Using your hotel’s reputation to increase rates

Reputation pricing uses your hotel’s online reputation as one of the factors influencing rates

Online reviews filled the information gap, driving value transparency and replacing price as the primary measure of quality. As a result, revenue managers were forced to adopt a new approach - reputation pricing - and cultivate a new set of decision-making skills.

Key takeaways

• Reputation pricing aligns your hotel's room rates with three factors: your guests' understanding of the level of experience you provide, their expectation of the value they'll receive for their money, and their willingness to pay for that value;
• Studies show that the more positive reviews a property accumulates, the higher it ranks in search results. This increased visibility leads to more site visits, conversions, and ultimately higher occupancy rates;
• Various research efforts have validated the correlation between reputation and pricing. For example, a Cornell University study estimated that a one-point improvement in a property's user review score (on the 5-point scale used by OTAs) could allow for an 11.2% price increase without negatively impacting occupancy rates.

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