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Trump's falling property ratings could become a $100M problem

Business Insider logo Business Insider 3/8/2017 Hayley Peterson

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Online customer ratings for President Trump's properties are plummeting.

Average ratings on Yelp and Google for the president's 29 hotels, golf courses, and other properties in the US have fallen 40% since he took office to about 3.7 stars out of 5, according to a new study by Signpost, a firm that helps businesses manage customer ratings and reviews.

If trends continue, the ratings declines could cost Trump's brand at least $66 million in revenue over the next four years, according to the study.

"Some of the highest earners of the portfolio, including what the president has designated 'The Winter White House' or the Mar-a-Lago Club, stand to lose about $1.8 million this year, should this trend continue," the study says. "It’s also worth mentioning that these calculations are conservative and according to the most recent revenue estimations. The actual cost if these trends continue could be in excess of $100 million." 

Online ratings are vital to businesses' success because they have proven to have a direct impact on revenue.

More than 90% of people look at companies' ratings before doing business with them, according to Stuart Wall, CEO of Signpost.

Ratings also affect Google rankings, giving businesses with higher ratings more visibility.

Just a one-star bump in ratings can boost a business’s annual revenue by 5%-9%, according to a Harvard Business School study. The same goes for ratings declines — when stars disappear, so does revenue.

Signpost © Provided by Business Insider Signpost

While the ratings declines could be a drag on the Trump brand's sales, they aren't necessarily indicative of customers' experiences at the properties.

That's because many of the recent negative ratings on Trump's properties are from people who have never visited his properties.

Instead, they are from people using the ratings system to express their political opinions on Trump himself.

Signpost © Provided by Business Insider Signpost

"A lot people are taking their political views onto reviews of Trump's businesses," Wall said.

In fact, there's so much political commentary flooding onto the Trump businesses' ratings pages that Yelp has suspended reviews for some of his properties until further notice.

For the study, Signpost analyzed the last three years of Google and Yelp data for Trump's US properties.

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