Groundbreaking Cornell study links reviews, occupancy, and pricing power
As social media has become more popular in recent years, the question on many hospitality professionals’ minds has been: what’s the return-on-investment? Is social media truly worth an investment of time and resources?
A new groundbreaking study – “The Impact of Social Media on Lodging Performance” – from The Cornell Center for Hospitality Research provides some answers. It’s the first research to demonstrate the return on investment that hotels can expect from social media and reviews.
Here are the key findings from the report:
- Guests are visiting TripAdvisor more frequently prior to booking. Also, reviews are one of the last resources they reference before selecting a hotel.
- Higher review scores on OTA sites allow hotels to charge more while maintaining occupancy rates. The report found that if a property can increase its review score by one point (on a five-point scale) on OTA channels, it could increase its prices by about 11.2% while maintaining the same occupancy rates.
- Properties with stronger reputations across all channels perform better overall. As a property’s social reputation improves, its pricing power can increase. This leads to stronger performance over time.
Source: “The Impact of Social Media on Lodging Performance.” Chris K. Anderson, The Center for Hospitality Research. Cornell University. November 2012.