When and how Managers' Responses to Online Reviews Affect Subsequent Reviews

<jats:p> In this study, the authors investigate the externalities of managers' responses (MRs) to online reviews on popular travel websites. Specifically, the authors examine the effect of publicly responding to hotel guests' reviews on subsequent reviewer ratings. The authors find that manager responses to negative reviews (MR-N) can significantly influence subsequent opinion in a positive way if those responses are observable at the time of reviewing. Notably, the findings show this externality to be negative for manager responses to positive reviews (MR-P). The authors conduct a topic analysis on review texts and corresponding MRs to study the moderating role of response tailoring on the opinion externalities of MR. The authors show that tailored MR amplifies the positive (negative) impact of MR-N (MR-P) on subsequent opinion. Intuitively, tailoring an MR-N adds specificity to the hotel's complaint management strategy, bolstering the positive effects of MR-N on subsequent opinion. However, by highlighting specific positive elements of a review, managers' intent for responding is brought into question as they take advantage of reviewers' positive feedback to promote their hotel. </jats:p>