Should Hotels Respond to Negative Online Reviews

The purpose of this study was to determine whether it is beneficial for service providers, such as hotels and restaurants, to respond to online negative reviews, and (a) whether company reputation is moderated by the number of negative versus positive reviews and (b) whether the underlying issue is attributed to controllable versus uncontrollable factors. To test the hypotheses, a 2 x 2 x 2 quasi-experimental design was utilized. Respondents were asked to imagine that they were planning a trip to New York City, were searching online for a hotel near Times Square, and were provided with several reviews. The results indicate, in general, that company reputation is adversely affected as the number of negative to positive reviews becomes greater. When service failures pertain to controllable factors, management responses can mitigate the adverse effects of negative reviews. When service failures stem from uncontrollable factors, company reputation is not adversely affected, and thus a response from management might not be necessary. A follow-up study examined whether the type of response matters. Findings revealed that an apology with assurance versus an apology with correction action is equally effective.