Upscale Hotels Plant Fake Reviews When High-End Vacation Rentals Come to Town

Many hotels have for years posted fake negative online reviews to undermine their hotel rivals. But premium hotels tend to change their tactics whenever premium short-term rentals start competing in their market, according to a new study. The upscale hotels instead start posting fake reviews that tout how wonderful their hotels are.

“More pressure from Airbnb causes high-end hotels to increase their ratings with more fake positive reviews,” said study co-author Cheng Nie, an assistant professor at Iowa State University, in an interview.

The switch to inflate hotel ratings was charted by a study of 2,188 hotels in Texas across eight years. The academic journal MIS Quarterly recently published (paywall) the peer-reviewed study.

Reviewing Reviews

It’s been an open secret for more than a decade that many hoteliers post fake reviews, often by hiring third parties. The aim is either to make competitor properties look worse or improve their own online ratings.

An academic study in 2015 estimated that somewhere between 5 percent and 30 percent of hotel online reviews had been made up. All online platforms have been plagued with the problem.

Academic researchers wanted to know what happened to hotel behavior since 2008 when Airbnb began its rise.

Manipulating High-End Travelers

To gauge review manipulation, the researchers looked at hotel ratings on Tripadvisor and Expedia.

The study found that, over time, whenever high-end Airbnb listings appeared within a one-kilometer distance, local high-end hotels and resorts tended to boost their fake, positive reviews. Between 2011 to 2015, the study estimated a 5.6 percent inflation in self-promoting reviews.

Posting fake bad reviews of rival hotels also tended to fall off. Average five-star ratings of high-end hotels tended to increase on Tripadvisor once Airbnb arrived in their markets.

“They don’t badmouth each much as before because they have this common enemy of Airbnb, reducing their demoting behaviors,” Nie said. The paper found that badmouthing decreased by about 1.85 percent each quarter.

The extent of the fake reviews problem is debated, however. Tripadvisor, for example, said it had led industry work in combating fake reviews. It rejected 1.3 million suspicious reviews in 2020 before they might have made it onto the site, the company said in a recent transparency report.

Low-end hotels didn’t show meaningful signs of changed behavior in the study. The researchers theorize that consumers aren’t as swayed by reviews in the budget category.

“A lot of people who stay at low-end hotels are less likely to pay attention to reviews compared to people trying to decide if a $500 resort is worth their money,” Nie said.

The paper was by Nie and co-authors Zhiqiang (Eric) Zheng and Sumit Sarkar of the University of Texas at Dallas.

The researchers used data from market research firm AirDNA to group the short-term rental listings into budget and high-end. They bet that, say, a vacation rental of whole homes with nice amenities and a swimming pool would be more likely to compete with a nearby high-end hotel or resort than would bare-bones rentals. They made similar groupings of hotels using numbers from STR, (formerly known as Smith Travel Research and a provider of hotel performance data). They matched the hotels they found online with hotel tax filings to confirm their identities. While other brands, such as Booking.com and Vrbo also offer short-term listings, the researchers focused on listings on Airbnb for simplicity.