Affiliation:
1. School of Economics and Management Dalian University of Technology Dalian China
2. Daniels College of Business University of Denver Denver Colorado USA
3. Eller College of Management University of Arizona Tucson Arizona USA
4. Department of Tourism Fudan University Shanghai China
Abstract
AbstractAs the sharing economy continues to disrupt incumbent services, whether and how incumbents respond to the competition remains largely unknown. We investigate how incumbents can utilize management responses—a managerial intervention to guest reviews—to exploit performance improvement opportunities in guest reviews and sustain competitive advantage facing increased competition from home sharing. Our method integrates quasi‐experiments, topic modeling, and deep learning techniques to not only estimate the impact of home sharing but also unveil the performance improvement mechanism. The findings reveal distinctive management response strategies across hotel price segments after home sharing's entry, which lead to divergent performance outcomes in guest satisfaction and sales. Regardless of their price segments, any hotel that responds more actively to guest reviews demonstrates improved guest satisfaction in service areas where home‐sharing leads (e.g., check‐in/out, cleanliness, sightseeing opportunity, and room conditions) and achieves higher sales. In contrast, hotels that respond less to guest reviews appear to lose guest satisfaction and sales to not only home sharing but also peer hotel cohorts that respond more. Our study contributes to the literature on the intersection of service operations and technology and provides timely implications that can inform incumbents’ response strategies to disruptions in the ever‐changing business world.
Funder
National Natural Science Foundation of China
Hong Kong Polytechnic University
Subject
Management of Technology and Innovation,Industrial and Manufacturing Engineering,Management Science and Operations Research
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