The findings reveal that reviews do indeed have a significant impact on both hotel conversion rates as well as the rates that travelers are willing to pay. Among the findings:
Given equal prices, travelers are 3.9 times more likely to choose a hotel with higher review scores
When hotel prices are increased for hotels with better review scores, travelers are more likely to book the hotel with the higher score despite the higher rate
When asked, 76% of travelers were willing to pay more for a hotel with higher review scores
The study provides evidence that a strong focus on online reviews and reputation management can indeed lead to increased revenue, both from improved conversion rates as well as optimizing pricing.
Improved conversion rates, holding other factors constant
The first booking engine displayed three hotels, all with the same daily room rates ($100/night), but different average review scores (80, 85, 90, on a 1-100 point scale). In this simulation, 72% of respondents chose hotels with higher average review scores.
In the remaining three simulated booking engines, respondents were presented hotel results with adjusted prices, based on review scores (i.e., the higher the review scores, the higher the price).
Despite raising rates up to 20%, the hotel with the highest review scores averaged the highest clickthrough rates.
Finally, respondents were explicitly asked if they would be willing to pay more for hotels with higher review scores.
More than three-fourths (76%) said that they would pay more for a hotel with better reviews.