Online Health: Independent Hotels vs. Brands

The efforts to gain direct bookings can be tough, especially for Independent hotels. A recent article in Skift notes how the “direct booking wars” have been going on for a while with hotel brands, independent hotels, OTAs, and especially Google enticing customers to make bookings on their websites or apps to build loyalty and drive revenue.

We looked at several factors to determine what Independent hoteliers need to do to be a part of a potential guest’s purchase journey to win a direct booking. In general, these areas provide a glimpse into a hotel’s online health.

Top Review Channels for Independent hotels compared to Brand hotels

First, we looked at our own proprietary data for the hotels we provided review responding services for in 2019. We analyzed the top channels where guests left reviews for Independent hotels compared to Brand hotels. Here’s what we found:

• Booking.com is the top driver when it comes to online bookings as a single online distribution channel. Close to 28% of reviews for Independent hotels came from Booking.com compared to 22% for branded hotels.
• Google has increased its prominence and has truly become an industry player when it comes to reviews. The percentage of Google reviews received by our client hotels, 15% for Independent and 19% for Brand, surpassed the number of TripAdvisor reviews received in 2019, 10% for Independent and 12% for Brand.
• Expedia Group continues to be a key player where one-third of the total online bookings & conversations are taking place – 32% for Brand hotels and at 30% for Independent hotels. These totals do not include another 14% of Expedia Real-time conversations that are taking place with hotel teams on a daily basis.

Phocuswright’s research shows that OTAs currently capture 38% of all online bookings for Hotels in general. Expedia and Booking.com maintain their grip on the OTA market, with a combined 92% share of OTA gross bookings.  

It is predicted that the trend of OTAs capturing reservations will continue to be strong – but the share might shift in 2020. Their biggest competitor is Google who is quickly becoming a one-stop-shop for all travel needs.

Comparing Positive, Neutral, and Negative Review Volume

We also examined the types of comments that were made (positive, neutral, or negative) about Independent hotels compared to Brand hotels on these review channels. When comparing by source and by review sentiment, we saw that Independent Hotels performed better than Brand hotels with higher scores on Booking.com, Google My Business, Hotels.com and Orbitz. On Expedia and Travelocity, Independent hotels ranking was 2% higher than Brand Hotels

• Both Brand and Independent Hotels have a 66% Positive zone in guest feedback overall.
• The biggest difference lies with neutral and unsatisfied guest comment ratios. Independent hotels have a lower percentage of “Red zoned – unsatisfied guests” at 17% versus Brands at 20%.
• Neutral guest experiences for Independent hotels is at 17% compared to Brands at 14%.
• Booking.com guests appear to be more demanding than other channels with the lowest percentage of guest satisfaction seen for both Brands and Independent hotels.  

Online Review Sites Checked the Most

ReviewTrackers found in their 2018 Online Reviews Survey that gauges when, why, and how consumers are using online reviews that 63.6% of consumers check reviews on Google before ever choosing a business. This makes Google the top choice over every other review site. Yelp ranks second at 45.18%, followed by TripAdvisor (30%) and Facebook (23%). Additional key findings from the survey:

• Google and Facebook have the highest growth YOY in comparison to sites that focus primarily on reviews such as TripAdvisor which has lesser growth YOY
• Google has become very proactive in soliciting reviews from users. This helps them accomplish their goal of becoming a one-stop-shop for travelers looking for lodging, activities, airfare, and reviews from others about their post-stay experience.

Takeaway for Independent hotels: Google has enhanced Google My Business insights - their analytics package which gives you an inside look at how people find your business listing on the web. Because many customers find businesses on Google Search and Maps, Insights focuses on how customers use Search and Maps to find your listing, and what they do once they find it. This is a great tool for Independent Hotels to leverage to better understand guest behavior and use for your direct marketing efforts.

How Travelers Make Decisions About Where To Stay

Travelers consider many attributes to determine the perceived quality of a hotel. For hotels to compete effectively, it’s important to understand how travelers make hotel selections and which attributes have the most influence when they are making those decisions. We looked at two recent studies that provide insights into a traveler’s decision-making process that are especially helpful for Independent hotels to consider.

Expedia Group Study

The first study was completed by Expedia Group in 2019 and studied the relationship between five attributes (room image, hotel brand, hotel ratings or stars, remodel callout, and price), and how travelers perceive and make hotel choices based on them. Study participants were asked to select a hotel property for a trip to one domestic city that was familiar to them and one international city that was aspirational and unfamiliar to them. A dummy brand, ‘Ruume,’ was created to test how a non-branded option might perform against a branded hotel.

Survey results found that price was by far the most important factor when picking a hotel, across both well-known and unknown brands. However, the data also revealed that guest ratings have a strong influence on hotel selection. Consumers are willing to pay more for hotels with higher guest ratings, and considerably more so than for premium branding.

Takeaway for Independent hotels: This research revealed that an independent hotel has opportunity to compete against an established brand player for traveler preference by focusing on the guest experience. An increase in guest ratings is much more valuable than the perceived increase in being a branded hotel.

An Exploratory Study of Online Reviews of Independent Hotels by Cornell University

Additional research by Cornell University supports the findings of the Expedia Group Study. The Cornell research analyzed more than 95,000 reviews and ratings for 99 independent hotel properties. Their goal was to find out what moves the needle the most in increasing a hotel’s star rating on these three channels: TripAdvisor, Expedia Group and Booking.com. Here is what they found:

• Not surprisingly, #1 key driving component in customer satisfaction is service – almost half – at 49.8% of the 95K reviews analyzed
• Room and location of the hotel were both important – at even 32% of the reviews for each
• While there is no solution for the location change of the hotel itself, guest reviews for the room alone indicated that the most important factor was a good nights’ sleep in a comfortable bed and not necessarily the aesthetic of the room itself.
• When analyzing the individual review texts, it was clear that solid delivery of core hotel service coupled with favorable experiences (consisting of personal & emotional interactions with the staff) was most important to consumers.

Surprisingly, the individuals were not looking for an occasional “wow” factor but were more interested in “operational consistency” during their stay. The analysis found that properties with the most consistent service also had the highest ratings, while hotels with inconsistent scores also had relatively low ratings.

Takeaway for Independent hotels: Both these studies support the fact that the key drivers in customer satisfaction and, thus booking choice, remain exceptional service and comfortable room. It is recommended that Independent hoteliers focus on the fundamentals of providing guests with exceptional service and a clean and functional room that offers guests a good night’s sleep. The authors of the Cornell Study emphasize that “Despite amenities creep, architectural fads, and numerous brand permutations, the core of the hotel business remains creating a positive and memorable stay by focusing on the fundamentals of a hotel’s operations & meaningful relationship building with guests.”