Luxury hotels post fake reviews to compete with Airbnb

High-end hotels rely on fake reviews to compete with Airbnb listings, a study has found.

As Airbnb launched in 2008, hotels pushed back. They lowered prices and lobbied legislators to regulate new competition better. Some even list their rooms on the platform now in a sign of adaptation and re-focused marketing strategies.

According to new research from Iowa State University, hotels also resorted to posting fake positive reviews to inflate their ratings on travel websites.

In what the study authors call "co-opetition," hotels are proactively forsaking an age-old industry tradition of badmouthing each other and start manipulating their own reviews instead to compete with Airbnb listings.

"We know hotels adapted to the competition with Airbnb by lowering prices, but we wanted to know if there was something else hotels were doing," Cheng Nie, assistant professor at Iowa State and co-author of the paper, said.

The research followed earlier findings that showed 15% to 30% of online hotel reviews were fake before the emergence of Airbnb. The practice was most common among smaller independent hotels eager to bring each other down.

High-end hotels were found more likely to post fake reviews. Image by Shutterstock

The trend changed after Airbnb had entered the scene. It is now almost exclusively high-end hotels in competitive markets that post fake positive reviews about themselves to better compete with rentals. The study showed it had little impact on budget hotels that do not rely on customer reviews as much.

"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 more Airbnb listings were available around high-end hotels, the more they would self-promote by posting fake reviews, according to the study.

Researchers compared data from Tripadvisor, which allows any user to post, to Expedia, which only allows customers with paid reservations to post. They found a "big difference" in the level of review manipulation, which was much more common on Tripadvisor.

"Consumers need to be careful because the reviews, especially on Tripadvisor, may be inflated and not be truly representative of the quality," Nie said.

The research covered eight years from when Airbnb launched in 2008 and analyzed the data of 2,188 hotels in 67 cities in Texas.

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