Towards a Model of Electronic Word-of-Mouth and Its Impact on the Hotel Industry

Scholars and practitioners recognize that spreading word-of-mouth can play an important role in the formation of a hotel's image. However, the relationships among various measures of online customer engagement are relatively unknown. The present study analyzes the relationships and quantifies the impacts of various measures of online engagement including the number of online reviews, overall rating, and relative ranking. The researchers used path analysis on a sample of 178 hotels to study the relationships among relevant variables and build a model to explain the impact of such measures (Figure 2). The results reveal there is a positive direct effect of the number of reviews on a hotel's TripAdvisor rating. A negative direct effect was found between TripAdvisor rating and a hotel's comparative ranking. Finally, the researchers discovered that TripAdvisor rating fully mediates the relationship between the number of reviews and a hotel's comparative ranking. This article concludes with a discussion of both the theoretical and practical implications of such findings.