After about a 40-percent response rate, hotels seem to reach a point of diminishing returns. A full description of the study, "Hotel Performance Impact of Socially Engaging with Consumers," by Chris Anderson and Saram Han, is available at no charge from the Cornell Center for Hospitality Research. Anderson is an associate professor at the Cornell School Hotel Administration, where Han is a doctoral student. "We see that hotel managers generally want to interact with guests who post reviews on line, but the question remains of exactly how to do that," Anderson explained. "We ran several tests of what happens when the hotels respond to reviews posted on TripAdvisor. For one thing, simply encouraging reviews is related to an improvement in a hotel's TripAdvisor ratings, compared to competitors. Our study used Revinate Surveys for this purpose." Anderson and Han found that the simple fact that managers respond to reviews leads to improved sales and revenue, when consumers click through from TripAdvisor to the hotel's listing at online travel agents. "However, we found a cautionary situation," Anderson added. "It turns out that making too many responses is worse than offering no response at all, in terms of both ratings and revenue. So, managers should focus on making constructive responses to negative reviews rather than simply acknowledging positive comments." Hotel Performance Impact of Socially Engaging with Consumers User reviews have become a critical aspect of the travel research process, as evidenced, for instance, by TripAdvisor having over 350 million unique monthly visitors. One benefit of these posted reviews is that hotels can address issues raised by consumers in an effort to improve consumer satisfaction along with review scores. Given the importance of consumer reviews, one goal for hotels is to find ways to improve their social media performance (with a goal of boosting financial outcomes). In this report we examine the effects of reviews posted on TripAdvisor to look at non-operational and relatively inexpensive ways in which hoteliers can improve their performance, both on the review sites themselves and in terms of actual hotel revenue and sales performance. In a previous CHR Report, co-author Chris Anderson illustrates the positive relationship between user-generated content and hotel performance.2 He calculates online reputation elasticity (percentage change in hotel performance given a percentage change in online reputation) using data from ReviewPRO and hotel performance data from STR. The study found substantive impacts of online reputation on overall hotel performance as measured by revenue per available room (RevPAR), with individual firms capitalizing on their improved reputation through some combination of higher occupancy and average daily rate. Using a second point-of-purchase or transactional dataset from Travelocity, he shows the positive impact of both online reputation and the number of reviews on the purchase likelihood. That study indicated that online reputation (review scores) and the number of reviews are positively related to hotel performance as measured by price, occupancy, and total revenue. There’s no doubt that service providers will want to address consumer issues and improve the quality and value of their service offering based on consumer reviews. However, what we outline here are other, less capital intensive approaches to improve a property’s reputation. In particular, we focus on more direct engagement with consumers by specifically encouraging them to post reviews on TripAdvisor.com, which so far remains the dominant source for hospitality-related reviews. Looking further at reviews, we compare the hotel’s financial performance and online reputation in a series of before-and-after tests, in which the after stage occurs once the hotel starts to encourage consumer reviews via post stay surveys. We show that once reviews are actively encouraged not only does the number of reviews posted to TripAdvisor increase, but so does the review score and hotel rank on TripAdvisor.com. Download the report at Cornell School of Hotel Administration