Regardless of which industry you work in, reviews are good for business—that much is obvious.
Online reviews influence purchase decisions—just imagine you’re looking to buy a new phone. Wouldn’t you first research what people are saying about the brand online? Reviews give you an idea of what to expect, helping you make an informed decision.
In this article, we explore the impact that reviews have on the hospitality industry, and discuss the different scenarios in which reviews may be beneficial or harmful to your hotel or rental business.
Are reviews really important in the hospitality industry?
The short answer to this is… yes, very much so! Reviews are critical to the hospitality industry
Here’s how it works: the more invested you are in a certain purchase decision, and the higher stakes this purchase is, the more reviews you’ll read.
For higher stakes purchases, you’re also likely to take reviews more seriously and eliminate certain options based on the reviews that you read.
Now, imagine that you’re purchasing a low-cost tech accessory, such as a computer mouse. Let’s say you’re buying your mouse on Amazon, and it costs $30. In this case, you might read a few reviews, and then go ahead and make your purchase pretty quickly.
After all, this is a low-stakes purchase—even if you get something that doesn’t work well, you can easily make another purchase on Amazon, and get it shipped to your home within 24 hours. You might even be eligible to return the first mouse, and get a refund.
Now, what about if you’re purchasing a hotel stay? This is obviously a much more high-stakes purchase, because it’s likely to cost you hundreds of dollars.
The opportunity cost is also higher, because if you’ve arrived at the hotel and you realize you don’t like it after all, it’ll be difficult to find different lodging at the last minute. Plus, it’s highly unlikely that you’ll be able to get your money back, should you not like your stay for some reason.
Bottom line? Once you’ve booked a hotel or rental property to stay at, you’re pretty much “locked in,” because there’s a high opportunity cost associated with finding the next best alternative.
With this in mind, people take these decisions more seriously, and they consider all the available information and weigh up their options carefully before making their decision. That’s why online reviews are exceptionally important in the hospitality industry.
The numbers don’t lie: 52% of customers would never book a hotel that has zero reviews, and customers are willing to pay 35% more for hotels with a rating of 4.4 versus 3.9 stars (on a 1-5 scale).
So make sure you’ve got a good review strategy for your hotel or rental business—this is not just a nice-to-have, it’s a must-have!
How reviews can positively impact the hospitality industry
Reviews are a powerful tool—and if you understand how to utilize them properly, they can definitely bring in more business and help boost your bottom line.
For example, here are a few things you can do with reviews:
- Use reviews to understand your Unique Selling Proposition (USP)
- Use reviews to run marketing campaigns
- Use reviews to identify opportunities to improve
First and foremost, reviews are a great way of seeing your hotel through the guest’s lens. You can use these to understand your guests’ perception of your hotel or rental property.
There are a couple of applications here, beginning with identifying your USP. For example, if 90% of your guests mention the hotel spa positively in their reviews, this is a clear indication that the spa is a key selling point of your property.
With this in mind, you should figure out how to capitalize on this USP (perhaps you can you lengthen the hours your spa is open, or offer a discount to guests for more upsell opportunities) and promote it more heavily.
On the flip side, if you realize that your guests often complain about your food/cleanliness/WiFi in online reviews, then this is definitely something you should tackle. Think of it as an opportunity to improve your offering so that you can delight your guests and win them over.
Moreover, you can also use reviews to run marketing campaigns. For example, repost your reviews on social media and run paid ads so that these can reach your intended audience.
Don’t forget: when deciding which brands to support, Millennials and Gen Z consumers find value in authenticity. When you showcase user-generated content like reviews, this helps you demonstrate authenticity, and build a connection with your potential guests.
How reviews can negatively impact the hospitality industry
While there are ways in which reviews can positively impact your business, they are very much a double-edged sword. If not managed properly, reviews can also inflict damage on your brand and make it difficult for you to bounce back.
Take unreasonable consumers and trolls, for instance. Most consumers these days are hyper-aware of the importance of reviews, and as such, some bad apples may unfairly weaponize this against your brand.
In this day and age, most businesses (hospitality or otherwise) would have encountered customers who unreasonably demand freebies or certain upgrades. These customers often threaten businesses with one-star reviews; they’re not afraid to slander your business online, should they not get their way.
How do you deal with these folks? Most businesses go with a peace-making approach—they try to satisfy the customers’ demands and appease them, even if their demands may be unreasonable.
Assuming these are once-off incidents that do not happen regularly, we’d suggest taking this approach. Unfortunately, unreasonable customers will always be part of the equation when you work in the hospitality industry—if you can take a conciliatory approach and soothe things over, that would definitely work out in your favor.
However, if your guests are really attempting to take advantage of the business and going too far, it’s perfectly fine to turn down their requests and let them take their business somewhere else. Just make sure you remain professional in your communication without getting personal.
Should they leave a nasty review for your business, be sure to reply (again, courteously and professionally) and give your side of the story. Doing this will give your potential future guests more context, and allow them to see that you’ve handled the situation the best you can.
Why online reviews matter to prospective customers
When making a big monetary decision, it’s just human nature to want to make sure you’re getting all that you’re expecting—and where better to find answers than the internet?
Online reviews make it easier for customers to:
- Verify experiences
- Set expectations
- Understand benefits
- Make a decision
After all, a hotel stay is a high-stakes purchase, and it’s important for guests to feel confident and comfortable in making the final call. Online reviews help your customers feel at ease, especially if they are overwhelmingly positive reviews that are raving about you! So, while we aren’t asking you to toot your own horn too loudly, we would always recommend providing great experiences that lead to vocal brand advocates (and more positive reviews)!
A final word on nailing your review strategy
For those working in the hospitality industry, make sure your reviews are working for you, not against you.
Use your reviews to gather more information and identify opportunities to improve, and market your hotel or rental business to your target audience. At the same time, try to deal with unreasonable customers as best as you can, and make it a point to respond to all your reviews (both good and bad). This not only shows customers that you care, but that you are always willing to take their concerns into account.
At the end of the day, online reviews can be the secret weapon you need to gain an edge over your competition!
Ready to collect the feedback you need to power amazing reviews? Find out how Sogolytics can help!
