Title of Paper

Financial Implications of Customer Engagement Behavior on Business Profitability

Author Bios (50 Words)

Karen P.S. Tan (karen.tan@temple.edu), is a PhD Candidate and Presidential Fellow at the Department of Tourism & Hospitality Management, Temple University. Having worked on numerous tourism and hospitality industry projects across Asia Pacific, her research interests include the study of tourist behavior and emotions as well as hospitality finance and real estate.

Suiwen (Sharon) Zou, Ph.D. (szou@illinois.edu), is an assistant professor in the Department of Recreation, Sport and Tourism at the University of Illinois at Urbana-Champaign. Her research focuses on the pricing and financial issues of tourism and leisure services.

Xiang (Robert) Li, Ph.D. (robertli@temple.edu), is a professor and Director of Temple’s U.S.-Asia Center for Tourism and Hospitality Research. Robert's research mainly focuses on destination marketing and tourist behavior, with special emphasis on international destination branding, customer loyalty, and tourism in Asia. Robert is a current TTRA board member.

Abstract (150 Words)

This study investigated the financial value of online reviews, an important customer engagement behavior (CEB). Total revenue, operating expenses and operating profits of a given period from each property were collected for 111 hotels in five Asian countries. These were matched with each hotel’s TripAdvisor reviews for the same time period, yielding a sample of 53,474 reviews. Panel regression analysis showed that review variance, volume and length had varying levels of association with gross operating profit indicators, thus providing empirical evidence linking CEB and business profitability. In comparison, only review volume was significantly associated with a hotel’s total revenue. Meanwhile, review valence is not significantly related with all measures of total revenue, total expenses and operating profits. The reviews were also assessed for their relationship with room revenue for comparisons with profitability and total revenue indicators. Theoretical and empirical implications of the study were discussed.

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Financial Implications of Customer Engagement Behavior on Business Profitability

This study investigated the financial value of online reviews, an important customer engagement behavior (CEB). Total revenue, operating expenses and operating profits of a given period from each property were collected for 111 hotels in five Asian countries. These were matched with each hotel’s TripAdvisor reviews for the same time period, yielding a sample of 53,474 reviews. Panel regression analysis showed that review variance, volume and length had varying levels of association with gross operating profit indicators, thus providing empirical evidence linking CEB and business profitability. In comparison, only review volume was significantly associated with a hotel’s total revenue. Meanwhile, review valence is not significantly related with all measures of total revenue, total expenses and operating profits. The reviews were also assessed for their relationship with room revenue for comparisons with profitability and total revenue indicators. Theoretical and empirical implications of the study were discussed.