Overall, hotel guests appreciate it when a manager posts a substantive response to an online review—especially when the review is a negative one. That conclusion comes from a new study from Cornell University, which found that a hotel’s TripAdvisor ratings and revenue levels increase as the number of management responses to online reviews increases. But as with all things, there’s a complication.
To begin with, the study found that clickthroughs from TripAdvisor reviews to an online travel agent increase when management responds to both good and bad reviews. So far, so good. But there seems to be a limitation. Hotels apparently reach a point of diminishing returns with regard to the benefits of responding to online reviews after about a 40-percent response rate. As the number of responses goes beyond the 40-percent mark, the sales and revenue improvements gradually fade, and even go into reverse.
Looking at ratings only, hotels also can get a boost to their TripAdvisor ratings simply by encouraging guests to post reviews. The researchers, Chris Anderson and Saram Han, installed Revinate Surveys in a set of test hotels to compare the sample hotels’ ratings before and after the effort to encourage guest reviews. Hotels’ TripAdvisor ratings improved (compared to the hotels’ competitive set) after the hotels started encouraging the reviews.
A full description of the study, “Hotel Performance Impact of Socially Engaging with Consumers,” by Anderson and Han, is available at no charge from the Cornell Center for Hospitality Research. Anderson is an associate professor at the Cornell School Hotel Administration, where Han is a doctoral student. Anderson suggests that making too many responses is worse than offering no response at all, in terms of both ratings and revenue. So, to make the most of the benefits of responding to online reviews, Anderson and Han conclude that managers should focus on making constructive responses to negative reviews rather than simply acknowledging every positive comment, tempting though that may be.
Glenn Withiam directs publications at The Center for Hospitality Research at the Cornell University School of Hotel Administration. Contact him at [email protected].