Abstract
The increasing use of web 2.0 applications has generated numerous online user reviews. Prior studies have revealed the influence of user-generated reviews on the sales of products such as CDs, books, and movies. However, the influence of online user-generated reviews in the tourism industry is still largely unknown both to tourism researchers and practitioners. To bridge this knowledge gap in tourism management, we conducted an empirical study to identify the impact of online user-generated reviews on business performance using data extracted from a major online travel agency in China. The empirical findings show that traveler reviews have a significant impact on online sales, with a 10 percent increase in traveler review ratings boosting online bookings by more than five percent. Our results highlight the importance of online user-generated reviews to business performance in tourism.
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