Online Hotel Reviews and Potential Customers: Does the Response Strategy Matter?

Abstract

Negative word-of-mouth in the hotel industry is easily spread on online platforms and has potentially serious implications for service providers; nevertheless, limited research has been done and managers seem largely undecided or confused about what strategy to adopt to deal with negative reviews. This study contributes to the existing literature in several ways; firstly, it has important managerial implications as it aims to understand which of three response strategies (no response, an accommodative response or a defensive response) will have the most positive impact on consumers’ evaluation of hotels, their booking intentions, attitudes and trust towards the hotel. Furthermore, it seeks to factor in severity of failure in connection with response strategies and suggests that the inconsistencies in the existing literature are due to the fact that not all failures are equal in weight, and the role of severity of failure has not been studied thoroughly until now. Participants in a convenient sample were asked to imagine that they were searching for a hotel. They were randomly assigned fictitious reviews of a 4-star hotel based on the TripAdvisor.com format. Six different experimental scenarios were constructed, containing one of two degrees of severity of failure (minor vs. serious) with one of the three response strategies (no response, accommodative or defensive).The results of this study indicate that the severity of the failure is an important factor when deciding which type of response strategy to apply. In the case of a minor failure, the best strategy is an accommodative response; however, the results of this study challenge the existing literature and the idea that managers should respond to negative reviews, since no significant difference in the potential customer’s evaluation of the hotel was observed in those who read a review with an accommodative response, versus those who read a review with no response to either level of failure. In the case of serious failures, interestingly, no difference was found between the effects of making an accommodative or a defensive response; however, as can be seen from the results regarding trust in the hotel, an accommodative response can help mitigate a serious failure condition, so this study suggests that a defensive strategy is the worst policy.