Most hostel owners will admit that reviews are important but few are aware of how freaking important they TRULY are!
In the past, word of mouth was the only real worry for your hostel when a guest had a bad experience. Yes, they could tell their friends and family but this didn’t affect your operations that much.
Times have changed. Now, anyone can spread words about your hostel within a few clicks. Hence, the importance of online reviews has never been greater than it is right now.
In the following, I let facts and statistics do the talking.
Let’s dive in.
6 Reasons Why Online Reviews Are Crucial For Your Hostel
I advocate you share this article with your staff. It’s absolutely key for them to understand how important reviews are for you as a hostel owner and thus their place of work.
#1 Reviews Are A Fixed Part Of The Booking Process
Most travelers agree that looking through reviews is a fixed part of their research for a proper hostel. In fact, 96% of Tripadvisor users consider it a cocksure part during their research. [Source]
In 2015, 4 out of 5 travelers said that they always read reviews before making a booking. [Source] Another study in 2015 found this percentage is as high as 95%. [Source] The actual numbers in 2019 are presumably close to 100% since online bookings have greatly increased over the past few years.
Bottom line: Hostel travelers will read your reviews before making a booking decision – there’s no doubt. The vast majority of travelers read through 6-12 reviews and will not take action before having read any reviews about your hostel. [Source]
Furthermore, I can’t think of any future scenario that could weaken the significance of online reviews at this point. Given that this will be an important duty for the next centuries, it’s worth focusing your energy on! (unlike trends like social media)
#2 Bad Or No Reviews Prevent People From Booking
Let’s start with the latter: having no reviews.
When you think about your past purchases on Amazon… when was the last time you bought something that didn’t have any reviews?
To be honest, I can’t recall a single purchase even though I do most of my shopping online.
The same principle applies to hostels. In fact, more than 50% of TripAdvisor users will not book an accommodation without reviews. [Source] Only five reviews increase the purchase likelihood by a staggering 270% compared to a product with zero reviews. [Source]
Another question for you.
If you’re buying something on Amazon, what’s the first filter you set?
If you’re like me, it’s probably the “show only 4 stars or higher ratings”. And again, the same holds true for travelers who are looking for a hostel. 57% of people only make use of businesses with a rating of 4 or more stars [Source] and 88% of travelers don’t even consider accommodations with a star rating of less than 3 stars. [Source]
That’s the reason why you see so few hostels with bad ratings. They just can’t exist that long. #survivorbias
#3 Social Proof Is The New Way Of Marketing
Did you notice that pretty much every online marketer uses testimonials nowadays?
Well, there’s a reason for that.
A study conducted in 2014 states that 88% of consumers trust online reviews as much as a personal recommendation of friends and family. [Source]
Some experts go as far as to say that “the old way of advertising is dead” because 75% of people don’t believe that companies tell the truth in their advertisements. [Source]
The new king of advertising is called “social proof”. Social proof is the psychological phenomenon that we assume what most other people do or think must be the “right thing”.
Robert Cialdini is the pioneer mind behind this topic. Before him, social proof was unheard-of. It was only when he published his famous book “Influence – The Psychology Of Persuasion” that the term and concept became publicly known.
His book is a summary of hundreds of amazing studies he’s done during his career. I highly recommend this book for any hostel owner or manager. It’s absolutely worth it. I’m convinced your perspective on management and marketing will greatly benefit from it.
Here’s how powerful social proof can be: In 72% of cases, customers put more weight on guest ratings than they put on an established hotel’s brand. [Source] The same holds true for hostels.
Hence, whenever you’re trying to advertise your hostel, stay away from the rookie mistake of NOT using testimonials. It’s the most valued and convincing advertisement out there – especially in combination with the reviewer’s profile picture and their first name displayed.
This simple “trick” proved to increase the average click-through rate by 400% and reduces the overall acquisition costs by 50% when used on Facebook ads. [Source]
Better reviews also increase your ranking on search engines and online travel agencies. Hence, the ones with the best reviews benefit even further!
Okay, gotcha. Reviews play a major role… but what about the price?
#4 Reviews Are The Second Most Important Booking Factor
Reviews rank on place #2 after – as you probably already suggested – your price.
Furthermore, if two properties are priced the same, 79% of travelers choose the one with the higher rating. [Source]
These stats match up exactly with how I personally made booking decisions in the past:
- 1. The first thing I usually did was to set a filter for more than 4 stars (or 8 stars on a 10-point scale).
- 2. The second step was to sort by price (ascending)
- 3. Finally, I researched the exact location, looked at a few images, and – of course – skimmed through several reviews
These were the things I cared about BEFORE I started a business in the hostel industry. I don’t recall ever having read any text or description.
However, things changed as soon as I entered the industry. I’m now much more interested in seeing how hostels promote themselves and I always try to book directly on their website to prevent additional costs for the hostel.
Now, back to reviews and prices.
The bad news is, the priorities will probably never change. People will always consider the price to be one of the most important aspects.
Now to the good news:
#5 Good Reviews Make Your Prices Less Relevant
This is huge. In forums, I hear many hostel owners discussing how the review system has destroyed their industry.
In my opinion, the exact opposite has happened: Awesome hostels now have a reliable way to get more money for a better service.
A few years ago, the loudest marketer, i.e. the one with the biggest marketing budget, won. The hostel industry resembled a “push-market”: the more you push, the more you bookings you get.
Review systems have turned this around.
By being remarkable you now have the possibility to attract guests automatically – it enabled a pull market. That means, the greatest hostels not only get their well-deserved bookings, they can also charge higher prices – without any extra effort.
Note: “greatest” as the equivalent to highest reviews. See my article about the best hostels worldwide.
The following formula shows how you can transform a 5-point scale into a 10-point scale. This is important in case you want to compare different reviews systems from various online travel agencies:
5-Point Rating x 9/4 – 9/4 + 1 = Your 10-Point Rating
Note: 4 stars on a 5-star rating do NOT equal 8 stars on a 10-star rating! It might sound counterintuitive. However, if you just multiply the scale with a factor of 2, it would mean that a 1-star rating on a 5-point scale equals a 2-star rating on a 10-point scale.
Think about it.
And for the dropouts among you who don’t want to get their calculator out:
Finally, let’s not forget what reviews actually stand for:
#6 Reviews Are The Breakfast Of Champions
Back when I was running a financial consulting company, I’ve paid serious money to get feedback from clients.
I know first-hand how painful online reviews can be. However, keep in mind that this is a true blessing for your business. After all, you’re getting FREE advice on how you can further improve your hostel. How awesome is that?!
No matter how painful some reviews might be. Almost all of them contain a spark of truth. Use it as an opportunity to improve your reviews, because…
REVIEWS only hurt those that refuse to adapt and grow.
REVIEWS are the fuel for your marketing.
REVIEWS are the breakfast of champions!
Before you leave: Answer this quick question and help our community.
What’s your opinion about online review systems?
Do you think they are fair?
Share your opinion in the comment section below!
P.S. here are my top requested blog articles about online reviews if you wish to take things to the next level: