GHN Thought Leader

Melissa Maher

Senior Vice President, Marketing and Innovation, Expedia Group

It likely comes as no surprise that travelers look at a handful of different attributes to determine the perceived quality of a hotel. Before the birth of the internet brought online marketplaces to the forefront, much of that information was limited to what a brand communicated through advertising, word of mouth, guide books, or AAA diamond ratings. Having a reputable brand meant that you could attract travelers booking directly through a call center, or in person after seeing outside signage.

Information is now much more transparent and readily available, with today’s consumers trained to research products and prices, read reviews and make educated and discerning purchase decisions[1]. It’s clear that travelers are researching and consuming travel in much different ways than from previous generations - from how they book, to where they travel, to their in-market and on-property preferences.

There is value in better understanding how consumers make hotel selections. How important is hotel brand when selecting a property, relative to other attributes? Can the value of hotel brand preference be quantified?

new study from Expedia Group and Unabashed Research addressed those questions and more, by analyzing the relationship between five key attributes (room image, hotel brand, hotel ratings or stars, remodel callout, and price), and how consumers perceive and make selections based on them.

Unsurprisingly, price was by far the most influential driver of hotel selection, as consumers prioritize value above all else when allocating their travel budgets. Price, which can be an indicator of quality, illustrated an almost a uniform distribution across both well-known brands and unknown brands.

Guest ratings strongly influence consumer selection

Pricing aside, what stands out is that guest ratings outshine all other property attributes as a strong influence on consumer hotel selection. The study showed that there is a 72% chance that any traveler will value guest ratings higher than hotel brand. Guest ratings can have a dramatic impact on consumers’ perceptions and willingness to pay on both ends of the spectrum. For example, they are willing to pay 24% percent more for a 3.9 rated hotel versus a 3.4 rated hotel, and 35% more for a 4.4 rated hotel versus a 3.9 rated hotel.

Leveling the playing field

Gone are the days when brands solely drive decision, and today peer reviews and guest ratings, wield stronger influence. This is positive for independent hotels, who have the opportunity to compete against established brands, cost efficiently, by focusing on and delivering a better guest experience.

Our data[2] shows a continuing trend in the rise of successful independents, with these properties having greater average daily rates (ADRs) and overall revenue growth than their branded hotel brethren. Independent popularity is soaring, with independents continuing to grow twice as fast as chains, which is consistent across both domestic and international bookings.

Independents clearly continue to excite and increasingly attract travelers today, and from our deep experience working with these properties in nearly every market, we have learned from our lodging partners the secrets to their continued success.

Here are just a few of those learnings unbranded hotels can lean into:

Focus on customer experience

Unlike larger hotel brands which are tied to strict brand guidelines, independent properties can create a unique local experience for the guest, clearly reflective of their community. From locally sourced artwork, to unique culinary experiences, independents can create the customized guest stay that travelers today crave.

Put your property’s reviews to work

Hotel managers have a lot of decisions to make – such as where will they invest or what they will improve in the guest experience – and reviews should be treated as an insight tool that allows them to address their shortcomings and highlight their strengths. Using insights and data on the sentiment of what is being said in a review can give you the direction on how to make investments or improvements that will have tangible value in the future. Technology tools, such as Guest Review Insights, are available to hotels so they can see in aggregate the biggest additives, and negatives, to their reviews.

Personalized communication matters

People want to communicate with businesses in the way they communicate in real-life. By harnessing the power of technology, such as artificial intelligence, mobile and chat bots, hoteliers can communicate with their guests in more personalized, natural, and efficient ways. For example, many of our hotel partners leverage our Conversations tool to encourage direct dialogue and engagement between themselves and their booked guests. These types of tools are unlocking new capabilities around personalization, allowing the hotelier to communicate with guests based on their preference.  There are also endless opportunities to communicate with a guest once they set foot on your property. Real time communication tools can ensure they’re satisfied with their check-in experience, that their room meets their requirements and expectations, and more. Small adjustments once a guest is on-property can go a long way in ensuring their satisfaction - not only increasing the chance of a repeat customer, but also improving positive guest review scores and ratings.

Tap into the experts

Expedia Group has market managers across the world who can provide even deeper market insights and regularly consult with hotel partners on everything, from how to better use the technology tools at their disposal, to maximizing their price and value proposition with data-driven insights specific to a property, market and region. Overall, knowing the nuances of your market helps you be smarter about your positioning.

Personalization will continue being a critical aspect in driving preference among travelers, helping create and maintain meaningful relationships with guests. Moving forward, technology will be able to do the heavy lifting on personalization and simplify this process for both travelers and hoteliers. And while many hotels may see this as daunting and expensive, there are many tech-forward platforms and partners, such as Expedia Group, enabling these experiences today. By using these tools, independent hotels today can compete on a global scale with brands because distribution and technology enable them to compete, and quality is within their control.