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You’re losing money if you have a bad online presence.
In this post, I will share just how important your online presence is and how a good one can be the difference between a hugely successful property and one that is struggling.
Welcome to another edition of hospitality property school.
I’m your instructor, Gerry MacPherson.
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Don’t forget to subscribe to the hospitality property school wherever you listen to these episodes and leave a 5-star rating to help others find these shows,
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Online Reputation Management (ORM) is as simple as it sounds.
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It is a method by which hospitality properties can oversee, influence and improve the feedback that guests leave about them online.
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The World Wide Web has changed the way commerce works in an untold number of ways, but most importantly, it has changed the dynamic of information between a guest and a hotel, resort, inn or bed and breakfast.
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Previously, the flow of information was one way; the hospitality property would advertise and provide information about their property, but the customer had no consistent way of providing feedback. There was the old saying about a dissatisfied guest telling up to eleven people, but that was about as large scale as the feedback could get.
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The internet altered that.
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eBay was the first company that made leaving feedback for seller’s normal, but now it has grown to cover almost everything that can be purchased online.
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Consumer services have grown to become an industry in its own for such things as financial services, home improvement providers or car sales. It has become an integral part of those businesses but, nowhere has an online reputation become more important than with the hospitality and travel industry.
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It has become very common for people to leave feedback and crucial for hospitality properties to manage it.
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In this post, I will share just how important this process has become. The impact it has on the core metric of the hospitality property industry, the impact on revenue, and how the difference between a hugely successful property and one that is struggling can be found in what they do about the comments people leave about them online.
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Internet and the hospitality property industry
No one should be surprised that the internet has revolutionised the hotel, resort, inn and bed and breakfast industry, but it is worth measuring just how much it has changed, drilling down into the specific ways that people research and make bookings, and how Online Reputation Management fits into the procedure.
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In 2001, just 1% of all hotel bookings were carried out online. In 2011, depending on the measure used, it was anywhere from 35% to 50%.
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Today, 65% of hotel bookings are made online via smartphone. Percentage of travel reservation via the internet is 57% and that shows no sign of slowing down.
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So, it is of vital importance that hospitality properties have a strategy in place for managing what those researching customers see when they look at the reviews of their property.
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Key Review Sites
In general, there is no one site that can be targeted with an online reputation management strategy, since virtually any online travel agency has the ability for guests to leave feedback about a property. However, there are a couple of larger sites that have particular sway in this market, and they provide a good picture of what might be seen on other sites.
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TripAdvisor is the largest site in the industry, and has comfortably the highest-profile, receiving over 390 million monthly unique visitors, according to their own statistics.
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TripAdvisor is by far and away from the most powerful and is almost always the first site that people consult. Indeed, many travel agencies and booking sites carry links through to the TripAdvisor page of individual properties in order to help the customer do that.
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Nevertheless, there have been problems. It has been publicised that false reviews have been posted on the website, both by people trying to raise the perception of their own property and by those trying to tarnish the image of rivals. Because of this, the reputation of TripAdvisor has become slightly dented, but it still retains enormous power.
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Others that hold sway in the industry are those that provide booking services. Orbitz, Travelocity and Expedia are the ones to be particularly aware of, because they have the largest number of users by some distance, though their approach to feedback mechanisms does vary. The importance of these sites is that people will see the reviews at the point of booking, and a negative review profile can make potential customers choose another property.
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Next, social media. People regularly post location-based updates that people can comment on, and others can view, so it is vital that you remain aware of what is being said, and engaging in a positive way.
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The final type of review site comes from providers of travel guides. The key sites are Frommers and Fodors, though these sites tend to rely on their experienced staff rather than customer reviews, they should be kept in mind.
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Why Does ORM Matter?
I have spoken with some property owners who have said that their Online Reputation Management does not really a matter. Even if you were to get a bit of bad feedback online, it will either blow over, or you could try and compensate the balance with some discounts and marketing activity.
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Wrong!
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The global trade bodies for the travel industry have researched this considerably, and they have found that reputation management could not be more important.
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A slowdown in bookings due to bad reviews cannot be countered with discounts. Extensive research has shown that any increase in the volume of sales driven by discounts is nowhere near enough to recover the lost original business.
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Even more important, past experiences, reputation, recommendations and online reviews…are now more important to potential guests than either location or price.
- 96% consider reviews important when researching a hotel
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- 79% will read between six and 12 reviews before making a purchase decision
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For properties that generate the largest profit margin from corporate and business travellers, research indicates that over 85% of purchasers in this segment consult social media and reviews before making their purchase decision.
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In terms of the impact on detailed financials, the evidence is compelling.
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According to Expedia, a good review of 4.0 or 5.0 will deliver more than double the conversions of a review of 1.0 or 2.0. Research has also found that when it came to hospitality properties, customers were willing to pay a minimum 20% more, but potentially up to 90% more, for a property with five-star customer reviews compared to four stars.
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In financial terms, the importance of online reputation management is beyond any doubt.
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These statistics prove that the online perception of a property is absolutely crucial to its financial feasibility. It, therefore, makes sense to invest just as much into online reputation management as you would into the facilities, fixtures and fittings of your property.
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A good investment will always pay dividends, and so spending on reputation management should be seen in that light.
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Investing in ORM supports your investments in other areas such as advertising, marketing and promotional activities.
If you aren’t managing what people read about you online, then much of this investment may go to waste when people read something negative about your establishment. There is no point spending a budget on raising the profile of your property if your profile is tarnished.
- Four out of five believe a hotel that responds to reviews cares more about its customers
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- 85% agree that a thoughtful response to a review will improve their impression of the hotel
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Online Reputation Management Best Practices
There are three golden rules that should be followed when managing your online reputation.
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- Never ignore negative feedback
You can’t be perfect all the time, and you need to have a clear process in place for when people leave a negative review of your property. Responding to a complaint in a clear, polite and positive fashion creates a much more favourable impression with potential customers than simply doing nothing. Never react in an aggressive or impolite manner, even if you feel the complaint or poor rating is unwarranted.
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- Encourage your customers to leave positive reviews
Customers are more likely (up to 7X) to leave a review or share their opinion if they have had a negative experience.
You need to be proactive in getting people to leave positive recommendations. If your customers say something nice to your property, ask them to put it online. At the point of check-in and check-out, ask your customers to leave positive feedback if they have had a good time.
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- Don’t be tempted to try and game the system
Earlier in the post, I mentioned that properties have tried posting false reviews on websites like TripAdvisor. Now, there is a growing list of properties that have been blacklisted from online travel agents for such activities. Don’t be tempted, you will be found out.
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Can You Do Online Reputation Management Yourself?
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If you have the time, there is nothing to stop you trying to manage your online reputation yourself. You can register as a hospitality property proprietor on most sites, and address the customer interactions yourself. Similarly, you can manage your presence on social media.
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However, you should probably consider the following questions before you decide to do that:
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Have you really got the time?
Running a property is hard enough and depending on the size of your property, a realistic strategy for ORM could involve hours a day when you consider the number of websites and social media channels involved.
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Do you know all of the channels that you need to manage?
The scale of the online travel industry means that there are literally thousands of sites online. Do you have the knowledge to find them, and to track changes in the online industry?
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Do you really know what to say and do for the best effect?
There is an art to how to deal with people online, and a range of techniques that can be deployed, like the semantic analysis. Do you know what they are, or have the inclination to learn about them? How expensive and time consuming would it be to train your staff to do it?
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Like all major investments in your property, you need to be professional with your online reputation management. Partnering with an established, successful and ethical ORM company will pay huge dividends over time.
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The effects will not be instantaneous, but outsourcing to a professional reputation management firm will allow you to achieve an ORM strategy, but at a considerably less expense and time investment, than training your staff to do it.
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In Conclusion
In this post, I shared just how important Online Reputation Management has become, the impact on the hospitality property industry, and your revenue.
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If you have had success with your ORM, I would like to hear from you. If you are concerned with your properties online reputation and its effect on your business, I would also like to hear from you. We might be able to point you in the right direction with an in-depth analysis of your current online reputation – along with useful strategies for improving your reputation and reversing the effects of negative feedback.
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Contact us at info@keystonehospitalitydevelopment.com or leave a comment below.
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