Digital marketing strategies, online reviews and hotel performance

We investigate to what extent digital marketing strategies influence hotel room occupancy and RevPar directly, and indirectly through the mediating effect of the volume and valence of online reviews they lead to, and to what extent this mechanism is different for different types of hotels in terms of star rating and independent versus chain hotels

Patrick De Pelsmacker; Sophie van Tilburg; Christian Holthof

2018

Scholarcy highlights

  • Electronic word-of-mouth is “all informal communications directed at consumers through Internet-based technology related to the usage or characteristics of particular goods and services, or their sellers”. eWOM can take many forms, the most important one being online reviews. eWOM has a profound effect on attitudes and buying behavior of consumers and on commercial results in many product categories, such as books, movies, online games and restaurants. eWOM appears to be important for experience products
  • We investigate to what extent digital marketing strategies influence hotel room occupancy and RevPar directly, and indirectly through the mediating effect of the volume and valence of online reviews they lead to, and to what extent this mechanism is different for different types of hotels in terms of star rating and independent versus chain hotels
  • Digital marketing strategies such as having a digital marketing plan, the frequency of TripAdvisor information used, using TripAdvisor metrics, using management reports, answering guest reviews within 24 h, using track software, and integrating commercial review sites’ reviews on the hotel website, all appear to affect room occupancy favorably, partly or fully because they lead to more reviews, and not because they increase review valence
  • The managerial implications of our study are that hotel management should devote considerable attention to both the number and the valence of reviews about their hotel, and should develop an extensive digital marketing strategy that has a profound impact on these reviews and, directly or indirectly, on hotel performance
  • The first step in such a digital marketing strategy is to have a digital marketing plan that provides for online hotel presence, tracking and monitoring online reviews, and Limitations and future research
  • 2009, Ye et al, 2011 show that a 10% improvement in reviewers’ rating can increase sales by 4.4%
  • The model was tested with 100 online customers and, with the adoption of the proposed methodology, the results indicated growth in average monthly revenue, Average Order Value and Items per Order

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