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Get Your GSI On!

Online reputation management for your hotel is serious stuff. And focusing on your Guest Satisfaction Index is critical.

Thursday, August 04, 2011
Daniel Edward Craig
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In a previous article I discussed how social media has enabled a new measure of hotel performance: the Guest Satisfaction Index (GSI). Derived from guest reviews and ratings aggregated from major review sites, the GSI provides a measure of a hotel’s market share of guest satisfaction within its competitive set.

In this post I discuss how newly available reputation metrics are paving the way for the integration of the online reputation management and revenue management functions in hotels. The implications will reach beyond decisions on pricing and revenue to budgeting, staff training and bonus plans.

“Hotels are quickly recognizing the link between revenue management and reputation,” says Corin Burr, Director of London-based Bamboo Revenue. “Common sense dictates that there is a link between guest reviews and revenue performance. Of course there are many contributing factors, but to watch your Revenue Generation Index increase as your Guest Satisfaction Index increases puts more science into the instinct.”

Kelly McGuire, Ph.D., Practice Director, Hospitality and Travel Global Practice at SAS Institute, would agree. “I think there is huge opportunity in incorporating reputation management into revenue management decisions both strategically and tactically,” she says. “In recent research, we found that the sentiment of online reviews reduces the impact of price on purchase decision, meaning that good reviews will influence a traveler to spend more, and bad reviews will discourage bookings, even if the hotel room is discounted.”

Analytics tools like Revinate, Synthesio and SAS provide a range of reports to help hotels monitor and benchmark online reputation, whereas companies like TravelClick, Rubicon and STR Global provide rate, occupancy, revPAR and market share reports. But only by integrating both types of data will hotels be able to see the whole picture and efficiently use reputation metrics to make strategic rate decisions.

“Given what I’ve been seeing in some of my research, it will be essential for revenue managers to understand their ‘satisfaction position’ on online channels as they make pricing decisions,” says McGuire of SAS. “Our social media analytics could certainly gather the information and apply the appropriate text analytics to get at the underlying sentiment that would drive this metric. We’d love to partner with a market level research provider like STR to work towards enabling this for the industry.”

By incorporating Guest Satisfaction Index data into market share reports, hotels will have a holistic view of how they’re performing against competitors: in rate, occupancy, revPAR—and guest satisfaction. GSI scores can be used to guide decisions in a range of areas: employee training and development, marketing and communications, capital upgrades, labor allocations, and services and amenities, as well as criteria for employee recognition and management bonus plans.

Aggregating and scoring review data is no simple process, however. There is no standard system among review sites for ratings and rankings, and some of the most valuable feedback is expressed in freeform commentary. To further complicate matters, a lot of traveler commentary is shared on even less structured channels like Facebook, Twitter and foursquare. Reputation monitoring tools like ReviewPro and TrustYou Analytics provide sentiment analysis to qualify commentary, but much of the feedback on these channels is inaccessible, contained within a walled garden.

And who is going to wade through all the data and understand it well enough to use it to make strategic revenue decisions? Revenue managers are stricken as it is with “analysis paralysis” by the sheer volume of revenue data and metrics available. Further, reputation management is a property-wide function, making it difficult to assign responsibility to a single department.

Do hotels need to create a new position? Fifteen years ago, revenue management was a new concept in the hotel industry. Today, every hotel has a dedicated revenue manager and a revenue team that meets weekly to review reports and make strategic and tactical decisions. Has reputation management become so integral to hotel success that it’s heading in the same direction?

“I will not be surprised to see the introduction of online reputation managers in hotels seated right next to revenue managers,” says Burr. “At Bamboo Revenue we are working with a range of hotels to help them understand the link between online reputation and revenue management performance. With experts in both fields we can give a holistic, practical and hands-on approach.”

It all sounds a bit complicated and overwhelming—and it’s likely to get even more complex. Says Sloan F Dean, senior vice president of revenue and market strategy for Alliance Hospitality, in a recent column on HotelNewsNow.com, “The business intelligence systems of tomorrow will need to interface with and/or integrate CRS, RMS, PMS, POS, social media, loyalty and sales data, linking all departments of a hotel with one central data source.”

As a first step, hotels can start channeling greater resources toward managing reviews and social media feedback to improve the guest experience and enhance reputation. As the relationship between reputation and revenue becomes more firmly established and integrated reporting is made available, hotels and hotel groups that act quickly to implement a structured reputation management program will likely see quick and favorable results to reputation and revenue.

And that program could very well involve the introduction of an online reputation manager to your management team.

Daniel Edward Craig is a former general manager turned hotel consultant specializing in social media strategy and reputation management. He is the author of three novels, a popular blog, and various articles about the hotel industry, as well as The Hoteliers’ Guide to Online Reputation Management. Visit www.danieledwardcraig.com.

Daniel Craig    Daniel Edward Craig
Hotel Interactive® Editorial Division

Bio: Daniel Edward Craig is a former general manager turned hotel and travel industry consultant specializing in social media strategy and reputation management. He is the author of three novels, a popular blog, and various articles about the hotel industry, as well as The Hoteliers’ Guide to Online Reputation Management. Visit www.danieledwardcraig.com
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