Happy Yelp Reviews Make Bank for Restaurants

Just half a star means more customers.

Looks like someone has quality Yelp reviews! (Photo: flickr.com/foundingfarmers)

Did you pick your Sunday afternoon brunch spot based on Yelp reviews? If a recent study is any indication, you have plenty of company. The Guardian reports that two Berkeley economists have decided to quantify the impact of your glowing Yelp review on that Thai place down the street. The results:

They found that a restaurant with a rating improved by just half a star – on a scale of 1 to 5 – was much more likely to be full at peak dining times.

Indeed, an extra half-star rating caused a restaurant’s 7pm bookings to sell out on from 30% to 49% of the evenings it was open for business.

That’s irrespective of changes in price or quality. So next time you’re considering a wrathful review of the local bagel joint and wondering whether it’ll make any difference, the answer is yes.

To us, that sounds like a big, glaring incentive to game the system. That inspires the question of whether any of these reviews can really be trusted. Nor is this question mere cynicism. Just last weekend, the New York Times ran a lengthy piece about the business of online book reviews, featuring an energetic entrepreneur who found himself banking tens of thousands of dollars by selling his services as an enthusiast. One expert estimates that a full third of online reviews are, basically, complete B.S.

The study’s authors don’t sound too bothered by the notion, though:

“These returns suggest that restaurateurs face incentives to leave fake reviews, but a rich set of robustness checks confirm that restaurants do not manipulate ratings in a confounding, discontinuous manner.”

However, it’s probably worth noting one little detail about the study’s methodology: The data crunched comes from 328 restaurants in the San Francisco area. We can’t help but wonder if that’s a population unusually swayed by the wisdom of the crowds.

Happy Yelp Reviews Make Bank for Restaurants