Social media and reviews are changing the landscape of revenue management
Social media and reviews are changing the landscape of revenue management Karthick Prabu
Next Gen Revenue Management• RTCP – Room, Time, Customer, Price• Added with, – The Right Distribution Channel with the best commission efficiency – Proactive decisions• Possible with knowledge on: Customers, customers, and customers.
Where to find, What they do• Social media – The obvious: Facebook, Twitter, Instagram, Pinterest, YouTube, Blogs – Beyond the obvious: Quora, Vine, Squidoo – The non-obvious: Humans – Core review sites: TripAdvisor, HolidayIQ, Zomato, Burrp – Type of content: Text, picture, video• Your own website
What To Do1. Know the tools, like a pro – Facebook EdgeRank, NearBy, GraphSearch, Home, Quora points2. Descriptive statistics: – Snapshot of historical and current performance – Answer questions like, how many fans do I have? How many reviews have been posted over the last six months? What is my average rating on each of the OTAs?3. Social network analysis: – Uses the connections among users, and the impact of their activity, to determine the degree of influence – Targeted marketing efforts can be directed at the most influential users4. Text analysis: 3.1 Content categorization – Automatically categorize responses on guest surveys, route to the appropriate department 3.2 Text mining – Understand the semantics, uncover key topics that can be used to predict or understand guest behavior 3.3 Sentiment analysis – Uses natural language processing to determine how guests feel about attributes of your brand, product or service.
What To Do … Contd5. Product alignment – Know the value score of your brand – Price according to your value – Test the value: In increments – Identify purchase drivers – Higher ADR, higher overall yield – Super informed consumers make revenue managers to watch RevPAR by room type. Ex: Google streetview, BusinessPhotos, Room 77 – Consumers have RM products at hand. Ex: Bing’s Farecast
What To Do … Contd6. Competitive benchmarking – Know what is said about your competitor – Metrics: Number of reviews on online travel websites, videos, Facebook fans, Twitter, photo shares, bookmarks and blog entries7. Strategic pricing – New retail concepts that offer members-only deals, flash sales, group buying and auctions – 70% same day bookings – Focus on value instead of price, value seekers will pay more – Better-informed consumers and shrinking lead time8. Google Hotel Finder – Yet another distribution channel that needs to be monitored – Deep integration happening with Google suit of products – Make sure your property is listed. – Keep it updated
What To Do … Contd9. Brand protection – Protect your brand from advertising hijacking – OTAs and other travel websites bid on search engines on your hotel name; diverts people – Costs you commission, instead of a direct sale – Facebook Ad options are even more granular
What To Do … Contd10. Make your website social – Build social analytics
Social Media Quadrant For Revenue Managers Time Scope SHORT TERM LONG TERM Tactical Strategic INBOUND (1) Inform (3) Inform pricing, User Generated promotions and distribution andInformation Content pricing decisions CRM strategy Flow OUTBOUND (2) Drive short term (4) Drive customer Hotel Generated demand and build development and Content brand awareness retention
Online Reviews – Importance90% of online shoppers said they trust recommendations from people they know70% trust opinions of unknown users10% rate swings due to online reviews50% of people won’t book a hotel if there are no reviews26% of TripAdvisor visits occur in the last five days prior to reservation booking
Online Reviews – Importance71% of Indian accommodations have rating of 3.5 (out of 5) in TripAdvisor38% customers are ready to pay more, for reviews that indicate superior service#1 reason visitors leave a hotel website - to check reviews elsewhere40% of consumers that leave hotel websites to validate their decision with other sitereviews end up booking there
Impact of ORM on revenue• “A 1-point increase in a review score equates to a 9% increase in average daily rate” – Expedia• Cornell University study reaffirms the impact of online reviews on all offline and online distribution channels +0.80% ADR 1 point increase in hotel’s Global Review Index (of ReviewPro) +0.54% Occupancy +1.42% RevPar
Reputation drives revenue – now what?1. Reputation is everything – Reviews are like glass. Handle with care. – Have good reputation and review score – Directly impacts ADR (average daily rate) – Set up a combined task force together with the operations team to improve the service level of the hotel, and tackle concerns or suggestions raised by guests – It’s not just about service. You need to get reviews.2. Grow direct sales – Help your marketing team to secure a relevant budget to grow direct sales – Make sure your website is well optimized and conversions are high – Most important social revenue channel – Loss in direct bookings is loss of revenue – Boost confidence: Integrate reviews, leverage analytics – Save commission from 3rd-party distribution channels – Direct bookings enable you to take better decisions, serve customers better
Reputation drives revenue – now what? Contd..3. Track your reputation against others – Which are the places your potential guests check while they’re shopping – When satisfaction drops or surges, dig deeper to understand the forces driving those trends, and then make changes based on what you learn – Semantic analysis of online feedback for a property can reveal opportunities for targeted improvements that make the biggest, fastest impact on guest satisfaction. – Doing this for a competitive set will help build a stronger unique value proposition for that hotel.
ORM Based Revenue Optimizer Quadrant Source: ReviewPro
Revenue Optimizer Quadrant - Example Source: ReviewPro
Case Study 1Olivia Plaza Hotel, 4 Star, Barcelona:• Used semantic analysis to improve breakfast offering• Significantly reduced the number of negative reviews and comments
Case Study 2CitizenM Hotels, Europe• Checkout includes guest satisfaction check – Negative: A manager is involved to resolve problem! – Positive: Receptionist encourages sharing experience in review!• Higher volume of negative reviews are minimized because guests do not leave the hotel with a negative feeling
Case Study 3Corinthia Hotels, Europe• Used their Twitter account to resolve Marc Benioff’s complaint• Brand and customer mileage
References• HotelMarketingCoach• Xotels• Tnooz• ReviewPro• HotelExecutive• HotelNewsNow• ISHC• WebInTravel• Altimeter Group• Awareness Inc• Cornell university school of hotel administration• PhoCusWright• TripAdvisor• comScore• eConsultancy• eMarketer
Q Q? ?Social media and reviews are changing the landscape of revenue management Karthick Prabu