Location, Location, Location was and still is the primary driver for the comp set, but in addition to that there are a slew of variables – franchise affiliation, physical plant quality, age and design, food and beverage options, health club amenities, complimentary services, room vs. suite product, indoor/outdoor pool and the list goes on…..

Franchise affiliation is probably the most noteworthy among investors and owners. STR and the investment community including PWC and PKF also breakdown hotel brands, and in some cases, independent hotels, into these type of classes for comparative reporting of performance in revenue and profit.

The most significant trend refocusing this lens is reputation management.

Research done by Chris Anderson, associate professor at Cornell’s School of Hotel Administration, in The Impact of Social Media, reported the results from his 2012 study that found if a hotel increases its rating by one point on Travelocity’s five-point rating system, the odds of being booked increase by +14.2% and rate can be increased by up to 11.2% without changes in demand.

Furthermore, Anderson found that a hotel’s online reputation score, as defined by ReviewPro’s Global Review Index, increases 1%, that leads up to a 1.42% increase in RevPAR.

All of this is suggesting that customers can find hotels regardless of placement in OTAs and that just because you buy placement, while beneficial, does not necessarily mean you are getting the highest ROI.

The customers’ ability to sort by guest ratings on so many sites allows guest to find hotels they wouldn’t ordinarily book.  If you are one of these hotels, you will create an environment where revenue management can be much more aggressive on rates and see continued strong booking pace.

I think this will give a reason for pause among owners, investors and operators that are always looking for benchmarks to measure against and ways to drive the profitability line that exceeds those benchmarks. In the process, this may impact a hotel’s true comp set in a specific market and change the game.

Customers will always find the good product and through social media and rating systems they can find it easier than before and will choose the best value in a free-market system. You may start seeing that so-called 3 star hotels (Independents, Courtyards, Hilton Garden Inn) will be viewed as much more in demand than some 4 or 5 star hotels.

So as an owner, investor, or operator if you are not focused on social media – on what your customers are saying, not engaging them on Facebook, and giving them great service, you are probably missing out on the some of the easiest occupancy and ADR lifts.

This will move the goal posts when it comes to your comp set.

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