Word-of-mouth in hotel industry has attracted myriad of academic attention due to its experiential and intangible products for years. With the advent of e-commerce, electronic word of mouth (e-WOM) recently becomes an increasingly significant phenomenon in service industry. In fact, the literature related to e-WOM in hotel industry depicts different lines of the subject. One such line of study centers round advanced knowledge about e-WOM and how it has been developed (Kasavana, Nusair, & Teodosic, 2010) (O’Connor, 2010) (Kaplan ; Haenlein, 2010). Another line focuses on the impacts of e-WOM to consumer behavior (Xie, Miao, Kuo, ; Lee, 2011) (Litvin, Goldsmith, ; Pan, 2008) (Zhu ; Zhang, 2010), potential customer acquisition (Ye, Law, ; Gu, 2009) and thus, hotel profitability (Yacouel ; Fleischer, 2011). Until 2015, a research conducted by Torres et al. (2015) has exposed the positive effect of e-WOM valued by hotel manager on service quality management (Torres, Adler, Behnke, Miao, ; Lehto, 2015). In spite of this, it is likely that the use of such electronic word-of-mouth to improve service quality has been remarkably neglected. To fill the gap, this study aims to portray the stream of using consumer-generated feedback to identify a gap in service quality provided resulting in a decrease in online hotel rating as well as hotel financial performance in a real-world context.
The selected organization is Boutique Hotel 57 which belongs to a chain of boutique hotels named Hotel Prophets based in Sydney. In the age of user-generated content, Boutique Hotel 57 is not an exception where electronic word-of-mouth (e-WOM) has a great impact on hotel performance and profitability as well as customer acquisition – said by Front Office Manager. Hotel 57 has experienced a remarkable drop in TripAdvisor ranking from #55 in March, 2018 to #59 in 189 Hotels in Sydney due to some negative reviews related to hotel service quality.
In order to achieve the set of aforementioned objectives, hotel managers need to define the answer for these following questions:
• Why is e-WOM important to hotel’s operation, especially the profitability?
• How significantly service quality impacts on hotel’s e-WOM?
• How to measure hotel’s service quality gap?