Analyzing the Impact of Online Reviews on Consumer Behavior

This report examines the significant impact of online reviews on consumer behavior, particularly within the hotel industry. It explores how online reviews, especially those found on platforms like TripAdvisor, shape consumer perceptions and influence booking decisions. The report highlights the importance of a strong online reputation and the influence of factors such as review credibility, the responsiveness of hotels to reviews, and the role of social media in the review process. It discusses how online reviews have become a crucial factor, often more important than brand recognition, in shaping consumer choices. The report also addresses the potential for fake reviews and the need for consumers to critically evaluate online information. The study concludes that online reviews play a major role in the hotel booking process and organizations should focus on responding to negative reviews to reflect concern about customer experiences.

Running head: IMPACT OF ONLINE REVIEWS ON CONSUMER BEHAVIOR
IMPACT OF ONLINE REVIEWS ON CONSUMER BEHAVIOR
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Author Note

1IMPACT OF ONLINE REVIEWS ON CONSUMER BEHAVIOR
Introduction
The application of the Internet in the 21st century can be experienced all across the
world. Every industry is incorporating the Internet for improving their efficiency and market
presence. The tourism and hospitality industry is considered to be earliest in involving
Integrated Marketing Communication for promoting services and products. The core value of
the hotel industry is connectivity, which reflects the need for online presence. The purpose of
the paper is to represent the impact of online reviews on the decision making process of
booking hotels. The paper will discuss the stimulated perception deduced from reading online
reviews for the operation of booking a hotel. The paper tends to argue on the significance of
online reviews on hotel booking decision. The paper will be concluded by presenting the
influence of online reviews on the consumer behaviour of customers in the hotel industry.
Discussion
In the last few years, online reviews have become increasingly popular and significant
in reflecting the consumer preference for a business or brand. Reviews are believed to be
helpful for people in strategizing a buying decision such as decisions regarding “what to eat,
where to travel and where to stay”. Online reviews have become a significant part of today's
business environment. Online reviews may reflect a positive or negative impact on the
consumer decision making process of the customers. In the hotel industry, for sustaining in
the increasingly profitable environment, organizations include a various source of revenue
stream. One of the sources consists of an online reputation and presence (Phillips et al. 2017).
The clear display of a strong online reputation and presence is online reviews. Companies
such as, TripAdvisor is solely based on accumulating or reflecting reviews regarding hotels,
restaurants and tourism business for the convenience of potential customers. Consumers tend
to incline towards the consensus of travellers' experiences. In various research studies, the
projected significance has been reflected in improving online reviews. In accordance with the

2IMPACT OF ONLINE REVIEWS ON CONSUMER BEHAVIOR
theories of Collective Consciousness, consumers of a particular region reflect shared belief
and attitude for responding to a product or service offerings (Zhang and Benyoucef 2016).
Hotels reputation and reach are the primary influencers in shaping consumer buying
decision. Establish brands in the hotel industry usually have a well-established website with
SEO application, which will result in the effective placement on the search results (Hu and
Yang 2019). However, while searching for hotels, potential customers will experience or will
look for online reviews from sites such as Online Travel Agencies and TripAdvisor. Online
reviews are considered significant determining factors amongst potential customer groups.
Social media sites of the hotel businesses are also used as a platform for reviewing service
quality. It is believed that around 97.7 percent of travellers read online reviews from Review
sites and Online Travel Agencies before deciding a hotel or place (Gavilan, Avello and
Martinez-Navarro 2018).
Online reviews have become more important than a brand recognition of a hotel in the
form of ‘stars'. Online reviews of a three-star hotel and a five-star hotel portray the
expectation gap that results in a minimum of 0.74 percent gap in rating. The reason for this
minimum gap is that the reviewers or the customers rate a hotel experience by considering a
comparison between expectation and actual experience. Online reviews reflect significant
influence on the consumer decision of booking a hotel (Casalo et al. 2015). In a survey of
TripAdvisor, around 96 percent of the TripAdvisor users believe that online reviews are
crucial for planning a trip with booking hotels. Approximately 83 percent of the TripAdvisors
refers to the online reviews before making a decision about a hotel place (Gavilan, Avello
and Martinez-Navarro 2018). More than half of the users of online review sites are found
restricting themselves while booking a hotel with zero reviews place (Gavilan, Avello and
Martinez-Navarro 2018). However, along with the significant impact of online reviews on the
hotels, responses to the reviews by the organization or a loyal customer also plays a major
role in remoulding the consumer behaviour about a specific hotel. Around 85 percent of the

3IMPACT OF ONLINE REVIEWS ON CONSUMER BEHAVIOR
online review site owners agree to the fact that the impact of bad reviews can be reshaped in
the presence of a logical and thoughtful response place (Gavilan, Avello and Martinez-
Navarro 2018). Replying or responding to bad reviews reflects the concern of Hotels towards
customer satisfaction and are found more indulge in improving the overall customer
experience. Around four out of every five travellers believes that the hotels that directs their
focus on responding to the bad reviews with an apologetic message or with the reason behind
a particularly bad experience are more concerned about creating positive customer experience
(Kim, Lim and Brymer 2015). Online review is experienced to be twice as significant as the
application of search engine optimization for hotels in the regions of Europe and the United
States, as they have a greater impact on influencing the booking decision. Around 76 percent
of the travellers reflects the willingness to pay extra for highly-rated review scores of a hotel
(Zhang et al. 2019). This fact can be backed by the business model of Trivago. Trivago is an
online service company that offers accommodation booking services based on the preferences
of customers. The process of customization in Trivago is executed by various filters, one of
them being ‘guest experience', which reflects the online customer reviews based on the
expectations and experiences.
The influence of the online reviews or recommendation on the hotel booking decision
shapes consumer perception about a hotel brand. Those perceptions, whether negative or
positive, are known for influencing the buying decisions and consumer attitude of hotel
booking decision. The shaping of perception is dependent on various factors such as the
credibility of online reviewing site and usefulness of the online content of the review site
(Chakraborty 2019). Moreover, the reliability and usefulness of the sites are perceived as
good or bad by consumers based on past experience or word-of-mouth (Lo and Yao 2019).
Online hotel reviews or ratings showcased by an unknown online community of travel
agency will not build a strong negative or positive perception regarding a hotel brand.
However, reviews from a well-known and highly used online site will construct a perception

4IMPACT OF ONLINE REVIEWS ON CONSUMER BEHAVIOR
amongst potential customers. A perception may positively or negatively influence the buying
decision and attitude of customers. The intention of making a hotel booking decision is
shaped by the perception of a hotel. The strength of potential customer’s willingness in
performing particular behaviour reflects the behavioural intention for making a decision. The
intention of purchasing is critical behavioural intension, which relates effectively with actual
purchase behaviour (Zhao et al. 2015). According to the theories of perception in consumer
behaviour, consumers are believed of having different perceived values for similar product
offerings. Hotel industry should focus on building experience on the common preferences of
customers for targeting most customer groups (Zhang and Benyoucef 2016).
Trusting and focussing on online reviews can result in the profitability of hotels as it
projects a picture of customer experience, which is the sole service offering of the business.
However, the online reviews or recommendations cannot be fully trusted due to various
reasons, including fake reviews, individual opinions, and can be from a machine automated
function. There are 9000 plus reviews on Google about the Great Wall of China with an
average rating of 4.2 stars. Many negative reviews are complaining against the average
experience following the hype or for the lack of USB plugins. Amazon customers have not
even spared Shakespeare, as Hamlet has received negative comments with the positives
(Ladhari and Michaud 2015). The perception of potential customers is dependent on the
online review and willingness to purchase, but it is also influenced by various intrinsic factors
such as motivation, preferences and curiosity. Increasing competition in the hotel and tourism
industry is resulting in various competing strategies, including fake reviews. The realization
of the impact of reviews has led in the aspect of creating fake negative and positive reviews
for establishing a valuable position in the market. Nevertheless, online reviews can be a
significant influencer for influencing the hotel booking decision of travellers as they are
actual experiences of people.
Conclusion

5IMPACT OF ONLINE REVIEWS ON CONSUMER BEHAVIOR
Therefore, it can be concluded from the paper that online reviews have a major impact
on hotel booking decision amongst consumers, as it shapes the negative or positive
perception. Organizations should focus on responding to the negative reviews for reflecting
concern about customer experiences. However, completely trusting the reviews can be
negative for the customers as those can be from a competitor, different opinion of customers
and the self-praising act of the hotel.

6IMPACT OF ONLINE REVIEWS ON CONSUMER BEHAVIOR
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