Reviewing the Reviews: How does TripAdvisor impact hotels and their bookings?

  Posted in Online Reviews

By Clare Riley, Content & Editorial Manager, SiteMinder

With 95% of travellers saying they regularly use travel review websites to make their booking decisions, a new study from TrustYou and AccorHotels has revealed some fascinating insights into the impact reviews have on hotel bookings.

Using AccorHotels as the basis for the study, TrustYou enlisted the help of academic and research institution, the Statistical Consulting Unit of LMU Munich.

The main aim was to examine what impact TripAdvisor reviews had on room bookings for AccorHotels – the study covered 225 of the group’s European properties and 182 from Asia-Pacific, with daily hotel bookings from October 2013 to November 2014 assessed.

In Europe the percentage of excellent reviews (those marked with the five green bubbles on TripAdvisor) had the greatest impact on bookings, showing that travellers seek out the best-rated properties. However, the story was different in Asia-Pacific where potential hotel guests prefer to consider the average review score, pointing to a more balanced look at reviews.

Review scores, rankings & bookings

Findings showed that in Europe, if the percentage of excellent reviews grows by 10%, a hotel’s search ranking on TripAdvisor improves 11.3%. A 10% increase in the hotel’s average review score will also push a search ranking up by 6.1%.

But, in Asia-Pacific, a 10% jump in excellent reviews will only increase the search ranking by 3.7% – while a 10% average review score increase boosts the hotel’s search ranking 4.3%.

And that theory was proven out further when the research team, led by TrustYou, looked at the direct correlation between a hotel’s search ranking on TripAdvisor and the volume of its bookings

The study found that a higher TripAdvisor search ranking delivers more bookings via the web channel.

If the search ranking in Europe improves by 10%, then the expected number of bookings via TripAdvisor increases 4.6% – and the figure rises even further in Asia-Pacific to 5.7%, highlighting that properties with a higher search ranking have the potential to drive more revenue.

One of the most interesting findings from the study came from the assessment of higher average review scores on TripAdvisor and the impact they have on web bookings.

If the average review score of a hotel on TripAdvisor is improved by 10%, the expected number of bookings on TripAdvisor increases by 9% in Europe, and more significantly so in Asia-Pacific, by an impressive 15%.

So, how does this affect a hotel’s rates?

In Europe, the percentage of excellent reviews shows the greatest increase in room rates, followed by a hotel’s average review score. An increase in the hotel’s search ranking only marginally increases room rates for the hotels assessed in this study.

Interestingly, in Asia-Pacific, the percentage of excellent reviews is the only criteria shown to increase rates. Better search ranking and higher average review scores actually decreased rates in Asia-Pacific hotels – lowering the risk of complaints if the experience didn’t meet expectations. For example, if a hotel charges higher rates, travellers may have higher expectations and, if disappointed in their experience, give the property lower scores.

Lastly, the study noted that the effects of average review scores decrease quickly over time. Researchers found an increase in search ranking will boost hotel bookings 5.2% – but only for an initial period of four weeks. After this time, the impact drops to 3.5%.

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