Rating vs. Reviews: Does official rating capture what is important to customers?

This paper examines the relationship between hotels' official ratings and customer review scores. Hotel ratings aim to provide an objective assessment of the hotel's quality and experience to potential customers. However, customer reviews frequently differ from official ratings. We use data on hotels in Dubai to explore their relationship and analyze their similarities and differences. Asymmetric information hampers demand in the hotel industry if ratings do not match the customers' views of quality. Furthermore, substantial discrepancies between the two measures provide competing interests for hotel managers to satisfy rating agencies' criteria or customers' preferences, reducing the hotels' efficiency and effectiveness in offering customers the best experience and value. Our findings show that, as expected, Star Rating primarily reflects hotel-related features. In contrast, customer review scores tend to appreciate features nearby in addition to hotel amenities. Also, some hotel amenities value differently in the customer review scores and Star Rating.