Six degrees of separation is a long-standing theory of Frigyes Karinthy that suggests that everyone is six relationships (or less) away from another person in the world. In its earliest word-of-mouth adaptation, this theory might have sounded something like: “I know that guy – he is my sister’s boyfriend’s mom’s hairdresser’s dog groomer.” Haven’t you ever tried mentally connecting those dots before?
This theory even evolved into a spin-off parlor game connecting Hollywood actor, Kevin Bacon, with any other conceivable celebrity. Here’s a fun fact: I bet you didn’t know that Kevin Bacon uses revenue management systems. Well, he practically does. In 1988, Mr. Bacon starred in She’s Having a Baby with Alec Baldwin. Alec Baldwin went on to star in 2014’s Still Alice with Twilight star, Kristen Stewart. Kristen Stewart was interviewed by Marie Claire magazine at the Charcuterie & Bar in Atlanta’s Loews Hotel. Loews Hotels & Resorts leverage automated revenue management systems to address their strategic growth initiatives.
Can we just stop for a minute? Isn’t that connection crazy?
The application of the six degrees of separation theory can also be found in today’s social media platforms in the form of “Connections” or “People You May Know” suggestions. LinkedIn, at its core, bases its platform on using 1st, 2nd or 3rd degree connection points. Studies conducted via Facebook and Twitter go on to further prove that the average human connection is even less than six degrees of separation.
So what does this all mean for hotels?
As it’s counseled in hotel guest service trainings: people talk. And they’re more likely to share a negative or sub-par experience than talking about one that simply met their basic needs. There was a word-of-mouth pyramid once used to depict the “Rule of Seven” in one of my hotel trainings. This was an example where one person would tell seven other individuals about their bad experience, who would then each go on to tell seven more people about what they heard, and so forth. The pyramid would exponentially grow with each share, with the message being that one lone guest experience has a far-reaching impact. It was, in effect, the hotel’s six degrees of separation to a potential future client.
The rise of social platforms have given consumers (in our case, hotel guests) an immediate and bigger voice where they can not only speak directly to whom they are buying from, but also potentially impact a company’s prospective customers. Guests no longer need to rely on directly knowing someone who knows someone who stayed at your hotel. Every good or bad review they need to look at can be immediately found online. This has undoubtedly had a significant impact on how the role of guest reviews and hotel reputation is being factored into today’s revenue management decisions.
One of the leading research studies by SAS Institute’s Kelly McGuire on how online reputation impacts hotel pricing even indicates that “reviews are the most powerful value indicator for consumers.” This development makes it critical that a hotel considers its reputation within its pricing and revenue management strategies. Today’s reputation evaluations help hotels identify opportunities to increase guest satisfaction, in addition to allowing hotels leverage their reputation in meaningful ways.
Think about it this way: Each guest experience in our interconnected and relational world can really be deconstructed down to the efforts put forth from a single hotel employee, and their individual contribution to guest satisfaction. Our reputations, our guest satisfaction, even our pricing strategies are no longer based on residual effects from a six degrees of separation connection point – they have become based on one degree of separation.
This means that our quest for Total Revenue Performance is truly an amalgamation of revenue and operational opportunities that will allow us to differentiate our properties and drive profitability at every level.