Investigating the impact of online word-of-mouth on hotel sales with panel data

With the rapid growth of online booking channel in hospitality industry, the impact of online word-of-mouth on hotel sales has become a popular topic among researchers and practitioners. Prior research mainly focuses on experience goods such as books and movies, and the results are inconsistent. To bridge the gap, we conduct an empirical study to testify how the average and variance of customer review impact hotel sales and further identify the moderating effect of hotel star ratings on this process. We collect panel data from a major travel service website in China, Elong.com, and reveal that both average rating of customer review and its variance have a positive impact on hotel sales. Besides, the average rating of customer review is more important for hotels with higher star ratings.