NewsPart Two of Two: Hotel revenue management, meet reputation managementThis article was originally published onBy Viewpoints | April 8, 2011 NB: This is a guest article by Daniel Edward Craig, a former general manager turned hotel consultant specializing in social media strategy and reputation management.In my last post, I discussed how social media has enabled a new measure of hotel performance: the Guest Satisfaction Index (GSI).Derived from guest reviews and ratings aggregated from major review sites, the GSI provides a measure of a hotel’s market share of guest satisfaction within its competitive set.In this post I discuss how reputation metrics are paving the way for the integration of the online reputation management and revenue management functions."Hotels are quickly recognizing the link between revenue management and reputation," says Corin Burr, director of Bamboo Revenue. "Common sense dictates that there is a link between guest reviews and revenue performance. Of course there are many contributing factors, but to watch your Revenue Generation Index increase as your Guest Satisfaction Index increases puts more science into the instinct."Share this quote Kelly McGuire, practice director for hospitality and travel global practice at the SAS Institute, would agree. "I think there is huge opportunity in incorporating reputation management into revenue management decisions both strategically and tactically," she says. "In recent research, we found that the sentiment of online reviews reduces the impact of price on purchase decision, meaning that good reviews will influence a traveler to spend more, and bad reviews will discourage bookings, even if the hotel room is discounted."Share this quote Analytics tools like Revinate, Synthesio, and SAS provide a range of reports to help hotels monitor and benchmark online reputation, whereas companies like TravelClick, Rubicon, and STR Global provide similar rate, occupancy, and revPAR reports.But only by integrating data from both types of reports will hotels be able to use reputation metrics to make strategic rate decisions.Further, by incorporating Guest Satisfaction Index data into market share reports, hotels will have a holistic view of how they’re performing within the competitive set."Given what I’ve been seeing in some of my research, it will be essential for revenue managers to understand their “satisfaction position” on online channels as they make pricing decisions," says McGuire of SAS. "Our social media analytics could certainly gather the information and apply the appropriate text analytics to get at the underlying sentiment that would drive this metric. We’d love to partner with a market level research provider like STR to work towards enabling this for the industry."Share this quote Aggregating and scoring review data is not a simple process, however. There is no standard system among review sites for scoring ratings and reviews.To further complicate matters, a great deal of traveler feedback and advice is shared on even less structured channels like Facebook, Twitter, and foursquare.Reputation monitoring tools like ReviewPro and TrustYou Analytics provide sentiment analysis to qualify commentary, but much of the feedback on these channels is inaccessible, contained within a walled garden.And who is going to wade through all the reputation data and understand it well enough to use it to make strategic revenue decisions? Revenue managers are stricken as it is with “analysis paralysis” by revenue data and metrics.Do hotels need to introduce a new position to manage this stuff? Fifteen years ago, revenue management was a new concept in the hotel industry.Today, every hotel has a dedicated revenue manager and a revenue team that meets weekly to review reports and make decisions for the coming weeks. Is this the direction reputation management is heading?“I will not be surprised to see the introduction of online reputation managers in hotels seated right next to revenue managers,” says Burr. "At Bamboo Revenue we are working with a range of hotels to help them understand the link between online reputation and revenue management performance. With experts in both fields we can give a holistic, practical, and hands-on approach."Share this quote Formalizing the reputation management function will facilitate the use of reputation metrics in other departments too, allowing hotels to use guest feedback to guide decisions about employee training and development, labour expenditures, capital upgrades, and marketing and communications.The potential is unlimited, really—and a bit overwhelming.Sloan F Dean, senior vice president of revenue and market strategy for Alliance Hospitality, in a recent column on HotelNewsNow, said: "The business intelligence systems of tomorrow will need to interface with and/or integrate CRS, RMS, PMS, POS, social media, loyalty and sales data, linking all departments of a hotel with one central data source."Share this quote As a first step, hotels can start channeling greater resources to managing reviews and social media feedback to boost reputation. Once the relationship between reputation and revenue is more firmly established, greater resources can be dedicated.NB: This is a guest article by Daniel Edward Craig, a former general manager turned hotel consultant specializing in social media strategy and reputation management.