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

Xingbao Hu, Yang Yang, Sangwon Park

Research output: Journal article publicationJournal articleAcademic researchpeer-review

4 Citations (Scopus)

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.

Original languageEnglish
Pages (from-to)4438-4461
Number of pages24
JournalInternational Journal of Contemporary Hospitality Management
Volume31
Issue number12
DOIs
Publication statusPublished - 9 Dec 2019

Keywords

  • Hedonic pricing
  • Hotel pricing
  • Meta-regression
  • Online ratings

ASJC Scopus subject areas

  • Tourism, Leisure and Hospitality Management

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