Understanding the relationship among resources, social media use and hotel performance

Abstract

Purpose The purpose of this study is to understand the use of social networking sites (SNSs) by hotels. Specifically, drawn upon a resource and capability-based perspective, this study addresses two research questions: (1) the relationship between a hotel’s resources and its use of Twitter and (2) the relationship between the use of Twitter by hotels and their RevPAR. Design/methodology/approach The research data include the hotel chain scales, Twitter user profiles and Twitter activities of the hotel parent companies in the USA and the hotels’ RevPAR. To more clearly understand the effect of the use of SNSs, the study uses two dimensions: electronic word-of-mouth and customer engagement. The two dimensions of the hotels’ Twitter use are calculated based on the data extracted from their Twitter user profiles and historical tweets. For a practical purpose, a social media index (SMI), which combines electronic word-of-mouth and the customer engagement score, was used to determine the overall level of Twitter use by hotels. Findings For RQ1, the results indicate there is a positive association between a hotel’s resources and Twitter use. For RQ2, this study shows there is also a positive association between Twitter use by hotels and their RevPAR. Practical implications Twitter use appears to be associated with hotels’ resources. In turn, Twitter use is positively associated with hotel RevPAR. Thus, hotels should look at Twitter as a potential strategic tool for business operation and attempt to increase their ability to leverage Twitter (and other SNSs) for organizational goals (e.g. sales, promotion, customer service). Originality/value To the authors’ knowledge, this is the first study empirically investigating the use of SNSs by hotels with the data drawn from actual firm-generated content (e.g. tweets, retweets) and hotels’ user profile information from Twitter.

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