest to do by putting your investment in reputation management.

How much to budget?

You can get a price quote from the ReviewPro team here, but here are some factors to consider when making space in the budget for reputation management:

Make more money with a positive reputation

Jean Francois Mourier of RevPar Guru confirmed there is a direct link between a hotel’s online reputation and the rates a hotel can charge on their websites. The same thing is true on third-party distribution sites. According to Brian Ferguson, VP of Analytics at Expedia, a 1-point increase [on a 1-5 scale] in a review score equates to a 9% increase in average daily rate (ADR).

Hotels that neglect their online reputation often have to resort to slashing rates.  Focusing on building your online reputation can help prevent you from being forced toward discounting.

Make more money by increasing your search visibility

Optimizing your reputation will lead to more people finding you in search engines. A key development that has taken place over the past few months is that search engines have become much more social. Invest in building your social media presence and cultivating as many online customer reviews as you can to increase your positioning and drive more website traffic.

Make more money by increasing guest loyalty

Online reviews provide hotels with the opportunity to build loyalty through listening to feedback, making changes based on it, and then communicating these changes back to customers. Recent research from the CMO council made the impact of loyalty on profitability very clear.

  • Acquiring new customers can cost five times more than satisfying and retaining current customers.
  • Loyal customers are 15 times more likely to increase spend than high-risk, intermittent customers.
  • A two percent increase in customer retention has the same effect on profits as cutting costs by 10 percent.

Save money by increasing inbound demand

HubSpot research shows that inbound marketing costs 64% less per lead than traditional, outbound marketing. The amount you pay for each booking you receive could be much lower if they find out about you in social media and on review sites. Focusing on encouraging more positive online reviews can reduce the amount you have to spend on advertising and traditional marketing channels.

Save money on quality assurance and market research

Online guest reviews act as a 24/7 mystery shopper that allows you to view your hotel through the eyes of guests. Rather than hiring a traditional mystery shopper, analysis of online reviews can provide a much more comprehensive view of what your clients are experiencing.

Save money by using time more efficiently

Directly involving managers in hotel reputation is important, but they typically have very little time – and their time is valuable. A top priority for hotel managers is not to spend time aggregating data: software can do that. Time should be spent serving guests and acting on the insights a reputation management tool can provide.

Reputation management technology can save hours of time each week for each executive involved in the program. Though saving time isn’t primary reason to use a tool like ReviewPro, this aspect alone quickly covers the investment amount.

Which department should pay?

Social media has evolved beyond just a marketing and PR activity, and now the applications of social media and review analytics are benefiting all departments in a hotel:

  • Executive management
    • See your hotel through the eyes of your guests.
    • Identify areas for improvement in your hotel.
  • Quality & operations
    • Know everything about your hotel, 24/7, with ReviewPro tracking nearly 100 million reviews in 14 languages.
    • Turn information into action with task delegation.
  • Marketing & PR
    • Use competitive insight to identify areas of differentiation.
    • Manage all your social media activity in one single tool.
  • Sales, distribution & revenue
    • Increase direct bookings by publishing select reviews on your website.
    • Analyze the impact of online reputation on sales and pricing.

In the end, social media and review analytics software can benefit everyone in your organization – so it’s a cost that must be shared by everyone. Investing in a hotel reputation management tool can be one of the most powerful ways to generate tangible ROI from your social media activity.