How to Use TripAdvisor to Test Pricing
When evaluating the rate a hotel is charging, travelers don't care about supply, demand, chain scale, or citywide compression. They care if other people have stayed there and had a good time. Or at least not had a bad time.
How can a hotel influence a traveler's decision-making process?
Most people read reviews before they buy anything online, and 80% of travelers consume between six and 12 reviews before they decide to book a hotel.
TripAdvisor reviews play an important role in the consumer perception of your hotel. How travelers perceive your hotel online, in turn, plays an important role in your revenue.
In short, you need to care about, read, respond to, and take action on your TripAdvisor reviews.
If you don't agree, I'd love to know why. For our purposes here, I'm going to assume that you do agree with that stuff.
Instead, let's turn our attention to how to test your price position using TripAdvisor. You (or at least your revenue strategy person) use all kinds of sophisticated tools in your hotel to determine ideal pricing. Those tools include the STR Report, Demand360, rate shops, and an events calendar. Your team learns to understand and anticipate demand conditions, and then you set rates accordingly.
But from a consumer perspective, demand conditions are mostly invisible. Instead, a traveler goes to TripAdvisor, reads two or three pages of reviews, and tries to pick the best value.
So here's how you test that. Make a spreadsheet that lists you and all of your competitors. Then click around on TripAdvisor to gather each hotel's Overall Score and Ranking, as well as scores on Location, Cleanliness, Service, and Value. (These are broken out on each hotel's TripAdvisor page.)
Record how many Excellent, Good, Average, Poor, and Terrible reviews each hotel has, and calculate the averages. Then note how your hotel's results compare to these averages. For example, if 37% of your reviews are Excellent, and your competitive set averages 28% Excellent reviews, then you have more Excellent reviews than average.
Now compare this data to your rate shops and positioning. If La Hotel Bubbles is consistently charging the highest rates, a consumer would expect that hotel to consistently have the highest reviews and highest ranking. If the Shady Trashland Inn has terrible reviews and the lowest ranking in the set, a researching traveler is going to anticipate that their shady rates are going to be well below the other hotels in the area.
If there is a mismatch in your hotel's rate position and its TripAdvisor position, dig deeper into the Excellent, Good, Average, Poor, and Terrible reviews. You might find that, while there are lots of Excellent and Good reviews, your hotel has a higher-than-average percentage of Poor reviews.
Well, maybe not good, but helpful, because now you know where to look. Read through all of the Poor reviews and jot down every complaint; you'll soon see which aspects of the experience are most likely to lead to a Poor review.
And they may not be what you think.
For example, when I did this exercise for a hotel that was long overdue for a renovation, I discovered that, yes, there were plenty of condition issues mentioned, but there were two other top complaints: not enough hangers in the closet and moldy shower curtains. The hotel team couldn't snap their fingers and get rid of their condition issues, but they could certainly add hangers and replace shower curtains.
TripAdvisor is a great source of feedback, sure, but unless you take the time to truly absorb and take action on the insights there, it's going to work against you. As you end the year strong, think about how you can create better alignment between your hotel's pricing and TripAdvisor presence.