Abstract
This paper investigates how managing online reviews affects hotel performance. An international hotel chain provided the hotel performance data and the online review data. A leading social media firm for the hospitality industry collected the online review data, which the hotel company purchased. The results indicate that overall ratings are the most salient predictor of hotel performance, followed by response to negative comments. The better the overall ratings and the higher the response rate to negative comments, the higher the hotel performance. Therefore, online reviews in social media, specifically overall rating and response to negative comments, should be managed as a critical part of hotel marketing.
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