Transforming Trust in Hospitality: How Web3 Can Reshape Online Reviews

Online reviews play a pivotal role in the decision-making journey of a traveler. Future guests go online and research past experiences shared by previous customers about destinations and hospitality services. However, studies suggest that approximately 30 to 40 percent of online reviews might be fake or not genuine, impacting customers' trust and decision-making. In addition, the online reviews ecosystem is significantly centralized. According to Review Pro, 83 percent of hotel reviews are concentrated on just three platforms: Booking, Google and TripAdvisor. This concentration poses the potential risk of data manipulation and control. New Web3 technologies can help transform hospitality online reviews. 

Understanding the Problem 

Studies reveal that the reviews of products being sold online can impact buyers' decisions, influencing around 68 percent of online purchases. Moreover, research indicates that online hotel reviews have the potential to shape readers' perceptions of the hotel, impact their consideration of the hotel, and influence their intentions to make a booking. 

However, the credibility of these reviews often comes under scrutiny, particularly on platforms such as Google or TripAdvisor, where proof of attendance is not required for writing a review. Additionally, numerous unethical businesses online claim they can manipulate overall ratings on such platforms by posting fake reviews, whether to boost or diminish a listed company. Even though online websites are taking measures to minimize fake and biased reviews, they persist. Given the substantial impact of reviews on consumer decisions, it becomes evident how detrimental they can be to the reputation of a hospitality business or a destination, potentially misleading prospective customers.  

As mentioned before, another potential risk is the centralization of hospitality reviews on a few online websites. Centralized data are at a higher risk of being compromised or manipulated by insiders or outsiders. This vulnerability could affect the integrity of reviews. For example, by targeting one company, hackers can access, alter or delete large amounts of these reviews. Moreover, review websites could manipulate those data to increase the overall review score of the listed business to artificially boost sales.  

The Role of Web3 Technologies 

Web3 refers to a new version of the Internet, one that is decentralized and built on blockchain technology. This new version of the Internet is made based on three leading technologies: blockchain, digital tokens and smart contracts. 

A blockchain is a decentralized, digitally distributed database or ledger that is present throughout a computer network and makes transaction recording easier. As new data are added to the network, a new block is made and added indefinitely to the chain. After that, the modification is reflected on all blockchain nodes. This indicates that there isn't a single point of failure or control over the system. If online review systems use this technology, the risk of data tampering could be eliminated, externally and internally. The risk could be eliminated internally since the review system is decentralized and operates automatically, and externally because blockchain technology is highly secured. 

But how can reviews exist in a blockchain? The answer is through digital tokens. These are valuable objects that are solely stored in digital form on the blockchain. They can include cryptocurrencies, NFTs (nonfungible tokens) or tokenized versions of assets, including real things like art or tickets to concerts. Imagine receiving a digital token each time you sleep at a hotel, eat at a restaurant, or even visit a destination. These digital tokens can provide proof of your experience. They can include details such as room type, dates or additional services provided during your trip. Each unique token will be linked to a review that serves as proof of stay or attendance. This tokenization of reviews can enhance credibility, traceability and transparency. Future guests will be able to trace the source of the review and assess its legitimacy, all under the security of blockchain technology.  

How can there be incentives to write such reviews? This is where smart contracts come into the scene. Smart contracts are simply software programs stored on a blockchain that run automatically when specified conditions are met, like terms agreed between a buyer and a seller. Once a smart contract is created on the blockchain, it cannot be changed. Smart contracts can enable reviewers to earn tokens or rewards for the amount and quality of their feedback. A simple upvote or downvote system could reward reviews that users found the most helpful. This can gamify the process and incentivize guests to increase both the quantity and the quality of the reviews. 

Image source: https://ieeexplore.ieee.org/document/10117974  

Several blockchain-based projects and startups, such as Triend and Leeway Hertz, are experimenting with tokenizing reviews to minimize fake comments and increase trust in online platforms. 

Leveraging the decentralized nature of blockchain enables the establishment of an impartial and fair review system, bolstering consumer relationships and fostering confidence. While implementing Web3 technologies requires time, financial investment, and a learning curve for businesses and consumers, the hospitality industry must refrain from replicating past mistakes and should actively engage in experimenting with such transformative technologies. 

This blog post was awarded First Place in the Fall 2023 HFTP/MS Global Hospitality Business Graduate Student Blog Competition presented by the HFTP Foundation. Participants are students participating in the Master of Science in Global Hospitality Business, a partnership between the Conrad N. Hilton College of Global Hospitality Leadership at the University of Houston, the School of Hotel and Tourism Management at Hong Kong Polytechnic University and EHL. The blog posts that received the top scores will be published on HFTP Connect. Learn more at HFTP News.

About the Author

Yiannis Denaxas is a graduate student of the Master in Global Hospitality Business, a partnership between three world-leading hospitality management schools over three continents: EHL Hospitality Business School, The Hong Kong Polytechnic University, and the University of Houston. Yiannis grew up on a small island in Greece in a family of Hoteliers and was always involved in the family business from a very young age. His goal is to further develop the family business into a renowned hospitality brand that will provide high-quality service and travel experiences with respect to the local communities and the environment.

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