There's been a lot of news lately about online reviews, and
sometimes it's hard to know how to measure their impact on
innkeepers. Well, now we have some great statistics to share. A
recent article from
TravelMole
reported that
The Kelsey Group
and
comScore.com did a joint
research project that focused on hotels (lodging), restaurants,
travel, and other areas. The impressive bottom line was that people
were willing to pay at least 20% more (and up to 99% more) for
services (like lodging) that were rated "excellent" (5 stars) versus
"good" (4 stars).
Furthermore, the study showed that 24% of Internet users read
online reviews before making a purchase decision, and of those, 40%
subsequently stayed at the hotel they reviewed online. Hotels ranked
the highest of all categories in that 87% said that the reviews had
a significant influence on the decision to book a room. More
surprising, still, was that a full 97% said that the reviews were
accurate!
So, what does this mean for innkeepers? At
The B&B Team we've been saying
for some time that Travel 2.0 was important for the unique lodging
industry. Sure, the studies are looking at hotels, but B&B's and
inns are in the lodging category, and we all know that you're being
reviewed online, like it or not. So, when was the last time you
checked out your reviews? If you're not looking, and if your guests
aren't saying nice things about you, and if the experience you offer
isn't up to your marketing hype, then you're probably leaving at
least 20% of your potential revenue on the table.
To measure that 20% another way, consider this: If your inn could
gross 20% more revenue, and your expenses stayed relatively similar
to what they are now, that's a LOT more net operating income at the
end of the year. And, in the parlance of inn valuation, if we used a
10% capitalization rate, for every $10,000 increase in net operating
income, your inn could be worth $100,000 more! Don't believe that
social media and online reviews have an impact? Think again!
Peter
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