Researchers from the University of Portsmouth have devised a new method to rank hotels more precisely.
The new method will assist hotel operators to maximize their revenue by providing more information on the areas that customers care about while customers also benefit from a more accurate and trusted rating of a hotel’s performance.
Online customer reviews have become increasingly significant for people when booking hotel rooms. Online review platforms typically provide an overall rating by combining customer ratings of several individual criteria and then computing an average of these scores.
The way they aggregate individual ratings into the overall rating is actually very simplistic, some platforms just do an arithmetic average of individual ratings. The problem is that it provides an equal weighting to each individual criteria and doesn’t differentiate between important and non-important hotel characteristics. Also, a hotel could compensate a low score in one aspect with a high score in another.
The new model relaxes some of the assumptions made by the abovementioned average approach and reflects a customer’s decision process more accurately by providing different weighting to attributes that are more important to customers.
The results found the roles of staff and location as the most crucial criteria for hotels to maximize their revenue. The higher up the rankings a hotel appears, the more bookings they get and in turn, increase their revenue.
The findings also showed that, contrary to previous research, location is not particularly critical when it comes to ranking a hotel’s performance. This could be because customers already know the location of a hotel when booking so their evaluation might refer to more intangible aspects of the location, such as street noise, that are more difficult to assess prior to booking.
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