Impact of hotel online reputation on its pricing strategy

Abstract

Social media has significantly changed the way people communicate and connect to each other, to the businesses and to the world in general. Hospitality industry is not an exception in this trend. There were numbers of papers written within this context; perhaps the most attractive nowadays is the topic of influence of social media on business performance. The aim of this paper is to find the understanding of the impact of one particular type of social media on to hotel pricing strategy. The key questions of this research are based on the importance given to online reputation by hotels in Malta, and whether the higher rated hotel offers rooms at higher rates. Literature reviewed for this study has allowed establishing, that findings related to the topic are not consistent, while one can identify the similarity, there is a significant difference in interpretation and figures. Approach taken for this research is absolutely different from previous studies, where many researchers used systematic analysis of data to come to the conclusion and generate the theory. For purpose of current study qualitative method of research was used to get better insights from the practical point of view and understand phenomena from the perspective of business. Following the results it is concluded that desire to charge higher price do not come from the fact that property is ranked better on online platforms, however its better ranking acts as element of confidence. Also the value given to the power or use of online reputation may vary from one property to another. The research has allowed generating the list of recommendations for practitioners as well as suggestions for future research.