The Effects of Reviewer Expertise on Future Reputation, Popularity, and Financial Performance of Hotels: Insights from Data-Analytics

Abstract

Although the impacts of reviews provided by reviewers with expertise are well documented, the literature lacks empirical research on how such reviews are longitudinally linked to performance indicators and whether management responses to such reviews lead to differential impacts on these indicators. This study investigates the effects of reviewer expertise on hotels’ online reputation, online popularity, and financial performance. Using a large data set of management responses and online reviews from 730 hotels over 26 quarters, matched with quarterly financial performance data, the authors found that the effects of average ratings and the number of reviews on hotels’ subsequent financial performance are attenuated when reviewer expertise increases. The study also demonstrates that business benefits are enhanced if hotels target reviewers of higher expertise when providing management responses to online reviews. Results suggest that when managing electronic word-of-mouth, practitioners should take strategic approaches that leverage the influence of reviewer expertise.