<abstract xmlns="http://www.w3.org/1999/xhtml">

<p>This study examines the importance of online reviews for price determination in the hotel industry in the pre-pandemic period. The research is conducted for Croatian small open economy with a developed tourism sector. The paper fills the gap in existing literature by using multivariate principal component analysis to group various customer satisfaction categories in the hotel industry and assessing the relationship between customer satisfaction and hotel price. The conducted empirical analysis points to a positive statistically significant relationship of guest satisfaction and hotel prices. Moreover, linear regression modelling is conducted separately for four-star and five-star hotels. The estimated impacts are statistically significant and positive, but the effects are twice as strong in five-star hotels then in four-star hotels. The obtained results indicate that hotel star rating impacts the strength of the relationship between hotel prices and guest satisfaction. Recognizing the link between hotel ratings, online reviews and pricing is essential both for hotel managers and customers. Hence, the paper provides valuable conclusions from the aspect of supply and demand side in the hotel industry.</p>
</abstract>

This study examines the importance of online reviews for price determination in the hotel industry in the pre-pandemic period. The research is conducted for Croatian small open economy with a developed tourism sector. The paper fills the gap in existing literature by using multivariate principal component analysis to group various customer satisfaction categories in the hotel industry and assessing the relationship between customer satisfaction and hotel price. The conducted empirical analysis points to a positive statistically significant relationship of guest satisfaction and hotel prices. Moreover, linear regression modelling is conducted separately for four-star and five-star hotels. The estimated impacts are statistically significant and positive, but the effects are twice as strong in five-star hotels then in four-star hotels. The obtained results indicate that hotel star rating impacts the strength of the relationship between hotel prices and guest satisfaction. Recognizing the link between hotel ratings, online reviews and pricing is essential both for hotel managers and customers. Hence, the paper provides valuable conclusions from the aspect of supply and demand side in the hotel industry.

The pre-pandemic role of customer online satisfaction in price determination: evidence from hotel industry

Croatian Review of Economic, Business and Social Statistics

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

This study examines the importance of online reviews for price determination in the hotel industry in the pre-pandemic period. The research is conducted for...

The pre-pandemic role of customer online satisfaction in price determination: evidence from hotel industry

Published Online: Dec 23, 2021

Page range: 50 - 60

Received: Oct 12, 2021

Accepted: Nov 02, 2021

DOI: https://doi.org/10.2478/crebss-2021-0009

Keywords
customer satisfaction, hotel pricing, hotel star rating, multivariate analysis, principal component analysis, regression analysis

© 2021 Irena Palić et al., published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

The pre-pandemic role of customer online satisfaction in price determination: evidence from hotel industry

Published Online: Dec 23, 2021

Page range: 50 - 60

Received: Oct 12, 2021

Accepted: Nov 02, 2021

DOI: https://doi.org/10.2478/crebss-2021-0009

Keywordscustomer satisfaction, hotel pricing, hotel star rating, multivariate analysis, principal component analysis, regression analysis

© 2021 Irena Palić et al., published by Sciendo

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.

Keywords
customer satisfaction, hotel pricing, hotel star rating, multivariate analysis, principal component analysis, regression analysis