Source: EHL

Today, hotels are greatly dependent on a limited number of reservation platforms. A significant feature of these platforms is guest evaluations, which are transformed into ratings and rankings. Consumers pay growing attention to user-generated content and a hotel's position in comparison to competitors can have a significant impact on demand for bookings. As a consequence, reputation management is becoming increasingly crucial for hotel managers.

But what exactly is the impact of guest evaluations on a hotel's performance? How do hotel managers cope with negative online reviews? And what are the main challenges they face in improving their results?

Our latest research examines these questions based on a survey of international hotel managers to understand their perspectives on online reputation and manipulation.

Key Highlights :

  1. Guests are increasingly aware of the importance of reviews and their power over reputation.
  2. Ratings, ranking positions and new market entries increase pressure on managers.
  3. Strategies employed to improve online reputation are often outside the control of platforms.
  4. The extent of manipulation appears to vary between individual businesses and countries.

Interviewed managers confirm growing competition as a result of ratings and rankings, and they report that guests are increasingly aware of the importance of reviews. To avert negative online feedback impacts, managers intervene strategically. They report - irrespective of hotel standard - to pay close attention to online reputation, and to engage in various strategies to maintain or improve their ratings or ranking position. Specifically, our research reveals four core challenges directly related to online reviews and ratings of accommodations.

Challenge #1: Consumer judgement culture not only encourages, it demands opinion.

The results have a persuasive power in influencing customer perceptions and choices, and on business behavior. In particular, negative reviews appear to be considered useful by consumers. The emergent consumer judgement culture and consumer citizenship increase pressure on management.

Moreover, while prospective hotel guests will be aware of the importance of credibility, also having learned to interpret reviews, there is nevertheless evidence of reputation 'thresholds'; this is, minimum ratings or ranking positions that are specifically attractive or no longer attractive to customers. These behaviors stand irrespective of whether review content is credible and if service quality of an accommodation business may change over time (for instance, when owners change, after renovations, or because of new service offers).

Challenge #2: Market dominance of selected platforms, including Orbitz, Travelocity or Booking.com, can be problematic where a business' reputation depends on one or a few platforms.

For example, by September 2017, Travelocity reported having stored 535 million reviews covering over four million accommodations, restaurants, attractions, resorts and destinations.

These figures mirror the considerable importance of platforms for information collection, usually before reservations are made.

Concentration also means that the online reputation of millions of small- and medium-sized enterprises, larger hotels and entire destinations throughout the world is now controlled by global corporate stakeholders.

The emergence of a near market-monopoly of a few selected platforms for reservations (Booking) and recommendations (TripAdvisor) has initiated processes that pose a significant problem for the hospitality industry. These problems are poised to become more prevalent, as market concentration continues and guest awareness increases.

Challenge #3: New market pressures force managers not only to improve customer relations and brand relationships; but also to deal with online reputation and manipulation, i.e. activities designed to control opinion to one's own advantage.

Manipulation can be complex, comprising strategies to involve staff, friends, bloggers or other parties.

Many of these strategies must be considered problematic from legal or ethical viewpoints, as they involve the soliciting of reviews from guests, friends and acquaintances or staff; the invitation of bloggers; or the use of commercial raters, a strategy used by about a third of managers.

Challenge #4: Addressing legal disparities is complex as laws with respect to defamation vary according to jurisdiction not just in relation to what constitutes defamation but also whether publishers and/or persons are liable.

Rating culture, most widely observed in the form of Facebook 'likes', has profoundly changed the character of customer-hotel interactions.

To be able to rate, judge and evaluate is a form of empowerment that affects reflection and empathy: Few guests will consider the implications of a negative review posted in a situation of momentary discontent, for example.

As critical guests are simultaneously treated with respect, deference and privilege, opportunities to evaluate generate a sense of entitlement and self-importance.

A set of specific responses are derived from the study and include, the emerging importance of reputation management strategy.

Online reputation management has become a key asset for most hotels. Guests appear to become increasingly aware of their influence over reputation, and the importance of positive reviews. This is a process fostered by managers anxious over reputation, who may pamper in particular already critical guests. Guest expectations and additional service offers stimulate each other, ultimately working to the disadvantage of businesses.

Meantime, hotels still need to offset critical reviews. The use of strategies to reduce negative content posted on platforms is thus an important aspect of reputation management.
Specific practices, including linguistic cues, can be used to distinguish manipulated/authentic reviews, though it is generally difficult for individual hotels to control who posted online content or to demand the removal of specific comments, even if these are evidently false.

More generally, there are opportunities for legal redress. Negative online reviews can potentially become a point of legal action for a hotel if it is regarded as defamatory and/or comments are not taken down when requested. Nevertheless, this creates further legal cases and costs for accommodation providers, one to obtain evidence of the identity of the person who posted the review and the other by way of defamation. Any legal action is likely to be expensive suggesting that such measures will usually fall outside of the capacities of many hotel SMEs.

To conclude, two projected scenarios concerning the future of online reviews are depicted.

  • One is that market concentration continues, and that platforms will implement protocols and algorithms to make it more difficult to post 'false' or manipulated opinion. This, however, already proves to be difficult, and there is little pressure on platforms to remove false content given limited options for SMEs to seek legal redress.
  • Another scenario is that hotels start to realize they are potentially better off without globally managed platforms. It is not unthinkable for entire countries to shun specific platforms; for businesses to find their own, decentralized marketing channels or for new relationship marketing strategies to be developed, particular with established customer bases.

About the Research

Our research presents the results of a survey including 270 hotel managers in five countries -
Germany, Israel, Norway, Sweden and Switzerland. This is the first quantitative academic study of manager perspectives on hotel online reputation and manipulation.

Our study is the result of a multidisciplinary research team, comprising:

Sherif Mamdouh
External Communications Manager
EHL

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