TCU Neeley Research Highlight - Assistant Professor of Business Analytics Sanghoon Cho alongside other experts share insights with industry and academic leaders.
March 31, 2024
TCU Neeley’s Sanghoon Cho collaborated with experts to examine the impact online reviews have on hotel booking performance. The study reveals that both a hotel’s own online reviews and those of its competitors significantly affect its booking performance, with the impact being greater for higher-priced hotels and for business travelers. The effects vary depending on the review content and whether the traveler is seeking subjective or objective information. (Journal of Marketing, 2024).
Abstract
The authors examine the effects of a firm’s and its competitors’ online reviews on its demand within the hotel industry. The authors leverage a unique data set of actual bookings from properties of a major hotel chain in six different markets in the United States, supplemented with online reviews garnered from a popular social media platform. The findings indicate that not only a hotel’s own reviews but also its competitors’ reviews have a significant impact on the hotel’s booking performance. The impact of review sentiment is amplified if the focal hotel also charges higher prices or when the volume of reviews is high. The authors establish heterogeneous effects across consumer segments (business vs. leisure travelers) and by the type of review content (objective vs. subjective attributes to assess quality). Specifically, both a hotel’s own reviews and its competitors’ reviews have a larger impact on bookings for business travelers compared with leisure travelers, and for reviews that mainly discuss subjective attributes, for which consumers need to rely on the experiences of others to assess the quality of a hotel prior to their stay. The study provides a set of comprehensive insights on the impact of both own and competitors’ online reviews on a focal hotel’s bookings.
