IDEAS home Printed from https://ideas.repec.org/p/hal/journl/halshs-01656399.html
   My bibliography  Save this paper

The Effect of Brand on the Impact of e-WOM on Hotels’ Financial Performance

Author

Listed:
  • Elisabetta Raguseo

    (Polito - Politecnico di Torino = Polytechnic of Turin)

  • Claudio Vitari

    (LAB IAE Paris - Sorbonne - IAE Paris - Sorbonne Business School)

Abstract

Travelers increasingly consider electronic word of mouth (e-WOM) from online review platforms when making their accommodation decisions. Theory predicts that e-WOM increases sales, but little is known regarding the role that branding plays in the relation between e-WOM and hotels\textquoteright financial performance. This study relied on financial data (including Revenue per Available Room\textemdashRevPAR\textemdashand sales profitability) and 34,164 online customer reviews gathered from TripAdvisor (as a proxy for e-WOM) based on panel data from 221 hotels, including not-branded and branded chain hotels in France from 2005 to 2013. The results show that the volume of reviews has no effect on RevPAR growth for branded chain hotels and a positive effect on RevPAR growth for not-branded chain hotels. In addition, the direct effect of the valence of online reviews and its interaction effect with the yearly and cumulative volume of online reviews on RevPAR growth and sales profitability is shown to apply to not-branded chain hotels but not to branded chain hotels. This study contributes to the e-WOM literature by revealing the role of a brand in e-WOM\textquoterights impact on hotel financial performance. Based on our results, managers of branded chain hotels should know that they might find it difficult to leverage e-WOM to achieve higher RevPAR growth and greater sales profitability, as their economic advantages derive from their brand instead of e-WOM.

Suggested Citation

  • Elisabetta Raguseo & Claudio Vitari, 2017. "The Effect of Brand on the Impact of e-WOM on Hotels’ Financial Performance," Post-Print halshs-01656399, HAL.
    • Handle: RePEc:hal:journl:halshs-01656399
    DOI: 10.1080/10864415.2016.1234287
    Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-01656399
    as

    Download full text from publisher

    File URL: https://shs.hal.science/halshs-01656399/document
    Download Restriction: no
    File URL: https://libkey.io/10.1080/10864415.2016.1234287?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Chrysanthos Dellarocas, 2006. "Strategic Manipulation of Internet Opinion Forums: Implications for Consumers and Firms," Management Science, INFORMS, vol. 52(10), pages 1577-1593, October.
    2. Onkvisit, Sak & Shaw, John J., 1989. "Service marketing: Image, branding, and competition," Business Horizons, Elsevier, vol. 32(1), pages 13-18.
    3. Silva, Rosario, 2015. "Multimarket contact, differentiation, and prices of chain hotels," Tourism Management, Elsevier, vol. 48(C), pages 305-315.
    4. Dowling, Grahame R & Staelin, Richard, 1994. "A Model of Perceived Risk and Intended Risk-Handling Activity," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 21(1), pages 119-134, June.
    5. Chrysanthos Dellarocas, 2003. "The Digitization of Word of Mouth: Promise and Challenges of Online Feedback Mechanisms," Management Science, INFORMS, vol. 49(10), pages 1407-1424, October.
    6. Yubo Chen & Jinhong Xie, 2008. "Online Consumer Review: Word-of-Mouth as a New Element of Marketing Communication Mix," Management Science, INFORMS, vol. 54(3), pages 477-491, March.
    7. Heyes, Anthony & Kapur, Sandeep, 2012. "Angry customers, e-word-of-mouth and incentives for quality provision," Journal of Economic Behavior & Organization, Elsevier, vol. 84(3), pages 813-828.
    8. Dellarocas, Chrysanthos, 2003. "The Digitization of Word-of-mouth: Promise and Challenges of Online Feedback Mechanisms," Working papers 4296-03, Massachusetts Institute of Technology (MIT), Sloan School of Management.
    9. Leonidou, Leonidas C. & Leonidou, Constantinos N. & Fotiadis, Thomas A. & Zeriti, Athina, 2013. "Resources and capabilities as drivers of hotel environmental marketing strategy: Implications for competitive advantage and performance," Tourism Management, Elsevier, vol. 35(C), pages 94-110.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Alshawawreh, Ali Ra’Ed & Liébana-Cabanillas, Francisco & Blanco-Encomienda, Francisco Javier, 2024. "Impact of big data analytics on telecom companies' competitive advantage," Technology in Society, Elsevier, vol. 76(C).
    2. Filieri, Raffaele & Lin, Zhibin & Pino, Giovanni & Alguezaui, Salma & Inversini, Alessandro, 2021. "The role of visual cues in eWOM on consumers’ behavioral intention and decisions," Journal of Business Research, Elsevier, vol. 135(C), pages 663-675.
    3. Manuel Rodríguez-Díaz & Raquel Alonso-González & Crina Isabel Rodríguez-Voltes & Ana Cristina Rodríguez-Voltes, 2019. "A Rating of the Online Reputation Balance in Lodgings," Administrative Sciences, MDPI, vol. 9(3), pages 1-18, August.
    4. Juan Pedro Mellinas & Eva Martin-Fuentes, 2019. "Does hotel size matter to get more reviews per room?," Information Technology & Tourism, Springer, vol. 21(2), pages 165-180, June.
    5. Michela Fazzolari & Marinella Petrocchi, 2018. "A study on online travel reviews through intelligent data analysis," Information Technology & Tourism, Springer, vol. 20(1), pages 37-58, December.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Bin Gu & Jaehong Park & Prabhudev Konana, 2012. "Research Note ---The Impact of External Word-of-Mouth Sources on Retailer Sales of High-Involvement Products," Information Systems Research, INFORMS, vol. 23(1), pages 182-196, March.
    2. Khim-Yong Goh & Cheng-Suang Heng & Zhijie Lin, 2013. "Social Media Brand Community and Consumer Behavior: Quantifying the Relative Impact of User- and Marketer-Generated Content," Information Systems Research, INFORMS, vol. 24(1), pages 88-107, March.
    3. Yabing Jiang & Hong Guo, 2012. "Design of Consumer Review Systems and Product Pricing," Working Papers 12-10, NET Institute.
    4. Dominik Gutt & Jürgen Neumann & Steffen Zimmermann & Dennis Kundisch & Jianqing Chen, 2018. "Design of Review Systems - A Strategic Instrument to shape Online Review Behavior and Economic Outcomes," Working Papers Dissertations 42, Paderborn University, Faculty of Business Administration and Economics.
    5. Chowdhury, Nasif, 2016. "The Impact of Electronic Word-of-Mouth on Consumers’ Purchase Intentions in Bangladesh Telecommunication Industry," EconStor Preprints 142747, ZBW - Leibniz Information Centre for Economics.
    6. Nisar, Tahir M. & Prabhakar, Guru & Ilavarasan, P. Vigneswara & Baabdullah, Abdullah M., 2020. "Up the ante: Electronic word of mouth and its effects on firm reputation and performance," Journal of Retailing and Consumer Services, Elsevier, vol. 53(C).
    7. Ampadu, Seth & Jiang, Yuanchun & Debrah, Emmanuel & Antwi, Collins Opoku & Amankwa, Eric & Gyamfi, Samuel Adu & Amoako, Richard, 2022. "Online personalized recommended product quality and e-impulse buying: A conditional mediation analysis," Journal of Retailing and Consumer Services, Elsevier, vol. 64(C).
    8. Yabing Jiang & Hong Guo, 2015. "Design of Consumer Review Systems and Product Pricing," Information Systems Research, INFORMS, vol. 26(4), pages 714-730, December.
    9. Kick, Markus, 2015. "Social Media Research: A Narrative Review," EconStor Preprints 182506, ZBW - Leibniz Information Centre for Economics.
    10. Peiyu Chen & Lorin M. Hitt & Yili Hong & Shinyi Wu, 2021. "Measuring Product Type and Purchase Uncertainty with Online Product Ratings: A Theoretical Model and Empirical Application," Information Systems Research, INFORMS, vol. 32(4), pages 1470-1489, December.
    11. Zhen Li & Fangzhou Li & Jing Xiao & Zhi Yang, 2020. "Topic Features in Negative Customer Reviews: Evidence Based on Text Data Mining," The Review of Socionetwork Strategies, Springer, vol. 14(1), pages 19-40, April.
    12. Hyun S. Shin & Dominique M. Hanssens & Kyoo il Kim, 2016. "The role of online buzz for leader versus challenger brands: the case of the MP3 player market," Electronic Commerce Research, Springer, vol. 16(4), pages 503-528, December.
    13. Meijian Yang & Enjun Xia & Yang Yang, 2023. "Deterring Sellers’ Cheap Talk Actions via Online Rating Schemes," Mathematics, MDPI, vol. 11(6), pages 1-16, March.
    14. Sun, Miao & Chen, Jing & Tian, Ye & Yan, Yufei, 2021. "The impact of online reviews in the presence of customer returns," International Journal of Production Economics, Elsevier, vol. 232(C).
    15. Yucheng Zhang & Zhiling Wang & Lin Xiao & Lijun Wang & Pei Huang, 2023. "Discovering the evolution of online reviews: A bibliometric review," Electronic Markets, Springer;IIM University of St. Gallen, vol. 33(1), pages 1-22, December.
    16. Liuan Wang & Lu (Lucy) Yan & Tongxin Zhou & Xitong Guo & Gregory R. Heim, 2020. "Understanding Physicians’ Online-Offline Behavior Dynamics: An Empirical Study," Information Systems Research, INFORMS, vol. 31(2), pages 537-555, June.
    17. Heyes, Anthony & Kapur, Sandeep, 2012. "Angry customers, e-word-of-mouth and incentives for quality provision," Journal of Economic Behavior & Organization, Elsevier, vol. 84(3), pages 813-828.
    18. Li, Yin & Arora, Sanjay & Youtie, Jan & Shapira, Philip, 2018. "Using web mining to explore Triple Helix influences on growth in small and mid-size firms," Technovation, Elsevier, vol. 76, pages 3-14.
    19. Guha Majumder, Madhumita & Dutta Gupta, Sangita & Paul, Justin, 2022. "Perceived usefulness of online customer reviews: A review mining approach using machine learning & exploratory data analysis," Journal of Business Research, Elsevier, vol. 150(C), pages 147-164.
    20. Christian Fieseler & Matthes Fleck & Miriam Meckel, 2010. "Corporate Social Responsibility in the Blogosphere," Journal of Business Ethics, Springer, vol. 91(4), pages 599-614, February.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hal:journl:halshs-01656399. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: CCSD (email available below). General contact details of provider: https://hal.archives-ouvertes.fr/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.