Face the competition and take proactive actions: How does neighborhood competition affect hotel online effort?

Competition is a double-edged sword that can benefit the society or hurt the related parties, thus its effect deserves attention from academe and industry. Taking advantage of the design of managerial response on travel websites, this study focuses on how competition influences hotels' online efforts suggested by managerial response. By constructing a panel dataset and applying a fixed effect model on 2,215 hotels in five cities in the US, this study draws several findings. First, competition from neighbor hotels positively affects a hotel's online efforts, which is embodied in its managerial response frequency and length. In addition, hotels belonging to the luxury category or have high review ratings are more sensitive to the effects of competition. Finally, the influence of competition on a hotel's online effort decreases as the competition hotels locate at a greater geographic distance.