Before the boom in reviews, travelers had few ways to tell how good a particular hotel was, aside from word-of-mouth and travel books—so the best way for them to pick a reliable hotel was to select a branded one. If travelers booked a room at a Holiday Inn, they knew what they were going to get. Now that there is more information out there about independent spots, Dr. Hollenbeck says, brand recognition doesn’t carry nearly the same weight. In his research, Dr. Hollenbeck looked at hotel revenue over 15 years and analyzed numerous aspects of 1.5 million reviews from multiple platforms. Branded hotels’ lead in revenue over independents has declined to 19% in 2015 from 32% in 2000, he found. After controlling for a number of other factors that might affect sales, Dr. Hollenbeck found that online reviews had a large effect in narrowing that gap. A boost from reviews For instance, if an independent hotel gets 10 reviews on average, this translates to about 1.7% higher revenue, while for a chain it increases revenue only by 0.7%, he says. Website reviews had the greatest impact on hotels with a long-term low-quality rating - as measured by AAA’s diamond ratings - and those in small markets. Those in urban areas saw less of an impact. In small markets, the revenue edge enjoyed by chains fell to 6.9% from 25%. In medium-size towns and suburban markets, the drop was to 13.7% from 33.4%. In denser urban areas, it fell only to 25.9% from 34.5%. The hotels that lost the most of their revenue edge belong to well-known but modest brands, such as Best Western, La Quinta, Super 8, and Motel 6. The effect doesn’t seem to hold for higher-end chains, which benefit from loyalty-points programs and luxury amenities that lure in customers, Dr. Hollenbeck says. Get the full story at The Wall Street Journal