According to a PhocusWright study from December 2013, 77% of travellers ‘usually or always reference reviews before choosing a hotel.’ The same study also reveals that 53% of travellers wont ‘commit to booking until they read reviews’, and 80% of travellers ‘read at least 6-12 reviews before booking a hotel’.
In fact, according to a recent study, reviews have now become more important than ratings from traditional sources like Forbes and AAA. According to MMGY Global’s ‘2015 Portrait of American Travelers’, 53% of the traveler segment earning an household income over $150,000 a year, now trust review sites more than these traditional rating standards.
Reviews and Ratings are Critical
As a hotelier, you know that reviews and ratings are critical to your success. You are always thinking about how you can improve your hotel’s online reputation. You understand that it’s important to keep improving your service levels.
There are dozens of potential areas that you might need to address. Some reviews might contain a photo of a chipped corner of a bathtub, someone might not have be happy with the amount of natural lighting their room had, while others might not be satisfied with the food.
The question is, where do you begin? Which areas do you address first?
Enter a 100 Year Old Mathematical Principle
That’s where the Pareto principle comes in. The Pareto principle, named after Italian economist Vilfredo Pareto, is a concept that can deliver tremendous gains in a business with comparatively little effort. The principle states that 80% of effects come from 20% of causes, or rather, 80% of results come from 20% of efforts.
In 1906, Vilfredo Pareto observed that 80% of the land in Italy was owned by 20% of the population. What’s really interesting is that this 80/20 distribution can be observed across various areas of natural phenomenon, life and business. For example, in a B2B business 80% of revenue comes from 20% of customers; 80% of complaints comes from 20% of customers.
How can you apply the Pareto Principle to improve your reviews and ratings scores?
You have limited resources at your disposal for managing your hotel. Its’s hardly possible for you to address every single area that your guests have a problem with. However, you can use the Pareto Principle to focus on those issues that matter most.
How do you go about identifying those areas?
Use Performance by Category
A simple way to begin is by using BrandGain’s Performance by Category Metrics.
You can use the ‘Positive Review Share’, which helps you analyze your hotel performance against your competitors on the basis of positive review share received for selected categories.
You can also use the Negative Review Share, which helps you analyze your hotel performance against your competitors based on the negative review share received for selected categories.
Another option is to use the Category Score, which helps you analyze your hotel performance against your competitors based on the score received for selected categories.
Once you have identified the categories which need your attention, you can drill down deeper into the reviews.
You need to look for issues that a large number of people have spoken about as well as those issues which that fewer people have spoken about, but some people feel very strongly about.
After going through these categories and reviews, make a list of all the areas that need your attention.
Rank these areas in terms of importance.
Use this list to finalize the top three areas that need your attention.
That’s all there is to it!
After this exercise, just go ahead and execute your changes. Keep your eye on the BrandGain dashboards to monitor the effect your initiatives have on your rankings.
Conclusion
The key in the pareto principle is to prioritize. Make sure you address those areas which will have the maximum impact on your rating scores. If you can implement this successfully, not only will your scores improve, but you will also be able to command higher room rates.
