This article was downloaded by: [Archives & Bibliothques de l'ULB]

On: 11 August 2015, At: 21:21

Publisher: Routledge
Informa Ltd Registered in England and Wales Registered Number: 1072954 Registered office: 5 Howick Place,
London, SW1P 1WG

Journal of Travel & Tourism Marketing

Publication details, including instructions for authors and subscription information:
http://www.tandfonline.com/loi/wttm20

Online Consumer Review Factors Affecting Offline

Hotel Popularity: Evidence from Tripadvisor
Karen L. Xie, Chihchien Chen & Shinyi Wu
Published online: 08 Jul 2015.

Click for updates

To cite this article: Karen L. Xie, Chihchien Chen & Shinyi Wu (2015): Online Consumer Review Factors Affecting Offline Hotel
Popularity: Evidence from Tripadvisor, Journal of Travel & Tourism Marketing, DOI: 10.1080/10548408.2015.1050538

To link to this article: http://dx.doi.org/10.1080/10548408.2015.1050538

PLEASE SCROLL DOWN FOR ARTICLE

Taylor & Francis makes every effort to ensure the accuracy of all the information (the Content) contained
in the publications on our platform. However, Taylor & Francis, our agents, and our licensors make no
representations or warranties whatsoever as to the accuracy, completeness, or suitability for any purpose of the
Content. Any opinions and views expressed in this publication are the opinions and views of the authors, and
are not the views of or endorsed by Taylor & Francis. The accuracy of the Content should not be relied upon and
should be independently verified with primary sources of information. Taylor and Francis shall not be liable for
any losses, actions, claims, proceedings, demands, costs, expenses, damages, and other liabilities whatsoever
or howsoever caused arising directly or indirectly in connection with, in relation to or arising out of the use of
the Content.

This article may be used for research, teaching, and private study purposes. Any substantial or systematic
reproduction, redistribution, reselling, loan, sub-licensing, systematic supply, or distribution in any
form to anyone is expressly forbidden. Terms & Conditions of access and use can be found at http://
www.tandfonline.com/page/terms-and-conditions
 Journal of Travel & Tourism Marketing, 2015
2015 Taylor & Francis
ISSN: 1054-8408 print / 1540-7306 online
DOI: 10.1080/10548408.2015.1050538

ONLINE CONSUMER REVIEW FACTORS AFFECTING

OFFLINE HOTEL POPULARITY: EVIDENCE FROM
TRIPADVISOR
Karen L. Xie
Chihchien Chen
Shinyi Wu
Downloaded by [Archives & Bibliothques de l'ULB] at 21:21 11 August 2015

ABSTRACT. The business value of online consumer reviews has emerged in recent year as one of
utmost importance for hotel marketers. This study examines how online consumer reviews affect
ofine hotel popularity. Using time-series data of 56,284 hotel reviews posted for more than 1000
hotels listed on TripAdvisor, this paper estimates the effect of factors of online consumer review,
including quality, quantity, consistency, and recency, on the ofine hotel occupancy (i.e. how popular
the hotel is among consumers). The empirical evidence shows the relative effect of online consumer
review factors on ofine hotel popularity when controlling for other hotel characteristics. In particular,
the effect of review quality lasts for at least a couple of quarters, whereas that of other online consumer
review factors remains short-term. The ndings provide a managerial basis to improve the online
presence of hotels on social media platforms by strategically utilizing important review factors.

KEYWORDS. Online consumer review, ofine hotel popularity, hotel occupancy, social media
marketing

1. INTRODUCTION quality is often unknown before purchase

Technological advances over the past dec-
ades have led to the proliferation of consumer
reviews on social media platforms where con-
sumers shop for goods. Consumer reviews are
posted of a wide range of products and services,
and they have become part of the decision-
making process for many consumers
(Chevalier & Mayzlin, 2006). In particular, con-
sumer reviews are important for learning about
experience goods such as hotel rooms as their
(Nelson, 1970; Pine & Gilmore, 1998). Gretzel
and Yoo (2008) indicate that online reviews
offer quality information to reduce risk in pur-
chasing experience goods. Online reviews
enable consumers to learn about the perception
of product quality and service satisfaction from
previous consumers without experiencing the
goods themselves. Consumer reviews written
by previous buyers signal a certain level of
evaluation and feedback of experience goods,
thus providing an important reference for new

Karen L. Xie, PhD is Assistant Professor, Hospitality Management, Daniels College of Business,
University of Denver, Denver, CO, USA, USA (Email: Karen.Xie@du.edu).
Chihchien Chen, PhD, is Assistant Professor, College of Hotel Administration, University of Nevada, Las
Vegas, NV, USA (Email: Chih-Chien.Chen@unlv.edu).
Shinyi Wu, is Associate Professor, Information Systems, W. P. Carey School of Business, Arizona State
University, Tempe, AZ, USA (Email: shinyi.wu@asu.edu).
Address correspondence to: Karen L. Xie, Hospitality Management, Daniels College of Business,
University of Denver, Denver, CO, USA (Email: Karen.Xie@du.edu).
1
 2 JOURNAL OF TRAVEL & TOURISM MARKETING
buyers to help them make informed decisions
and choose the products that best match their
preference. As a result, nowadays about three-
quarters of consumers take into account online
consumer reviews when planning their travel
itineraries (Xie, Zhang, & Zhang, 2014), and
nearly 50% of consumers visit an online review
site for information connected with their online
travel purchasing (Compete, Inc., 2006). Online
consumer reviews have become an important
source of information for consumers, substitut-
ing for other forms of business-to-consumer
(Jiang & Chen, 2007) and ofine word-of-
Downloaded by [Archives & Bibliothques de l'ULB] at 21:21 11 August 2015
mouth (WOM) communication (Lewis &
Bridger, 2001) about the quality of service
providers.
Given the prevalent use of online reviews by
consumers, the value of online consumer
reviews to business performance has emerged
in recent years as one of utmost importance to
marketers. It is thus not surprising that online
consumer reviews have become the subject of
extensive research (Cunningham, Smyth, Wu,
& Greene, 2010). A burgeoning academic
body of literature has emerged to study how
online consumer reviews affect ofine business
performance (Moe & Trusov, 2011; Xie et al.,
2014). Specically, previous research has iden-
tied three primary factors that aggregate
online consumer review information and are
strategically important to business perfor-
mance: review quality, review consistency,
review quantity, and review recency. Review
quality, or the review rating, reects the level
of consumer satisfaction and is the focus of
most empirical studies on product reviews
(Clemons, Gao, & Hitt, 2006; Dellarocas,
Zhang, & Awad, 2007). Review consistency,
measured as the standard deviation to the mean
rating, captures the degree of disagreement
among consumers (Godes & Mayzlin, 2004).
Review quantity, or the number of reviews, as
a measure of the volume of discussions, signals
brand awareness and popularity of a product
on a social media platform (Duan, Gu, &
Whinston, 2008; Zhu & Zhang, 2010).
Finally, because each consumer review has its
time stamp at the time it is published online,
review recency refers to the age of consumer
reviews (TripAdvisor, 2015).
Despite the fact that the value to business of
online consumer reviews has become one of the
most important research topics, empirical litera-
ture still lags behind in three critical aspects that
motivate our study. First, previous literature has
discussed online consumer review factors
affecting business performance but most often
in a singular and fragmented fashion without
accounting for the many aspects of online
review factors. For example, some studies only
investigate the review consistency to measure
the degree of disagreement in consumer opi-
nions (Godes & Mayzlin, 2004; Sun, 2012)
while others focus solely on review quantity to
assess product awareness among consumers
(Dellarocas et al., 2007; Godes & Mayzlin,
2004). The number of empirical studies
accounting for a holistic picture of the effects
of online consumer review factors is limited.
Second, previous studies mainly focus on
online performance measures such as online
product popularity on social media websites
(see for example Ghose, Ipeirotis, & Li, 2012
for Travelocity; Luca, 2011 for Yelp; and Xie
et al., 2014 for TripAdvisor), neglecting the
ofine product popularity among consumers
(i.e. how many consumers actually purchase
the product). The ofine product popularity is
important because it justies the return on
investment (ROI) of the social media marketing
efforts and is directly related to the bottom line
of business performance (Aria, 2015). Despite
the industry trend toward recognizing the
importance of the consumer voice, how online
consumer reviews affect ofine product popu-
larity remains poorly understood owing to the
paucity of existing research on the topic.
Finally, previous social media studies have
focussed mainly on one-off purchase items or
short life-cycle information goods such as
movies (Dellarocas, Gao, & Narayan, 2010;
Duan et al., 2008; Liu, 2006), books
(Chevalier & Mayzlin, 2006; Li & Hitt, 2008),
and software (Duan et al., 2008; Lee & Tan,
2013), which is likely to be due to the avail-
ability of data for these categories. However,
information goods are unique in that they have
product life cycles that are both short and fol-
low predictable exponential patterns (Moe &
Fader, 2001; Sawhney & Eliashberg, 1996).
 Xie, Chen, and Wu
These products experience the greatest level of
sales (and review activity) immediately after
launch. Very quickly after that, sales (and
review activity) taper off dramatically. The dan-
ger of using such product categories is that
results can be very sensitive to the stage of the
product life cycle during which the researcher
collects the data. As a result, the product popu-
larity observed can be more easily attributed to
changes due to the natural progression of the
product life cycle, and are less likely to be a
result of changes in the consumer review envir-
onment. Studies that examine social media
Downloaded by [Archives & Bibliothques de l'ULB] at 21:21 11 August 2015
exposure in relation to more mundane consumer
and business products such as hotels are rare.
This paper aims to bridge this knowledge
gap by empirically examining the effect of
online consumer review factors on ofine
hotel popularity. Our research question is there-
fore: what is the relative effect of online con-
sumer review factors on ofine hotel
popularity? Our study is based on a unique
dataset of 56,284 individual TripAdvisor con-
sumer reviews of 1067 hotels across ve major-
destination cities in Texas, United States (US)
(i.e. Austin, Houston, San Antonio, Dallas, and
Fort Worth). The uniqueness of our dataset is
two-fold. First, these novel data not only
enables us to investigate the direct effect of
consumer review factors within one self-con-
tained platform but also prevent the inuence
of confounding factors from separate platforms
which have been used in most previous research
(Stephen & Galak, 2012). Second, previous
media research focuses mostly on the aggre-
gated market level effect of consumer review
factors, overlooking the critical phenomena
occurring at the dyadic individual hotel level.
Our dataset allows us to look into the inuence
of consumer review factors at a disaggregated
individual hotel level. Using our dataset, we
exploit a blend of econometric models (xed
effects and random effects) to estimate the ef-
cacy of online consumer review factors such as
quantity, quality, and consistency in ofine
hotel popularity (i.e. hotel occupancy), control-
ling for the variation of differences across hotels
and within time. This study sheds some light on
the vague online review determinants of ofine
hotel popularity and advocates an integrated
3
social media marketing perspective which
emphasizes a coordinated use of online consu-
mer review factors to drive the ofine business
performance and to maximize the social media
marketing success.
In the following, we rst introduce related
literature and develop our hypotheses. This is
followed by the description of our methodology.
We then outline models to estimate, the results
are presented, and research implications are dis-
cussed. We conclude by providing recommen-
dations to hotel marketers and pointing out
limitations of this study.
2. LITERATURE AND HYPOTHESES
The recent surge in online user-generated
reviews has evidently had a signicant inuence
on consumer purchasing behavior. It has
become common practice to include these
user-generated reviews alongside product
descriptions as a means for consumers to gather
more information, form opinions, and make
purchasing decisions, as well as for companies
to collect consumer data and make recommen-
dations. Due to the high volume of user-gener-
ated reviews that are posted, it becomes
increasingly difcult for consumers to sift
through the reviews and identify a hotel of
high quality. For that reason, most leading
online review websites such as Yelp, Amazon,
and TripAdvisor tend to aggregate online con-
sumer review information into four key factors,
namely review quality, review quantity, review
consistency, and review recency, and highlight
these factors at the top of each hotel review
page (Figure 1). By referring to this aggregated
information, consumers can easily access
recommended products from a vast amount of
information available (Rajan, 2014).
2.1 Review Quality
Most social media platforms allow consu-
mers to provide reviews and ratings to evalu-
ate their experience with a product (Chu,
2009). According to Jeong and Jeon (2008),
ratings can be closely assimilated to an
 4 JOURNAL OF TRAVEL & TOURISM MARKETING
FIGURE 1. An Example of Online Consumer Review Factors on TripAdvisor
Review quantity
Downloaded by [Archives & Bibliothques de l'ULB] at 21:21 11 August 2015
Review consistency
Review quality
overall service evaluation. In that sense, the
customer uses a single scale to express his or
her judgment of the product experience.
Review quality serves as a simplied heuristic
to instantly signal a hotels level of quality as
agreed by individual consumers. Hence, the
review quality can be assimilated and used
as a proxy of quality as perceived by previous
customers (Chen & Xie, 2008; Jiang & Chen,
2007).
According to the rational action theory
(Becker, 1976), a rational individual tends to
want good rather than bad. This assumption
is widely used in social and economic behavior
contexts. Rational action theory holds that con-
sumers, when making their purchase decisions,
tend to choose a higher quality product rather
Review recency
than a lower quality one. Generally, if we
assume that consumers are rational, it is very
likely that they would purchase a product with a
higher review quality indicated by other consu-
mers than one with a lower review quality
(Chen, Wu, & Yoon, 2004). There is therefore
a strong reason to believe that the higher review
quality indicated by previous consumers may
signal a desirable product quality and guest
satisfaction which persuades subsequent consu-
mers to purchase the item (Liu, 2006). The
superior review quality simply increases consu-
mers condence level when purchasing the
product (Ratnasingham, 1998) because the posi-
tive WOM from previous reviewers mitigates
the potential risks and uncertainty associated
with the purchase and ensures an informed
 Xie, Chen, and Wu
decision, just like the decision previous
reviewers have made (Xie et al., 2014).
Products with a higher review quality are likely
to be purchased by many subsequent reviewers
who have seen the previous consumer reviews,
and generally these products become more pop-
ular among consumers than those with a lower
review quality. We therefore propose the fol-
lowing hypothesis (H):
H1: Review quality of online consumer
reviews has a positive effect on ofine
hotel popularity.
Downloaded by [Archives & Bibliothques de l'ULB] at 21:21 11 August 2015
2.2 Review Consistency
According to the rational action theory
(Becker, 1976), rational consumers are risk-
averse. When making a purchase, consumers
are reluctant to accept a product of uncertain
quality rather than another product of a more
certain (possibly even lower) quality (Zhu &
Zhang, 2010). Faced with a wide range of
review quality, it is impossible for subsequent
consumers to determine the true quality of a
product, especially if there is no textual review
to complement the review quality. Thus, incon-
sistent opinions should have a negative impact
on demand (Sun, 2012). As a statistical concept,
variance of reviews is a natural measure to
capture the heterogeneity or inconsistency in
consumer opinions. This concept of review con-
sistency is generally associated with uncertainty
about product quality (De Maeyer, 2012). A
wider range of review quality (i.e. higher varia-
tion in review ratings) may indicate that pre-
vious consumers who write reviews have
inconsistent opinions about the product quality.
As Kirby (2000, p. E1) explains, one may not
trust just one non-expert . . . but if 9 out of 10
non-experts agree, it is probably worth buying.
Zhu and Zhang (2010) point out that high var-
iation carries great risk, while low variation
offers certainty. Ghose et al. (2012) investigate
the impact of consumer reviews on a variety of
5
products and state that less variability in the
review quality could reduce risk and uncertainty
associated with the hotel quality perceived by
readers and thus result in higher product perfor-
mance. Accordingly, we propose the following
hypothesis:
H2: Review consistency of online consumer
reviews has a negative effect on ofine
hotel popularity.
2.3 Review Quantity
Consumer reviews at the very least convey
the existence of the brand and thereby add it to
the choice set of the consumer (Clark,
Doraszelski, & Draganska, 2009). According
to the theory of social contagion (Sutherland,
1995), peer consumers are likely to follow the
opinions of previous reviewers as a result of
pressure to conform to a peer group (Zhang,
Pan, Smith, & Li, 2009). As consumers post
their recommendations and opinions about a
product or service on social networking sites,
they attempt to persuade their peer consumers
to see their point of view and, thus, inuence
their decision-making (Chu & Kim, 2011).
Thus, consumer reviews can lead consumers
to rationalize their purchasing decisions by
reinforcing the idea that many other consumers
also bought or did not buy the same product or
services. Previous studies have lent support to
the presence of social contagion in online con-
sumer reviews. For example, Moe and Trusov
(2011) demonstrate that subsequent consumer
behavior is signicantly affected by reviews
from previous consumers. In an experimental
setting, Schlosser (2005) nds that consumers
who have decided to post their opinions tend to
negatively adjust their product evaluations
after reading negative reviews from previous
reviewers. This indicates that consumer post-
ing behavior is affected by the inuence of
previously posted reviews. We therefore pro-
pose the following hypothesis:
 6 JOURNAL OF TRAVEL & TOURISM MARKETING

H3: Review quantity of online consumer 3. METHODOLOGY

reviews has a positive effect on ofine
hotel popularity. 3.1 Data and Measures
Our research context is TripAdvisor, a pro-
minent consumer review website on which the
2.4 Review Recency impact of online dissemination of opinions and
reviews is rapid and far-reaching (Litvin,
A plethora of consumer review data is gener-
Goldsmith, & Pan, 2008). TripAdvisor offers
ated, processed, and presented on the Internet on a
more than 150 million reviews and opinions
daily basis. Almost all social media platforms list
covering more than 810,000 hotels, bed-and-
consumer reviews on their webpages according to
breakfasts, and specialty lodging in the world
the recency of reviews, which refers to the age of
(TripAdvisor, 2015). It acts as a forum for
Downloaded by [Archives & Bibliothques de l'ULB] at 21:21 11 August 2015

the review (TripAdvisor, 2015). According to the

everyday consumers to air their personal opi-
serial position effect (Coleman, 2006), consumers
nions regarding service providers quality whilst
tent to recall or mainly take into account the last
also enabling them to read the recommendations
item in a list or sequence, rather than earlier items.
of fellow consumers (Jeacle & Carter, 2011). In
Particularly, the order in which consumer reviews
the meantime, hotel managers can regularly post
appear (and presumably the recentness) have been
their product and service information (Zhang
found to effect consumers purchase decisions and
et al., 2009) and also proactively induce their
perceived usefulness (Hu & Li, 2011). Usually,
consumers to spread the word about their pro-
recent reviews are listed before older reviews.
ducts online (Godes & Mayzlin, 2009).
Displaying upfront the data that matter to consumer
Therefore, TripAdvisor provides a good inter-
decision-making is relevant because consumers
active setting where we can observe consumers
pay more attention to recent, fresh information
information search behaviors and hotel man-
than older information. According to Murphy,
agers manipulation and feedback mechanism
Hofacker, and Mizerski (2006), a links location
strategies simultaneously.
on a web page is an important factor inuencing
Our study is based on a unique dataset of
visitors decision to click on a particular link. Using
56,284 hotel reviews for more than 1000 hotels
two eld experiments, they nd that the higher a
located in ve major hotel markets of Texas over
links position on a list of links, the greater the
26 quarters (2005 Quarter 12011 Quarter 2).
probability that visitors will click on that link. A
These niche data enable us to explore hotel
study by Ansari and Mela (2003) also suggests a
popularity in relation to consumer review factors
positive relationship between the serial position of
at individual hotel level over time. Table 1 pre-
a link in an email and recipients clicks on that link.
sents distributions of consumer review records
Similarly, Drze and Zufryden (2004) imply a
across our focal markets. Unlike most previous
positive relationship between a links serial posi-
tion and site visibility. That is, ceteris paribus,
consumers would pay most attention to product
reviews near the top of a review web page and TABLE 1. Distributions of Consumer Reviews
least attention to reviews near the bottom of the Across Hotel Markets (Texas, United States)
web page or email. Thus, considering that online
consumer reviews are typically posted in chrono- Consumer Reviews
Market
logical order, consumers are likely to be most
Reviews % of total Hotel % of total
inuenced by the recently posted online reviews.
We therefore propose the following hypothesis: Austin 9,814 17.43 162 15.18
Dallas 11,722 20.82 164 15.37
Fort Worth 2,896 5.14 89 8.34
H4: Review recency of online consumer Houston 13,158 23.36 345 32.33
reviews has a positive effect on ofine San Antonio 18,716 33.25 307 28.77
hotel popularity. Total 56,284 100 1067 100
 Xie, Chen, and Wu
studies that tend to focus on either large or chain
hotels, our sample includes both large and small,
and independent and chain hotels.
Consumer reviews are auto-parsed from
TripAdvisor review webpages using two crawlers
developed by Ruby.1 Following previous litera-
ture (Duan et al., 2008; Zhu & Zhang, 2010), we
collect individual reviewers hotel ratings
(ReviewQuality) distributed on a scale of 15, 1
representing terrible and 5 representing excel-
lent. Based on the individual reviews collected,
we calculate the standard deviation of review rat-
ings (ReviewConsistency) and count the number
Downloaded by [Archives & Bibliothques de l'ULB] at 21:21 11 August 2015
of consumer reviews received for each hotel
(ReviewQuantity). We also document the date
and time each consumer review is posted in
order to measure the review recency.
In addition, we obtain multi-quarter, archi-
val data of hotel occupancy records from a
research rm well-known for their hospitality
data and research services (Trepp, LLC). The
hotel records contain information on the hotel
occupancy (logOccupancy).2 Besides the focal
variable of hotel occupancy, we collect hotel
characteristics information, including the loga-
rithm of the average daily rate at the property
level (logADR), age of the hotel (HotelAge),
number of guest rooms (HotelSize), hotel
class (HotelClass), number of amenities
(HotelAmenity) and the ratio of the number
of manager responses to the number of con-
sumer reviews (ResponseRatio).
We consider the intersection of consumer
reviews and the hotel occupancy records at a
quarterly level for each individual hotel in our
sample. The quarterly level aggregation of the
consumer review activities allows us to over-
come the sparseness of social media activity
because consumer reviews for hotels tend to
be spaced out and rarely occur on multiple
days in the same quarter, as would be expected
for almost all hotel properties except for very
high-prole ones.
Table 2 presents variable denitions and
summary statistics. Hotels in our sample receive
an average review rating of 3.48 out of 5 at a
standard deviation of 0.99 in a given quarter.
The total number of consumer reviews varies
from 1 to 189, with an average number of 3.67
reviews in a given quarter. The average
7
management response ratio is 0.09, indicating
that about nine hotel managers respond to every
100 consumer reviews in a given quarter. On
average, hotels in our sample are 17 years old
with 189 guest rooms, between mid-market
economy and full service, and with eight inter-
nal amenities.
3.2 Model Specication
Consumer reviews are time series for indivi-
dual hotels in our sample. This panel data struc-
ture makes it necessary to adopt appropriate
econometric models to account for individual
heterogeneity. We use two techniques to analyze
the data, xed effects, and random effects, con-
trolling for unobservable variables across hotels
or change over time but not across hotels (man-
agement strategy, hotel culture, etc.). The result-
ing model is
logOccupancyit Xit Sit Zi i
t it
where the dependent variable, logOccupancyit,
is a measure of popularity of hotel i at quarter t.
Xit is a set of consumer review factors, includ-
ing ReviewQualityit, ReviewConsistencyit,
ReviewQuantityit, and their lagged terms. We
control for other variables, including time-var-
iant social variables Sit (ResponseRatioit) and
hotel characteristics Zi (logADRit, HotelAgeit,
HotelSize i, HotelClassi, and HotelAmenityi).
The hotel and time dummies are represented
by i and t. The error terms that have been
clustered at the hotel level are captured by it.
4. RESULTS AND FINDINGS
We estimate review quality, review consis-
tency, and review quantity in the ofine hotel
popularity model and present the estimation
results in Table 3. By estimating both models
of xed effects and random effects, we examine
the effect of consumer review factors on hotel
popularity while accounting for hotel-specic
characteristics and social variables. Specically,
the xed effects estimation controls for all time-
 Downloaded by [Archives & Bibliothques de l'ULB] at 21:21 11 August 2015

TABLE 2. Description of Variables

Description Mean Standard deviation Median Minimum Maximum

ReviewQuality Average review rating of a hotel: 1 for terrible, 2 for poor, 3 for average, 4 for 3.48 1.19 3.86 1 5
very good, and 5 for excellent in a given quarter
ReviewConsistency Standard deviation of review ratings of a hotel in a given quarter 0.99 0.62 2 0 2.83
ReviewQuantity Number of consumer reviews in a given quarter 3.67 6.62 2 1 189
logADR Logarithm of the ADR of a hotel in a given quarter 4.53 0.01 4.60 2.82 5.97
ResponseRatio Number of management responses compared with number of consumer reviews 0.09 0.26 0 0 1
in a given quarter
HotelClass Dummy variable with the value of 5 for a luxury hotel, 4 for an above average 2.72 1.05 3 0 5
hotel with some outstanding features and a broad range of services, 3 for a
full service hotel, 2 for a mid-market economy hotel, and 1 for a budget
traveler hotel
HotelAmenity Number of internal amenities such as indoor swimming pool, free high-speed 7.90 2.54 8 0 13
Internet, tness center, wheelchair access, and pets allowed
HotelAge Number of years since the opening of a hotel 17.43 12.65 13 1.00 63
HotelSize Number of guest rooms 189.41 184.91 132 5 1,840
JOURNAL OF TRAVEL & TOURISM MARKETING

Notes. ADR: average daily rate.

 Xie, Chen, and Wu 9

TABLE 3. Estimates of Consumer Review Effects on Hotel Popularity

Hotel popularity (logOccupancy)

(1) Fixed effects (2) Random effects

Estimate Robust p-value Estimate Robust p-value

ReviewQualityit 0.011** (0.011) 0.046* (0.079)

ReviewConsistencyit 0.000 (0.584) 0.024 (0.541)
ReviewQuantityit 0.003** (0.033) 0.043** (0.048)
ReviewQualityit-1 0.020*** (0.000) 0.044*** (0.000)
ReviewConsistencyit-1 0.001 (0.222) 0.035 (0.355)
ReviewQuantityit-1 0.002 (0.216) 0.079 (0.311)
ReviewQualityit-2 0.009** 0.025 0.053** (0.020)
Downloaded by [Archives & Bibliothques de l'ULB] at 21:21 11 August 2015

ReviewConsistencyit-2 0.000 (0.829) 0.024 (0.565)

ReviewQuantityit-2 0.000 (0.663) 0.037 (0.563)
logADRit 0.446*** (0.000) 0.188*** (0.000)
ResponseRatioit 0.021 (0.248) 1.376 (0.180)
HotelClassi - - 0.025*** (0.000)
HotelAmenityi - - 0.003 (0.176)
HotelAgeit 0.032*** (0.000) 2.034*** (0.000)
HotelSizei 0.002*** (0.000) 0.078*** (0.000)
Constant 2.941*** (0.000) 3.309*** (0.000)
Hotel xed effects Yes Yes
Time xed effects Yes Yes
Adjusted R-squared 0.256 0.167
Number of year-quarter 26 26
Diagnostic tests
Hausman test for model preference Null hypothesis: Difference in coefcient is not systematic
Chi2 = 3.670; Prob > Chi2 = 0.042
BreuschPagan test Null hypothesis: Presence of homoskedasticity (or constant variance)
Chi2 = 5.860; Prob > Chi2 = 0. 000
Lagram-Multiplier test Null hypothesis: There is no serial correlation.
F = 0.214; Prob > F = 0.660

Note. ADR: average daily rate; *** p < 0.01; ** p < 0.05; * p < 0.1.

invariant differences between the hotels so that
the estimated coefcients of the xed-effects
models cannot be biased because of omitted
time-invariant characteristics. Unlike xed
effects, random effects estimation assumes that
differences across hotels may have some inu-
ence on hotel popularity and should be mea-
sured. We then run a Hausman test to decide
which is the preferred model for xed effects
and random effects respectively. In addition, we
conduct a few additional diagnostic tests for
robustness check purposes.
Column (1) in Table 3 shows the results of
mean effects estimation using xed effects estima-
tion. The regression estimates that hotel popular-
ity becomes higher with an increase in
ReviewQualityit (0.011, p = 0.011) and
ReviewQuantityit (0,003, p = 0.033), supporting
H1 and H3. In other words, the popularity of
hotels becomes higher the higher the number of
positive ratings (to inform consumers of the hotel
quality) and the higher the number of consumer
reviews from reviewers (to create online buzz).
However, the effect of ReviewConsistency on
hotel popularity (0.000, p = 0.584) is not signi-
cant, which means consistency of reviewer opi-
nions would not signicantly inuence hotel
popularity. It is thus likely that quality and quan-
tity of consumer reviews become primary consu-
mer-generated information to determine the hotel
occupancy rate, suppressing other information
sources such as review consistency. Interestingly,
the effect of review quality carries over to at least
a couple of quarters (0.020, p < 0.001 for
ReviewQualityit-1 and 0.009, p = 0.025 for
ReviewQualityit-2), whereas the effect of review
 10 JOURNAL OF TRAVEL & TOURISM MARKETING
quantity decays quickly in the next quarter (0.002,
p = 0.216 for ReviewQuantityit-1 and 0.000,
p = 0.663 for ReviewQuantityit-2).
Column (2) in Table 3 presents the random
effects of our hotel popularity model. The
results of review factor estimations of random
effects in Column (2) are also qualitatively
similar to those in Column (1). Hence, our
results in Table 3 are quite robust with differ-
ent estimation methods. Although both results
of the xed effects estimation in Column (1)
and the random effects estimations in Column
(2) are qualitatively similar, our proposed
Downloaded by [Archives & Bibliothques de l'ULB] at 21:21 11 August 2015
model using xed effects ts the data better
than random effects based on the Hausman test
(Prob > Chi2 = 3.670, Prob > Chi2 = 0.042)
(Greene, 2003).
In order to check the robustness of our xed
effects estimation results, we conduct several
diagnostic tests. First, we use a BreuschPagan
test to check for heteroskedasticity. As shown in
Table 3, the BreuschPagan test result
(Chi2 = 5.860, Prob > Chi2 = 0. 000) does not
support the null hypothesis, suggesting there is
preferred heteroskedasticity. This nding indi-
cates that our use of xed-effects estimation is
warranted. Second, we use the Lagram-
Multiplier test to check for the presence of serial
correlation of the errors. Serial correlation
causes the standard errors of the estimated
regression coefcients to be smaller than they
actually are and inates the estimation R-
square. Although it does appear to arise natu-
rally in time-series data, one would want to look
carefully at the data and the model specication
before assuming that it is present (Stock &
Watson, 2007). The result of the Lagram-
Multiplier test fails to reject the null hypothesis
(F = 0.214; Prob > F = 0.660), the conclusion
being that the data does not have rst-order
autocorrelation. Our diagnostic tests show that
results in Table 3 are quite robust.
5. CONCLUSION AND
IMPLICATIONS
Consumer reviews are at the forefront of e-
commerce in the hospitality industry. In this
paper the effect of online consumer review
factors on ofine hotel popularity was examined.
An emerging research stream has started to look
at social media platforms featuring user-gener-
ated content and consumer WOM. However, this
stream of research mainly focuses on one-off
purchase items or short life cycle information
goods (Chevalier & Mayzlin, 2006; Dellarocas
et al., 2010; Duan et al., 2008; Liu, 2006),
neglecting experience products with a stable pro-
duct life cycle, such as hotels. Our ndings
address industry concerns regarding the undi-
sclosed mechanism of online consumer reviews
by shedding light on specic online consumer
review factors that would contribute to ofine
hotel popularity. We explore multiple aspects of
consumer review information to examine their
effects on ofine hotel popularity. By integrating
the multifaceted data we extracted from consu-
mer reviews in an empirical setting, this study
advances our understanding of the connection
between the multidimensional facets of review
content and business performance-based ofine
hotel popularity.
Our analysis suggests that review quality and
quantity can signicantly elevate the ofine
popularity of hotels, supporting H1 and H3. In
particular, the inuence of the review quality
can last for at least two quarters while the
effects of other online consumer review factors
such as review quantity and consistency taper
off quickly within about one quarter. This nd-
ing partially supports H4. Additionally, hotels
frequently receive very diverse opinions from
consumers about the quality of service and pro-
ducts. Consistency of opinions, however, seems
not be an inuencer of hotel popularity. This
nding does not lend support to H2.
These ndings provide important implica-
tions for practicing managers and research in
this eld. Specically, we demonstrated that an
increase in consumers review quality regarding
their hotels increase ofine hotel popularity.
This relationship reinforces the importance of
product and service quality of hotels. Despite
the popularity of social media in the hotel
industry, the key to hotel popularity remains
outstanding service quality. Therefore, hotel
businesses should try to focus on continuous
improvement of service quality and encourage
positive reviews from guests immediately after
 Xie, Chen, and Wu
they check out or even during their stay. In
addition, hotel managers can provide incentives
to encourage customers to write reviews and
particularly reward frequent reviewers.
Developing a customer review system that con-
nects to the property management system such
as MICROS OPERA, and targeting customers
accordingly at the time they check in and out at
an establishment might be a trend in the future.
Furthermore, review quantity drives ofine
hotel popularity. A direct implication of this
nding is that a hotel can take advantage of
network effects in terms of online buzz. Hotels
Downloaded by [Archives & Bibliothques de l'ULB] at 21:21 11 August 2015
should correctly identify their need of social
media given that the social media strategy is
most effective in producing an increase in
brand awareness through the sheer number of
consumer reviews. Therefore, a hotel business
successful social media campaign can expand
its consumer base by strategically encouraging
more consumer reviews to be written speci-
cally for that hotel. Hotel businesses can then
target this customer group and solicit hotel
reviews from them in order to create more
social buzz through subsequent consumers
who would see the previous reviews and ulti-
mately drive hotel popularity.
Finally, the recency of online reviews also
matters. In this study it was found that, on
average, the quality of reviews in a recent per-
iod (i.e. extending over two quarters) inuences
ofine hotel popularity. Vast amounts of consu-
mer review data are generated, processed, and
presented on social media platforms on a daily
basis. Collecting timely data that matter to con-
sumer decision-making is relevant for hotel
businesses. For example, besides asking for
consumer reviews when guests check out or
during their stay, hotel businesses can use an
automated guest response and communication
system to send out an email to text message
guests asking for consumer reviews. This
email or text message should thank guests for
visiting and remind them that if they enjoyed
their stay it would be extremely valuable if they
clicked the link provided to write a review of
the hotel.
Overall, our research reveals the importance
of unobtrusive social media marketing. Based
on our ndings, social media platforms such as
11
TripAdvisor can provide more customized mar-
keting plans to hotel businesses planning to
increase their popularity among consumers.
For example, instead of distributing resources
to all review functions, social media websites
such as TripAdvisor can work with each hotel
property to personalize the hotel review page by
highlighting primary review factors that may
inuence the hotel popularity.
6. LIMITATIONS AND FUTURE
STUDIES
This study is not without its limitations.
While we have taken the rst step with regard
to several research directions in learning about
hotel popularity, this study may prompt future
researchers to extend the research. First, we are
condent about the quality of our dataset
because it captured the actual consumer review
behaviors online with a social media platform
for ve major markets in the state of Texas.
However, markets in Texas may not necessarily
represent the US hotel lodging industry.
Scholars are encouraged to collect more repre-
sentative samples to justify the estimated effects
of online consumer review factors. Second, we
have initiated efforts to analyze consumer
review data to inform business decisions. With
the advanced of technology nowadays, real-time
data analytics are imperative in the hospitality
industry. Managers concerned with relative
popularity determinants can utilize our study
and exercise caution when employing social
media strategies. We expect more future
research to emerge that can provide up-to-date
perspectives by integrating actual behavior data
collection and advanced data analytics techni-
ques in order to optimize business strategy in
the hospitality industry.
NOTES
1. Fully automated parsing refers to the approach
used to collect information from a website. We developed
two crawlers using Ruby (1) to download automatically
the web pages of hotel reviews and other hotel information
from TripAdvisor, and (2) to remove the HTML format-
ting from the text and then convert it into an XML le that
 12 JOURNAL OF TRAVEL & TOURISM MARKETING
separated the data into records (the review) and elds (the
data in each review) in an automated fashion using a
precoded computer program on the local machine. We
used the crawlers to retrieve all available user-generated
content information for the designated hotels. For each
hotel, we obtained all of the posted reviews. Each con-
sumer review was analyzed and selected review features
were recorded.
2. In order to account for the nonlinearities and to
smooth skewed distributions (Greene, 2003), we took the
logarithm of the hotel occupancy. Similar variable trans-
formation has also been applied on the average daily rate.
For purposes of brevity, the nonlinearity and skewness of
each variable is not shown but is available upon request.
Downloaded by [Archives & Bibliothques de l'ULB] at 21:21 11 August 2015
REFERENCES
Ansari, A., & Mela, C. F. (2003). E-customization.
Journal of Marketing Research, 40(2), 131145.
doi:10.1509/jmkr.40.2.131.19224
Aria. (2015). Boosting the bottom line: 3 Years with
Denton, TX. Aria Case Study Series. Retrieved March
17, 2015, from http://www.ariaagency.com/work/boost
ing-the-tourism-bottom-line-3-years-of-hotel-occu
pancy-tax-revpar-average-daily-rates-and-average-occu
pancy-in-denton-texas
Becker, G. S. (1976). The economic approach to human
behavior. Chicago, IL: University of Chicago Press.
Chen, P. Y., Wu, S. Y., & Yoon, J. (2004, December
1215). The impact of online recommendations and
consumer feedback on sales. Proceedings of the
International Conference on Information Systems,
ICIS, Washington, DC (pp. 711724).
Chen, Y., & Xie, J. (2008). Online consumer review:
Word-of-mouth as a new element of marketing com-
munication mix. Management Science, 54(3), 477491.
doi:10.1287/mnsc.1070.0810
Chevalier, J. A., & Mayzlin, D. (2006). The effect of word
of mouth on sales: Online book reviews. Journal of
Marketing Research, 43(3), 345354. doi:10.1509/
jmkr.43.3.345
Chu, S. C. (2009). Determinants of consumer engagement
in electronic word-of-mouth in social networking sites
(Doctoral Dissertation). University of Texas, Austin.
Chu, S.-C., & Kim, Y. (2011). Determinants of consumer
engagement in electronic word-of-mouth (eWOM) in
social networking sites. International Journal of
Advertising, 30(1), 4775.
Clark, C. R., Doraszelski, U., & Draganska, M. (2009).
The effect of advertising on brand awareness and per-
ceived quality: An empirical investigation using panel
data. Quantitative Marketing and Economics, 7, 207
236. doi:10.1007/s11129-009-9066-z
Clemons, E. K., Gao, G., & Hitt, L. M. (2006). When
online reviews meet hyper-differentiation: A study of
the craft beer industry. Journal of Management
Information Systems, 23(2), 149171. doi:10.2753/
MIS0742-1222230207
Coleman, A. (2006). Dictionary of psychology (2nd ed., p.
688). Oxford: Oxford University Press.
Compete, Inc. (2006). Embracing consumer buzz creates
measurement challenges for marketers. Retrieved April
26, 2015, from http://class.classmatandread.net/am1/
Buzz.pdf
Cunningham, P., Smyth, B., Wu, G., & Greene, D. (2010).
Does TripAdvisor makes hotels better? University
College Dublin School of Computer Science and
Informatics Report. Retrieved January 1, 2013, from
http://www.csi.ucd.ie/content/does-tripadvisor-makes-
hotels-better
De Maeyer, P. (2012). Impact of online consumer reviews
on sales and price strategies: A review and directions
for future research. Journal of Product & Brand
Management, 21(2), 132139. doi:10.1108/
10610421211215599
Dellarocas, C., Gao, G., & Narayan, R. (2010). Are con-
sumers more likely to contribute online reviews for hit
or niche products? Journal of Management Information
Systems, 27(2), 127158. doi:10.2753/MIS0742-
1222270204
Dellarocas, C., Zhang, X. M., & Awad, N. F. (2007).
Exploring the value of online product reviews in forecast-
ing sales: The case of motion pictures. Journal of
Interactive Marketing, 21(4), 2345. doi:10.1002/
dir.20087
Drze, X., & Zufryden, F. (2004). Measurement of online
visibility and its impact on Internet trafc. Journal of
Interactive Marketing, 18(1), 2037. doi:10.1002/dir.10072
Duan, W., Gu, B., & Whinston, A. B. (2008). The
dynamics of online word-of-mouth and product sales
An empirical investigation of the movie industry.
Journal of Retailing, 84(2), 233242. doi:10.1016/j.
jretai.2008.04.005
Ghose, A., Ipeirotis, P. G., & Li, B. (2012). Designing rank-
ing systems for hotels on travel search engines by mining
user-generated and crowd-sourced content. Marketing
Science, 31(3), 493520. doi:10.1287/mksc.1110.0700
Godes, D., & Mayzlin, D. (2004). Using online conversations
to study word-of-mouth communication. Marketing
Science, 23(4), 545560. doi:10.1287/mksc.1040.0071
Godes, D., & Mayzlin, D. (2009). Firm-created word-of-
mouth communication: Evidence from a eld test.
Marketing Science, 28(4), 721739. doi:10.1287/
mksc.1080.0444
Greene, W. H. (2003). Econometric analysis (5th ed.).
Upper Saddle River, NJ: Prentice Hall.
Gretzel, U., & Yoo, K. H. (2008). Use and impact of
online travel reviews. In D. P. OConnor, D. W.
Hpken, & D. U. Gretzel (Eds.), Information and com-
munication technologies in tourism (pp. 3546).
Vienna: Springer.
 Xie, Chen, and Wu
Hu, Y., & Li, X. (2011). Context-dependent product eva-
luations: An empirical analysis of Internet book
reviews. Journal of Interactive Marketing, 25(3),
123133. doi:10.1016/j.intmar.2010.10.001
Jeacle, I., & Carter, C. (2011). In TripAdvisor we trust:
Rankings, calculative regimes and abstract systems.
Accounting, Organizations and Society, 36(45),
293309. doi:10.1016/j.aos.2011.04.002
Jeong, M., & Jeon, M. M. (2008). Customer reviews of
hotel experiences through Consumer Generated Media
(CGM). Journal of Hospitality Marketing &
Management, 17(1), 121138. doi:10.1080/
10507050801978265
Jiang, B. J., & Chen, P. Y. (2007). An economic analysis of
Downloaded by [Archives & Bibliothques de l'ULB] at 21:21 11 August 2015
online product reviews and ratings (Working Paper).
Pittsburgh, PA: Tepper School of Business, Carnegie
Mellon University.
Kirby, C. (2000, January). Everyones a critic: Web sites
hope online reviews of products lead to online buying.
San Francisco Chronicle, 22, E1.
Lee, Y.-J., & Tan, Y. (2013). Effects of different types of
free trials and ratings in sampling of consumer soft-
ware: An empirical study. Journal of Management
Information Systems, 30(3), 213246. doi:10.2753/
MIS0742-1222300308
Lewis, D., & Bridger, D. (2001). The soul of the new
consumer: Authenticity What we buy and why in
the new economy. Clerkenwell: Nicholas Brealey
Publishing.
Li, X., & Hitt, L. (2008). Self-selection and information
role of online product reviews. Information Systems
Research, 19(4), 456474. doi:10.1287/isre.1070.0154
Litvin, S. W., Goldsmith, R. E., & Pan, B. (2008).
Electronic word-of-mouth in hospitality and tourism
management. Tourism Management, 29(3), 458468.
doi:10.1016/j.tourman.2007.05.011
Liu, Y. (2006). Word of mouth for movies: Its dynamics
and impact on box ofce revenue. Journal of
Marketing, 70(3), 7489. doi:10.1509/jmkg.70.3.74
Luca, M. (2011). Reviews, reputation, and revenue: The
case of Yelp.com (Working Paper No. 12-016).
Cambridge, MA: Harvard Business School.
Moe, W., & Trusov, M. (2011). The value of social
dynamics in online product ratings forums. Journal of
Marketing Research, 48(3), 444456. doi:10.1509/
jmkr.48.3.444
Moe, W. W., & Fader, P. S. (2001). Modeling hedonic
portfolio products: A joint segmentation analysis of
music compact disc sales. Journal of Marketing
Research, 38(3), 376385. doi:10.1509/
jmkr.38.3.376.18866
Murphy, J., Hofacker, C., & Mizerski, R. (2006).
Primacy and recency effects on clicking behavior.
Journal of Computer-Mediated Communication, 11
(2), 522535. Article 7. doi:10.1111/jcmc.2006.11.
issue-2
13
Nelson, P. (1970). Information and consumer behavior.
Journal of Political Economy, 78(2), 311329.
Pine, J. B., & Gilmore, J. H. (1998). Welcome to the experi-
ence economy. Harvard Business Review, 76(4), 97106.
Rajan, R. (2014). How to be number one on TripAdvisor.
RethinkHotels. Retrieved July 1, 2014, from http://
www.rethinkhotels.com/how-to-be-number-one-on-tri
padvisor/#comments
Ratnasingham, P. (1998). The importance of trust in elec-
tronic commerce. Internet Research: Electronic
Networking Applications and Policy, 8(4), 313321.
doi:10.1108/10662249810231050
Sawhney, M. S., & Eliashberg, J. (1996). A parsimonious
model for forecasting gross box-ofce revenues of
motion pictures. Marketing Science, 15(2), 113131.
doi:10.1287/mksc.15.2.113
Schlosser, A. (2005). Posting versus lurking:
Communicating in a multiple audience context.
Journal of Consumer Research, 32(2), 260265.
doi:10.1086/jcr.2005.32.issue-2
Stephen, A. T., & Galak, J. (2012). The effects of tradi-
tional and social earned media on sales: A study of a
microlending marketplace. Journal of Marketing
Research, 49(5), 624639. doi:10.1509/jmr.09.0401
Stock, M., & Watson, J. (2007). Introduction to econo-
metrics (2nd ed.). Addison-Wesley Series in
Economics. Addison-Wesley.
Sun, M. (2012). How does the variance of product ratings
matter? Management Science, 58(4), 696707.
doi:10.1287/mnsc.1110.1458
Sutherland, S. (1995). Macmillan dictionary of psychol-
ogy. London: Macmillan Press.
TripAdvisor. (2015). TripAdvisor for business. Retrieved
August 2, 2015, from http://www.tripadvisor.com/
Owners-t2
Xie, K. L., Zhang, Z., & Zhang, Z. (2014). The business
value of online consumer reviews and management
response to hotel performance. International Journal
of Hospitality Management, 43, 112. doi:10.1016/j.
ijhm.2014.07.007
Zhang, L., Pan, B., Smith, W. W., & Li, X. (2009). An
exploratory study of travelers use of online reviews
and recommendations: A qualitative approach.
Information Technology & Tourism, 11(2), 157167.
doi:10.3727/109830509789994775
Zhu, F., & Zhang, X. (2010). Impact of online consumer
reviews on sales: The moderating role of product and
consumer characteristics. Journal of Marketing, 74(2),
133148. doi:10.1509/jmkg.74.2.133
SUBMITTED: August 29, 2014
FINAL REVISION SUBMITTED:
March 17, 2015
ACCEPTED: May 8, 2015
REFEREED ANONYMOUSLY