Travel Review Sites: Moral Hazard Ahead

by Russ Hearl / Mar 02, 2010 / 1 comments

"Trust me." "To be honest with you."

 

Have you ever noticed that these prefacing statements are often precursors to
a tall-tale? Well, when it comes to endorsements (or indictments, for that
matter) of travel experiences it becomes equally difficult to separate fact from
fiction.

 

 

User generated and social travel review sites such as TripAdvisor and HotelChatter have become mainstream
options for travelers seeking a third-party review of airlines, car rental
companies, tour operators, hotels, and vacation rentals, to name a few. Millions
of people use these sites to obtain a less biased review than they would get by
looking at a travel services supplier website or brochure.

 

But, how un-biased are these sites in reality?

 

It's a question that we should all ask ourselves. After all, many of these
sites are supported by advertising revenues. This applies a not-so-insignificant
amount of pressure on the site operators/businesspeople to make sure the people
paying the bills are happy. I know this may sound cynical, but as a former
advertising executive myself, I can tell you that there is a significant moral
hazard present in advertising supported businesses. Lest we think that the big,
colorful real estate section in our local newspaper is there because the editor
just couldn't wait to tell you about the new sub-division opening up on the
other side of town.  I have friends in the newspaper business that tell me a
meaningful portion of the content is written to garner paid advertisements. So
ask yourself - Is it real news or bait to lure-in advertisers?

 

When it comes to review sites, how trustworthy is the 5-star aggregate score
for the service provider in question? Case in point, Yelp was hit
with a class action lawsuit
alledging that they are really running an
extortion scheme. The lawsuit was filed on behalf of a collection of local
businesses that alledge Yelp promises to remove negative comments about their
businesses only if they agree to pay a monthly advertising fee. Whoa. If that's
true it really makes you wonder whether you're actually getting reviews of real
exerpeinces or just the positive ones. Anyone that has used Yelp knows that
there's no shortage of inflammatory reviews of service providers.  Many of the
negative reviews are actually really funny, but most are plain outrageous and
could be considered libelous in some jurisdictions.

 

Forrester Research examined the
motivations of travelers that read and wrote reviews of travel experiences. The
research found that 21% of travelers had read reviews on travel review sites
like TripAdvisor in the previous 12 months in order to make travel purchase
decsisions. The research also found that:

  • 19% of the travelers who responded said that they left a review because they
    were told they would be entered into a drawing for a prize or would receive some
    form of compensation for submitting a review.
  • 27% said they wanted to warn others about a bad experience.
  • 48% said they wanted to share a good experience with others.

Overall, more than 6 in 10 U.S. leisure travelers were found to regularly
participate in travel-focused social media activities like rating a hotel.
Clearly, travelers like to tell almost anyone about our experiences (witness the
50,000+ travel blogs).

 

Indeed, many marketers would argue that the revolutionary impact of the
social networks and user generated content sites (like travel review sites) is
embodied in the ability to inspire, monitor and, (cough, ahem!) control word of
mouth marketing.  Of course, the transparency offered by social networks can cut
both ways.  As travelers, we ought to question the credibility and integrity of
some of the advertising supported review sites. Perhaps a more faithful
representation of travel experiences could be gained by polling your own social
networks using a Facebook poll or some sort of survey. But even then it would be
difficult to gain a large enough sample size or let alone locate anyone within
your network that has purchased or consumed services from a provider in your
intended destination.

 

Despite the moral hazard, review sites might still over the best solution in
the market for obtaining fast background checks on potential service providers. 

 

How about you?  Do you trust these review sites?

 

 

By Russ Hearl, CEO and Co-Founder, Sherpa Travel Exchange, LLC

 

Russ Hearl is the Budget Travel Editor for Wandering Educators

 

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