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hotels responded to airbnb's arrival by ‘posting fake positive ratings,’ study says
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customer reviews have proven enormously important in influencing online purchases. reuters/dado ruvic
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the emergence of airbnb didn’t just cause high-end hotels to lower their prices, it also prompted them to falsely inflate their own reviews.
a study published in mis quarterly found the hospitality industry took a hands-on approach to deal with new competition provided by the short-term vacation rental company when it entered the market in 2008. “we know hotels adapted to the competition with airbnb by lowering prices, but we wanted to know if there was something else hotels were doing,” said cheng nie, assistant professor of information systems and business analytics at iowa state university.
customer reviews have proven enormously important in influencing online purchases, with research showing they hold more sway over potential clients than promotional campaigns. before airbnb became a major player in the industry, previous studies estimated that between 15 and 30 per cent of online reviews were fabricated, with manipulation found to be highest in the most competitive markets. in addition to using fake reviews to boost their prospects, hotels also use them to drag down the competition.
an analysis of 2,188 texas hotels found that in the eight years following the launch of airbnb, high-end hotels continued to inflate their own reviews but stopped bad-mouthing other hotels with similar price points. as negative reviews dropped off, overall hotel ratings began to rise through a process researchers dubbed “co-opetition.”
interestingly, the emergence of airbnb did not have an effect on the tendency of low-end hotels to post fake reviews, likely because these abodes have a smaller clientele not easily swayed by online feedback about the decision they’re about to make.
“a lot of people who stay at low-end hotels are less likely to pay attention to reviews compared to people trying to decide if a $500 resort is worth their money,” nie said.
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customers who are willing to pay high-end prices, however, usually do so for the experience and have higher expectations. they’re more likely to take an in-depth look at a listing and filter out places with red flags, a tendency hotel managers have come to anticipate.
“we have shown the evidence that if there are more airbnb listings available around high-end hotels, those hotels tend to self-promote more by posting fake positive ratings. consumers need to be careful because the reviews, especially on tripadvisor, may be inflated and not be truly representative of the quality,” nie said.
as part of their research, the team divided hotels into low- and high-end establishments and used tax records to determine the periods in which they were in operation.
“we were trying to get the most accurate picture of who was competing with who,” nie said.
to determine if review manipulation was taking place, the team compared hotel ratings on tripadvisor, where anyone can post for free, to expedia, where only those who have made a transaction on the site can leave a review. according to researchers, any large difference between review ratings across the two sites “offers an indication of the level of review manipulation.”
the team acknowledged that it was still possible to pay to create fake reviews on expedia, but it was more likely to occur on tripadvisor and that customers should take any online reviews with a large grain of salt.
dave yasvinski is a writer with healthing.ca
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