The impact of digital word-of-mouth on tourism
Author: Joonas Riihijarvi
2 Commentries
The impact of digital word-of-mouth on tourism
Keywords: digital word-of-mouth, online reviews.
Tourism has always been an unorthodox business as it is an industry where products and services are sold to consumers who cannot 'test' the product before the actual purchase. Experience goods have always been dependent on word-of-mouth as people have been making their travel decisions, at least partly, on the basis of what they have heard of the destination, hotel, airline etc. from their friends and family. Word-of-mouth has played an important role on travel behaviour because of the unpredictable nature that tourism has. Tourism is a high risk product/service because most of the time the consumer is unaware of the quality of the purchase as well as the dimensions of possible dangers when on holiday. Because of this consumers try to find out as much information as possible when making the final decision on where to go and where to stay etc. As Papathanassis and Knolle (2011) note, that consumers take advantage of all the information available to them when booking a holiday. In the 21st century this is mostly done on the Internet because of the easy accessibility to information and because the traditional way of booking holidays in an office at a travel agency is being replaced by online bookings.
In experience goods user reviews are very influential however it demands the consumer to rely on unknown people whose expertise of the matter is also unclear (Ye et al. 2011). Another aspect that also makes decisions harder is the fact that nowadays there is an information overload which forces the consumers to be selective of what information they can trust and choose to process (Papathanassis and Knolle 2011). These issues force the consumer to analyze the actual reviews. Papathanassis and Knolle (2011) found out in their study that overly positive reviews make the consumer think that the review lacks criticism as negative ones seem many times more genuine as well as a kind of warning from a fellow consumer. It must be remembered that the actual reviews are only opinions and not facts as the level of enjoyment one receives from a holiday is many times dependent on the consumer's characteristics and on what they look for and not necessarily on the level of quality the product/service has. Therefore the most reliable reviews can perhaps be the ones that have somewhat of a balance between positive and negative reviews with the reviews having some similarities with each other. Interestingly enough Ye et al. (2011) found out in their study that other consumers opinions are perceived as being more up-to-date, enjoyable and reliable than ones made by professional critics. Perhaps this can be contributed to consumers thinking that other consumers look for the same kinds of characteristics from their holidays as critics can be seen as focusing on minor things.
When these issues are looked at from the point of view of actual tourism organizations things look a bit different. For example for hotels, online reviews impact greatly. For lesser known hotels online reviews can be seen as a positive (regardless of the nature of the reviews) as the actual exposure of an online review can elicit purchases however as for brand hotels their familiarity to the consumer can make them 'immune' to reviews as the consumer already has a certain image of the hotel (Vermeulen and Seegers 2009). Ye et al. (2011) found out that online word-of-mouth has significant impact on online room sales while positive reviews can bring in more line sales. According to Vermeulen and Seegers (2009) hundreds of millions of potential hotel visitors consult tourism review sites with 84 % of them being affected by what they read. These numbers clearly show the enormous impact that digital word-of-mouth has on tourism. It should be noted that these numbers were also just about hotels, there is still a lack of study regarding the influence of digital word-of-mouth and its impacts (and the actual numbers) on consumers purchases on airlines, destinations etc.
This study concludes that the impact of digital word-of-mouth is significant on the tourism industry as the influence of the Internet on everyday life and on consumer behaviour is expanding. This study suggests that the dimensions of online services can be expanded as well as further studies in to these issues examined in this paper can be increased. As this conference proves the tourism industry is reaching out more and more in to the Internet.
Reference list
Papathanassis, A. and Knolle, F. (2011) Exploring the adoption and processing of online holiday reviews: A grounded theory approach, Tourism Management, Vol. 32, pp. 215-224.
Vermeulen, I. E. and Seegers, D. (2009) Tried and tested: The impact of online hotel reviews on consumer consideration, Tourism Management, Vol. 30, pp. 123-127.
Ye, Q., Law, R., Gu, B. and Chen, W. (2011) The influence of user-generated content on traveller behaviour: An empirical investigation on the effects of e-word-of-mouth to hotel online bookings, Computers in Human Behavior, Vol. 27, pp. 634-639.
Keywords: digital word-of-mouth, online reviews.
Tourism has always been an unorthodox business as it is an industry where products and services are sold to consumers who cannot 'test' the product before the actual purchase. Experience goods have always been dependent on word-of-mouth as people have been making their travel decisions, at least partly, on the basis of what they have heard of the destination, hotel, airline etc. from their friends and family. Word-of-mouth has played an important role on travel behaviour because of the unpredictable nature that tourism has. Tourism is a high risk product/service because most of the time the consumer is unaware of the quality of the purchase as well as the dimensions of possible dangers when on holiday. Because of this consumers try to find out as much information as possible when making the final decision on where to go and where to stay etc. As Papathanassis and Knolle (2011) note, that consumers take advantage of all the information available to them when booking a holiday. In the 21st century this is mostly done on the Internet because of the easy accessibility to information and because the traditional way of booking holidays in an office at a travel agency is being replaced by online bookings.
In experience goods user reviews are very influential however it demands the consumer to rely on unknown people whose expertise of the matter is also unclear (Ye et al. 2011). Another aspect that also makes decisions harder is the fact that nowadays there is an information overload which forces the consumers to be selective of what information they can trust and choose to process (Papathanassis and Knolle 2011). These issues force the consumer to analyze the actual reviews. Papathanassis and Knolle (2011) found out in their study that overly positive reviews make the consumer think that the review lacks criticism as negative ones seem many times more genuine as well as a kind of warning from a fellow consumer. It must be remembered that the actual reviews are only opinions and not facts as the level of enjoyment one receives from a holiday is many times dependent on the consumer's characteristics and on what they look for and not necessarily on the level of quality the product/service has. Therefore the most reliable reviews can perhaps be the ones that have somewhat of a balance between positive and negative reviews with the reviews having some similarities with each other. Interestingly enough Ye et al. (2011) found out in their study that other consumers opinions are perceived as being more up-to-date, enjoyable and reliable than ones made by professional critics. Perhaps this can be contributed to consumers thinking that other consumers look for the same kinds of characteristics from their holidays as critics can be seen as focusing on minor things.
When these issues are looked at from the point of view of actual tourism organizations things look a bit different. For example for hotels, online reviews impact greatly. For lesser known hotels online reviews can be seen as a positive (regardless of the nature of the reviews) as the actual exposure of an online review can elicit purchases however as for brand hotels their familiarity to the consumer can make them 'immune' to reviews as the consumer already has a certain image of the hotel (Vermeulen and Seegers 2009). Ye et al. (2011) found out that online word-of-mouth has significant impact on online room sales while positive reviews can bring in more line sales. According to Vermeulen and Seegers (2009) hundreds of millions of potential hotel visitors consult tourism review sites with 84 % of them being affected by what they read. These numbers clearly show the enormous impact that digital word-of-mouth has on tourism. It should be noted that these numbers were also just about hotels, there is still a lack of study regarding the influence of digital word-of-mouth and its impacts (and the actual numbers) on consumers purchases on airlines, destinations etc.
This study concludes that the impact of digital word-of-mouth is significant on the tourism industry as the influence of the Internet on everyday life and on consumer behaviour is expanding. This study suggests that the dimensions of online services can be expanded as well as further studies in to these issues examined in this paper can be increased. As this conference proves the tourism industry is reaching out more and more in to the Internet.
Reference list
Papathanassis, A. and Knolle, F. (2011) Exploring the adoption and processing of online holiday reviews: A grounded theory approach, Tourism Management, Vol. 32, pp. 215-224.
Vermeulen, I. E. and Seegers, D. (2009) Tried and tested: The impact of online hotel reviews on consumer consideration, Tourism Management, Vol. 30, pp. 123-127.
Ye, Q., Law, R., Gu, B. and Chen, W. (2011) The influence of user-generated content on traveller behaviour: An empirical investigation on the effects of e-word-of-mouth to hotel online bookings, Computers in Human Behavior, Vol. 27, pp. 634-639.