Hoteliers know that reputation is everything. A strong reputation from positive reviews brings hotels guest loyalty and an increase in revenue. Adversely, even one negative review can bring a hotel increased costs to repair their reputation. How much does a negative review cost? It isn’t just a simple loss of a booking or a comped room; it can cost you much more.

Bad reviews = bad revenue

Your hotel’s revenue will feel the immediate impact of a negative review through the loss of bookings. Guests might feel deterred after reading the reviews, leaving you with more vacant rooms, causing a potential slash in room prices to stay competitive. That is a major hit to your hotel’s bottom line. 

Guests are far less likely to book at your hotel if they see multiple negative reviews, which could be a consideration beyond pricing. More than three negative reviews can lead to a major loss of up to 70% of potential new customers. If your hotel becomes known for poor service or lack of attention to guests, you are losing out on a lot of revenue that could take years to repair.

Staff morale and turnover

Often when we think of costs, we are thinking of customer-facing costs like room prices, refunds, bookings, etc. However, negative reviews can also cost you internally and impact your team morale. Nobody likes seeing negative feedback, so if your team is constantly reading negative reviews, especially about their department, it can lead to frustration and a sense of failure. This wears on them over time, which can send them looking for a new job and costing your hotel more money in turnover costs.

Onboarding is expensive, so the higher your turnover rate the higher it will cost you to have a fully trained staff. And while you're transitioning your new employees, there will naturally be a dip in service, which could lead to even more comped rooms.

Lacking reviews will cost you, too

Not only do negative reviews cost you money, but a lack of positive reviews will impact your hotel, too. Positive reviews earn the trust of customers, leading to more bookings. If guests aren’t seeing positive reviews - or any reviews at all - they are going to look elsewhere. That means you will need to spend more money on marketing or public relations to help boost your reputation. The best and most efficient marketing is organic, word-of-mouth marketing. Without it, hoteliers are looking at spending 5-25 times more on marketing in order to acquire new guests. So not only do you want to avoid negative reviews, you want to actively bring in positive reviews.

Boosting your revenue can start at reducing your operational costs, and a simple way to reduce costs is to make sure your guest service is exceptional in preventing negative reviews. Check out our tips on service recovery that will turn a negative experience into a positive review!