Abstract

Current studies show that online hotel bookings are growing constantly as consumer increasingly uses Internet for the arrangement of their travel. One of the important factor in online hotel booking is the rating and review of past customers. However, the impact of online reviews are not fully explored in online hotel booking setting. For that purpose, we choose two most popular tourist destinations in the world: Paris and London. Our analysis shows that both stars ratings and customer reviews positively affect hotel pricing. Besides, high stars hotels benefit more from higher customer satisfaction. The implication of these results is that hotels should strive to please customer as their future revenue depends on the satisfaction of previous users. This study also guides hotel manager how to make price decisions of hotel room.

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