The development of electronic word-of-mouth and its impact on observer’s purchase intention in the hotel industry
The development of eWOM and its differentiation from traditional WOM
Word-of-mouth (WOM) has evolved from traditional communication among friends and family into an electronic mass communication method where consumers share information about products, brands, and services In the past, consumers relied on personal recommendations or marketer-generated content like advertisements to make informed purchase decisions Nowadays, this informal communication occurs anonymously and transcends geographic boundaries, allowing consumers to gather online and share insights about products and services, thereby making their opinions accessible to a global audience.
According to K Leine-Kalmer (2015), reciprocity in communication relies on mutuality and bi-directionality, necessitating active participation for it to be considered true interaction Observers who do not engage actively are not part of the interactive process.
13 Cf L IM /C HUNG (2014), p 40, cf A NDERSON (1998), p 6, cf A RNDT (1967a), cf D ICHTER (1966), cf
The author discusses mass communication from the consumer's perspective, highlighting C2C (consumer-to-consumer) and C2B (consumer-to-business) interactions In contrast, mass communication from the organization's viewpoint, such as B2C (business-to-consumer) and B2B (business-to-business), has been established long before the rise of electronic word of mouth (eWOM) through traditional media channels.
M EFFERT /B URMANN /K IRCHGEORG (2015), pp 587 et seqq
16 Cf K ANE G C.; ET AL (2009), cf B OYD /G OLDER /L OTAN (2010), p 1
Platform-dependent individuals have the ability to manage access to their user-generated content (UGC), while electronic word-of-mouth (eWOM) can significantly impact a vast audience of potential customers eWOM is defined as any positive or negative commentary made by current or former customers about a product or company, shared widely through the internet Research by KING, RACHERLA, and BUSH (2014) highlights six key characteristics that distinguish eWOM from traditional word-of-mouth, which are crucial for marketers' strategic implementation.
Source: Own illustration based on K ING /R ACHERLA /B USH (2014), pp 169 et seqq.
The authors realized that the increasing number of internet users influences the vol- ume and reach of eWOM, resulting in the opportunity for organizations and consum-
21 The terms eWOM and brand-related UGC are often used interchangeably According to E ILERS
eWOM differs from brand-related user-generated content (UCG) primarily in its focus While brand-related UCG emphasizes the content itself, eWOM is concerned with how that content is distributed This distinction highlights the varying perspectives from which these constructs can be analyzed.
22 Cf K ING /R ACHERLA /B USH (2014), pp 170 et seqq eWOM
Salience and valence play crucial roles in community engagement, particularly as online opinions become more prevalent In 2014, 2.89 billion people worldwide accessed the internet, a number projected to reach 3.6 billion by 2018, representing half of the global population Consequently, comments regarding products and services are widely disseminated across the internet, highlighting the importance of understanding consumer sentiment in the digital age.
The omnipresence of online platforms leads to uncontrolled diffusion of conversations, known as platform dispersion, which refers to the widespread nature of product-related discussions across various communities According to Dellarocas and Narayan (2007), the written format of online opinions ensures that statements from electronic word-of-mouth (eWOM) senders are both persistent and permanently accessible to the public Unlike traditional word-of-mouth (WOM), eWOM is not limited to a single recipient; instead, it can be observed by the entire internet community, potentially influencing the purchasing decisions of prospective customers.
According to KING, RACHERLA, and BUSH (2014), the anonymity of eWOM senders presents opportunities for organizations to manipulate online opinions In response to these covert tactics, platforms have implemented quality control mechanisms to safeguard the integrity of online reviews.
Research indicates that consumers tend to trust electronic word-of-mouth (eWOM) more than information generated by marketers, as eWOM is perceived as unbiased and independent According to Bughin, Doogan, and Vetvik (2010), the credibility of eWOM significantly influences purchasing decisions, accounting for 20% to 50% of all consumer choices.
29 Cf L EE /L EE (2006), p 69, cf H OGREVE /E LLER /F IRMHOFER (2013), p 523, cf M UNZEL (2013), pp 126 et seq., cf L EE /S ONG (2010), p 1074, cf L EE /C RANAGE (2012), p 3, cf VAN
N OORT /W ILLEMSEN (2011), pp 132 et seq
31 Cf K ARDON (2007), p 30, cf S MITH /M ENON /S IVAKUMAR (2005), p 29-31, cf
T RUSOV /B UCKLIN /P AUWELS (2009), cf L EE /Y OUN (2009), p 493, cf L I /B ERNHOFF (2008)
Chevalier and Mayzlin (2006) highlight that the explicit nature of online opinion statements, aided by rating systems, clearly conveys the valence of opinions, unlike traditional word-of-mouth (WOM) communication, which can lead to misinterpretation Research indicates that both positive and negative online opinions significantly influence consumer behavior, with negative electronic word-of-mouth (eWOM) exerting a stronger impact Skowronski and Carlston (1989) identify this "negativity effect," where consumers prioritize negative information over positive during their purchasing decisions As a result, organizations are increasingly recognizing the need to adopt effective strategies to manage negative eWOM.
According to KING/RACHERLA/BUSH (2014), electronic word-of-mouth (eWOM) fosters greater community engagement through unrestricted information sharing on online platforms, leading to heightened involvement with brands, products, or services Opinion leaders play a crucial role in eWOM by acting as mediators that can positively or negatively influence consumer-brand relationships While opinion leaders existed in traditional word-of-mouth contexts, their impact was limited to family and friends The rise of the internet and online communities has significantly expanded their reach, allowing them to attract both supporters and detractors.
33 See chapter B 1.4 for a detailed analysis of online review platforms
35 Cf A RNDT (1967b), p 292, cf G ODES /M AYZLIN (2004), pp 555 et seq., cf H ART /H ESKETT /S ASSER
(1990), cf S EN /L ERMAN (2007), p 81, cf L EE /R ODGERS (2009), pp 6 et seqq., cf B AUMEISTER ET
38 Opinion-leaders are defined as “consumers who exert an unequal amount of influence on the decision of others” R OGERS /C ARTANO (1962), p 435
39 The terms “opinion-leader” and “mediator” are often used interchangeably and refer to the influ- ence this individual has on other individuals’ decision, cf K ATZ /L AZARSFELD (1955)
Opinion-seekers can enhance their ability to assess the consensus and credibility of opinions, as noted by Lyons and Henderson (2005) King, Racherla, and Bush (2014) emphasize that organizations recognize the significant impact of opinion leaders on potential customers' purchase intentions, which in turn influences profitability and consumer loyalty To manage the influence of opinion leaders effectively, it is crucial for brands to understand how these individuals share their experiences.
ET AL (2013) suggest that organizations are increasingly under pressure to constantly perform service recovery management to minimize the spreading and effect of nega- tive eWOM 45
Online customer reviews and their influence in the hotel industry
As KING/RACHERLA/BUSH (2014) investigated, eWOM communication can take place in discussion forums 46 , UseNet groups 47 , product review sites 48 , blogs 49 and social networking sites 50 51
SCHINDLER/BICKART (2005) and SEN/LERMAN (2007) argue that online product reviews represent one of the most influential forms of eWOM 52 Research suggests that in the
42 Opinion-seekers are individuals who “search out advice from others when making a purchase decision”, F LYNN /G OLDSMITH /E ASTMAN (1996), p 138 According to F LYNN /G OLDSMITH /E ASTMAN
(1996), p 138, opinion-leaders may also be opinion-seekers due to their interest in the product or service category
45 Cf B LAZEVIC ET AL (2013), pp 304 et seq., cf K ING /R ACHERLA /B USH (2014), p 171
Discussion forums are focused on specific topics, allowing community members to initiate threads and ensuring that all participants have an equal opportunity to contribute their opinions.
UseNet groups are text-based discussion forums covering a wide range of topics, facilitated by the UseNet system, which has been in operation since the 1980s and is distinct from the World Wide Web Users typically employ specialized software to read and post messages, though many news groups are now also accessible through web-based interfaces.
48 Product review sites contain text-based or visualized opinions on products and services They assist consumers in buying and selling products and services, cf K LEINE -K ALMER (2015), p 2
Author-centered blogs focus solely on content created by the blog's author, allowing readers to engage only through comments on existing posts (M Effert, B Burmann, K Kirchgeorg, 2015, p 649; M Miyazoe, A Anderson, 2010, p 186).
50 Social networking sites are “platforms that focus on relationships among people with shared inter- ests”, K LEINE -K ALMER (2015), p 2
In the modern buying decision process, online product reviews have become a crucial information source, significantly influencing consumer choices A recent study in the U.S found that 90% of consumers who search for information online are affected by product reviews, while a German study indicated that over 78% of online shoppers are similarly influenced Online review sites, classified within social commerce, play a vital role in assisting consumers with their purchasing decisions by offering product, service, or brand-related information from other customers These platforms typically feature textual reviews along with numerical ratings that reflect individual evaluations and an overall average score for products or services Additionally, many review sites now allow consumers to upload images to support their assessments.
Online review sites are valuable for evaluating any product or service category, but research indicates that they are particularly prevalent for experience goods like hospitality and tourism This trend highlights the importance of consumer feedback in these sectors.
53 Cf A DJEI /N OBLE /N OBLE (2009), cf Z HU /Z HANG (2010), cf C HEVALIER /M AYZLIN (2006), p 345, cf
A study conducted by Dimensional Research in early 2013 surveyed 1,046 individuals in the United States, focusing on the impact of online reviews on consumer purchasing decisions Among the respondents, 702 consumers who had previously read online reviews were asked whether these positive or negative reviews influenced their buying choices The primary objective of the research was to explore customer service experiences.
55 Note that this study is only focusing on consumers having written online reviews before, cf TOMMORROW FOCUS M EDIA (2014), p 22
In September 2014, a study conducted by Tomorrow Focus Media surveyed 3,023 individuals, focusing on the review writing behavior and influence of online reviews Out of these, 2,248 respondents from Germany, who had previously written online reviews, answered how these reviews impacted their decision-making when considering products or services.
57 For an in-depth analysis of online review sites, see chapter B 1.4
58 Cf K LEINE -K ALMER (2015), pp 2 et seq based on T UTEN /S OLOMON (2013), p 7
According to N E Nelson (1970), there is a clear distinction between experience goods and search goods Experience goods are characterized by attributes that cannot be assessed until after purchase and use, making information search challenging and often expensive In contrast, search goods offer readily available and easily accessible information regarding their quality, allowing consumers to evaluate them prior to making a purchase.
62 Cf P APATHANASSIS /K NOLLE (2011), p 216, cf S PARKS /B ROWNING (2011), p 1311, cf
A study by Cantalops and Salvi (2014) highlights an industry comparison based on online customer reviews, revealing that hospitality and tourism products receive more evaluations than any other sector in the German market, closely followed by online retailers (Tomorrow Focus Media, 2014).
Figure 2: Share of written online customer reviews by sector in Germany
Source: Own illustration based on TOMMORROW FOCUS M EDIA (2014), p 9
The abundance of online customer reviews for hospitality and tourism products can be attributed to the unique characteristics of these services Due to their intangible nature, hospitality and tourism offerings are created and consumed simultaneously, making it impossible to assess the quality before purchase Furthermore, these products are considered high-involvement purchases, often driven by emotional factors.
In September 2014, a study conducted by Tomorrow Focus Media surveyed 2,248 German consumers who had previously written online reviews Respondents were asked about the sectors for which they had written reviews or could envision doing so The sectors included a variety of categories such as books, cosmetics, food, apps, politics, telephone companies, music, and toys, among others.
64 Cf S WEENEY /S OUTAR /M AZZAROL (2014), p 338, cf L EWIS /C HAMBERS (2000), p 39
In the hospitality and tourism industry, consumers increasingly seek quality pre-purchase information to mitigate the risks associated with high-priced services As traditional travel agencies decline due to the rise of online travel agencies (OTAs), the opportunity for personal consultation has diminished, leading consumers to rely heavily on online customer reviews for product-related information Research by Williams (2006) indicates that consumers find these online reviews more credible than the recommendations of commission-based travel agents, highlighting a significant shift in the buying decision process influenced by changes in distribution structures within the industry.
According to HO-DAC, CARSON, and MOORE (2013) in their article published in the Journal of Marketing, potential customers, or observers, read online reviews to mitigate their purchase risks The authors utilize signaling theory to explain how these customers interpret the information available to them Signaling theory posits that individuals aim to minimize their purchase risk by identifying cues that indicate a low likelihood of failure and minimal expected loss This is particularly relevant for experience goods, which are characterized by attributes that cannot be assessed prior to purchase or use, leading to heightened risk perception in the decision-making process.
Recent research shows that online reviews play a crucial role in shaping the decisions of potential customers in the hospitality and tourism sectors A study from the United States found that 97% of consumers who read online travel reviews reported that these reviews significantly impacted their purchasing choices.
66 Cf J ENG /F ESENMAIER (2002), cf C HEN (2008), p 1979, cf L EWIS /C HAMBERS (2000), p 162
67 In the German market the number of brick and mortar travel agencies decreased from 14,235 to 9,729 agencies from 2002 to 2013 (CAGR = - 3,4%), cf STATISTA (2015a)
70 Cf M OORTHI (2002), p 263, cf Z EITHALM /B ITNER (2003), p 49
Numerous studies highlight the significant influence of online customer reviews on hotel booking decisions Research indicates that 90% of online consumers in Germany rely on review sites when selecting accommodations, a finding echoed by an international study from IPSOS commissioned by TripAdvisor, which revealed that 89% of travelers consider online reviews crucial in their decision-making process, second only to price Additionally, a study by Anderson at Cornell University emphasizes the direct correlation between customer reviews and hotel performance metrics, such as Average Daily Rate (ADR), occupancy, and Revenue per Available Room (RevPAR), demonstrating that even a 1% change in reviews can impact these financial indicators.
Management responses to online reviews in the hotel industry
Recent studies emphasize the importance of addressing negative online customer reviews due to the growing volume of reviews, their widespread visibility, their significant impact on potential customers' purchase intentions, and their effect on overall company performance.
Hotels, like the Hilton Hotel Berlin, have the opportunity to engage with online customer reviews, which significantly influence both reviewers and potential customers Platforms such as TripAdvisor encourage hotels to respond, as research by PHOCUSWRIGHT (2012) shows that 78% of respondents believe management responses indicate a hotel's concern for its guests Additionally, 84% feel that appropriate replies to negative reviews enhance their perception of the hotel, and 57% are more likely to book a hotel that responds to reviews compared to one that does not While this study, commissioned by TripAdvisor, should be interpreted cautiously, it remains a valuable source of numerical data on the impact of management responses to online reviews.
Figure 3: Exemplary hotel management response to a negative online customer review
While experts agree on the importance of managing online customer reviews, the strategies for how companies should respond are still not well-explored in existing research.
99 Cf L EE /S ONG (2010), p 1074, cf M UNZEL (2013), p 125, cf C HENG /L OI (2014), p 2, cf
K ING /R ACHERLA /B USH (2014), p 177, cf C ANTALLOPS /S ALVI (2014), p 50, cf S PARKS /B RADLEY
(2014), p 2, cf VAN N OORT /W ILLEMSEN (2011), p 132, cf L EE /C RANAGE (2012), p 5 for managing negative reviews due to the stronger impact negative reviews have on potential consumers’ buying behavior 100
This thesis examines the impact of negative online customer reviews by focusing on the anonymous observers rather than the reviewers themselves According to a 2010 study by Forrester Research, the majority of social media users are observers, highlighting their significant role in the digital landscape In the hotel industry, these observers are potential customers who rely on online reviews to inform their purchasing decisions.
Following the presentation of the relevance to manage negative eWOM, the next section will focus on the current state of research regarding this topic.
Current state of research on management responses to negative online
Research on management responses to negative online customer reviews is scarce, with only a handful of academic studies exploring how different response strategies affect observers' attitudes and behavioral intentions.
Recent empirical studies have explored management responses to negative online customer reviews, specifically examining their impact on potential customers' attitudes and behavioral intentions towards the company These studies, published between 2010 and 2013, primarily address service recovery and complaint management within a broader context A summary of these articles can be found in Table 1.
100 Cf C HENG /L OI (2014), pp 1 et seq., cf L EE /S ONG (2010), p 1074, cf M UNZEL (2013), p 125 et seq., cf L AER / DE R UYTER (2010)
101 F ORRESTER R ESEARCH (2010) identified that observers represent 70% of online consumers in the
In a 2010 study, it was found that 38% of individuals in Germany actively observe social media, compared to 52% who are inactive, while the US has a significantly lower inactivity rate of 18% This disparity highlights that the German market has a 10% higher percentage of active social media observers Notably, the research does not account for more recent studies on social media observation trends.
Table 1: Overview of current research examining the effect of organizational responses to negative eWOM on observers
Lee and Song (2010) conducted a web-based experiment focusing on the dependent variables of responsibility attribution and company evaluation Their research provides a theoretical background that highlights the relationship between these variables and offers significant insights into industry perspectives The main results underscore the importance of how responsibility attribution influences perceptions of company performance.
Att ri b u tio n T h e ory (Res p o ns e S tra te g ie s - Ac co m m o d a tiv e , Def en si ve , No R e sp o ns e )
The characteristics of messages and corporate response strategies play a crucial role in shaping how observers attribute responsibility and assess a company's reputation According to Vannoor/Willemsen (2011), these factors significantly influence public perception and evaluation of corporate actions.
E xp e ri m e nt (w e b -b a se d ) Dep e n de n t Va ria bl e s: Bra n d e va lu a tio n
Effective web care strategies, whether proactive or reactive, significantly enhance brand perception Observers tend to evaluate a brand more favorably when it actively responds to negative electronic word-of-mouth (eWOM) compared to when it remains unresponsive.
Au to - m o b ile O b se rv e r L EE /C RA NA G E (2 0 1 2 ) E xp e ri m e nt (p ri n te d - ve rs io n )
The attribution of responsibility and attitudes towards a company are significantly influenced by consensus among observers In situations with high consensus, an accommodative response strategy is recommended, while in low consensus conditions, a defensive response becomes more advisable Understanding these dynamics is crucial for effective communication and reputation management.
In a 2013 web-based experiment conducted by Restaurant Observer Munzel, key dependent variables were analyzed, including credibility, benevolence, attitude towards the company, and purchase intention These factors play a crucial role in understanding consumer behavior and decision-making processes in the restaurant industry.
Organizations can effectively mitigate the impact of negative online reviews by adopting an accommodative response strategy This approach enhances the observer's perceptions of the organization's credibility, benevolence, and overall attitude, ultimately boosting purchase intentions By employing an accommodative response, organizations positively influence the observer's sense of justice, leading to improved public relations and customer trust.
This article offers a concise overview of service recovery management, focusing on the analysis of existing literature regarding management responses to negative online customer reviews Each study's empirical findings are presented, followed by a discussion of their limitations, which are grounded in the importance of effectively responding to online customer feedback.
As a conclusion of reviewing this extant literature, the author derives a research gap, which is illustrated in Figure 4
Service recovery encompasses the actions taken by an organization in response to service failures to mitigate customer losses Unlike complaint management, which addresses broader product and service issues, service recovery specifically targets service-related failures A service failure occurs when a customer perceives a loss due to the service provider's underperformance, leading to customer dissatisfaction In response, customers typically choose to either exit the relationship or voice their grievances, either directly to the company or through negative word-of-mouth (WOM) With advancements in technology, dissatisfied customers can now express their complaints publicly through online reviews, allowing both the company and the public to witness the feedback This phenomenon is often termed "complaining to the masses," highlighting the shift in how service recovery is approached in the digital age.
104 Cf H EUMANN (2012), pp 12 et seqq
106 Cf B ECHWATI /M ORRIN (2003), p 5, cf B LODGETT /G RANBOIS /W ALTERS (1993), cf H IRSCHMAN
(1970), cf R ICHINS (1983), p., cf S INGH (1990a), cf S MITH /B OLTON /W AGNER (1999), p 365, cf
107 Cf A U /B UHALIS /L AW (2009), p 74, cf B REITSOHL /K HAMMASH /G RIFFITHS (2014), p 908, cf VAN
N OORT /W ILLEMSEN (2011), p 132, cf L EE /S ONG (2010), p 1074, cf L EE /C RANAGE (2012), p 3, cf
WOM, were not visible to companies in times before Web 2.0), complaints in form of negative eWOM represent a new challenge for customer care departments 108 109
To mitigate losses from service failures, addressing customer complaints is essential, as highlighted in service recovery literature Organizational responses to these complaints are crucial, defined as the specific actions taken by the organization Such responses significantly influence the complainant's behavior after the complaint, underscoring the importance of effective service recovery management, which is explored in detail in Chapter 2.
Existing research on consumer reactions to management responses to negative online reviews primarily examines service recovery management from a general perspective However, studies like those by Lee and Song (2010) delve deeper into this area, highlighting the significance of tailored responses to enhance customer satisfaction and brand perception.
LEE/CRANAGE (2012) utilize attribution theory to explore service recovery, emphasizing its role in determining the appropriate response to negative consumer feedback This theory suggests that individuals analyze information to understand the reasons behind a consumer's negative communication about a company, thereby attributing responsibility for the issue Organizations can choose from three primary response strategies to address complaints: accommodative, defensive, or no response An accommodative response involves acknowledging responsibility and offering an apology, while a defensive response, often termed a "non-recovery strategy," entails a lack of engagement with the complaint.
108 Departments that are concerned with handling customer complaints are usually referred to as
“customer care” departments They might also be referred to as “complaint management” or “cus- tomer relationship management” departments, cf S TAUSS /S EIDEL (2007), p 199
112 Cf B ETTMAN (1979), cf F OLKES (1984a), cf F OLKES (1984b), cf B ROCK (2009), p 44
113 Cf H EIDER (1958), cf J ONES /D AVIS (1965), cf K ELLEY (1967), cf W EINER (1994), p 257
114 Cf C OOMBS (1998), cf M ARCUS /G OODMAN (1991)
115 Cf B OBOCEL /Z DANIUK (2005), p 474, cf T EDESCHI /N ORMAN (1985), p 299
116 Cf S PARKS (2001) nial of responsibility by shifting the blame to external, unforeseen factors or the com- plainant her/himself 117
Research by Lee/Song (2010) and Lee/Cranage (2012) highlights the significant impact of online customer review consensus on the attribution of fault and effective response strategies When the majority of reviews are negative, observers are likely to hold the company responsible, leading to a diminished perception of the brand Conversely, if there are only one or two negative reviews among many positives, responsibility is often attributed to external factors or the complainant In cases of high consensus with negative feedback, companies should adopt an accommodative response to engage in service recovery, while a defensive response is appropriate when negative reviews are minimal Both studies underscore that a strategic response is preferable to no response at all, reinforcing the importance of managing customer perceptions effectively.
Research objective, research questions and study outline
The challenges posed by negative online customer reviews of hotels necessitate a thorough examination of response strategies, particularly from the perspective of potential customers Current research falls short in offering hotel managers actionable insights on managing these reviews Although recent literature advocates for service recovery approaches to understand observer behavioral intentions, there remains a lack of studies that provide a solid conceptual foundation or empirical analysis of management responses to negative reviews from the observer's viewpoint Therefore, this thesis aims to establish a conceptual framework that elucidates how observers react to response content rooted in traditional service recovery management while also conducting an empirical investigation into this dynamic.
163 Cf B ITNER (1993), cf DEL R ÍO -L ANZA /V AZQUEZ -C ASIELLES /D IAZ -M ARTIN (2009), p 775, cf
165 Cf A U /B UHALIS /L AW (2009), pp 75 et seq
166 Cf M IDDLEBERG (1996), cf Z HU /S IVAKUMAR /P ARASURAMAN (2004), pp 514 et seqq
Numerous studies have explored various aspects of the subject, including the works of Cheng and Loi (2014), Hennig-Thurau et al (2004), Lee and Song (2010), Lee and Cranage (2012), Van Noort and Willemsen (2011), Munzel (2013), Parks and Bradley (2014), and Hogreve, Eller, and Firmhofer (2013) These references provide a comprehensive overview of the topic, highlighting key findings and contributing to the ongoing academic discourse.
Research indicates that the content of management responses to negative online customer reviews significantly impacts potential customers' intentions to book hotel rooms Studies by Lee and Song (2010), Lee and Cranage (2012), Van Noort et al (2014), and Munzel (2013) highlight the importance of effective communication in mitigating the adverse effects of negative feedback on consumer behavior.
Accordingly, the following research questions will be answered:
1) Which organizational response dimensions have a positive influence on the observer’s purchase intention of a hotel room?
2) Do there exist interaction effects of the influence of organizational response dimensions on the observer’s purchase intention of a hotel room?
3) How do the findings differ from established findings in classical service recov- ery literature, taking the perspective of complainants?
Chapter C will provide empirical analysis to address research questions one and two Research question three will be partially answered in chapter C and further explored in chapter D, where the findings from this thesis will be compared from the observers' perspective with classical service recovery literature, which focuses on the complainants' viewpoint.
This thesis aims to provide actionable recommendations for hotel companies to effectively respond to negative online customer reviews, thereby enhancing potential customers' purchase intentions It emphasizes the importance of resource allocation in addressing these reviews Furthermore, the research also focuses on the cognitive aspect, highlighting the necessity of conceptualizing and operationalizing constructs to develop concrete strategies for hotel managers.
As a consequence of the above mentioned research questions, this thesis proceeds as depicted in Figure 5 and is outlined as follows:
Chapter B establishes the conceptual foundation of this thesis by generating hypotheses and developing a research model It begins with an analysis of the evolving decision-making processes in the hotel industry since the advent of Web 2.0 The chapter explores customer complaint behavior, focusing on the complainants themselves, to better understand observers' behavioral intentions regarding complaint handling Key theories such as perceived justice, signaling, and risk reduction are examined to elucidate observers' reactions to organizational complaint management Ultimately, these theories inform the development of hypotheses aligned with established complaint handling strategies in service recovery literature, culminating in a comprehensive research model.
Chapter C validates previously developed hypotheses through an empirical study, specifically utilizing a web-based experiment to examine relevant effects The chapter begins with an introduction to the theoretical background of the research method and the operationalization of key constructs, followed by a presentation of the results.
Finally, chapter D contains a summary of the result as well as the consequent impli- cations for management and academia
The hotel industry and its development since the emergence of Web 2.0 31
Characterizing the hotel industry
The travel and tourism industry is a multifaceted system that includes various sectors working together to shape the overall tourism experience Key sectors encompass hospitality (like hotels and restaurants), transportation (including airlines and railways), travel organizers and intermediaries (such as tour operators and travel agencies), attractions and events (like theme parks and museums), and destination organizations (including national tourist offices and marketing agencies) Hotels, a vital part of the hospitality sector, are the largest tourism subsector in terms of global employment, with projected revenues reaching $550 billion in 2016 Traditionally, hotels were seen as short-term accommodation facilities offering food and beverage services, but evolving tourist demands have prompted changes in their offerings.
169 Cf H OGREVE /E LLER /F IRMHOFER (2013), p 523, cf H O -D AC /C ARSON /M OORE (2013), p 37
170 Cf M IDDLETON /F YALL /M ORGAN (2009), pp 10 et seq
171 Non-serviced accommodations are timeshares, caravanning and camping, cf P AGE /C ONNELL
172 Cf P AGE /C ONNELL (2014), p 182, cf M IDDLETON /F YALL /M ORGAN (2009), p 365
174 Cf STATISTA (2015b) © Springer Fachmedien Wiesbaden 2016
I Nee, Managing Negative Word-of-Mouth on Social Media Platforms,
The hotel industry has evolved to focus on wellness and unique experiences, offering a wide range of services and facilities A hotel is defined as an establishment that provides accommodation and additional services for travelers This sector is primarily composed of family-owned businesses, alongside a smaller number of influential chain hotels As of 2013, Wyndham Hotel Group was the largest hotel chain globally, operating 7,342 hotels, while Intercontinental led in revenue, generating 21.6 billion U.S dollars.
Hotel ownership can be categorized into three main types: hotels operated under their own brand, franchised hotels, and hotels managed on behalf of an owner, such as major chains like Hilton and Marriott.
The hotel industry, a segment of the broader service sector, is shaped by three key factors that affect consumer behavior in searching, booking, and assessing their service experience: intangibility, perishability, and inseparability These elements will be explored in greater detail to understand their impact on the hospitality experience.
Hotels are primarily viewed as intangible offerings, despite having physical components like the building and rooms This intangibility arises from the challenges in evaluating and experiencing the service beforehand As potential customers cannot test the hotel service or facilities in advance, they heavily depend on signals such as brochures, images, videos, and word of mouth This reliance introduces uncertainty into the purchasing process, often linked to perceived risks Economic risk is a significant concern, especially given the high costs associated with hotel stays during outbound travel, leading customers to question the value for money Additionally, performance risk emerges from the uncertainty regarding the quality of service delivery, causing further apprehension among potential guests.
178 Cf STATISTA (2014a), pp 37 et seq
179 Cf P AGE /C ONNELL (2014), p 182, cf F LETCHER ET AL (2013), pp 351
180 Cf Z EITHALM /P ARASURAMAN /B ERRY (1985), p 33, cf E VANSCHITZKY (2003), p 18, cf L ANGEARD ET
182 Cf S WEENEY /S OUTAR /M AZZAROL (2014), p 338; cf F LETCHER ET AL (2013), p 498, cf
The hotel industry is highly sensitive to information, as potential guests invest considerable time seeking reliable indicators to reduce perceived risks associated with their choices Holidays hold significant emotional and personal value for individuals, making it crucial for hotels to deliver the expected benefits Additionally, the psychological risk of booking a hotel with a negative reputation can lead to social loss for the consumer.
The perishability of hotel services is a critical challenge, as unsold hotel rooms represent lost revenue that cannot be recovered This issue is particularly pronounced in popular, weather-dependent tourist destinations, where demand fluctuates significantly due to seasonal variations Additionally, negative word-of-mouth, amplified by social media, can further impact demand To address these challenges, hotel companies implement strategies such as yield management, flexible staffing policies, and quality management to stabilize occupancy rates and smooth demand fluctuations.
Inseparability in services highlights the simultaneous production and consumption, making each service encounter unique due to customers acting as co-producers This heterogeneity, coupled with diverse customer needs and values, can lead to inconsistent customer satisfaction in service delivery Furthermore, the interpersonal exchanges inherent in service interactions mean that employee performance is closely tied to customer satisfaction Given the complexity of factors influencing the service experience, research indicates that service delivery is inherently variable.
191 Cf F LETCHER ET AL (2013), pp 498 et seq., cf M IDDLETON /F YALL /M ORGAN (2009), pp 47 et seq
192 Cf Z EITHALM /P ARASURAMAN /B ERRY (1985), p 33, cf S TAUSS (1989), p 48
100% error-free 195 Consequently, quality control programs are necessary to mini- mize service failures and negative WOM in the long-term 196
The development of social media in the hospitality and tourism industry
Social media is considered a “mega trend” in the hospitality and tourism industry 197
The rise of information and communication technology (ICT) in the early 1990s transformed the hospitality and tourism industry, presenting both challenges and opportunities for service providers The internet enabled hotels of all sizes to globally promote and sell their offerings, with the primary aim of reaching potential customers worldwide With the advent of social media, these customers have evolved from passive information recipients to active participants, engaging as co-producers of travel-related content online.
Social media refers to a collection of internet-based platforms that leverage Web 2.0 technologies, enabling the creation and exchange of user-generated content This evolution signifies a shift in communication, where users engage by sharing, commenting, and producing content, often related to brands In addition to active participation, users also have the opportunity to observe social interactions and discussions within these platforms.
195 Cf B ITNER (1993), cf DEL R ÍO -L ANZA /V AZQUEZ -C ASIELLES /D IAZ -M ARTIN (2009), p 775, cf
Information and communication technologies (ICT) encompass a range of tools essential for capturing, processing, storing, disseminating, and utilizing information Key components of ICT include hardware, software, telecommunications, netware, groupware, humanware, and increasingly, social media Tourists leverage these technologies to enhance their planning processes, which involve searching for and booking travel, making payments, and sharing experiences and reviews.
199 Cf M INAZZI (2015), p 1, cf X IANG /M AGNINI /F ESENMAIER (2015), p 244, cf L EUNG ET AL (2013), pp 3 et seq
200 Cf P AGE /C ONNELL (2014), pp 90 et seq., F LETCHER ET AL (2013), pp 594 et seqq
Web 2.0 refers to a platform where content and applications are collaboratively created and continuously modified by users, rather than being solely produced and published by individuals This participatory approach fosters a dynamic online environment, as highlighted by Kaplan and Haenlein (2010).
203 Cf J AHN /K UNZ (2014), p 2 media interaction, either between users or between users and a company or brand
In the diverse landscape of social media, various platforms facilitate the creation and sharing of User-Generated Content (UGC) Tuten and Solomon (2013) simplified the complexity of these platforms by categorizing them into four distinct zones based on their primary purposes Notably, these zones can overlap and impact one another, highlighting the interconnected nature of social media environments.
Platform Typology Primary Objective Examples
Social Community Building and maintaining rela- tionships among people with shared interests
Social Publishing Assisting in disseminating con- tent
Offering opportunities for play and enjoyment
Second Life, MySpace, Come2Play
Social Commerce Assisting in online buying and selling products and services
Table 3: Categorization of social media
Source: Own illustration based on T UTEN /S OLOMON (2013), p 6
Xiang et al (2014) identified 207 key technology developments that significantly impact the hospitality and tourism industry Their research examines these developments across three interconnected levels, emphasizing those that enhance information search, which is crucial given the complex and experiential nature of hospitality and tourism products The authors highlight the omnipresence of technology as a driving force in this sector.
207 X IANG ET AL (2014) did not list all technology developments, however, focused on those that had the biggest impact on the technology development in the tourism and hospitality industry
208 This thesis attempts to pursue the research by X IANG ET AL (2014), consequently providing up-to- date figures and developments
The evolution of information on the internet has led to the creation of search engines, starting with WebCrawler in 1994, which allowed users to search for any word across websites Since 2000, major search engines like Google, Yahoo!, and Bing have focused on enhancing user experience in information retrieval Google, in particular, has introduced several innovative features to improve search capabilities, including Google Voice Search in 2011 and Google Semantic Search in 2012/13.
Google Voice Search allows users to conduct searches by speaking instead of typing, requiring either an integrated or external microphone According to Google (2015a), this feature enhances information retrieval, particularly when users are unsure of a word's spelling, have lengthy search queries, or are unable to use their hands.
Google's Search by Image feature allows users to gather information about various images, including those of places, art, and animals Users can utilize four methods to search by image: dragging and dropping an image from the web or their computer into the search field, clicking the camera icon to upload an image, pasting an image's URL into the search field, or right-clicking an image on the web to initiate the search.
212 Google Semantic Search improves search accuracy by understanding the intent of search term and the contextual meaning to it, cf A MERLAND (2014)
Source: Own illustration based on X IANG ET AL (2014), p 3 214
Meanwhile, XIANG ET AL (2014) observe the development and fast adoption of e- commerce and social media 215 Amazon.com launched as an online bookstore in
Since its inception in 1994, the leading online retailer has grown significantly, boasting over 88 million customer accounts by 2008 and reaching 270 million by 2014 Facebook, established in 2004, became the world's largest social network, amassing more than 1.4 billion monthly active users by 2015 Additionally, YouTube, the premier video-sharing platform, experienced explosive growth, with over 300 hours of video uploaded every minute as of November 2014, a substantial increase from 100 hours per minute in May 2013 Furthermore, research by Xiang et al (2014) highlighted the increasing importance of online customer reviews in shaping consumer behavior.
214 This thesis attempts to pursue the research by X IANG ET AL (2014), consequently providing up-to- date figures and developments in this figure
215 Cf X IANG ET AL (2014), pp 2 et seq
Macro-level e-commerce and social media
(first web-based search engine)
Net-scape starts Web 2.0 coined
Rise of Google, Yahoo, Bing
Google voice search/image search launched
Google semantic search is available
Facebook reaches 1bn user accounts
Apple App Store reaches 75bn down- loads; Yelp reaches 135m unique monthly visitors
61t live travel apps in Apple App Store
Acquisition of TravelWeb by Priceline
TripAdvisor hits 40m unique monthly visitors
TripAdvisor: 350m unique monthly visitors, 200m reviews platforms Yelp, the first commercial review platform, established in 2004, listed
135 million unique monthly visitors 219 as of December 2014 220 221
The evolution of the internet, particularly with the advent of Web 2.0, has transformed the distribution landscape in the hospitality and tourism sector This shift led to the disintermediation of traditional travel agencies, followed by a significant re-intermediation through online travel agencies (OTAs) Enabled by the internet and technologies like computer reservation systems (CRS) and global distribution systems (GDS), OTAs offer low transaction costs, greater volume discounts, and streamlined coordination, benefiting both consumers and suppliers Additionally, meta-search engines have gained popularity among consumers, allowing them to efficiently compare options across various platforms.
Unique visitors are a crucial performance metric that reflects a website's reach and popularity over a specified timeframe, typically one month During this period, each IP address is counted only once, regardless of the number of visits While unique visitors serve as a standard measurement, it's important to view this figure relatively, as users can clear cookies or browse in private mode, potentially leading to inaccurate counts Additionally, a single user may access the website from multiple devices, which complicates the measurement The terms "unique visitor" and "unique user" are often used interchangeably in this context.
The rise of the internet significantly transformed the hospitality and tourism industry, as highlighted by Xiang, Magnini, and Fesenmaier (2015) By the early 2000s, nearly every tourism organization had established a website, making it a crucial point of contact for customers seeking information and services.
223 Disintermediation is considered when tourists bypass tourism intermediaries (e.g., travel agen- cies) and book directly at the tourism supplier (e.g., hotel), cf P AGE /C ONNELL (2014), p 97
Re-intermediation occurs when a current tourism intermediary, such as a travel agency, adjusts its strategy to enhance its competitiveness within the tourism distribution chain, particularly in response to the rise of online travel agencies (PAGE/CONNELL, 2014, p 97).
226 Computer reservation systems are databases that enable tourism suppliers to manage inventory and provide partner with this inventory information, cf F LETCHER ET AL (2013), p 599
Global distribution systems (GDS) are essential computer databases utilized by intermediaries for booking tourism products The leading GDS in the market today include Sabre, Galileo, Amadeus, and Worldspan, which collectively hold the largest market share in the industry, according to Fletcher et al (2013).
Changes in the travel process since the development of social media
Recent technological advancements have significantly transformed consumer behavior in planning and consuming travel-related products These changes impact how travelers find inspiration, gather information, book services, and engage post-trip After examining key technological developments in the hospitality and tourism sectors over the past two decades, this section will explore their effects on consumer behavior during the travel planning process Notably, there is a scarcity of academic studies that comprehensively investigate these changes throughout the entire travel planning journey Therefore, this analysis primarily relies on research conducted by market research firms to present quantitative evidence of shifts in consumer behavior.
235 Cf F OTIS /B UHALIS /R OSSIDES (2012), p 13, cf X IANG /M AGNINI /F ESENMAIER (2015), p 245, cf
236 Here considered as: pre-trip, during-trip and post-trip stages
To date, there is only one academic study that empirically examines changes in consumer behavior throughout the travel planning process, conducted by Otis, Buhalis, and Rossides in 2010 However, given the rapid rise of social media in recent years, these findings should be interpreted with caution Additionally, existing research is limited and primarily focuses on the U.S travel market This study specifically addresses private travel, as business travel is less affected by purchase risk and businesses typically lack the flexibility to select hotels based on online customer reviews.
Research in the tourism and hospitality industry often utilizes a staged process to analyze changes in the booking decision-making process, focusing on behavioral shifts across three key phases: the pre-trip (anticipatory) phase, the during-trip (experiential) phase, and the post-trip (reflective) phase This structured approach helps to effectively identify and understand traveler behavior.
During the pre-trip phase, consumers are inspired, gather information, choose travel products, and make bookings, shaping their expectations and decisions Technological advancements have reduced search costs while enhancing consumer engagement and influence Social media significantly inspires consumers to embark on vacations, effectively transforming need recognition into desire.
In 2014, Google commissioned IPSOS to conduct a study aimed at understanding how the internet influences travel-related decision-making The research revealed that during the initial planning phase, travelers often seek inspiration online to guide their choices.
238 Existing processes are: The Wahab, Crampon and Rothfield model of consumer behaviour
(1976), the Schmoll model (1977), the Mathieson and Wall model (1982), the Woodside and Ly- sonski model (1989) and the activities-based model of destination choice by Moscardo et al
(1996) For an in-depth comparison, see F LETCHER ET AL (2013), pp 53 et seqq
Recent research highlights the need for a comprehensive investigation into how social media influences the travel planning process, particularly the substeps of the three-stage model Current literature has primarily concentrated on this three-stage framework, indicating a gap in understanding the nuanced changes in travelers' planning behaviors due to social media.
L EUNG ET AL (2013), F OTIS /B UHALIS /R OSSIDES (2012) and M INAZZI (2015)
240 Cf X IANG ET AL (2014), cf G RETZEL /F ESENMAIER /O'L EARY (2006)
A study conducted by IPSOS in 2014 surveyed U.S citizens aged 21-64 who were involved in travel decisions, with a focus on personal leisure travelers (n = 3,500) The research revealed that 56% of respondents relied on the internet and personal connections, such as family and friends, for travel inspiration Among those who used the internet, 83% found inspiration through social networking sites, videos, and photos, while 61% turned to search engines and 42% utilized travel review sites and apps Additionally, platforms like Pinterest allow users to tailor their content exposure to travel-related topics.
“stuff you may like” or “weekly inspiration” Moreover, Facebook users may see posts by Facebook friends who posted photos or videos from their last vacation 245
When inspired to travel, consumers enter a planning phase where they actively seek information, evaluate options, and ultimately book their vacations Due to the high costs and intangible nature of tourism services, travelers prioritize gathering and comparing diverse travel-related information to minimize the risk of poor decisions According to a 2014 IPSOS study, 74% of travelers rely on the internet for trip planning, with 40% utilizing online travel agencies and 36% consulting travel review sites and apps While social networking sites play a role in this process, accounting for 26% of planning efforts, their influence is less dominant compared to other online resources Research highlights the significant role of social media in the hospitality and tourism planning phase.
HUANG/BASU/HSU (2010) even state that obtaining travel-related information is the primary objective of travelers to use social media and UGC CANTALLOPS/SALVI
(2014) argue that online reviews, in particular, give information-seekers the oppor- tunity to reduce economic, performance and psychological risks associated with
243 I PSOS (2014b), p 6 Base: leisure travelers (n = 3500) Question: “Which of the following sources typically inspire you to start thinking about your personal or leisure trips? (Select all that apply).”
A survey conducted by PSOS in 2014 revealed that among 2,286 leisure travelers who utilize online resources for inspiration, respondents were asked to identify the online sources that typically motivate them to consider their personal or leisure trips.
247 I PSOS (2014b), p 10 Base: leisure travelers (n = 3500) Question “Which of the following sources do you typically use to plan personal or leisure trips? (Select all).”
248 Comonly, online travel agencies also provide customer reviews For an in-depth analysis see chapter B 1.4
249 I PSOS (2014b), p 11 Base: use internet to plan travel (n = 2734) Question: “Which of the follow- ing online sources do you typically use to plan personal or leisure trips? (select all).”
Research indicates that consumers increasingly rely on user-generated content (UGC) like online reviews to streamline their search and evaluation processes, mitigate risks, and find social reassurance when booking holidays Studies show that travelers consider these reviews more credible than traditional commercial sources Notably, online reviews significantly influence decision-making, booking intentions, and perceived trustworthiness A study revealed that 58% of travelers consult travel review platforms before making booking decisions, with 97% acknowledging that these reviews greatly impacted their choices, particularly in selecting hotel accommodations.
In 2014, K Ing and R Acherla conducted a comprehensive analysis of electronic word-of-mouth (eWOM) communication, examining 190 studies across various fields including Marketing, Management Information Systems (MIS), Communications, Management, Psychology, Economics, and Tourism and Hospitality The selected studies were criteria-based, ensuring they were published in peer-reviewed journals, focused specifically on eWOM or its related variables, and employed defined samples and empirical methodologies.
(4) addresses eWOM at individual consumer or market level
254 Cf C ASALÓ /F LAVIÁN /G UINALÍU (2011), cf L ITVIN /G OLDSMITH /P AN (2008)
255 Cf X IE ET AL (2011), cf L ITVIN /G OLDSMITH /P AN (2008), cf V ERMEULEN /S EEGERS (2009), cf
H ILLS /C AIRNCROSS (2010), cf X IANG /G RETZEL (2010), V ERMA (2010), cf W EN (2009), cf
256 Cf V ERMEULEN /S EEGERS (2009), cf W EN (2009), cf V ERMA (2010), cf S PARKS /B ROWNING (2011), cf T OH /D E K AY /R AVEN (2011)
257 Cf L ITVIN /G OLDSMITH /P AN (2008), p 465, cf X IE ET AL (2011), cf D ICKINGER (2011)
258 Cf K IM /M ATTILA /B ALOGLU (2011), pp 402 et seq., cf S PARKS /B ROWNING (2011), p 1311, cf
A RSAL /W OOSNAM /B ACKMAN (2010), p 2, cf P APATHANASSIS /K NOLLE (2011), p 216
In June 2013, a study was conducted with a representative sample of 603 individuals from the United States, all aged 21 or older, who had taken at least one leisure trip in the past year Participants answered questions regarding their use of travel review sites, with 362 specifically addressing whether these sites influenced their travel choices The primary aim of the research was to explore consumer trends within the hospitality and tourism industry.
260 Compared to Resort Hotel (58%), All-Inclsuive Resort (32%), Air (21%), Packaged Tour (18%), Cruise (14%), Car Rental (14%), Escorted Tour (11%) and other (8%)
From 2007 to 2012, a longitudinal study by Xiang et al (2014) surveyed U.S consumers annually, with sample sizes ranging from 2,436 in 2007 to 1,041 in 2012 Utilizing descriptive statistics, the study revealed significant shifts in consumer planning behavior Notably, the reliance on travel guidebooks and brochures declined by 3.9% and 2.5%, respectively, while the use of tourist offices as an information source also fell by 2.5% Conversely, the influence of traveler-generated content surged, with a 13.4% increase in the use of comments and materials posted by travelers Additionally, the preference for watching product-related videos on social media platforms rose by 15% during the same period.
The majority of travelers now book tourism products online, with a 2013 PHOCUSWRIGHT study revealing that 37% exclusively use online platforms for their travel arrangements, marking a 7% increase since 2010 In contrast, only 10% of travelers reported booking offline in the same year Additionally, a study by WARREN WEISS CO indicates a growing trend in mobile device usage for travel bookings, with 30% of travelers utilizing mobile technology in 2013, reflecting a 5% rise from the previous year.
Before the rise of social media, travelers sought information about activities and restaurants at their destinations However, the advent of mobile technologies has intensified this search for information during trips, largely due to the ease of accessing free internet A study by IPSOS (2014b) highlights that smartphones are utilized at every stage of the travel process, showcasing their integral role in modern travel planning and experiences.
263 The last data collected are from 2012, consequently results should be evaluated with caution as technology is ever-changing and consumers become more experienced with technology
264 Cf X IANG ET AL (2014), pp 6 et seq
Typology of hotel review platforms
This section aims to identify the platforms where users access hotel reviews and to evaluate which of these platforms allow hotel managers to respond to customer feedback.
Hotel reviews can be found on various platforms, each serving a unique purpose Some platforms, like Trivago, focus solely on providing reviews, while others, such as Booking.com, prioritize room sales with reviews that aid in the booking process Additionally, there are platforms that encompass not only hotel reviews but also a wide range of travel-related products.
In October 2010, a study by Otis, Buhalis, and Rossides surveyed 356 internet users from Russia and the former Soviet Union Republics Participants were required to have taken at least one holiday trip within the 12 months preceding the survey.
281 Cf K ING /R ACHERLA /B USH (2014), pp 171 et seq
282 Cf M INAZZI (2015), p 60 and services (e.g., Yelp) 283 Literature on classifying the access of hotel reviews is limited The author merely identified one overall typologization by NWAOGU ET AL
(2014) 284 which will be used as a basis for an adapted categorization Table 4 shows a typologization of platforms, taking into account website content and activity
Platform Type Content and Activity Examples
• No purchase possibility; click- through for purchase
Hotel booking platforms • Hotel bookings
• Hotel review information Booking.com, Ho- tels.com, HSR, HotelClub, Agoda
• Travel review information (e.g., ho- tels, restaurants, activities)
• No purchase possibility; click- through for purchase
Online travel agencies • Travel information (e.g., hotels, flights, train, schedules, car rental)
Expedia, Opodo, Ebookers, Last- minute, Orbitz
General review platforms • Information on other products and services (e.g., electronics, cars, fashion) and travel
• No purchase possibility (sometimes click-through for purchase)
Table 4: Typologization of platforms providing hotel reviews
Source: Own illustration based on N WAOGU ET AL (2014), p 24
In their 2014 study, N Waogu et al analyzed 423 websites across all EU Member States, identifying six categories of review platforms, which included social networking sites, blogs, and online forums However, the author of this thesis excluded these platforms from categorization, as their primary focus is not social commerce—defined by Tuten and Solomon (2013) as facilitating the buying and selling of products and services Additionally, while N Waogu et al combined travel review sites and online agencies into one category, the author distinguished between them due to their different objectives; travel review sites solely provide reviews, whereas online agencies aim to sell travel-related products, with reviews serving to support the booking process.
Hotel review platforms like Trivago serve the main purpose of offering users valuable information on hotel reviews and comparisons However, they do not facilitate direct bookings, as they lack ownership or access to hotel inventory Instead, these platforms rely on data from hotel suppliers' websites to provide insights on products and pricing.
Consumers can easily access product offerings through 'click-through' buttons that direct them to websites like booking.com Hotel suppliers incur a cost per click (CPC) for this service, while hotel review websites also generate income by selling advertising space.
Hotel booking platforms like booking.com and hotels.com primarily focus on selling hotel rooms by acting as intermediaries They either purchase inventory directly from hotels or facilitate bookings for a commission on each transaction While hotel reviews are important, they often come from third-party sources such as TripAdvisor, rather than being generated directly on the booking sites.
Travel review platforms extend beyond hotel reviews, offering insights on various travel-related services, including restaurants, vacation rentals, and activities at tourist destinations For instance, TripAdvisor not only gathers reviews for hotels but also provides essential travel information like flight schedules, making it a comprehensive resource for travelers.
Meta-search engines, also known as aggregator platforms, compile pricing and product information from multiple suppliers and display it on a single interface Utilizing software that accesses suppliers' websites, these engines gather data without holding any inventory themselves.
(2014), p 99 Since the author of this thesis is referring to the aggregated information on hotel re- views, in this context, the term hotel review site is used
Cost per Click (CPC), often known as Pay per Click (PPC), is an online advertising model where advertisers incur costs only when a user clicks on their ad, directing them to the advertiser's website (Heinemann, 2015, p 44).
292 Cf T RIP A DVISOR (2015c) possible, however, with the help of a ‘click-through’ button interested consumers get directed to the supplier’s website 293
Online travel agencies, such as Expedia, primarily focus on selling a wide range of travel-related products, including flights, car rentals, and insurance, in addition to hotel bookings Unlike hotel booking sites, which mainly concentrate on accommodations, online travel agencies provide a broader scope of services Hotel booking sites typically feature user-generated reviews or integrate third-party review platforms to enhance customer insights.
General review platforms like Yelp and Ciao provide user-generated content (UGC) by allowing consumers to share reviews on a wide range of products and services, including electronics and cars, with hotel reviews making up only a small portion While some platforms, such as Yelp, enable direct purchases, others, like Ciao, redirect users to the supplier's website for transactions.
This thesis aims to explore how hotel management responses to online customer reviews impact overall customer perceptions It categorizes hotel review platforms based on their capability for hotel managers to respond to reviews Notably, research by Nwaogu et al (2014) indicates that over 50% of the platforms analyzed do not allow hotel managers to engage with customer feedback, highlighting a significant gap in interactive communication in the hospitality industry.
In 2014, platforms were categorized based on their response types: public and private A public response is displayed directly beneath the customer review, making it accessible to all users of the platform In contrast, a private response is sent directly to the reviewer and remains confidential, not visible to other users.
(2014) 300 the following matrix gives an overview on platforms offering hotel managers
293 Cf N WAOGU ET AL (2014), pp 26 et seq
295 Cf N WAOGU ET AL (2014), pp 26 et seq
Revinate is a hospitality software start-up that aggregates hotel reviews from multiple platforms, offering hotel companies valuable insights into guest satisfaction This innovative software alerts hotels whenever a new review is posted, eliminating the need for them to monitor each platform individually for updates.