TRIPADVISOR has been a wonderful innovation for anyone booking a hotel. With 350m customer reviews of 6.5m establishments, it has given consumers a meaningful way to judge a hotel’s service and amenities against the price it charges. Because so many of us now book a room based on reviews on such “meta-search” sites, those with poor service are quickly weeded out. And customers have proved discerning. They tend to have a rough idea of how much they are prepared to spend on a night’s accommodation, and a realistic idea of the level of service that might buy (evidenced by the fact that the average hotel rating is around 4 out of 5). Hence they can shop around for the best establishment within their price bracket. In that way, review sites have had a positive effect both on hotels’ cost and their quality.

Compare that with the effect of meta-search on the airline industry. Here, there are no widely used customer reviews. Instead, flights tend merely to be listed in order of price. That encourages flyers to consider only cheapest option, regardless of how much it...Continue reading