7 Disruptions Hotels Can Create to Dominate their Market

Discussions of market disruption are often reserved for the realm of advanced technology. However, hotel general managers should be on the lookout for opportunities to disrupt their local markets for their advantage. Here are seven disruptions any general manager can create if he/she is committed to mastering their understanding and use of TripAdvisor reviews.

The Disruption I Missed

I was running the guest and meeting planner satisfaction program for a diverse hospitality and entertainment brand in the summer of 2007. We were getting ready to launch one of the first voice of the guest programs that leveraged the use of text mining software to analyze every comment made in survey responses from our hotels’ guests and meeting planners, as well as the fifty or so retail stores, dining establishments, live music venues, museum, golf course and more. My focus was so intently on making sure we had our internal surveys process mastered that I virtually ignored a major disruption that was taking place at that moment.

The iPhone was released in June of 2007 and there were stories of how it was going to revolutionize and eliminate many of the hassles guests experienced in hotels at the time. It was projected to become a new way for marketers to engage guests and increase the share of wallet captured onsite.

As with most technology, it took longer to implement than originally imagined, but we are now seeing many advances like remote check-in, keyless entry and a multitude of location and context-based ad tools. However, one of the biggest disruptions to hotels came, not from an undiscovered technology, but rather, it was from a simple website that already existed: TripAdvisor.com.

(AUTHOR'S NOTE: Some of you have expressed concerns that being engaged on TripAdvisor will prevent direct bookings. This is not necessarily the case. For many guests it's simply seen as an unbiased place to do research and to get opinions. I am a loyal Marriott customer and nearly always book direct. However, I always research on TripAdvisor. As I discuss later in this article, because TripAdvisor has been so disruptive, if your hotel is not active on TripAdvisor, you will lose bookings to those hotels that are. The best strategy is the engage on TripAdvisor to raise your rank and ratings and also offer your incentives on direct bookings.)

The Convergence that Caused a Hospitality Disruption

The disruption I am referring to was not driven so much by the TripAdvisor site itself. As with so many true disruptions, it required a convergence of several independent components. This disruption required the combination of:

• the existence and promotion of the TripAdvisor site;
• the iPhone’s ability to access the internet anywhere;
• virtually free data; and,
• the willingness of people to trust the honesty of complete strangers who left reviews of hotels on TripAdvisor

In 2008, the early impact of TripAdvisor became painfully apparent to me when reviews were pouring in that triggered some negative press about one of our hotels. This led to hard questions from the CEO. We weathered that storm and, what was a painful experience at the time, became a blip on the trendline of our charts. But, I could not shake the feeling that we had just experienced a new reality and that we weren’t really ready for it.

Fast forward a decade and we can see that TripAdvisor truly has disrupted the way guests make their decisions about how they will book a room and at which hotel they will stay. Research conducted in 2015 by TrustYou found that 95% of travelers read reviews before booking a room. TripAdvisor alone receives 390 million average unique monthly visits. TripAdvisor’s exponential growth occurred primarily because of the convergence of technology in the form of the smartphone, the access to virtually free data and the willingness of people to trust complete strangers.

TripAdvisor changed how we shop for travel-related experiences. I recently spoke with the CEO of a startup who spent a few months in Europe on vacation. He bragged about how he only used TripAdvisor to decide where he was going to visit. He found that it was so reliable, he had no need to look elsewhere. He had access to a wireless or cell network and could reach the TripAdvisor site practically anywhere he was to check on local restaurants, tourist attractions or his next hotel. His reliance on and trust in the strangers who shared their experiences on TripAdvisor caused me to think back to how my parents relied on the expertise captured in stacks of AAA books as we traveled from state to state on vacation. Those days are long gone.

How We Helped One Hotel Disrupt Their Market

After I started my consulting firm in 2009, I kept my eye on TripAdvisor and studied what was happening and how hoteliers could leverage this disruptive catalyst to be disruptive in their own ways. Not long after, our preparation met a need. The president of a hotel ownership group approached and asked what we could do to help his company. His hotels were not performing well and he didn’t have the capital to invest in everything the guests said should be remedied. We analyzed his hotels’ data on TripAdvisor and provided recommendations for each one.

The company decided to start with the worst of their hotels. It was in the bottom 10% of more than 125 hotels in their metro area. He figured they had little to lose and much to gain. Rates were abysmally low. Online bookings were declining. The reputation of the property was falling.

He took our recommendations and implemented many of them with great success. Within a few months they saw tremendous improvements in all areas. We waited patiently to see if the results were an anomaly. They held strong. 

As you can see in the chart above, which shows the percentage of reviews for each rating level, the hotel essentially reversed its ratings on TripAdvisor and it is now ranked in the top 25% of the hotels in the metro area. This property outranks hotels with AAA four star ratings. It’s rates are now nearly double what they were in the past and their occupancy is significantly higher, even reaching sell-out or near sell-out occupancy several times a year.

What it Takes to Disrupt Your Market

The journey took effort. There’s work that goes into knowing exactly what to change while on a budget and, more importantly, the order of changing things to achieve the types of results outlined above. It takes a level of expert guidance and it takes a commitment from hotel leadership to follow through. There is some investment involved, but the returns are exponentially greater if you follow the right process to unlock the seven disruptions below in the right order.

For More Information About Guest Experience Micro-Moments Read: How Micro-Moments Are Transforming Your Customer Experience & Impacting Your Sales

You must start by understanding which micro-moments of the guest experience are triggering the negative emotional spiral. This a critical factor of success. Many general managers who go it alone think that fixing every major theme that the guests mention will turn 1 out of 5 ratings into 5 out of 5 ratings. This is just not the case. Besides what is broken, you also have to know what your guests aren’t even telling you. This is what we’ve discovered makes the real difference.

“A thing is disruptive if, once a person has an experience, they will not go back to the previous experience.”

Mark S.A. Smith, creator of the Selling Disruption Show weekly podcast

As I share in the #1 best selling book I co-authored last year (The Complete Experience: Unlocking the Secrets of Online Reviews that Drive Customer Loyalty is available in Hardcover or Kindle), each rating level on TripAdvisor has unique characteristics. Certain language structures, themes and emotions show up while others are non-existent at each level. What it takes to achieve a 5 out of 5 rating cannot be learned by simply studying the reviews with ratings of 1 through 4. They are missing what matters most for your hotel to achieve consistent 5 out of 5 ratings. And, what matters for your guest is often different than what matters to the guest who books a room at the hotel next door.

This is why smart general managers look outside for expert help. It takes a skill beyond what they have mastered to see the patterns and spot the guest experience tipping points. To achieve the level of mastery required, it would take the time you don’t have because you must focus on running your hotel. Just as you leave the pool cleaning and air conditioning maintenance to other experts, you should rely on experts to analyze the condition of your reviews.

Starting Your Hotel's Journey of Disruption

When you have the information and recommendations from your expert in hand, you can move forward. It is important to be aware of the seven disruptions you can expect to see if your efforts are productive. If you don’t see evidence of these disruptions, you should seek additional guidance. The market may have shifted or you may be missing a critical step in the execution of the plan which will reduce or eliminate the ROI of the efforts. Also, be aware that these disruptions typically happen in the following order:

1. Employee Engagement Disruption
2. Employee Attraction Disruption
3. Guest Attraction Disruption
4. Occupancy Disruption
5. Room Rate Disruption
6. Acquisition Cost Disruption
7. Profitability Disruption

You may also enjoy this article: 7 Steps to Transform Your Customer Experience Micro-Moments in 30 Days

Employee Engagement Disruption

When you start your disruption efforts using TripAdvisor as a key component of your metrics ‘dashboard’, it is essential to trigger your team’s engagement. Many of the earliest wins come from training them on the specific micro-moment experiences that uniquely drive the 5 out of 5 reviews. These will emerge from the data analysis your expert provides and will give you very precise focus on the emotions and even the words that will make a difference.

When your teams feels empowered, because they know what to listen for and what to do to help guests in the specific micro-moments that matter, they gain confidence and feel greater self-esteem and job satisfaction. It is important to note that the employee engagement disruption is the critical foundation to the success of your entire guest experience improvement efforts. When you show your employees their early wins in the form of better reviews on TripAdvisor and your hotel moves up in the rankings, your team will be energized.

If you're ready to create a disruption in your market, contact us and we'll schedule a strategy session.

Research shows that the impact of performance improvements on employee attitudes diminishes after one year. That means, you have a limited time to create this shift and build in the winning habits that sustain a positive attitude regardless of the performance metrics. As you reach that one year mark, your employees must be internally motivated if your hotel’s performance is going to remain high and continue to improve.

Employee Attraction Disruption

General managers often tell me that one of the inevitable challenges they face as they take on a guest experience improvement efforts is employee turnover. They know that most of the employees leaving were disengaged and were a net drain on the company, but that doesn’t ease the pain or cost of having to find, interview, select, on-board and train new employees. This pain should be short-lived, though, if you are focused on evoking the key micro-moments that matter most to guests. Why? Because the faster you raise your ratings, the more likely you are to attract even better employees.

Negative product or service reviews actually damage the brand’s attractiveness to new employees. Researchers found that 75% of job seekers consider an employer’s brand reputation before applying for a job. In addition, Glassdoor conducted research that found 69% of job seekers would not take a job with a company that had a bad reputation.

As your ratings improve, you will attract great employees who want to be part of your brand. This helps the upward spiral of success continue to accelerate. If you ignore your ratings on TripAdvisor, you are likely to continue to see a downward spiral because you will not attract the best employees. This will cost you more money by extending your search time, training time or causing further degradation in profitability due to poor service provided by employees who lack basic social skills, empathy or courtesy.

Guest Attraction Disruption

When you read and process emotional information, your body will mimic the emotion. The words trigger the same physiological states that are typical of the emotion. If we read about someone being happy, we automatically smile. If we read about someone being angry, we frown. This mimicry allows our bodies to help our minds interpret social cues. We are often unaware that we are even involved in mimicry.

This new research finding can help us understand why so many people seek out reviews before booking a hotel room or buying a product. They use the reviews as a way of feeling what it is like to do business with your hotel before they spend a dime. If you have too many unpleasant reviews online, you will drive people away.

This is one of the reasons you cannot just settle for 3 out of 5 or 4 out of 5 ratings. You need 5 out of 5 ratings with a positive emotional stories that support the rating. Prospective guests will read the stories and emotionally engage in a way that helps them decide if this is an experience they would love.

When a guest reads reviews that are rated as a 1 out of 5 or 2 out of 5, he/she is subconsciously asking a series of very important purchase decision questions.

“Can I tolerate this?”

“Is this worth taking the risk for the discounted price?”

“Will I feel the pain of regret if I decide to stay here?”

If you have few or no recent reviews on TripAdvisor, your hotel is a riskier bet than other hotels that have abundant reviews. In essence, the number of reviews serves as a validation of the experience a prospective guest can and should expect. Without reviews, a prospective guest has no way to evaluate if they will like or dislike the experience. Therefore, he/she will move on quickly to another hotel to see what the experience will be like there.

As your ratings improve and your reviews tell more positive stories, you will see that more guests who want your 5 out of 5 experience are booking rooms. And, delivering that experience becomes easier because there is less variation between the expectations of your guests. These guests will know what to expect and, if you consistently deliver an excellent experience in those key micro-moments that differentiate your hotel, you will see the guests write even more raving reviews. This becomes a virtuous cycle.

A Quick Sidebar about Reviews as "Stories"

It is important to note that I called the reviews above "stories." This refers to most of the reviews on TripAdvisor but it does not necessarily refer to reviews on Google or on hotel sites like Marriott’s current review platform. I am not complaining about these platforms, but the structure of the survey and/or the linguistic structure of the question that encourages a guest to share their experience does not seem to be designed to trigger a micro-moment of desire to tell a story. They merely elicit facts from the guest.

As an example, some surveys imply the emotion in the question so the writer eliminates the emotion from their response. If the guest chooses the rating of 5 for an excellent experience in a particular element of their stay and is then prompted to comment on "What made that experience excellent?", the guest may simply write the facts about the experience and leave out the emotions or even fail to mention that they had an excellent experience because the question is leading. This often happens when the questions trigger a person to think logically and to identify reasons he/she liked or disliked something rather than asking the guest to express what was felt. In the end, what could have been a amazing story that inspires prospective guests to book rooms becomes just a listing of lifeless facts.

Another example comes from the way survey platforms ask guests about their overall experience. Does the question ask you to "tell" or to "share" your experience? Our early research on this topic indicates that this one word difference could change the linguistic structure of the response causing guests to “tell a story” or just “share the facts”.

We have more research to do in this area, but it is important to note that TripAdvisor tends to have reviews that are more like stories than just a listing of facts. The emotions expressed by the reviewers are the triggers for buying decisions of prospective guests. In short, all stories are reviews, but not all reviews are stories. Stories drive emotion-based buying decisions.

Occupancy Disruption

Numerous studies have proven that, as your ratings improve, your occupancy will improve. This is in part because 87% of TripAdvisor users state that reviews “help me feel more confident in my decisions.” If you maintain a consistent room rate strategy while you improve your ranking on TripAdvisor, you are more likely to see that a greater proportion of your reviews have high ratings. If you raise the rates first, the increased prices may reduce the desire of guests to reciprocate with a positive review.

You should note that responses to reviews that are well-crafted and that show leaders taking responsibility, while making the reader feel like the reviewer was "heard," are challenging to write but very valuable. When hotel leaders responded to at least 50% of the reviews online, 84% of users said that this increased the likelihood that they would book a room. In fact, there is a 6.8% growth in the occupancy rate when hotel leaders respond to more than 50% of the reviews. It should be obvious that it is not just the quantity of responses that matter, but also the quality of the responses.

Room Rate Disruption

Cornell University led the way with research about the impact of online reviews on room rates. These studies have shown that as a hotel's average guest rating increases, room rates can also increase and occupancy levels can be maintained. Therefore, a sequenced strategy of occupancy disruption followed by rate disruption will allow significant long-term gains. Reversing the order may not have the same impact because if room rates are increased too quickly, the occupancy levels of the original average guest ranking may be maintained. The goal should be to raise the ranking and increase occupancy so that you receive even more highly rated reviews first. Then, when you raise your rates, you will maintain the new higher occupancy and ranking.

Other researchers have found that 76% of respondents would pay more for a hotel with better reviews. In fact, approximately 50% of leisure travelers and about 60% of business travelers will pay 10% or more for hotels with better reviews. The 5 out of 5 rated reviews have real measurable top and bottom line value.

Acquisition Cost Disruption

When the above disruptions converge, you are likely to experience yet another disruption. Your cost to acquire a new guest will likely decline. This happens because many prospective guests explore TripAdvisor to learn about the hotel through the experiences of past guests. Then, they book direct with the hotel. These guests don’t cost your hotel the fees associated with non-direct booking. Yet, they leverage the advantage of TripAdvisor reviews for purposes of shopping. If your hotel is highly ranked on TripAdvisor, and competitively priced, you will attract customers at a lower cost. They will be sold by the stories of past guests which means less selling is required by your team or your website.

Profitability Disruption

Your profitability can be positively disrupted at several points on this journey. If you adjust your behavior and your planning appropriately, you can maintain new levels of profitability that give you a distinct competitive edge. You’ll have the cash to pay better wages and the capital to renovate sooner. Building your occupancy and rate are obviously supportive of profitability.

We have also seen causal evidence that onsite spending per guest increases in line with the level of rating they provide after their visit. This means that a 5 out of 5 rating is a lag indicator of the value of the guest while in the room. When we've compared point of sale data for decisions made by the guests while at the property and the ratings provided by guests after they leave the property, we found that guests who described having a better experience while on site also spent more than guests who described a lesser (but not a terrible) quality experience. The conclusion is that guests tend to spend more on purchases in the moment on things like amenities, food and activities when they are having an excellent experience. This is a secondary way that your excellent experiences drive profitability.

How to Start Disrupting Your Market

TripAdvisor can be an amazing tool for you to use to create seven distinct disruptions in your hotel’s market. To fully leverage the reviews on TripAdvisor you must first understand:

• Which micro-moment experiences differentiate your hotel from your competitors in the minds and hearts of your guests.
• Which micro-moment experiences are unique to each level of guest rating given to your hotel.
• Which micro-moment experiences you can immediately improve with little or no capital investment and yet will generate noticeable increases in your ratings and ranking.

We work closely with hotel management teams to expertly answer these questions with their data. We then create recommendations that align with your goals and your property’s unique challenges to create an action plan that is right for you. We can even calculate how quickly you can move up your ratings and approximate how quickly you can gain new positions in your rank on TripAdvisor. Finally, we coach leaders and their teams through the changes so they stay on course and follow the right sequence to maximize benefits.

In the end, TripAdvisor should be a part of your management dashboard because it can be leveraged for your benefit in a number of ways. You could operate your hotel like you’re on a Sunday drive, just lazily taking in the view through the windshield, or you could master the use of your reviews, ratings and the metrics TripAdvisor provides to supercharge your performance so you can disrupt the other Sunday drivers in your market.

If you're ready to create a disruption in your market, contact us and we'll schedule a strategy session.

Tony Bodoh is the co-author of the #1 best selling book, "The Complete Experience: Unlocking the Secrets of Online Reviews that Drive Customer Loyalty" and he is the creator of the Admiration Equation and CX MicroMoments courses.