Good or excellent? Factors determining online hotel ratings. A spatial approach.

Abstract

In a competitive environment, where hotel demand is lower than market supply, it is of interest to determine what factors explain how excellence differentiates certain hotels from others. Using spatial quantile regression, this research investigates the effect of locational factors as well as those related to the management of human capital investment in Spanish hotels rated on Booking.com. The study shows that human capital investment in hotels can significantly increase guest delight. As regards location, hotels in protected natural areas that are far from large cities obtain higher guest review scores. Additionally, a spatial spillover effect due to reputation transfer among nearby hotels with median scores is found. However, this effect is not observed for hotels with very high scores. These results can serve to rationalize the available resources and inform hotel owners and managers about the factors required to achieve high scores.