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Can you trust hotel reviews?

August 17, 2012 | Hotel Marketing

In a Web-enabled world, it should be harder for careless or unscrupulous businesses to exploit consumers. Yet recent studies suggest that online reviewing is hardly a perfect consumer defense system. Because it’s essentially free to post a review, it’s all too easy to dash off thoughtless praise or criticism, suggests a new study.

Just how prevalent are fake reviews? A trio of business school professors, Yale’s Judith Chevalier, Yaniv Dover of Dartmouth, and USC’s Dina Mayzlin, have taken a clever approach to inferring an answer by comparing the reviews on two travel sites, TripAdvisor and Expedia. In order to post an Expedia review, a traveler needs to have made her hotel booking through the site. Hence, a hotel looking to inflate its rating or malign a competitor would have to incur the cost of paying itself through the site, accumulating transaction fees and tax liabilities in the process. On TripAdvisor, all you need to post fake reviews are a few phony login names and email addresses.

Differences in the overall ratings on TripAdvisor versus Expedia could simply be the result of a more sympathetic community of reviewers. (In practice, TripAdvisor’s ratings are actually lower on average.) So Mayzlin and her co-authors focus on the places where the gaps between TripAdvisor and Expedia reviews are widest. In their analysis, they looked at hotels that probably appear identical to the average traveler but have different underlying ownership or management.

There are, for example, companies that own scores of franchises from hotel chains like Marriott and Hilton. Other hotels operate under these same nameplates but are independently owned. Similarly, many hotels are run on behalf of their owners by large management companies, while others are owner-managed. The average traveler is unlikely to know the difference between a Fairfield Inn owned by, say, the Pillar Hotel Group and one owned and operated by Ray Fisman. The study’s authors argue that the small owners and independents have less to lose by trying to goose their online ratings (or torpedo the ratings of their neighbors), reasoning that larger companies would be more vulnerable to punishment, censure, and loss of business if their shenanigans were uncovered.

Get the full story at Slate

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