Insights

The review is part of the rate.

A rate that ignores what recent guests said is missing a piece.

In 2019, Hu, Yang and Park gathered 163 estimates from 22 studies. The paper appeared in the International Journal of Contemporary Hospitality Management. It is not one hotel’s experience. It is a review: it sets many results side by side and looks at what sits in the middle.

In the middle, the median elasticity of online ratings on the rate was 0.851. Elasticity, here, means how far one thing moves when the other moves. 0.851 means the rating and the rate moved together, but not one for one. If the rating rises, the rate tends to rise, and not by the same proportion.

0.851 should not be turned into “85 percent per star.” The paper does not say that. 0.851 is not a percentage added to one hotel’s rate each time it gains a star. It is not a promise either. It is the median of 163 estimates: the midpoint of many studies, not the rule of one property.

Inside that review, not every line of a review does the same work. Value for money and the room rating had the largest link to the rate. Staff and cleanliness did not show a significant link. That does not mean guests are indifferent to staff or cleanliness. It means that, in that set of studies, the link to price did not show up in those two lines. It showed up in value and in the room.

“The reviews are fine” folds all of that into one sentence. A hotel can have favorable comments about the front desk and a series of complaints about the price, and the summary can still be that the reviews are fine. Beside a rate, what is needed is the part of the review that moves with the rate, not the average of every kind sentence.

If there are no recent reviews, the honest result is a gap. Not an invented supplement, and not a number put there so the line is not empty. A gap says what is missing. An invented figure says nothing is missing, and that is false.

Which is why “the reviews are fine” is not enough beside a price. In that review, what moved with the rate was value for money and the room, not one judgment about the whole comment. If there are no recent reviews, leave the gap visible. Do not fill it with a figure so the line looks complete, and do not turn 0.851 into a percentage per star.

Hu, Yang and Park, International Journal of Contemporary Hospitality Management, 2019.