Daily online review sentiment and hotel performance
International Journal of Contemporary Hospitality Management
ISSN: 0959-6119
Article publication date: 10 May 2023
Issue publication date: 30 January 2024
Abstract
Purpose
This paper aims to investigate the links between daily review sentiment and the hotel performance measures of occupancy rate (OR), average daily rate (ADR) and revenue per available room (RevPAR).
Design/methodology/approach
The authors conducted review sentiment analyses in three moments (−1, −7 and −14 days) before arrival time using a data set of budget hotel performance and online reviews. The aim was to identify the effect of review sentiment in the budget hotel market on the three performance metrics.
Findings
Daily sentiment positively affects ADR and negatively affects OR and RevPAR, but only up to a certain threshold, after which the trend reverses. Prices increase with the level of sentiment, and high prices lead to low OR and RevPAR only when the sentiment scores are low. When they are high, they are associated with low rates, which lead to high OR and RevPAR.
Research limitations/implications
Daily review sentiment can be viewed as a valuable “barometer” indicating a hotel’s daily operational effectiveness. Daily sentiment can thus allow hotel managers to adjust their dynamic pricing strategies more accurately.
Originality/value
This study identifies daily sentiment as an alternative predictor of hotel performance. In addition to the roles of valence and volume in the decision-making process, the authors found that daily review sentiment can be an “in-the-moment” factor with a high impact, encouraging consumers to complete their transactions. This study suggests that aggregated measures such as the total number of reviews and overall ratings of the hotel should not be the sole consideration in reputation management.
Keywords
Citation
Nicolau, J.L., Xiang, Z. and Wang, D. (2024), "Daily online review sentiment and hotel performance", International Journal of Contemporary Hospitality Management, Vol. 36 No. 3, pp. 790-811. https://doi.org/10.1108/IJCHM-05-2022-0594
Publisher
:Emerald Publishing Limited
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