The business value of online consumer reviews and management response to hotel performance

Abstract

The business case for investing in online reputation has received increasing scrutiny in recent years. This study identifies the business value of consumer reviews and management responses to hotel performance. We present a panel data analysis of online consumer reviews and management responses of 843 hotels on a hotel review website. The results show that overall rating, attribute ratings of purchase value, location and cleanliness, variation and volume of consumer reviews, and the number of management responses are significantly associated with hotel performance. In addition, variation and volume of consumer reviews moderate the relationship between overall rating and hotel performance. Management responses, together with variation and volume of consumer reviews, moderate the relationship between certain attribute ratings and hotel performance. Implications of utilizing consumer reviews and management responses to leverage hotel business are provided.