Purpose
This study aims to investigate a sharing economy context, where vacation rental units that are owned and operated by individuals throughout the world are rented out through a common website: vrbo.com. It is posited that gross domestic product (GDP) per capita, a common indicator of the level of economic development of a nation, will impact the likelihood that prospective travelers will choose to book accommodations in the sharing economy channel (vs traditional hotels). The role of online customer reviews in this process is investigated as well, building upon a significant body of extant research which shows their level of customer decision influence.
Design/methodology/approach
An empirical analysis is conducted using data from the website Vacation Rentals By Owner on 1,940 rental listings across 97 countries.
Findings
GDP per capita serves as risk deterrent to prospective travelers, making the sharing economy an acceptable alternative to traditional hotels for the average traveler. It is also found that the total number of online customer reviews (OCR volume) is a signal of popularity to prospective travelers, while the average star rating of those online customer reviews (OCR valence) is instead a signal of accommodation quality.
Originality/value
This study adds to a growing agenda of research investigating the effect of online customer reviews on consumer decisions, with a particularly focus on the burgeoning sharing economy. The findings help to explain when the sharing economy may serve as a stronger disruptive threat to incumbent offerings. It also provides the following key insights for managers: sharing economy rental units in developed nations are more successful in driving booking activity, managers should look to promote volume of online customer reviews and positive online customer reviews are particularly influential for sharing economy rental booking rates in less developed nations.
Connecting relational mechanisms to performance measurement in a digital service supply chain