A First Approach to Measuring the Impact of Changes in Online Reviews on Hotel Room Prices

Third party experiences are one of the main deciding factors to pick a hotel. With the growth of the Internet and online reviewing sites word-of-mouth has been extended to electronic word-of-mouth. The effect of online customer ratings on hotel performance has not been studied extensively. Hedonic prices allow estimating the value of attributes that form a product, when only the price of the product as a whole is known. If hotel rating is considered a hotel’s attribute hedonic functions may offer insight on the implicit price. A review of the literature shows that such an effect exists, however, the changes of these variables and the impact with each other in time has not been studied. This research note proposes a set of experiments to carry out such research