Influence of Online Reviews on Potential Customers in the Tourism Industry

This paper evaluates the influence of online reviews on potential customers in the tourism industry, especially in the case of booking hotels. It further evaluates how the reviews and recommendation shapes the perception of the potential customers.

Running head: CONSUMER BEHAVIOUR
Consumer Behaviour
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1CONSUMER BEHAVIOUR
Introduction
There are various options that one can avail in the tourism industry. The tourism industry
is the assimilation of industries such the leisure industry, hospitality industry and the food and
beverages industry (Krizaj, Brodnik and Bukovec 2014). The industry is highly competitive and
companies in the industry are always competing in order to gain a competitive advantage over
each other (Kangogo, Musiega and Manyasi 2013). The reviews that the customers leave
determine the effectiveness of the companies in ensuring future traffic in their respective
companies. The aim of the paper is to critically evaluate the influence of the online reviews on
potential customers in the tourism industry, especially in the case of booking hotels. The reviews
or recommendations that are adjudged by potential customers are perceived to be posted by past
customers and thus to some extent it is perceived that their comments will reflect about the actual
facts about the company. The paper will further evaluate how the reviews and recommendation
shapes the perception of the potential customers.
Discussion
The advent of the modern generation, it is evident that people have the ability to ask for
opinions and second opinions from past users of a product or service. It is something that is
highly visible for leisure services. Potential customers to the hospitality industry are seen to be
on the receiving end of second opinions from people before they make any major investment
(Zhou et al. 2014). Any investment can be termed as major depending on the capital investment
associated to the same of the degree to which the latter is crucial for the user of such a product or
service. With technology at disposal 24x7 users of a particular service have the ability to rate the
services that have been subject to. Reviewing is deemed to be a medium that is used by the

2CONSUMER BEHAVIOUR
consumers to provide a feedback to organisation regarding the services that they have provided
to the customer. The prospective customers screen the same to get an idea about the fact whether
the services offered by a particular service provider is better than what is offered by some other
company in the same industry.
Influence of online reviews on decision making
It is a general trend and safety measure that people tend to look at reviews before
choosing a hotel (Viglia, Furlan and Ladron 2014). Not only do the reviews help the consumers
in solving the problem of choice, it also helps them in being satiated with the investment that
they are going to make. Problem of choice refers to a scenario when a particular customer is
faced with a scenario w1ere they have to choose one product or service variant from a list of
numerous options that are available in front of them (Eseryel et al. 2014). This, is a common
problem that is experienced by individuals who are aiming to opt for a service, however are
experiencing dilemma associated with the development of the final decision. Hence, reviews can
help in terms of solving the dilemma of the customers associated with the selection of the most
appropriate hotel of their choice. A review is a form of two way communication that can be used
effectively by companies to identify the feedback of the customers and it also help the customers
get a clear idea about the nature of services offered by a particular hotel (Verhoef, Kannan and
Inman 2015).
The reviews are placed in order to assist the customers, however, it is found that the
customers can get easily influenced by reviews and alter their decisions. One can get easily
influenced by good reviews that are highlighted and not be notified about the unfavourable
nature of services offered by a hotel. The opposite scenario might also occur when one neglects

3CONSUMER BEHAVIOUR
all the good reviews and gets influenced by a bad review that might be an opportunity loss to
them.
Perception of the review readers
Perception refers to how individuals perceive things (Wang et al. 2016). Difference in
perception refers to perceptual difference and it is an aspect that is responsible for the difference
in opinions of people. While reading reviews online, there might be a company that is deemed to
be favourable in terms of the customer. Thus, they might have favourable perceptions regarding
a hotel which has been reviewed unfavourably. On the other hand there might be an
unfavourable impression of hotel in the perception of an individual. Positive reviews regarding
the latter might not be perceived effectively by the consumers. There are different types of
reviews that a review reader or a prospective customer has to analyse while aiming to cater to a
decision. Apart from the existent perception of individuals, there might be perceptions that one
might develop with the help of certain reviews. Even if one might have enjoyed the service
offered by a hotel once they visited it, or even if they had favourable perceptions about a certain
hotel or service provider, a negative review might change that completely. Thus, it can be said
that there can be changes in perception through reviews that have been presented in a third party
website by a third person.
Trust factor in reviews
It has been found that there are consumers who are influenced by few comments or the
top comments. There are also some customers who aim to go deep in the inventory of comments
in order to effectively arrive at a decision regarding selection of a service. It can be interpreted
that the latter have to go through several reviews before arriving at a decision that is
characterised by the development of an inference regarding services offered by a particular hotel.

4CONSUMER BEHAVIOUR
While the latter are seen to be taking considerable amount of time and review counts to arrive at
a decision, the former group is seen to develop trust in the top few reviews way too soon. The
former group are seen to be developing trust through the review way too soon than should be the
case. It can be said that people are starting to trust reviews way too much and the latter is the
reason behind the unfavourable outcomes that are being experienced by some organisation who
are performing effectively. It has been identified that not review alone, also ratings have the
scope to influence the perception of people who are potential customers to a hotel. People tend to
check ratings and develop perceptions regarding the efficiency of a service (Hartog et al. 2013).
Thus, assimilation of factors such as perceptions and reviews determine the effectiveness of
individuals in terms of arriving at decision regarding availing services from one company or the
other.
Conclusion
In conclusion, it can be said the activity of putting forward reviews is gaining popularity
every day. The aim of the utility maximising customers is to carefully decide before they make
an investment. It has been identified in the assignment that there are various factors that
determine the decision that is taken form the part of the consumers. Perceptions are developed,
altered and influenced with the help of the reviews. People in the current can be found to be
increasingly dependent on reviews and ratings in the modern era and it is as a result of the same
reason that greater importance is being paid towards the satisfaction of customers while
companies operate in the highly competitive industry.

5CONSUMER BEHAVIOUR
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