Impact of Guest Opinions on the Hotel Industry

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Introduction As we have entered the second decade of the 21st century, our habits are changing significantly. The Internet is still on the rise and now is more than ever impacting virtually all the industries worldwide. The case is not different for the hospitality industry, where sites like TripAdvisor.com, Trivago.com or Oyster.com lead the way of new-age hotel reviewing. According to ReviewPro “The influence of online reviews and social media has now reached an unprecedented level within the hotel industry.” and therefore hoteliers must recognise the importance of these on their sales and reputation. This essay will be focusing on the hotels’ point of view to explain the significance of online reviews on hotel industry and how hotels can use them to their advantage. How customers select hotels To understand how the reviews affect hotels and their booking figures, we must first understand how customers choose where they are going to stay. Research carried out by Market Metrix research company on January 13, 2010, shows that nowadays customers value guest experience factors in favour of location or even price. In previous years however, the location was the main criteria that potential customers looked at when selecting hotel. In the Exhibit 1, you can see this information. It must be said that hotels in different segments of the market are affected differently by positive and negative reviews as their GRI elasticity differs quite significantly. The mid scale hotels are by far most influenced by the online reviews (Anderson, 2012) where the elasticity for their ADR , Occupancy and RevPAR very elastic, meaning that they are easily influenced by positive or negative reviews. On the other hand, luxury hotels have very low GR... ... middle of paper ... ...2013, from Market Metrix: http://corp.marketmetrix.com/research/what-is-more-important-than-location-in-selecting-a-hotel/ McGuire, K. (2013, June 13). Pricing in a social world: Five tips for revenue managers. (SAS Institute Inc.) Retrieved November 12, 2013, from The Analytic Hospitality Executive: http://blogs.sas.com/content/hospitality/2013/06/21/pricing-in-a-social-world/ Rheams, C. (n.d.). The Impact of Internet on Hotel Operations, by Connie Rheams. Retrieved November 11, 2013, from Hotel Business Review: http://hotelexecutive.com/business_review/1710/the-impact-of-the-internet-on-hotel-operations TOI Tech. (2013, January 18). Online reviews impact hotel's pricing power: Study - Times Of India. Retrieved October 29, 2013, from The Times Of India: http://articles.timesofindia.indiatimes.com/2013-01-18/internet/36414499_1_tripadvisor-occupancy-indian-hotels

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