Understanding the interplay between online reviews and growth of independent and branded hotels

This study investigates the differential roles of negative and positive reviews on the growth of branded and independent hotels and their underlying interplays. We construct a dataset by combining the revenue data with TripAdvisor review data of hotels in four Texas cities. Based on the resource-based view of firm growth and signaling theory, we obtain several novel findings. Positive reviews exert greater positive effects on the growth of independent hotels than branded hotels, and high growth in turn brings them additional positive reviews. Such a positive feedback loop helps explain why independent hotels benefit more from positive reviews than branded hotels. Negative reviews negatively affect the growth of independent hotels. Although a high growth of branded hotels leads to more negative reviews, the latter does not jeopardize their growth significantly due to the protecting role of brands.