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TOURISM MARKETING

Analyse online user reviews of your business and of your competitors

By our News Team | 2023

Researchers discover how a hotel’s pricing structure and the online reviews it receives can impact consumers’ booking decisions.

Researchers in the US have published a new Journal of Marketing article that examines the impact of online reviews on hotel booking performance, with a specific focus on the competitive effects of reviews.


A team from Texas Christian University, the University of South Carolina and RealPage, a property management software company, have jointly produced the study titled ‘The Competitive Effects of Online Reviews on Hotel Demand’.

Tourism Marketing

Illustration courtesy of Pixabay

They examined review-based competitive effects by utilising hotel booking data at an individual booking level. 

 

Analysing information from six upmarket hotels in six cities over a three-year period – along with ratings and reviews from the TripAdvisor website – the researchers investigated the effects of competitor hotel prices and of the hotel’s own pricing structure.

 

Lessons for hoteliers and CMOs

 

The study offers several insights for hoteliers and chief marketing officers:

 

  1. Both prices and online reviews of a hotel can significantly affect consumers’ booking decisions and the number of bookings a hotel receives.
  2. Apart from a hotel’s own review scores, its competitors’ scores can impact the bookings – and this impact is even higher if the volume of reviews is high. Thus, hotel management must evaluate and improve their scores relative to the competition.
  3. Different consumer segments show different booking behaviour based on the interplay between prices and reviews. For instance, leisure travellers are more influenced by a hotel’s prices, whereas business travellers are more sensitive to online reviews and are primarily concerned about comfort and quality. Hotel management must therefore develop or adjust their strategies according to the needs of these different consumer groups.
  4. Reviews where consumers need to rely on the experiences of others to assess the quality of the hotel has more impact than a search attribute, such as ‘location’, where information can be obtained directly from a hotel’s website or some other external source. The impact of review sentiment – by consumer segment and by review content – can help hotel management and their marketing teams to understand where to direct their efforts in responding to reviews and addressing those consumer concerns.

 

Additionally, if the hotel’s prices are perceived as high, they may see a larg drop in bookings because of more negative reviews, or because its competitors receive more positive reviews. 

 

“Hotel managers must evaluate their review scores in conjunction with their prices and incorporate review scores into their marketing strategies. Although most hotel chains employ sophisticated dynamic pricing, we are seeing some initial movement towards incorporating non-price data into pricing decisions,” the researchers say.

“Our study provides empirical evidence to support the significance of the interplay between reviews and prices, and shows that this might change by consumer segment and review content.” 


You can find out more about the study here.

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    Dr Kin Kariisa

    Group CEO - Next Media

    Dr. Kin Kariisa is an extraordinary force at the helm of Next Media Services, a conglomerate encompassing NBS TV, Nile Post, Sanyuka TV, Next Radio, Salam TV, Next Communication, Next Productions, and an array of other influential enterprises. His dynamic role as Chief Executive Officer exemplifies his unwavering commitment to shaping media, business, and community landscapes.
    With an esteemed academic journey, Dr. Kariisa’s accolades include an Honorary PhD in exemplary community service from the United Graduate College inTexas, an MBA from United States International University in Nairobi, Kenya, a Master’s degree in Computer Engineering from Huazong University in China, and a Bachelor’s degree in Statistics from Makerere University.
    Dr. Kariisa pursued PhD research in Computer Security and Identity Management at Security of Systems Group, Radboud University in Nijmegen, Netherlands. As a dynamic educator, he has shared his expertise as a lecturer of e-Government and Information Security at both Makerere University and Radboud University.

    Dr Kin did his PhD research in Computer Security and Identity Management at Security of Systems Group, Radbond University in Nigmegen, Netherlands. He previously served as a lecturer of e-Government and Information Security at Makerere University in Kampala, Uganda and Radbond University in Netherlands.

    Dr Kin did his postgraduate courses in Strategic Business Management, Strategic Leadership Communication and Strategies for Leading Successful Change Initiatives at Harvard University, Boston USA.

    • Other current and previous roles played by Dr Kin Kariisa:
    • Lecturer of e-Government and Information Security to graduate students at Makerere University, Kampala and Radbond University in the Netherlands
    • Director of Eco Bank Uganda Limited, one of the largest banks in Africa
    • Chairman of the National Association of Broadcasters, an umbrella industry association for all Television, Radio and online broadcasters in Uganda.
    • Chairman of Board of Directors of Nile Hotel International, that owns the leading hotel in Uganda, Kampala Serena Hotel.
    • Chairman of Board of Directors of Soliton Telmec Uganda, the leading telecom company in Optic fibre business managing over 80% of optic fibre in Uganda.