A meta-regression on the effect of online ratings on hotel room rates

Xingbao (Simon) Hu (Department of Tourism and Hospitality Management, Temple University, Philadelphia, Pennsylvania, USA)
Yang Yang (Department of Tourism and Hospitality Management, Temple University, Philadelphia, Pennsylvania, USA)
Sangwon Park (School of Hotel and Tourism Management, The Hong Kong Polytechnic University, Hong Kong)

International Journal of Contemporary Hospitality Management

ISSN: 0959-6119

Publication date: 8 August 2019

Abstract

Purpose

Online ratings (review valence) have been found to exert a strong influence on hotel room prices. This study aims to systematically synthesize research estimating the impact of online ratings on room rates using a meta-analytical method.

Design/methodology/approach

From major academic databases, a total of 163 estimates of the effects of online ratings on room rates were coded from 22 studies across different countries through a systematic review of relevant literature. All estimates were converted into elasticity-type effect sizes, and a hierarchical linear meta-regression was used to investigate factors explaining variations in the effect sizes.

Findings

The median elasticity of online ratings on hotel room rates was estimated to be 0.851. Meta-regression results highlighted four categories of factors moderating the size of this elasticity: data characteristics, research settings, variable measures and publication outlet. Among sub-ratings, results revealed value rating and room rating to exert the largest impact on room rates, whereas staff and cleanliness ratings demonstrated non-significant impacts.

Practical implications

This study provides practical implications on the relative importance of different types of online ratings for online reputation and revenue management.

Originality/value

This study represents the first research effort to understand factors moderating the effects of online ratings on hotel room rates based on a quantitative review of the literature. Moreover, this study provides beneficial insights into the specification of empirical hedonic pricing models and data-collection strategies, such as the selection of price variables and choices of model functional forms.

Keywords

Citation

Hu, X., Yang, Y. and Park, S. (2019), "A meta-regression on the effect of online ratings on hotel room rates", International Journal of Contemporary Hospitality Management, Vol. ahead-of-print No. ahead-of-print. https://doi.org/10.1108/IJCHM-10-2018-0835

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Publisher

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Emerald Publishing Limited

Copyright © 2019, Emerald Publishing Limited

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