Author:
Mohan Wang
Qi Lu
Robert T. Chi
Wen Shi
Abstract:
Information cues about products influence consumer purchase decisions. Online review can enhance
communication among consumers while affecting consumer perception by increasing awareness and reducing
uncertainty. However, little is known on how Word-of-Mouth (WOM) and information cues interact, especially on
experience goods like hotel rooms. To bridge this gap, we analyze data collected from Expeida.com and use actual
booking numbers to measure sales performance instead of proxy approaches employed by previous researches. This
research investigates the negative effect of WOM on information cues, namely room price and hotel star rating, to
hotel online sales performance. Moreover, we confirm that room price and hotel star rating can have negative and
positive impacts on hotel online booking respectively. If hotels receive positive WOM, their online sales
performance is less likely to be influenced by room price and star rating. However, for hotels receiving negative
WOM, their online sales performance is more likely to be influenced by room price and star rating. These findings
will help researchers and industry practitioners better understand the impact of online WOM in an electronic
commerce context.
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Published Date:
February, 2015