How to increase your conversion rate with verified reviews

Showing third party reviews on your vacation rental website isn’t just a question of prestige. Fundamentally, they provide useful information to your guests and can increase your profit as a property manager. This is because third party reviews matter to your future guests. They matter a lot!

Below, we’ll share with you some statistics regarding their importance in the consumer’s decision making process. VRBO carried out a pilot test with their programme “Fast Start” (reference) that measured the impact of verified reviews in re-posted adverts on their website (therefore, not ratings posted by VRBO), including a graphic showing the average score and the number of verified reviews that the particular property had been awarded. Comparing the results with other OTAs within the same market, such as Airbnb, it determined that their incorporation resulted in the following advantages for vacation rentals:

• 25% more reservations
• A 50% increase in the number of nights reserved
• A 140% increase in the total value of these reservations

Do you really want to lose out on the opportunity to achieve the same results, obtaining more direct reservations and for a longer period of time, for your own website?

What is the catalyst that turns visitors to our websites into customers?

Attracting visitors to our webpages is a crucial step in gaining future guests, but it’s not the only one. Nor is it even the most important. This would be when visitors decide to solicit more information about our vacation rentals, or even immediately make a reservation. But what turns these visitors into customers?

Reserving a vacation rental is a somewhat rational, but mostly emotional, decision. It’s one that
the customer takes after weighing up the advantages and disadvantages upon consulting the
information we present to them via our website. Influencing this decision is the price, the
characteristics of the house or apartment, as well as the images of the property that we choose to
share. However, also impacting this decision are the intangible elements, such as the experiences
of previous guests, expressed through their ratings and reviews.

A vacation rental website that includes the experiences and appraisals from previous guests will achieve a higher conversion rate than one that doesn’t have these ratings and reviews. What’s more, a study carried out by PowerReviews (reference) has confirmed that the number of reviews is so important that the more opinions and reviews that a website has, the higher its conversion rate will be. In short: the number of reviews is also valued, as well as the average score.

PowerReviews shows that with 100 reviews, a website will achieve an increase in its conversion rate of 250%!

Imagine what this could mean for your vacation rental!

Even though it has been shown that the increase in the conversion rate is proportionate to the growth in the number of reviews, you could say that they create a “virtuous cycle”, given that after a certain number (>4,4), the conversion rate shoots up.

This isn’t the only study that shows that the number of reviews that a website receives increases the conversion rate and results in a higher occupation rate of these vacation rentals.

Transparent Intelligence (reference), a big data company within our specialised vacation rental industry, carried out a detailed analysis of this issue. It determined that the occupation rate of vacation rentals on OTAs such as AirBnB, Booking or VRBO increased by more than 90% when they had more than 20 reviews, compared to those that didn’t have any.

What should these reviews look like?

Logically, there is a correlation between occupation and average ratings of vacation rentals. The higher the rating, the more demand there is for the lodging. However, as humans, we are sceptical by nature when it comes to making an important decision such as reserving an apartment or flat for our vacations. We don’t trust a lack of information, nor something that doesn’t appear “normal” or consistent.

Just as they cause us to distrust vacation rentals that don’t have a single review by previous guests, we also don’t trust them if every single one is a glowing review. Various studies in this field have shown that consumers tend to be sceptical of companies whose products or services are only given 5 stars.

In this sense, Uberall: Global Benchmark Report shows us that the highest conversion rate comes with a score of 4.9 stars. On the other hand, those with 5 stars have the same conversion rate as those with 4.6 (reference).

The conclusion to be drawn from this is that the average score of our vacation rentals needs to be high, but that the odd bad review actually lends credibility overall.

Another Transparent Intelligence study (reference) showed that properties with 4.6 stars or less achieved an average occupation rate of 48%, compared to the 53% obtained by those with 4.7 stars or more.

Occupancy by review score.

However, higher average occupation isn’t the only benefit that property managers enjoy from a vacation rental thanks to ratings, reviews and the fact that these are scored highly by their previous guests.

Due to the higher demand for a vacation rental, the property manager can charge higher prices! It’s the famous law of supply and demand!

A further piece of analysis from Transparent Intelligence (reference) shows us that for the most in demand and best rated apartments, the “Superhosts” on the vacation rental website Airbnb receive an average ADR (Average Daily Rate – Precio Medio Diario, in Castilian Spanish) of $7 more along with a 9% increase in the occupation rate, compared to the other listings.

What are the keys to success in achieving these results? That the ratings and reviews on your website are verified and come from a variety of trusted sources, such as Airbnb, Booking or VRBO, amongst others. Your own direct reviews alone don’t offer sufficient credibility to your potential future guests.