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Social Media Engagement Boosts Hotel Occupancy Rates

Hotel properties that actively engage with social media reviews grow occupancy at double the rate of properties that don’t, according to a study released today by Medallia. The study examines customer and business data from over 4400 hotel properties worldwide to understand and quantify the impact of social media engagement on a company’s revenue growth, customer satisfaction and social reputation. The study supports the claim that hotel properties that actively engage with social media reviews grow occupancy at double the rate of properties that don’t.

Hotels that Respond to Social Media Reviews Grow Occupancy Rates Faster

The study found a direct relationship between responsiveness to social media reviews and occupancy rate. Properties that responded to over 50 percent of social reviews grew occupancy rates by 6.4 percentage points, more than twice the rate of properties that largely ignored social media reviews. These socially engaged properties also outperformed the hospitality industry as a whole, which achieved a4.3 percent occupancy growth rate during the same period.
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“The hospitality industry has experienced the impact social media can have on their business, both positive and negative, but these findings allow properties to quantify the impact of taking action on reviews — and make it easier to justify additional investments in social media engagement,” said Aurelia Setton, Medallia’s General Manager for Hospitality.

Responsiveness Impacts Occupancy Rates

Regardless of the total percentage of reviews a hotel had responded to previously, even a small increase in the proportion of reviews a hotel responded to resulted in an increase in occupancy rate. The properties that increased their responsiveness by over 50 percent earned double the occupancy rate growth of those that didn’t improve their responsiveness:

  • 50%+ increase: 6.8 percentage points of occupancy rate growth
  • 30-50% increase: 3.7 percentage point growth
  • 10-30% increase: 2.2 percentage point growth
  • 1-10% increase: 3.2 percentage point growth

Responsiveness Impacts NPS

High responsiveness does not just impact occupancy rate, either. A commitment to social media engagement was found to drive similar gains in overall customer satisfaction. Properties that responded to over 50 percent of social reviews saw their Net Promoter Scores® (NPS) increase by an average of 1.4 points — while all properties with less than 50 percent responsiveness saw their scores decrease:

  • 50%+ response rate: 1.4 point NPS growth
  • 30-50% response rate: 0.3-point decrease
  • 10-30% response rate: 1.5-point decrease
  • 1-10% response rate: 1.7-point decrease

Timeliness of Response

The speed with which properties respond to customer feedback also has a significant impact on their occupancy rate. Properties that responded to feedback in less than a day on average had average occupancy rates 12.8 percent higher than properties taking longer than two days.

  • Responded within a day: 52.3% average occupancy rate
  • Responded in 1-2 days: 49.3% occupancy rate
  • Responded in over two days: 39.5% occupancy rate

Outperform Competitors

Hotels with the highest responsiveness to social media outperform competitors in their overall social reputation. Properties that responded to over 50 percent of social reviews had social scores an average of five points higher than competing properties.

  • 50%+ response rate: 4.9 point advantage over competitors
  • 30-50% response rate: 2.7 point advantage
  • 10-30% response rate: 1.2 point advantage
  • 1-10% response rate: 1.2 point advantage

Research Methodology

The study examined customer and business data from over 4400 independently- owned Best Western properties, including approximately 2300 in the US & Canada and approximately 2100 across the rest of the world. Results are based on multiple regression analyses and cover the period from April 2013 to September of 2014. Occupancy rates were estimated based on the total number of survey invitations sent per quarter, the average number of nights per stay, the property’s (current) number of rooms and the number of days in the quarter.