Preliminary remarks (1) A wide range of review sites and booking platforms with evaluation function

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1 ITB Berlin Convention 2012 ITB Marketing and Distribution Day 9 th March 2012 Focus on Social Media: Fakes on Review Sites!? A new empiric study of the ITB Berlin and Worms University of Applied Sciences Prof. Dr. Roland Conrady Scientific Director ITB Berlin Convention / Worms University of Applied Sciences Preliminary remarks (1) A wide range of review sites and booking platforms with evaluation function 2 / 39

2 Preliminary remarks (2) In times of web 2.0 customer evaluations on the Internet have a considerable influence on the sales chances of suppliers Fake of customer evaluations are obviously very common: probably % of all hotel evaluations are faked (Stiftung Warentest, 2010) Level of reviews which are fake and misleading has now reached epidemic levels (Kwikchex, 2011) Increase of civil disputes (in Germany, UK, etc.) Media hype about fakes since 2011 (e. g. ZDF/Wiso, WDR/Markt, Stern TV, Die Welt, Top Hotels etc.) Up to now no empiric research on how hoteliers estimate faked customer evaluations and how they deal with this 3 / 39 Agenda Initial position meaning of customer evaluations on review sites legal situation fake opportunities and effects Study results study profile dealing with customer evaluations in portals evaluations and dealing with fakes Recommendations for hoteliers for consumers 4 / 39

3 Agenda Initial position meaning of customer evaluations on review sites legal situation fake opportunities and effects Study results study profile dealing with customer evaluations in portals evaluations and dealing with fakes Recommendations for hoteliers for consumers 5 / 39 Meaning of customer evaluations on review sites (1) High rate of use: 48 % of the Internet users in Germany read evaluations of other users before purchasing (source: Bitkom 2010) High credibility: Germany: 95 % of the Internet users regard evaluations of other users as very reliable or reliable (source: VIR/IUBH 2011, n = 1,035) USA: 51 % of the internet users regard evaluations or recommendations on review sites as very reliable or reliable (source: e-tailing group, Social Shopping Study 2011, n = 1,004) Strong purchase decision influence: 59 % of Internet users are very influenced by online evaluations when booking their accommodation (source: VIR/IUBH 2011, n = 1,027, just as: e- tailing group, Social Shopping Study 2011, n = 1,004) 6 / 39

4 Meaning of customer evaluations on review sites (2) Among search engines evaluation portals often rank higher than hotel sites and, therefore, are easier found Influence of customer evaluations beyond the Internet (e. g. Tripadvisor s Zertifikat für Exzellenz or co-operation TrustYou and Dehoga (allocation of hotel stars) Sorting in evaluation portals: either pre-selection or active selection of the listing per evaluation Despite all fears of evaluations: majority is positive 7 / 39 Legal situation Fake evaluations on the Internet as act of unfair competition acc. to 4 no. 3, 3 UWG: legal situation clear, however, proof is difficult Often disputable: question of liability and behavioral duties ofthe platform operator Operator of an online hotel evaluation platform can not be obliged to review critical user comments and negative evaluations regarding their correctness prior to publication (Supreme Court Berlin). Interdiction of the evaluation of a hotel group is legally unenforceable. Also anonymous expressed opinions are under the protection of freedomof opinion and communication (OLG Hamburg). Accusation vs. Tripadvisor: publication of reviews without fake control British Kwikchex has objected against Tripadvisor at the UK Advertising Standards Authority and the US Federal Trade Commission and requested investigations into offences at the FBI (more than 3,000 obvious fake evaluations). Tripadvisor in UK indicted: after a red flag (fake suspicion) turnovers of the Riderside hotels about 75 % 8 / 39

5 Fake opportunities and effects Fakes wide-spread: British user Bellagio (32,300 evaluations in 7 years), 2 US users (56,000 comments), Niederländer (since 2005 more than 23,400 comments) Identification of fakes is difficult There is not only true or untrue. Correct, but unilateral pointed evaluations are hardly to be found, legally not doubtful but effective: irradiation effects and attribute dominances study of the Cornell university: people do not identify fakes (!), software support imperative (new Cornell software identifies 90 % of the fakes) Purchase of fakes by agencies and Internet users is possible Proof of residence does not prevent positive fakes Fakes can significantly warp evaluation results. Rule of thumb: in case of left-skewed or right-skewed distribution of the evaluation 20 % of extreme fakes change the average evaluation by nearly half a rating point! 9 / 39 The market price for fakes 5 star web reviews go by $5 New York Times, 19 th Aug / 39

6 Agenda Initial position meaning of customer evaluations on review sites legal situation fake opportunities and effects Study results study profile dealing with customer evaluations in portals evaluations and dealing with fakes Recommendations for hoteliers for consumers 11 / 39 Study profile Study of Worms University of Applied Sciences, department of Tourism/Travel Management, and ITB Berlin* (authors: Sabrina Ludwig, Anja Rebmann, Maren Vogler; leadership: Prof. Dr. Roland Conrady) Objective: investigation of evaluations and handling of fake reviews on behalf of German hoteliers Time frame: 10 th Jan -22 nd Feb ,200 contacted hotels (survey via telephone interviews (152) and questionnaires (178)) 330 actual interviews (43 % chain hotels, uniform distribution business/leisure, 63 % are 4* and 5* hotels, representative regional distribution in Germany) * with the kind assistance of the Hotelverband Deutschland IHA 12 / 39

7 Customer evaluations are the norm n = / 39 More than 50 % of the hotels are present on the Top 6 platforms n = / 39

8 Sighting of the evaluations is everyday work for the hoteliers n = / 39 Time waster evaluation portals? (1) n = 306 less than 20 min./day! 16 / 39

9 Evaluation portals as important element for benchmarking n = / 39 Time waster evaluation portals? (2) n = 249 less than 10 min./day! 18 / 39

10 Technologies support market analysis n = / 39 Brand leader is TrustYou n = / 39

11 The boss sights the entries n = / 39 Hoteliers recognize the trend n = / 39

12 Evaluations as instrument for complaint management wide-spread n = / 39 Disparate picture to the reaction of positive evaluations n = / 39

13 Reaction to negative evaluations can be improved n = / 39 Hoteliers initiate evaluations n = / 39

14 Hoteliers are creative n = / 39 Nearly half of the hoteliers: experiences with fake evaluations n = / 39

15 Various sources of fakes No 1: the competition n = / 39 Extortion of the hoteliers by guests wide-spread n = / 39

16 Hoteliers mostly remain steady on attempted extortions n = / 39 Hoteliers mostly react on occurred extortive evaluations n = / 39

17 Agenda Initial position meaning of customer evaluations on review sites legal situation fake opportunities and effects Study results study profile dealing with customer evaluations in portals evaluations and dealing with fakes Recommendations for hoteliers for consumers 33 / 39 Recommendations for hoteliers To sight customer evaluations in the relevant platforms (own and competition) regularly In case of obviously wrong evaluations: to contact platform and to request deletion. Installation of an own evaluation system (with support by software suppliers), but: hotel has already to be found Market research and quality management: preservation of customer feedback, motivation for improvement suggestions Utilization for bonus scheme To use positive evaluations in marketing material (increase of the conversion rate) Further research requirements: coherence evaluations and sales, finances, etc.? 34 / 39

18 Recommendations for consumers Always visit several portals Do not only pay attention to customer evaluations but also to hotel website, travel agency recommendations, magazine contributions, etc. Consider number and actuality of the contributions Read evaluations carefully (caution with descriptions from catalogues, etc.) Inspect evaluators (register date of the user, which hotels doesthe user evaluate, contacting possible? social demographics?) 35 / 39 Thank you for your attention! Prof. Dr. Roland Conrady mail: mobile: / 39

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