New vacation rental listings need a rating. Review numbers and scores on OTAs are said to be the second most critical factor in a guest’s decision-making (after photos) – and guests mean revenue! Read on for top tips from Thibault of Rental Scale-Up, on how to secure those all important early, positive reviews and why they’re so crucial.
Why ratings & reviews are worth the effort
Vacation rental owners and property managers know that the more highly-rated reviews a listing has, the more it will be booked. Higher numbers create trust in the mind of OTA bookers; a rating of 4.9/5 based on 80 reviews will naturally feel a safer choice than a listing with 0 reviews. Occupancy is often the limiting factor on your revenue so with reviews being so pivotal in guest decision-making, they can have huge impacts on your business. Moreover, these these numbers underpin the OTA search ranking, which dictates the visibility of your property. So, new listings need a rating as soon as possible!
Correlation between higher rating & higher occupancy
If you need any more convincing, take a look at Transparent’s data. It proves what property managers have undoubtedly noticed…
Properties with above average review scores enjoy higher occupancy. Ratings are after all a proxy for the perceived quality of the property and stay.
Correlation between higher review count & higher occupancy
Similarly, the number of reviews is a proxy for the consistency of the guest experience. It can be very hard to maintain a perfect score over a large number of reviews.
The graph below shows that properties with a high number of reviews achieve higher occupancy. Caution dictates we note that this could be a chicken/egg scenario, but regardless, reviews and occupancy come hand in hand.
Why do new vacation rental listings need a rating?
So, the ideal state is obviously to get a lot of good reviews. Yet, there is an initial hurdle: Properties must first get an average review score that meets the minimum criteria for the OTAs to display a review badge to their users. Thus, we need to look first at the rules around rating ‘badges’ and their visibility.
What is a rating badge and why is it crucial for a new listing?
Typically, an OTA will only display a review score badge once a property gains 3 reviews. So, if a property has 0, 1, or 2 reviews, it still has no review rating to show to create visibility and trust.
Looking at search results from Booking.com and Airbnb below, you can see ‘badges’ displayed next to the property name in search results:
- ‘review score’ on Booking.com
- a ‘star rating’ on Airbnb
Positive reviews help travelers know that you take pride in your property and that their vacation is in good hands. Four- and five-star reviews show you’re committed to your guests and can influence your rank.Vrbo
In search results, this is eye-catching for a potential guest looking at dozens of properties. Note that a lot of consumers also apply filters to refine their search results by rating – if you do not have a star rating, those guests won’t even see your property.
So initially, it is not just the value of the reviews that matter, but the number of reviews. This is where it pays to understand how OTAs work.
Here’s how Airbnb states the rules:
A host needs to receive star ratings from at least 3 guests before the rating will display on their listing. At the top of a listing page, the number of stars displayed is an aggregate of the primary scores guests have given for that listing.
On Booking, until 2020, it took 5 reviews to get a public review score. It is now 3 reviews. Imagine an average cancellation rate of 30% on Booking.com, and only 60% of guests leave a review. To get 3 reviews and earn your badge, you’d need 5 stays, and at least 8 bookings!
Ultimately, once you account for cancellation and those guests who don’t review, you need to generate a fair few bookings to get those 3 reviews and trigger the review score badge for your listing.
It seems like a catch-22; if you need this review score badge to get bookings, how then do you get enough bookings to get this very badge? Especially as, as a new listing, you have to compete with hundreds of other properties that already have their badge.
The cold start effect: When new listings don’t have a rating
On the other hand, vacation rental owners and managers listing a new property on an OTA dread the cold start effect:
- Lower trust: With no review, the listing inspires less trust from OTA users. They do not know what to expect at the property.
- Lower visibility: Ranking and sorting algorithms favor properties with a rating score, and moreover, higher scores. A high rating also attracts more users to click on a listing.
- Vicious circle: Lower reviews and ratings mean less visibility, less trust, fewer clicks and ultimately fewer bookings. Fewer bookings means lower reviews ratings.
- Long time to see results: It can take months for a small host to break this vicious circle. As a result, a new host may never fulfil revenue potential or give up on the platform altogether.
It can take a long time for a property to get its first review, let alone its 3rd: According to Transparent, it takes on average 116 days between 1st and 3rd review. So, upwards of 4 months until the badge and the virtuous circle of visibility and trust kick in.
So, how to kickstart this cycle faster? How do you secure the necessary bookings before you or the homeowner give up on an OTA?
How to break the vicious circle and get reviews faster
As we’ve established, those all-important first reviews can take time when you need them fast. Crucially, OTAs tend to award new listings with a ‘visibility boost‘ to compensate for the lack of reviews that underlie their ranking algorithm. Capitilizing on this boost is essential to the immediate and long-term prosperity of a listing.
Vrbo’s Fast Start program wants to help Airbnb Superhosts avoid this cold start phase when they list their property with Vrbo. They will even import the existing Airbnb star rating of a property to display on its platform, so that an Airbnb host trying out Vrbo gets visibility and bookings fast.
Data shouldn’t be under-estimated here: Visibility over aggregated reviews and market rates and demand can help you attract the bookings and boost your score. And there are other tactics too…
+ New vacation rental listings need a rating: lower your initial prices
Why not invest in your first reviews by lowering your initial prices.
Airbnb is paving the way for you to speedily attract those important first 3 bookings and reviews.
Similarly, on Booking.com:
“Do you want to lower your price by 20% for your first guests?”
Get your first bookings quicker and reach the three reviews needed to display a guest review score. You can raise your price at any time.“
The idea is that, once you get the review score badge, you can raise your price to your ideal level. The visibility and trust conferred to the listing by the badge should justify your price increase.
+ New vacation rental listings need a rating: relax your settings
Settings can provide blocks to guests interested in booking your property. Choosing to (judiciously) relax restrictions such as minimum stay and cancellation policy is a good tactic for occupancy in general. However, it’s particularly beneficial for new listings to position themselves for as many types of booking as possible.
+ New vacation rental listings need a rating: give the best guest experience
As per the rules, the property will get its badge at 3 reviews, irrespective of the rating. Yet, as we’ve seen, the higher the score, the higher the occupancy, so you want that high rating.
Going the extra mile to welcome guests and make their stay memorable will pay dividends – why not leave a welcome gift? Airbnb’s 11-star framework is a great guide to think about how to delight guests.
I remember sitting in a panel about revenue management along with someone from Sonder. She explained that getting good reviews fast was so important for their new listings that they would dedicate their best customer service reps to the guests staying at these places. Sonder really understood the importance of quick, great first reviews as an important investment to launch a property.
So, new listings need ratings!
Just like in video games, it pays to understand how and when you get to collect prizes and badges. An average rating score is more than a number: It is a sign that you want a new listing to get up to speed fast, so that it can escape the cold start trap. By lowering your prices, you can get there faster. But you also need to have great reviews, as one bad review will weigh more heavily on a listing with a few reviews than after 100 review.
More on us…
Rental Scale-Up’s goal is to share the right information and best practices to help the owners and managers of short-term rental businesses grow their revenues, become more profitable, and save time.
We publish articles, hold online conferences, deliver reports, and share content aimed to help industry entrepreneurs take the right decisions.
You can subscribe to our free weekly newsletter to get the best of our articles right into your inbox:
To learn more about how Transparent data can help you to secure bookings and boost your review score, visit our Smart Rental PRO page: