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Does e-WOM effect consumers motivation to purchase tourism and hospitality products?

Does e-WOM effect consumers motivation to purchase tourism and hospitality products?
Author: Marta Y. Gavrailova
1 Commentries
Does e-WOM effect consumers motivation to purchase tourism and hospitality products?
Author: Marta Gavrailova University: Wolverhampton

Abstract
This paper discusses the effects of eWOM (electronic word of mouth) on tourism and hospitality organizations, by discussing how positive/negative eWOM effect consumer choice and by justifying the stated with some consumer behaviour theories.

Key words:
eWOM, tourism and hospitality products, consumer behaviour, positive/negative reviews, purchasing behaviour

Discussion paper:
Does e-WOM effect consumers motivation to purchase tourism and hospitality products?




Social media is a growing sector and consumers participate in it in different ways and for a variety of reasons. The role of internet is of increasing importance for tourism and hospitality organizations as more and more consumers spread the word about their experiences with products and services, and thousands of reviews occur daily on different websites. Many tourism and hospitality consumers use the internet to either obtain or produce information about products and services. E-Word-of-Mouth is believed to be a significant part of the decision making process of consumers when they make their choice of hotels because they often seek for an advice from other people. Negative reviews were found to have deterring effect on customers who book hotels as they are considered as a form of complaining whereas positive ones tend to have positive impact on profits. Negative WOM is more likely to put off people from buying products and services than positive could encourage them to do so, which means that consumers are not willing to purchase tourism and hospitality products after reading positive reviews but are likely to refrain from booking a hotel or holiday for instance after reading a bad review .Different studies point out that negative WOM has greater influence on consumers than positive as they tend to find it more important when examining products and services. People want to know what others like and recommend and recommendations on experience products like a holiday for e.g. was found as much more influential than recommendations on tangible products. Previous studies distinguished eight different motives for searching consumer reviews: risk reduction, decrease in search time, learn how a product is consumed, examine new product, determination of social position, dissonance reduction, remuneration and belonging to a virtual community.

A study found that most of the participants in eWOM were rather consuming the information than generating it.
Consumer-generated-content is regarded as more trustworthy than market generated one as it is created by regular users who would have no economic gain for providing inaccurate information. Previous studies have used theories on consumer behaviour to determine how user-generated content effects consumers perception of products and services and how does it affect their choice. Despite the fact the EWOM has been considered as more reliable than marketer generated information, there are some trustworthy issues doe to the annonymosity of its generators and traditional WOM is still believed to be the most reliable source of information.

The social impact theory clarified how people have the ability to influence and imitate each other. Individuals tend to accept the information other people provide them with for reality and also believe that other people have better information than themselves. In addition, when too many individuals imitate each other they tend to disregard their own information, which is called informational cascade, this occurs in environments which are rather uncertain. This social influence increases in power with the increase of uncertainty about a product and consumers are more likely to include other people's opinions in their decision making process. The influence of other opinions on consumers choice is even stronger when there is a consensus in opinions.and people believe information they've received whether it's true or not. There are two types of social influence normative and informational where normative is when people conform to others expectations and informational is when individuals tend to accept information they've received for reality. Informational social influence is the influence to accept other peoples' information as evidence about reality even if there is no motivation to agree with them and the more uncertain individuals are in regards to their own judgment, the more likely it is for them to accept informational social influences when making their choice. Other studies describe the online herding effects as the experiences of other people, consumers face in an online environment which is proved to be prominent when the product is intangible and the decisions are highly-motional. People tend to imitate each other and herding behaviours occur when people do what everyone else is doing. Online information certainly has an effect on consumers' choice when they are not familiar with the product. Thus, in order to make the right decision consumers consider the opinions of others. A number of studies have proved the influence of hotel star rating on hotel room sales and others have related the number of reviews to the popularity of the product and future sales.

Online feedback can determine prices of products and services, where organizations with negative reviews command lower prices. Different studies have established the relationship between online feedback and consumers choice as the majority of consumers want to know about the experiences of others before they purchase a product or service.
That's why it is evident that positive reviews can increase room sales for hotels or popularity of destinations for e.g. and negative ones can destroy the company's or destinations' image and deter consumers. This fact needs to be considered by tourism and hospitality managers as keeping a positive eWOM can drive customers at very low price and negative can decrease sales and destroy reputation. Nevertheless, previous studies have pointed out that the majority of travelers book online and read online feedback prior to making their decisions, thus eWOM needs to be acknowledged and monitored.


References
Litvin, S., Goldsmith, R., and Pan, B. (2008). Electronic word-of-mouth in hospitality and tourism management. Tourism Management . 29 (3), 458-468
Olrik van Dam Msc (Unknown) Exploring the effects of herding and word of mouth on purchase decisions in an online environment, Master's Thesis Erasmus School of Economics Master Marketing - Economics & Business
Xiang,Z. and Gretzel, U. (2010). Role of social media in online travel
information search. Tourism Management . 31 (2), 179-188
Commentary by Nina Pirogova
Author: Nina Pirogova

This paper is an interesting discussion on a very current topic of eWOM, particularly focusing on its effect on consumers' motivation to purchase tourism and hospitality products. Marta starts the discussion by addressing the increasing importance of the internet and eWOM as a significant part of consumers' decision making process, focusing on the impact of negative reviews. Marta has put the paper into strand five; however there is no explanation in the paper why she has done so. I would argue that this paper would fit better in strand two - Becoming a tourist: how backgrounds shape preferences, as it discusses eWOM as a motivator for purchasing/not purchasing a tourism product.

Next, the author makes a point that "there are trustworthy issues due to anonymity of its generators and traditional WOM is still believed to be the most reliable source of information". I agree that there might be an issue of trustworthiness, as there is a possibility of a 'shilling' when organisation themselves post either positive reviews for their own hotels, or negative reviews for competitors (O'Conner, 2010). However, in order to leave reviews on most user-generated content (UGC) websites, registration has to be complete. Also, according to Gretzel et al (2007) the credibility of the person posting a review tends to be judged based on their previous travel experiences and the extent to which their profile is similar to that of the reader, therefore anonymity is not the main issue.

The discussion of the social impact theory and types of social influence was extremely interesting. Having done a research similar to this topic in the past, I have not thought about this aspect, even though it does make a lot of sense, e.g. when there is a consensus in opinions, people believe information they receive whether it is true or not. Of course, all people are different and many decide themselves whether to believe what was posted or not; despite the fact that more than half of online travellers claimed to consult online reviews every time they plan a trip, only one third said they found its input useful (Gretzel et al, 2007).
Marta concludes the paper with the discussion on the relationship between online reviews and organisations' and destinations' image, where positive eWOM may boost sales, whereas negative reviews may worsen the image. This can also be supported by the study of Ye et al (2009), where authors found out that a 10% improvement in reviewers' rating can increase sales by 4.4%, whereas a 10% increase in reviews variance can decrease sales by 2.8%.

I would say the main strength of this paper is extending the topic outside the tourism studies to psychology and social studies, while the weakness is the lack of statistical data to support the theory. Overall, a very interesting paper written in an academic manner, and showing author's reading around this topic. It would be interesting to read the whole paper. Well done.

References
O'Conner, P. (2010) Managing a Hotel's Image on TripAdvisor. Journal of Hospitality Marketing and Management. 19(7) pp.754-772.

Ye, Q., Law, R. and Gu, B. (2009) The Impact of Online User Reviews on Hotel Room Sales. International Journal of Hospitality [online] 28(1) pp.180-182 [Accessed 13 October 2012]. Available at: < http://www.sciencedirect.com/science/article/pii/S0278431908000546 >.

Gretzel, U., Yoo, K.H. and Purifoy, M. (2007) Online Travel Review Study: Role & Impact of Online Travel Reviews [online] [Accessed 15 May 2012]. Available at :< http://www.tripadvisor.com/pdfs/OnlineTravelReviewReport.pdf>.