An examination of online ratings on hotel performance indicators: An analysis of the Boston hotel market
This research study is designed to examine the impact that a posted online review rating has on the financial performance of a hotel room in the lodging industry. The popularity ratings of hotels in the Boston, Massachusetts market, as posted on the popular online travel review website TripAdvisor, will be examined against the hotel performance metrics of average daily rate (ADR) occupancy, and Revenue per Available Room (RevPar) This study examines the literature to better understand the previous research behind the impact that word of mouth communication, both in traditional and electronic forms, has on customer satisfaction. The emergence of social technologies has created an environment in which businesses can be rated and reviewed in an open market for potential future customers to read, and the development of user generated content has become a more trusted and credible source of product and service information. The purpose of this study was to determine the influence of these online ratings on hotel performance, specifically that of TripAdvisor rating attributes on the financial performance of a hotel. The study found that the various attributes had varying levels of significant impact on Average Daily Rate (ADR) Occupancy, and Revenue per Available Room (RevPar) Based on the natures of the lodging properties in Boston, Value was found to be statistically significant across all categories analyzed. Ultimately, the contribution of this research is both academic and practical, as this study will be among the first to examine and test the various TripAdvisor rating attributes on each hotel financial performance metric. In addition, this study will expand upon the current body of knowledge in the areas of user generated content, online reviews, ratings of TripAdvisor, and electronic word of mouth (eWOM)