The impact of word of mouth when booking a hotel: could a good friend’s opinion outweigh the online majority?

Abstract

Online user generated reviews are transforming business and customer behavior and could have a major impact on sales. The primary aim of this study was to measure the impact of online reviews in comparison with the impact of a good friend’s opinion. The question in focus was: to what extent could a single review made by a good friend compensate the opinion of the online majority? Subjects were randomly allocated to different versions of guest reviews of a fictive hotel: either constituting a positive or a negative online majority. After reading the reviews, respondents were asked about their booking intention. The respondents were also asked to re-evaluate booking intention given the additional information that a good friend has given a recommendation or an advice against booking the hotel. The study design was experimental and based on a survey which included 1319 respondents who were randomized to the different versions of guest reviews. The results showed that the overall valence of reviews is crucial for booking intention, also the latest two reviews were important even though the effect was much smaller. If the overall valence was negative the latest two reviews had no importance, no matter if these were positive or negative. But, if the overall valence was positive, then the booking intention could be diluted if the two latest reviews were negative. Concerning the primary aim of the study, it is concluded that a good friend’s word of mouth could outweigh the online majority. This means that a negative online majority could be outweigh by a good friend’s recommendation and that a positive online majority could be outweigh by a goods friend’s recommendation against booking the hotel.