Tom Vanderbilt has a great article on the meteoric rise of TripAdvisor:
Those reviews carry demonstrable weight. A study by Cornell University’s Center for Hospitality Research found that for every percentage point a hotel improves its online reputation, its “RevPAR” (revenue per available room) goes up by 1.4 percent; for every point its reputation improves on a five-point scale, a hotel can raise prices by 11 percent without seeing bookings fall off. This has been a boon for smaller, midpriced, independently owned hotels. “Twenty years ago, the brands owned the sense of quality,” says Bjorn Hanson, a professor at New York University’s Tisch Center for Hospitality and Tourism. “If I stayed at a big-name hotel, I knew what I was getting.” That sense of confidence in quality, argues Hanson, has been supplanted by TripAdvisor. Not only can there be variation within a brand, but suddenly that quirky hotel that was once the obscure favorite of a single guidebook gets lifted to market prominence.
There’s a flip side to this story. TripAdvisor has a huge influence over hotels, to the point where it sometimes may be considered unfair. This has become an industry where negative TripAdvisor reviews routinely cost people their jobs. A good friend of mine works as a hotel director and she always tells me that the single thing they fear most is a negative review on TripAdvisor. Due to the way ratings work, a pissed-off customer can single-handedly ruin a small hotel’s reputation on a whim, and they’re basically defenseless against that.
Via The Loop.