Tripadvisor Directly Affects Rates, Occupancy & RevPar
– The percentage of online travel shoppers consulting reviews at Tripadvisor prior to booking a hotel room has steadily increased over time,
– If a hotel increases its review scores by 1 point on a 5-point scale, then the hotel can increase its price by 11.2 percent and still maintain the same occupancy or market share,
– A 1-percent increase in a hotel’s online reputation score leads up to a 0.89-percent increase in price as measured by the hotel’s average daily rate (ADR).
– This 1-percent increase in reputation also leads to an occupancy increase of up to 0.54 percent,
– Also this same 1-percent reputation improvement leads up to a 1.42-percent increase in revenue per available room (RevPar).
This report is so important because it is the first of its kind that provides facts rather than assumptions that social media and user generated contents impact hotels occupancy, rates and RevPar.
Recently, Hotel managers became more conscious that online guest satisfaction impacts their occupancy levels; they assume that their Tripadvisor ranking will affect the number of their potential reservations. Hotel operators have realized the value of online reviews and social media as a key source of customer insight, and a tool to achieve operational and service excellence.