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Study on Online Consumer Reviews in the Hotel Sector Final Report

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Study on Online Consumer Reviews in the Hotel Sector Final Report Study on Online Consumer Reviews in the Hotel Sector Final Report Written by: Risk & Policy Analysts (RPA) Ltd, CSES and EPRD Online consumer reviews in the hotels sector © European Union, 2014 The information and views set out in this report are those of the authors and do not necessarily reflect the official opinion of the Commission. The Commission does not guarantee the accuracy of the data included in this study. Neither the Commission nor any person acting on the Commission’s behalf may be held responsible for the use which may be made of the information contained therein. Reproduction is authorised provided the source is acknowledged. ISBN 978-92-79-38030-3 DOI 10.2772/32129 June, 2014 2 Online consumer reviews in the hotels sector Study on Online Consumer Reviews in the Hotel Sector Submitted by: Report written by: Tobe Nwaogu, Project Manager, RPA Vania Simittchieva, RPA Mark Whittle, CSES Michael Richardson, CSES Approved for issue by: Pete Floyd, Project Director This report was prepared under the Framework Service Contract SANCO/2012/02/011 Lot 2: Consumer Policy European Commission Directorate General for Health and Consumers (DG SANCO) Submitted 9 June 2014 June, 2014 3 Online consumer reviews in the hotels sector June, 2014 4 Online consumer reviews in the hotels sector Table of Contents 1. Introduction............................................................................................. 7 1.1 Background to the study ........................................................................ 7 1.2 Objectives of the study .......................................................................... 8 1.3 Methodology ......................................................................................... 8 1.4 Structure of this report .......................................................................... 9 2. Consumer attitudes towards online reviews ................................................10 2.1 Introduction.........................................................................................10 2.2 Importance consumers place upon online reviews ....................................10 2.3 Trustworthiness of online reviews...........................................................16 2.4 Trends in online hotel reviews................................................................21 2.5 Summary ............................................................................................22 3. Typology of hotel review websites .............................................................23 3.1 Overview of typology approaches ...........................................................23 3.2 Category 1: Hotel review websites.........................................................25 3.3 Category 2: Hotel bookings and reviews websites....................................25 3.4 Category 3: Travel agency or travel websites..........................................26 3.5 Category 4: Websites for travel and other products .................................27 3.6 Category 5: Social networking websites .................................................28 3.7 Category 6: Blogs and online forum(s)...................................................28 3.8 Prevalence of website types...................................................................29 3.9 Summary of key findings.......................................................................30 4. Analysis of current practices on review websites..........................................31 4.1 Introduction.........................................................................................31 4.2 Presentation of hotel reviews .................................................................33 4.3 Verification mechanisms on hotel review websites ....................................41 4.4 Dealing with misleading and/or fake reviews............................................44 4.5 Multilingual websites and mobile/smartphone apps...................................49 4.6 Summary of key findings.......................................................................50 5. Problems relating to misleading and/or fake reviews in the hotels sector ........52 5.1 Introduction.........................................................................................52 5.2 Problems relating to the integrity of reviews ............................................52 5.3 Consumer detriment caused by misleading and/or fake reviews .................61 5.4 Sources of misleading and/or fake reviews ..............................................64 5.5 Problem awareness...............................................................................69 5.6 Summary of key findings.......................................................................71 6. Measures taken to address misleading and/or fake reviews ..........................73 6.1 Introduction.........................................................................................73 6.2 Measures by the review website operators...............................................73 6.3 Measures by industry associations ..........................................................81 6.4 Measures by public authorities and consumer associations.........................82 6.5 Actions in non-EU or EEA countries.........................................................93 6.6 Summary of key findings.......................................................................99 7. Analysis of EU legislation of relevance to misleading and/or fake reviews .....100 7.1 Introduction.......................................................................................100 7.2 Summary of European legal framework.................................................100 7.3 Implementation of EU legislation to address misleading/fake reviews........103 June, 2014 5 Online consumer reviews in the hotels sector 7.4 Legal responsibilities of actors involved in review websites ......................105 7.5 Findings from website checking............................................................107 7.6 Summary of key findings.....................................................................108 8. Possible additional measures for addressing misleading and/or fake reviews.109 8.1 Overview...........................................................................................109 8.2 Presentation of hotel reviews ...............................................................110 8.3 Verification mechanisms on hotel review websites ..................................111 8.4 Dealing with misleading and/or fake reviews..........................................114 8.5 Framework for future action ................................................................116 8.6 Summary of key findings.....................................................................123 9. Summary of key findings and recommendations........................................124 9.1 Background .......................................................................................124 9.2 Importance of online hotel reviews and consumer trust...........................124 9.3 Problems associated with misleading and/or fake reviews........................125 9.4 Concerns relating to review websites ....................................................126 9.5 Measures for addressing misleading and/or fake reviews.........................127 10. References ...........................................................................................132 June, 2014 6 Online consumer reviews in the hotels sector 1. Introduction 1.1 Background to the study The internet has brought about significant changes in the way consumers purchase goods and services and how businesses advertise and sell such goods and services. Today, price and product comparison websites and online consumer reviews are widely used tools by consumers and are becoming embedded in consumer behaviour and business models (EC, 2013a). These comparison tools bring a number of benefits to consumers (e.g. in terms of saving time and money, finding deals that are best suited to each consumer's individual needs, facilitating cross-border purchases, etc.) as well as businesses (e.g. by helping retailers and service providers improve their market positioning and reach a broader consumer base). The rapid increase in the uptake and use of these comparison tools and the influence they can have on consumers’ decisions have, however, given rise to concerns about their trustworthiness. If the transparency and reliability of comparison tools and online reviews is not guaranteed, they can become a source of consumer detriment and risk undermining consumers’ trust in the market as a whole (EC, 2013c). As a first step in addressing the issue of transparency and reliability of comparison tools, the European Commission (EC) set up a stakeholder dialogue process (EC, 2012) to identify existing shortcomings in the functioning of comparison tools and explore the most efficient and effective ways for addressing them. The dialogue process was launched on 29 May 2012, with the organisation of a series of workshops held in Brussels, with the participation of representatives from national and EU-level consumer organisations, Member States’ national authorities and EU-wide business associations and chaired by DG SANCO. The conclusions and recommendations of the Multi-Stakeholder Dialogue on Comparison Tools (MSDCT) were summarised in a report (EC, 2013a). One of the key areas covered in the MSDCT is the issue of user ratings and reviews. While these allow consumers to
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