Risk Management Practices in Hospitality Organizations

​An Empirical Study on Reputation Risk Management based on Online Reviews of Hotel Guests (Prof. Farzaneh Solemani Zoghi and Prof. Dr. Hannes Antonschmidt).

The popularity of online review postings on social media has made online reputation management inevitable for the success of every business. Negative comments and reviews could significantly impact the reputation of a hotel and lead to unfavorable consequences. Reputation Risk management for the hotels is one of the areas that have not received enough attention from hotel managers. A research study done by Barsky and Frame (2009) shows that 85 % of hotels have no guidelines for monitoring and responding to online reviews and only 4% of negative reviews get a response from hotels (Barsky J. & Frame, 2009).

As a service-based industry, it is essential for hotels to listen and respond to guest’s online reviews properly and formalize this process by implementing a systematic approach that incorporates the individual hotel’s objectives and strategies. A survey by Clutch (2018) indicates that about 54% of digital marketers consider online reputation management necessary for company success. Moreover, one-quarter of the companies surveyed had realized growth in sales from investing in online reputation management and monitoring (Seter, 2018). Managers who respond successfully to negative comments on online review platforms can turn an unsatisfied customer into a loyal one (Pantelidis, 2010) . Appropriate responses to negative reviews can create and increase future revenue for hotels (Noone et al., 2011). The current study seeks to propose a framework which helps hotel managers to measure reputation risk level from the online reviews and take necessary action when its threshold is exceeded in specific areas.

Current Research Questions:

The main purpose of this study is to analyze the complaint behavior of hotel guests based on their online reviews. Furthermore, the importance of hotel responses to complaints and their impact on reducing reputation risk and customer dissatisfaction will be highlighted. Finally, a system will be developed that classifies online reviews by means of sentiment analysis and helps managers to systematically monitor and response to reputation risk in hotels.

The thesis would address the following research questions:

  • Why do hotel guests complain?

  • How do hotel guests express their dissatisfaction?

  • What are most common hotel guest complaints?

  • What are the possible influencing factors of dissatisfaction responses (Bolfing, 1989)?

  • What are hotel manager attitudes towards the guests’ complaint?

  • How do hotels respond the complaints?

  • What are the most common response patterns/response strategies to the guests’ complaint?

  • Which response patterns/response strategies are most favored by hotel managers?

Relevant Publications in the research project:

Barsky, J., & Frame, C. (2009). Handling Online Reviews: Best Practices.

Bolfing, C. P. (1989). How do Customers Express Dissatisfaction and What can Service Marketers do About it? Journal of Services Marketing, 3(2), 5–23. https://doi.org/10.1108/EUM0000000002483.

Noone, B. M., McGuire, K. A., & Rohlfs, K. V. (2011). Social media meets hotel revenue management: Opportunities, issues and unanswered questions. Journal of Revenue and Pricing Management, 10(4), 293–305. https://doi.org/10.1057/rpm.2011.12.

Pantelidis, I. S. (2010). Electronic Meal Experience: A Content Analysis of Online Restaurant Comments. Cornell Hospitality Quarterly, 51(4), 483–491. https://doi.org/10.1177/1938965510378574.

Seter, J. (2018). The Importance of Online Reputation Management for Businesses | Clutch.co. https://clutch.co/pr-firms/resources/importance-online-reputation-management-businesses.