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Pranjal Parashar

Pranjal Parashar is the Founder & CEO of Repup.co.

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How is Online Reputation Management Directly Affecting Revenue Volume of Hotel Industry?

Additionally, reputation needs to be managed across a varied number of known and unknown platforms so that it reflects in positive changes in sales volume.

Online reputation management – ORM has become the buzzword for the travel and hospitality sectors.

ORM has gained a particular importance in the hotel industry because of the sheer volume of business that the industry generates from online sources. The online volume pie is becoming chunkier day by day. Today in India 25% of entire hotel bookings are done online. 90% of the users read a minimum of three online reviews before making a booking. And the smartphone empowered traveler is free to leave as many reviews online as he wishes has left the hoteliers with a Hobson’s choice – Manage your reputation online or die trying!

Those online reviews that come armed with additional statistical data or an action button are more potent indirectly affecting the revenue of the hotels.

Goibibo shows the number of times a review has been read on their platform thereby automatically adding a variable degree of credit to each and every review in the eyes of every new reader. A “book now” action button alongside a customer review increases the significance of the review manifold. The connection between the online reputation and sales becomes direct and immediate.

Additionally, reputation needs to be managed across a varied number of known and unknown platforms so that it reflects in positive changes in sales volume. An understanding of the cross-platform interplays online also helps the hoteliers to manage their own ORM. For example, Makemytrip and Goibibo are leading Indian Online Travel Agencies - OTAs. Both these players are currently investing heavily in review platforms. Quite simply Review platforms add credibility to OTA offerings. OTAs account for almost 72% of the total online bookings. Customers book standalone and individual properties mostly through OTA channels. The remaining 28% of online booking is through individual websites mostly of brands that have a chain of properties. So it is very clear that ORM reigns supreme in the minds of hoteliers today to drive revenue and growth.

A recent study undertaken by us at our organization has thrown up some significant results for the hoteliers. The study shows that a mere 1% increase in reputation score leads to a 6.9% increase in Average Daily Rate – ADR. The same 1% increase in reputation score leads to 1.4% increase in occupancy. This study shows a direct and a high correlation between ORM and occupancy and revenue volumes. A better ORM score definitely translates into a higher revenue for hotels.

Occupancy rate, ADR, and Revenue per available room (RevPAR) have traditionally been the KPAs in the hotel industry. New age hotels like OYO, Treebo, and Fab Hotels have added new KPAs like a number of reviews, ratings, rankings and guest satisfaction index. This shows the seriousness and importance accorded to ORM. Reviews are a veritable mine of information for hoteliers to get an in-depth insight into what satisfies their customers and which areas need to be re-furbished immediately. Online reviews reach prospective customers far and wide. ORM is no longer a luxury – it is a necessity for the very survival of the players in the hotel industry.

The hotels that are going to win in the long run will be determined by:

- Their ability to get a glowing and positive online review from 100% of their guests.
- Their ability to quickly analyze and consume guest reviews into their internal processes and make effective changes immediately.

Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house



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