A study by Cornell University’s Center for Hospitality Research found that for every percentage point a hotel improves its online reputation, its “RevPAR” (revenue per available room) goes up by 1.4 percent; for every point its reputation improves on a five-point scale, a hotel can raise prices by 11 percent without seeing bookings fall off. This has been a boon for smaller, midpriced, independently owned hotels. “Twenty years ago, the brands owned the sense of quality,” says Bjorn Hanson, a professor at New York University’s Tisch Center for Hospitality and Tourism. “If I stayed at a big-name hotel, I knew what I was getting.” That sense of confidence in quality, argues Hanson, has been supplanted by TripAdvisor. Not only can there be variation within a brand, but suddenly that quirky hotel that was once the obscure favorite of a single guidebook gets lifted to market prominence. Thanks to TripAdvisor, a formerly sleepy spot like the Magic Castle Hotel in Los Angeles—ranked number one in the city—is, says Hanson, “able to generate rates and occupancy levels that from a hotel-analyst point of view are quite extraordinary.”
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In the absence of a comprehensive attempt to quantify the impact of social media upon lodging performance as measured by bookings, occupancy, and revenue, this report uses the unique position of Cornell’s Center for Hospitality Research to combine data from three CHR research partners (ReviewPro, STR, and Travelocity), and two other data providers (comScore and TripAdvisor) in a first attempt at determining ROI for social-media efforts.
How interesting! Although I am not nearly traveling as much as I’d like to…