The effects of hotel performance characteristics on customer online ratings

Abstract

<p>Due to rapid development and consumer adoption of technology, the hospitality industry has dramatically increased online-based consumer reviews for a variety of hospitality services such as those found in foodservice and lodging segments (e.g., Litvin, Goldsmith, & Pan, 2008). This study focused on the lodging industry, and investigated the relationship between characteristics of lodging industry performance and user-generated customer reviews on a popular website, TripAdivsor.com, by analyzing five of the top U.S. lodging US markets. Data from these cities included: (a) the top 100 highest ranked hotel ratings based on online customer reviews; (b) total number of hotels; (c) the average daily rate (ADR) for hotels; and (d) the occupancy percentage of hotels in a selected city.</p> <p>Customer hotel ratings were collected from TripAdvisor.com and city characteristics were collected from Smith Travel Research (STR), a leader in hotel industry data collection and analytics. The results of this study revealed that customer ratings differ by location, which can impact the destination image in the mind of customers and influence their destination travel choices. Results also revealed that ADR, occupancy rate, and the number of total number of hotel properties could be used to predict customer ratings on a lodging property or an overall average rating for a market. The study concludes with a discussion of the findings, implications for practice, and recommendations for future research.</p>