Average Daily Rate (ADR) is one of the hotel industry’s key performance indicators.
Calculated by dividing total room revenue by the number of rooms sold, it represents the average rental income per occupied room.
Research from Expedia shows that one significant way you can increase ADR is by improving guest ratings.
For example, in the survey a hotel with a guest rating of 4.4/5 was able to charge +26% more than a hotel with a baseline rating of 4.0/5.
The report found that guest reviews are the most influential factor for travellers after price. The higher the hotel rating, the higher price premium the hotel can charge.
Maximising the Impact of Your Reviews
We spoke to Ben Jost, Founder and CEO of TrustYou, a guest feedback management platform with a database of over 700,000 hotels that analyses over 100 million guest reviews each year, about how hoteliers can use guest feedback to improve their review scores and subsequently charge higher room rates.
“Everything that TrustYou does tests back to the fundamental question of whether a product will enable hotel clients to achieve higher review scores by delivering better service to guests,” says Ben.
Research from TrustYou has found that 95% of travellers read reviews before making a booking decision and that 76% are willing to pay more for a hotel with higher review scores.
This illustrates how important it is to manage your online reputation and how it relates to commercial metrics such as ADR (Average Daily Rate). Better scores lead to more bookings. More bookings mean increased bottom-line revenues.
Platforms like TrustYou give you the ability to collect and share all of your hotel reviews from and across Google, OTAs, metasearch sites, your own website and even your own Facebook page.
As these reviews are so influential to travellers, they should form an integral part of your strategy and marketing efforts.
Catching Problems in Real-time
Another key consideration is how you respond to guest feedback.
It’s all about being proactive rather than reactive.
If you can catch a problem, such as a faulty lamp or broken air-conditioning unit, while the guest is still on the property you will gain the opportunity to fix the issue and turn a negative experience into a positive review.
And it turns out digital messaging is guests’ preferred method of communication.
“In our research, we have found that 91% of travellers are willing to communicate issues during their stay, and 68% prefer digital communication vs. in-person or on the phone,” says Ben.
“Travellers are understanding of issues, but they do want them acknowledged, they expect to be able to easily report issues and for action to be taken.”
By opening up a line of communication, you gain the ability to respond quickly and efficiently to guest feedback. With a guest messaging platform like TrustYou, the task can instantly be assigned to the appropriate department and member of staff, reducing the workload for the front desk.
Interestingly, Ben states that “over 80% of guest feedback is positive, so hoteliers will not be burdened with issues, but instead be alerted of opportunities to turn detractors into promoters.”
And ultimately, improved ratings will lead to increased revenue, as TrustYou have found that for every +1% increase in guest satisfaction you can increase ADR (Average Daily Rate) by +5%.
How to Get Better Reviews?
Okay, so we’ve established that a higher guest rating can lead to higher ADR and higher profits.
Catching problems in real-time to improve the guest experience and analysing your reviews to keep on improving are important strategies for increasing your guest rating.
But according to Ben, there are two key factors that really stand out when it comes to guest experience and ratings.
“In 2019, we collected and analysed over 145 million reviews, and we are able to pinpoint what travellers comment on most,” says Ben.
When travellers approve of the food and service, they rate hotels “+5-6 points higher on average.”
“From a negative standpoint, travellers most often complain about room cleanliness and bathrooms. When these are not up to their expectations, they rate hotels -7-9 points lower than average.”
So, there you have it: if you want to get better reviews and increase hotel ADR you need to focus on the bread and butter of hospitality: great food, great service and clean rooms.
To find the right online reputation management tool for your hospitality brand, get in touch today to discuss your objectives and how we can help you get started.