Examining the trade-off between compensation and promptness in eWOM-triggered service recovery: A restorative justice perspective

Hongfei Liu, Chanaka Jayawardhena, Sally Dibb, Chatura Ranaweera

Research output: Contribution to journalArticle

5 Citations (Scopus)

Abstract

Our research examines the effectiveness of monetary compensation and the promptness of response during electronic word-of-mouth (eWOM)-triggered service recovery. Drawing upon restorative justice theories, we explore three main questions: whether the hotel's response to negative online reviews are always beneficial; whether offering compensation or responding promptly is more efficient under different levels of service failure severity; and how the hotel's response influences consumers' future engagement through eWOM media. Experimental results reveal that making minimum online service recovery effort is only effective in fixing consumer attitudes for less severe service failures. Compensation is the optimal solution for less severe failures, while prompt response is optimal for more severe service failures. The hotel's responsiveness to negative reviews and the service recovery outcome positively influence consumers' future eWOM behaviours through the same online medium. Implications for hotels seeking cost-effective management of negative reviews and for online media owners are offered.

Original languageEnglish
Pages (from-to)381-392
Number of pages12
JournalTourism Management
Volume75
Early online date19 Jun 2019
DOIs
Publication statusPublished - 1 Dec 2019

Bibliographical note

NOTICE: this is the author’s version of a work that was accepted for publication in Tourism Management. Changes resulting from the publishing process, such as peer review, editing, corrections, structural formatting, and other quality control mechanisms may not be reflected in this document. Changes may have been made to this work since it was submitted for publication. A definitive version was subsequently published in Tourism Management, 75, (2019)
DOI: 10.1016/j.tourman.2019.05.008

© 2019, Elsevier. Licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International http://creativecommons.org/licenses/by-nc-nd/4.0/

Keywords

  • Compensation
  • Electronic word-of-mouth (eWOM)
  • Media engagement
  • Online reviews
  • Restorative justice
  • Service failure severity
  • Service recovery
  • Speed of response

ASJC Scopus subject areas

  • Development
  • Transportation
  • Tourism, Leisure and Hospitality Management
  • Strategy and Management

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