The Influence Of Electronic Word Of Mouth In Hotel Booking Industry

The popularization of Internet in the early 2000's and easy access to the World Wide Web has shrank the world in terms of communication.In the beginning,users were able to communicate in forums,sharing their opinions on the variety of topics.Later on,first social networks such as LinkedIn or Facebook replaced forums in some aspects.The will to communicate,share the opinions and to protect others from mistakes drives people to use the websites in order to share their thoughts.In online world,electronic Word of Mouth was first spreading through both forums and social networks,but later the reviewing platforms appeared and became popular among Internet users.The number of review platforms is huge and a variety of topics are reviewed: food,hotels,car rentals,movies,etc.Customer either leaves just a detailed feedback or gives his own rating,and sometimes does both of these,depending on the website.Review platforms help customers to make a right choice of products and services and possibly reduce the risk of dissatisfaction.As a result,it is beneficial for both customers and hotel businesses.Different customers have different preferences for hotels.Satisfying customers' needs is a key goal of hoteliers,and the market has a lot to offer to potential customers.Since customers are empowered to spread the word of mouth,hoteliers have to be able to recognize the needs of their guests and to be able to predict the needs of different categories of travelers.The popularization of online booking websites put hospitality industry on a new level.Customers leave feedbacks and recommendations after staying in hotels and these feedbacks can be seen by potential customers for a long period of time,so it may affect consumers' booking decision.Nowadays,most customers look through the feedback sections on TripAdvisor.com,booking.com,ctrip.com,airbnb.com before the booking.The customers are more or less aware of what to expect from the hotel stay and as a result,they are more likely to be satisfied with it.This study is analyzing the influence of electronic word of mouth on high-end hotel networks on an example of Radisson hotel chain.And the feedbacks left on Tripadvisor.com is the data source.In this research,hotels' star rating was assumed as an indicator of hotels' brand image.Another objective of this research was to study customers rating behavior in relation to hotels located near the airport and resorts,to analyze whether stress or relaxed atmosphere influence rating behavior.“Radisson” brand belongs to Carlson Rezidor Hotel Group;hotels of this chain are operating in 87 countries all around the world.Customer reviews of Radisson hotels are very controversial and it allows us to research the influence of feedbacks.High-end hotel customers expect higher level of service and higher demands in general.The perception of value for money varies in every segment from economy to high-end.The first assumption in this research is that customer-given overall ratings and extended ratings(such as cleanliness,location,service ratings)influence hotels' brand image and star rating.Potential customers read the reviews and rankings and it affects booking decision.Secondly,it was hypothesized,that location of the hotel may affect customers' rating behavior,especially under stressful situations,like staying for a transfer near the airport.This research was based on Multiple Linear Regression analysis in Stata.The information was collected with Octopus web crawler,the total number of selected hotels was 67 and only 47 fit the research.The total number of collected unique reviews is 15,321 and the number of matching observations is 458,738.The correlation of hotel stars rating and overall star rating given by customers was analyzed through Stata correlation.The Multiple Linear Regression in this research proposes seven independent variables: overall star rating given by customer,cleanliness,location,rooms,sleep quality,value and service and a dependent variable: official star rating of the hotel.The second dataset is related to the regression analyses of hotels located near resorts and airports.Total number of hotels covered in this analysis is equal to 21.The analysis was using a linear regression with one dummy variable,and 1 represents airport while 0 represents resort hotels.Hotels star rating was used as dependent variable and customers' overall rating was used as explanatory variable.Firstly,it was found that there is a positive influence of e-WOM on hotel brand image,the customer rankings and official star rating are related.Secondly,according to the data collected and analyzed in this research,the hypothesis concerning the location near the airports and low ratings,and resort hotels and higher ratings has not been proved.There are mainly two contributions of this article.Firstly,most of the previous researches are customer-oriented,and studying the motives of customers that drive them to leave negative feedbacks,and moreover,most of the researches are concentrated on hotel business in general,while this study is aimed to explore the high-end segment which filled the research gap.Secondly,the vast majority of researches in this field use questionnaire approach,while this paper is using data mining technique.Several limitations were met during the work on this paper.First of all,most of the information about actual number of bookings,customer loyalty and sales are private and cannot be accessed.This information might play an important role in the research.Secondly,there is a fact of approximation of the results existing.Customers may leave either extremely positive feedback or rating or in contrast,extremely negative rating.This may happen in cases when customers' expectations were not met,or customer had extremely negative experience related to one rating criterion and anger lead to a low rating in the rest of criteria in the feedback.In contrast,an extremely positive experience might lead to not paying the attention to other criteria.As a result,the existence of these kinds of ratings leads to approximation of results.For the future researches,it is recommended to study the aspect of customer loyalty to the brand and its relation to brand image.This research uses ratings as variables,but using the detailed opinion of customers and knowing the opinions of loyal customers would make the research more accurate.Then,according the findings from the data collected for this research,the location might be an important factor in customers' rating behavior.This aspect could be studied in future and make a great contribution for the practitioners.For example,in medical tourism cases,hotels located near the popular hospitals could arrange additional services according to customers' extra needs,which would decrease the level of stress for a customer and influence rating behavior in a positive way.