Hunting for a top-rated hotel or searching for the perfect dim sum restaurant? Chances are you will turn to sites such as Yelp, Citysearch or TripAdvisor to guide you through the mass of options most locations have to offer. As the Huffington Post recently noted, “In an increasingly tech-reliant world, most of us do not step foot in a restaurant or buy anything online without doing at least a modicum of Internet research.”
Hoteliers and restaurateurs have long known that positive online reviews equal greater occupancy rates, increased bookings, and greater revenue for their businesses: An influential 2011 Harvard Business School (HBS) study found that “a one-star rating increase on Yelp translated to an increase of 5% to 9% in revenue” for restaurants, while researchers at Cornell found that a one-star swing in a hotel's online ratings on travel sites equate to a 11% sway in room rates.
So how trust-worthy are those 4-star online reviews? Turns out, unsurprisingly, caveat emptor.
A 2013 HBS report estimates that the number of fraudulent reviews on Yelp rose from 5% in 2006 to 20% in 2013.
Greg Duff founded and chairs Foster Garvey’s national Hospitality, Travel & Tourism group. His practice largely focuses on operations-oriented matters faced by hospitality industry members, including sales and marketing, distribution and e-commerce, procurement and technology. Greg also serves as counsel and legal advisor to many of the hospitality industry’s associations and trade groups, including AH&LA, HFTP and HSMAI.