Social media boosts hotel occupancy

Hotel properties that actively engage with social media reviews grow occupancy at double the rate of properties that don’t, according to a study released by Medallia. The study examines customer and business data from more than 4,400 hotel properties worldwide to understand and quantify the impact of social media engagement on a company’s revenue growth, customer satisfaction and social reputation.

According to the study, there is a direct relationship between responsiveness to social media reviews and occupancy rate. Properties that responded to more than 50 percent of social reviews grew occupancy rates by 6.4 percentage points, more than twice the rate of properties that largely ignored social media reviews. These socially-engaged properties also outperformed the hospitality industry as a whole, which achieved a 4.3 percent growth rate during the same period.

“The hospitality industry has experienced the impact social media can have on their business, both positive and negative, but these findings allow properties to quantify the impact of taking action on reviews—and make it easier to justify additional investments in social media engagement,” Aurelia Setton, Medallia’s general manager for hospitality, told Loyalty 360.

The properties that increased their responsiveness by more than 50 percent earned double the occupancy rate growth of those that didn’t improve their responsiveness:

  • 50-percent increase: 6.8 percentage points of occupancy rate growth
  • 30 to 50-percent increase: 3.7 percentage point growth
  • 10 to 30-percent increase: 2.2 percentage point growth
  • 1 to 10-percent increase: 3.2 percentage point growth

High responsiveness does not just impact occupancy rate, either. A commitment to social media engagement was found to drive similar gains in overall customer satisfaction. Properties that responded to over 50 percent of social reviews saw their Net Promoter Scores (NPS) increase by an average of 1.4 points — while all properties with less than 50 percent responsiveness saw their scores decrease:

  • 50 percent response rate: 1.4 point NPS growth
  • 30 to 50 percent response rate: 0.3-point decrease
  • 10 to 30 percent response rate: 1.5-point decrease
  • 1 to 10 percent response rate: 1.7-point decrease

“One notable aspect of these findings is that the responses are taking place at the property level,” said Michael Morton, Best Western’s vice president of member services. ”Hotels already trust their frontline with in-person customer interactions, and this research shows that letting employees engage with customers online as well—armed with their first-hand knowledge of specific customer experiences — pays real dividends.”

The speed with which properties respond to customer feedback also has a significant impact on their occupancy rates. Properties that responded to feedback in less than a day on average had average occupancy rates 12.8 percent higher than properties taking longer than two days.

  • Responded within a day: 52.3 percent average occupancy rate
  • Responded in 1-2 days: 49.3 percent occupancy rate
  • Responded in over two days: 39.5 percent occupancy rate