New ranking method could help hotels to maximize their revenue

phys.org | 11/8/2018 | Staff
malik778 (Posted by) Level 3
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Researchers from the University of Portsmouth have devised a new method to rank hotels more accurately.

The new method will help hotel operators to maximise their revenue by providing more information on the areas that customers care about. Customers also benefit from a more accurate and trusted rating of a hotel's performance.

Online - Customer - Reviews - People - Hotel

Online customer reviews have become increasingly important 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 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.

Model - Assumptions - Approach - Customer - Decision

The new model relaxes some of the assumptions made by this 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 important criteria for hotels to maximise their revenue. The higher up the rankings a hotel appears, the more bookings they get and in turn, increase their revenue.

Findings - Research - Location - Hotel - Performance

The findings also showed that, contrary to previous research, location is not particularly key 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.

Co-author of the study Dr. Marta Nieto-García, Lecturer in the Marketing and Sales Subject Group at the University of Portsmouth, said: "Our new...
(Excerpt) Read more at: phys.org
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