Takeaways from the Q3 2022 Global Hotel Benchmark Report

How did your hotel’s reputation hold up this summer? A boom in travel activity this summer provided a fresh trove of review data to help hoteliers understand how guest sentiment has changed and benchmark future performance. Here below we share some of the key review trends we picked up in our Q3 Global Hotel Review Benchmark Report.

In the third installment of ReviewPro’s Global Hotel Review Benchmark report, we analyze over 1.76 million reviews of 7,500 hotels posted between July 1 and September 30, 2022. We compare the results with the same period in 2019 and 2021 and break down performance by star segment and five regions: Asia Pacific, Europe, Middle East & Africa, Latin America & Caribbean, and North America.

Here we share key takewaways and review trends from the report.

Back to Boom Times (Mostly)

Before we look at the data, let’s set the context. By the third quarter of this year, most Covid-19 restrictions had been eliminated around the world, resulting in a long-awaited and much needed boom in travel demand. In July and August, average global occupancy was 67%, 3% higher than the same period in 2019. In August, nearly one-third of global markets grew both occupancy and average rate over 2019 numbers.

In the Asia Pacific region, however, the pace of recovery lagged. Some countries were slower to loosen travel restrictions, and China’s borders remained closed to travelers, affecting demand across the region. In 2019, Chinese travelers accounted for 23% of inbound travel across the Asia-Pacific region.

Review Trends: Summer 2022 Challenges

The rebound left many hoteliers struggling to keep up with demand while facing dire staffing shortages. During ReviewPro’s recent webinar, Using 2022 Data for 2023 Planning, we asked hoteliers which of the following they found to be more challenging than usual this summer. Here are the results:

• Labor shortages – 38%
• Running on a leaner staffing model – 23%
• More demand than we could properly service – 23%
• High guest expectations – 54%
• Keeping up morale among staff – 31%

Global Hotel Review Scores: A Sharp Decline from 2019

How did these conditions affect guest satisfaction? In Q3 2022, the Global Review Index™ (GRI™) for our global data set fell by almost two points compared to the same quarter in 2019, hitting a low of 84.0%.

Breaking performance down by star category:

• 3-star hotels fared the worst, dropping by 2.5 points to 80.2%.
• 4-star hotels lost 2.0 points, dropping to 84.2%.
• 5-star hotels experienced the smallest decline, dropping 1.5 points to 88.3%.

Review Scores by Region: Asia Pacific Leads, North America Tanks

Compared to Q3 2019, all five regions experienced significant declines in GRI™ in Q3 2022.

• Asia Pacific boasted the highest score, at 86.4%.
• Latin America & Caribbean had the second highest score, at 85.2%.
• Next came Middle East & Africa, at 83.0%, almost fully recovering its pre-pandemic score.
• Europe experienced a significant decline of 2.7 points, tying Middle East & Africa with a GRI™ of 83.0%.
• North America experienced the sharpest decline, losing 3.7 points, with the lowest GRI™ of all five regions (82.8%).

Global Review Volume: Better, but Still Down from 2019

In Q3 2022, 1.76 million reviews were posted for our global data set. This was an increase of 15% over Q3 2021 but was still 30% lower than Q3 2019 – an indication that global travel volume is still well below pre-pandemic levels.

Review Market Share: Booking.com Dominates

While most review sources were relatively flat in terms of review share from Q3 2019 to Q3 2022, Booking.com has been busy carving an outsized share of review volume.

• Booking.com accounted for an incredible 43.4% of total reviews in Q3 2022.
• Google accounted for 29.4% of reviews.
• Together, Booking.com and Google generated almost three-quarters of review volume.
• By comparison, Tripadvisor generated 12.3%, while Expedia generated only 3.6%.

Source Indexes: Booking.com Drives Down Review Scores

Source Indexes are a measure of average review scores for each review source. In Q3 2022, Booking.com had a Source Index of 81.4%, the lowest of any major review source and 2.6 points lower than the GRI for all sources. Given that Booking.com represented over 43% of reviews, it had a substantial negative impact on overall review scores.

• Ctrip (90.9%) and Trip.com (88.8%) had the highest Source Indexes, but they each generated only about one percent of total review volume.
• Hotels.com (84.8%), Expedia (84.5%), and Google (84.4%) had the next highest Source Indexes.
• At 82.9%, Tripadvisor’s Source Index was significantly lower than the other major sources, aside from Booking.com.

Department Indexes: Staffing Shortages Have Consequences

Department Indexes are a breakdown of review scores by hotel department or attribute. The four major department indexes declined compared to the pre-pandemic period – likely a direct consequence of the staffing challenges hoteliers faced.

• At 80.4%, the Value Index had the lowest score, presumably a reflection of increased room rates at a time when service and quality levels were lagging.
• The Room Index had the next lowest rating, at 84.1%.
• Next came the Service Index, at 85.6%
• The highest Department Index came from Cleanliness, at 87.0%.

Management Responses: Still a Priority

Despite staffing shortages, hotels managed to respond to 61.5% of respondable reviews in Q3, an improvement over both Q3 2019 and Q3 2021.

• 5-star hotels responded to the highest proportion of reviews, at 70.2%.
• 4-star hotels responded to 60.9% of reviews.
• 3-star hotels responded to 51.9% of reviews.
• 64.8% of positive reviews but only 50.8% of negative reviews received a response. This goes against the conventional wisdom that negative reviews should be the priority.
• On average, hotels took 3.5 days to respond to positive reviews and 4.3 days to respond to negative reviews.

Looking Ahead: Review Trends

Under the circumstances, hotels have done a remarkable job of upholding guest satisfaction levels in 2022, but there is certainly room for improvement. And bear in mind that review ratings are highly competitive. Differences in GRI™ among competing hotels are often just a few fractions of a percentage point.

Next year, it will take hard work to bring guest satisfaction levels back to 2019 numbers. At the same time, hoteliers will face a number of headwinds. During the webinar, we asked attendees, “Looking ahead to 2023, which of the following do you anticipate being big challenges for your property/group?”

Here are the results:

• A global recession – 50%
• Staff recruitment, retention & training – 50%
• Unrealistic expectations from owners/management – 8%
• Unpredictable room demand – 17%
• Rising costs – 50%
• Maintaining guest satisfaction – 67%

Clearly, the economy is on the minds of hoteliers as they plan for next year. In fact, while the pandemic remains an ongoing concern, it has been supplanted by the economy as the number one concern for hoteliers, according to STR. Meanwhile, room rates are expected to continue to climb, although at a slower pace than this year.

If the pace of recovery continues, hotels can expect to see more business travelers, more groups, and more international travelers, including travelers to and from China, if and when its borders reopen. These travelers will have different needs and expectations from domestic and leisure travelers.

7 Data-driven Strategies for Improving Guest Satisfaction in 2023

With these review trends in mind, here are seven ways hoteliers can take a data-driven approach to improving guest satisfaction in 2023:

1. Anticipate that continued labor shortages may mean that the new, leaner staffing model that came out of the pandemic may become a long-lasting reality.
2. Expect to see even more automation and technology in hotels. This will create efficiencies but may also create service challenges if not carefully implemented.
3. To keep up with guest expectations, especially in a climate of rising room rates, invest in capital expenditures, maintenance, and staff training programs that were put on hold during the pandemic.
4. Monitor guest intelligence data closely and connect data sources to get a holistic view of changing guest sentiment and behavior.
5. When setting 2023 review targets, benchmark performance against previous years as well as your competitors, region, and star segment.
6. Pay extra attention to reviews on Booking.com, making efforts to improve ratings and pursue a diverse review distribution strategy to build strength on all sources.
7. Ensure that both negative and positive reviews receive the prompt action and responses they merit.

To receive your free copy of the Q3 2022 Global Hotel Review Benchmark Report and read more about the latest review trends:

Sign up here.