i

THE IMPACT OF ONLINE REVIEWS TO FINANCIAL PERFORMANCE OF

SELECTED RESTAURANTS IN MANDAUE CITY

A thesis
Presented to the faculty of the
College of Hospitality and Tourism Management
University of Cebu Lapu-Lapu and Mandaue
Mandaue City, Cebu Philippines

In Partial fulfilment
Of the Requirements for the
Degree of Bachelor of Science in Hospitality Management

by:
Baco, Era
Bernaldo, Dimuel C.
Book, Carlito Jr. S.
Cuadra, Christian Jay R.
Daligdig, Joss Mark C.

Acknowledgement and Completely Checked by:

DR. REGIE C. GABUNADA
Research Adviser

2025
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APPROVAL SHEET

IN PARTIAL FULFILLMENT of the requirements for the Degree of Bachelor of

Science in Hospitality Management, this research entitled “THE IMPACT OF
ONLINE REVIEW TO FINANCIAL PERFORMANCE OF SELECTED
RESTAURANTS IN MANDAUE CITY” prepared and submitted by Era Baco,
Dimuel C. Bernaldo, Carlito S. Book Jr., Christian Jay R. Cuadra, Joss Mark C.
Daligdig, has been examined, accepted, and approved for THESIS PROPOSAL.

DR. REGIE C. GABUNADA

Adviser
ACCEPTED AS partial fulfillment of the requirements for the Degree of
Bachelor of Science in Hospitality Management

GRAYFIELD T. BAJAO, DH-HRM

Dean, College of Hospitality and Tourism Management

APPROVED by the tribunal at THESIS PROPOSAL with the grade of .

PANEL OF EXAMINERS

GRAYFIELD T. BAJAO, DM-HRM

Chairman

RAFAEL M. BACHANICHA, PhDM IRENE G. MARIE OSORNO

Member 1 Member 2

GRAYFIELD T. BAJAO, DM-HRM

Dean, College of Hospitality and Tourism Management
Date: May 2025
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ACKNOWLDEGEMENT

This study would not have been successful without the assistance and support of
the following people, who shared their knowledge and given inspiration to the
researchers in accomplishing thus study. It is truly happy with pleasure to acknowledge
the following:

Firstly, praise the Lord God Almighty for His greatness and for giving each
researcher the strength to persevere and stay motivated, especially throughout the
challenging times in completing this study. To God be the Glory;

Dr. Regie C. Gabunada, the research adviser, for his guidance despite his busy
schedule given his responsibilities and for sharing his ideas and knowledge throughout
the research process. His guidance is truly instrumental to the success of this research;

Engr. Roland B. Fernandez, the statistician, for his assistance with in-statistical
computations and corrections on the study. Despite his hectic schedule, he still managed
to impart his expertise;

Dr. Nemesia W. Devero, the research instructor for Class 3E, deserves
appreciation, for sharing her knowledge since the first day of this research journey. Her
patience in proofreading just to make sure that everything is well done is truly
noteworthy. The researchers would like to thank her for her words of encouragement to
uplift the researcher and for consistently reaching out to complete the required tasks,
especially in the trying moments;

Dr. Grayfield T. Bajao, the Dean of the College of Hospitality Management and
chairman of the panel members; for the utmost support in making his research possible.
Also, for believing in the potential of the researchers
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Dr. Rafael M. Bachanicha, the program coordinator and member 1. The

gratitude of the researchers towards him is beyond words.

Faculty members of the College of Hospitality and Tourism Management for

their abiding and assisting all the researchers throughout this study.

The parents of the researchers, who motivate and encouraged the researchers to
strive and pursue harder in this research in the best possible way, and for the never-
ending support financial, moral and spiritual. Without them, it would not have been
possible for the researchers to keep going;

The respondents in this study were highly appreciated for their support and assistance in
helping the researchers make the study possible.

Lasty, the researchers would like to extend their deepest gratitude to their friends and
family for providing a solid foundation of assistance and a secure environment
throughout the demanding and physically taxing stages of finishing this research
endeavo. Sincere appreciation is offered for all that was produced during the course of
the research for this study

THE RESEARCHERS
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Table of Contents

Pages

Cover Page i
Approval sheet ii
Acknowledgement iii
Table of Contents v
List of Appendices vii
List of Figures viii
List of Tables ix
CHAPTER
1 THE PROBLEM AND ITS SCOPE
INTRODUCTION
Rationale of the Study 1
Theoretical Background 3
THE PROBLEM
Statement of the Problem 10
Statement of the Hypothesis 11
Significance of the Study 11
Scope and Limitations of the Study 12
Definition of Terms 13
RESEARCH METHODOLOGY
Research Design 15
Research Environment 16
Research Respondents 17
Research Instrument 18
Dry Run Procedure 19
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Data Sources 19
Research Procedure 20
Data Gathering 20
Date Analysis 21
Statistical Treatment 21
Ethical Consideration 22
Trustworthiness of the Research 23
2 PRESENTATION, ANALYSIS AND INTERPRETATION OF DATA
Profile of the respondents
3 SUMMARY, FINDINGS, CONCLUSIONS AND RECOMMENDATION

REFERENCES 24
APPENDICES
CURRICULUM VITAE
 vii

List of Appendices

Figure Description Pages

A Transmittal Letter
B Survey Questionnaire 27
C Location Map
D Standard Form 1S
E Standard Form 10S
F Standard Form 11S
G Standard Form 3S
 viii

LIST OF FIGURES
Figure No. Description Pages
1 Conceptual Framework 5
2 Research Flow Chart 15
 ix

List of Tables

Table Description
1
2
3
4
5
6
7
 1

CHAPTER 1

THE PROBLEM AND ITS SCOPE

INTRODUCTION

Rationale of the Study

Digital technology has completely reshaped the process by which consumers

make their buying choices within the hospitality sector. Consumers highly rely on online
reviews to make their buying choices especially when selecting restaurants. Customers
in Mandaue City an active and fast-growing Philippine city now enjoy simpler platforms
to post dining reviews because of the expanding presence of online services. The way
restaurant owners perform financially depends on the reviews customers express through
this new shift (Chechi et al., 2021).

Social proof occurs through online reviews because potential customers depend on
what others experienced at restaurants before deciding (Liu et al., 2020). The reputation
of restaurants grows through positive reviews which drives both increased customer
numbers and increased profitability according to Zhang et al. (2022), but negative
reviews negatively impact sales figures and customer attraction. Online reviews play an
essential role for business growth and sustainability in Mandaue City because of its
intense restaurant market competition.

Financial performance gets influenced by three key aspects within online reviews
which include the total number of reviews, the overall rating scale and the expressions of
sentiment within reviews. Positive review volume stands as a key indicator of financial
success because customers tend to select restaurants backed by numerous positive
ratings as documented by Kumar and Gupta (2023). The overall rating which clients
typically see through star ratings functions as a rapid assessment tool that guides
consumers toward their selection (Lee & Yoon, 2021). The numerous restaurants in
Mandaue City compete for attention which makes strong ratings on review platforms
serve as an essential competitive edge for businesses.
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Competitive strength through online reviews depends on both the number of

reviews and their actual content quality according to sentiment analysis findings.
Reviews that express positive sentiments help customers form emotional bonds which
creates higher chances of choosing the business for patronage (Huang et al., 2023). The
dining preferences of Mandaue City residents heavily depend on both traditional word-
of-mouth feedback and electronic customer interactions.

The digital evolution continues to demonstrate why online reviews hold immense
power for altering consumer actions and driving financial business outcomes. The topic
analyzes Mandaue City restaurant financial performance under the influence of online
review feedback to add value to existing knowledge. The research advances
understanding between customer conduct behavior models and financial success
evaluation to generate practical suggestions for restaurant administrators operating
within current dining challenges.

This study aims to examines examines how online reviews specifically affect
restaurant financial outcomes in Mandaue City. This study will evaluate the effect of the
online review information from multiple websites to establish meaningful connections
between these metrics while supplying restaurant owners and stakeholders with essential
insights. The financial relationship between online reviews enables restaurant owners to
build successful marketing designs and improve their services resulting in increased
financial success.
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Theoretical Background

This study is anchored on several key theories that explain the relationship
between online reviews and restaurant financial performance. Among these, the
Electronic Word-of-Mouth (eWOM) Theory serves as a primary foundation.
Hennig-Thurau et al. (2004) describe eWOM as consumer-generated content
shared through digital platforms, influencing the perceptions and decisions of
potential customers. Unlike traditional word-of-mouth, online reviews have a far-
reaching impact due to their accessibility, permanence, and visibility. This theory
supports the idea that customer feedback on online platforms plays a significant
role in shaping public perception, brand reputation, and ultimately, the revenue of
restaurants.

Additionally, the Signaling Theory (Spence, 1973) provides a crucial perspective

in understanding how online ratings and customer reviews act as quality signals to
potential customers. In a competitive marketplace like the restaurant industry, where
consumers often rely on external cues to assess service quality, online reviews serve as
an important indicator of a restaurant’s reliability and performance. A restaurant with
high ratings and positive reviews is more likely to attract customers, as these signals
reduce uncertainty and increase trust in the establishment.

Furthermore, the study draws upon Social Influence Theory (Cialdini & Goldstein,
2004), which explains how individuals are influenced by the opinions and behaviors of
others. Online reviews create a form of social proof, where potential customers rely on
the experiences of previous diners to make informed decisions about their dining
choices. The presence of a large number of positive reviews fosters confidence and
encourages new customers to visit a restaurant, while negative feedback can deter
potential patrons. This aligns with the study’s aim of assessing how online reviews
influence consumer behavior and, consequently, financial performance.
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Another critical theoretical framework that underpins this study is the Expectancy-
Confirmation Theory (ECT) (Oliver, 1980). This theory explains that customer
satisfaction is determined by the alignment between expectations and actual experiences.
Online reviews shape consumer expectations even before they visit a restaurant. If the
experience meets or exceeds expectations set by positive reviews, customer satisfaction
increases, leading to repeat visits, customer loyalty, and positive financial outcomes.
Conversely, negative reviews can lower expectations and discourage potential customers
from choosing a particular restaurant.

Lastly, the Theory of Planned Behavior (TPB) (Ajzen, 1991) supports this study
by explaining how consumer behavior is driven by attitudes, subjective norms, and
perceived behavioral control. Online reviews shape customer attitudes toward a
restaurant, influence social norms about dining choices, and affect the ease of decision-
making when selecting where to eat. This theory reinforces the idea that customer
decisions, shaped by online reviews, directly impact a restaurant’s financial
performance.

By anchoring this study on these theoretical perspectives, it becomes clear that

online reviews are more than just customer opinions—they are a crucial factor in
consumer decision-making and business success. The integration of these theories helps
provide a strong foundation for analyzing how online reviews influence restaurant
revenues, customer engagement, and competitive positioning in Mandaue City.
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THE IMPACT OF ONLINE REVIEWS TO FINANCIAL

PERFORMANCE OF SELECTED RESTAURANT IN
MANDAUE CITY

Electronic Word of Mouth

(eWOM)
Theory
T

Signaling Theory Expectancy-Confirmation Theory

Social Influence Theory Theory of Planned Behavior

Sales Revenue
Net Income
Assets
Operating Expenses

Proposal Action
Plan Pan
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Figure 1
CONCEPTUAL FRAMEWORK

The study’s Framework serves as the supporting structured idea that highlights
the interdependence of variables and also the theories used in the study. The
framework comprises one anchored theory and 4 supporting theories that investigates
the impact of online reviews to the financial performance of restaurants in Mandaue
City. It can be said that through using the Electronic Word of Mouth Theory (eWOM)
as an anchored theory into understanding how online reviews affects the financial
performance of restaurants, it paves way into 4 supporting theories that talks about the
behavior, social influence, and expectation vs. reality of customers to which would
influence them into leaving a review in a specific restaurant. Since this is the case, it
would affect the restaurant’s financial performance specifically in the aspects of sales
revenue, net income, operating expenses, and others in which the study seeks to
understand how it works, what gives impact of, and propose an action plan in order for
restaurants to survive despite the reviews left by people online. As such, the following
variables indicate areas for assessing and evaluating the related problems in the study.

REVIEW OF RELATED LITERATURE AND STUDIES

According to Chevalier and Mayzlin (2006), consumers tend to trust online

reviews more than traditional advertisements due to their perceived authenticity and
unbiased nature. Similarly, Hu, Pavlou, and Zhang (2009) found that customers rely
heavily on online ratings and feedback when selecting dining establishments, especially
in urban areas where multiple options exist.

In the context of the restaurant industry, Luca (2016) analyzed data from Yelp and
discovered a strong correlation between online ratings and restaurant revenues. The
study concluded that a one-star increase in ratings could lead to a 5-9% increase in
revenue. This finding highlights the importance of maintaining a positive online
reputation to attract more customers and boost financial performance.
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Anderson and Magruder (2012) examined the relationship between Yelp reviews
and restaurant sales, revealing that higher ratings and positive reviews lead to increased
consumer visits and revenue growth. The study also emphasized that even small changes
in ratings could have substantial effects on customer traffic.

Moreover, Zhang, Ye, Law, and Li (2010) investigated how online customer
reviews impact the hotel and restaurant industry. Their study indicated that the volume,
valence, and sentiment of reviews influence a restaurant’s ability to attract customers
and maintain financial stability. Positive reviews enhance consumer confidence, while
negative feedback can deter potential patrons, leading to revenue losses.

A study conducted by Kim, Lim, and Brymer (2015) further explored the impact
of review credibility and user-generated content on restaurant profitability. The findings
suggested that detailed and well-articulated reviews have a more significant impact on
potential customers compared to generic or vague feedback. This underscores the
importance of restaurants actively managing their online presence and responding to
customer feedback appropriately.

According to a study by Zhang, Gu, and Jahromi (2020), restaurants with strong
social media engagement tend to have higher brand visibility, leading to increased
customer interest and revenue growth. With the rise of social media platforms,
consumers now have multiple channels to express their opinions about dining
experiences. Platforms such as Facebook, Instagram, and Google Reviews have become
essential tools for restaurants to build their online reputation

Review aggregators, such as TripAdvisor and Google Reviews, also play a crucial
role in shaping consumer perceptions. Sparks and Browning (2011) found that
restaurants with higher aggregated ratings on these platforms experienced better
 8

financial performance. Additionally, customer responses from restaurant owners on

review platforms were associated with improved brand loyalty and customer retention.

A study by Cruz and Martinez (2019) examined the effect of online reviews on
small and medium-sized restaurants in Cebu, revealing that businesses with proactive
online engagement strategies reported better financial outcomes than those with minimal
digital presence.

Furthermore, data from the Department of Trade and Industry (DTI) in Mandaue
City indicate that restaurants investing in online marketing and reputation management
experience higher sales growth compared to those relying solely on traditional marketing
efforts. This suggests that leveraging online reviews effectively can contribute to
improved financial performance among restaurants in the region.

According to Filieri, Alguezaui, and McLeay (2015), consumers are more likely to
trust online reviews when they perceive them as genuine and unbiased. Fake or
manipulated reviews, on the other hand, can damage a restaurant’s reputation and deter
potential customers.

Additionally, research by Xie, Zhang, and Zhang (2014) found that verified reviews
and user-generated photos enhance credibility, increasing consumer confidence in a
restaurant’s quality. The presence of owner responses also plays a vital role in mitigating
the impact of negative reviews, as prompt and professional responses demonstrate
accountability and customer service commitment.

Studies by Lee, Song, and Kim (2016) suggest that the language used in reviews
can significantly impact consumer perception. Positive sentiment, persuasive language,
and descriptive content tend to attract more customers, while highly critical or
aggressive language in negative reviews may lead to more significant financial losses for
restaurants.
 9

Furthermore, Kwok, Xie, and Richards (2017) explored how emotional tone and
star ratings interact to influence customer behavior. Their findings indicate that even
moderate-rated reviews with positive sentiment can encourage customer visits,
emphasizing the role of linguistic cues in consumer decision-making.

Research by Park, Lee, and Han (2020) suggests that restaurants with higher
online ratings tend to outperform competitors in the same geographic area. This
competitive edge can lead to increased brand recognition and higher market share over
time.

Moreover, a study by He, Zha, and Li (2013) explored how restaurant owners can
strategically use online reviews to differentiate themselves. Their findings suggest that
highlighting unique selling points in customer responses and leveraging positive
feedback in marketing campaigns can create a lasting competitive advantage.

According to Lee and Cranage (2011) indicates that negative reviews, whether
justified or not, can spread rapidly and harm a restaurant’s financial performance. In
some cases, competitors or disgruntled customers may post fraudulent reviews, making
it difficult for businesses to maintain a fair online presence.

Additionally, Zhao, Wang, and Fan (2021) found that responding to negative
reviews in a defensive or confrontational manner can further damage consumer trust.
Instead, adopting a professional and solution-oriented approach is crucial in mitigating
the negative effects of bad reviews
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THE PROBLEM

Statement of the problem

This study aims to determine the impact of online reviews on the financial
performance of restaurants in Mandaue City. Specifically, it seeks to answer the
following questions:

1. What is the demographic profile of the respondents in terms of:

1.1 Age
1.2 Gender
1.3 Nationality;
1.4 Highest educational attainment;
1.5 Employment status;
1.6 Years of employment;
2. What online platforms used by the restaurants?
3. What is the impact of online reviews in the financial performance of restaurants
in Mandaue City in terms of:
3.1 Sales revenue;
3.2 Net Income;
3.3 Assets;
3.4 Operating expenses;
3.5 Overall financial performance;
4. What are the common problems encountered on the financial performance for
restaurants in Mandaue City?
5. Is there a significant relationship between the profile of respondents and the
impact of online reviews on the financial performance of restaurants in Mandaue
City?
6. Based on the findings of the study, what action plan may be proposed?
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Statement of Hypothesis

H0. There is no significant relationship between the profile of respondents and the
impact of online reviews on the financial performance of restaurants in Mandaue City.

Significance of the study

This study on the impact of online reviews on the financial performance of

restaurants in Mandaue City is significant for various stakeholders, including restaurant
owners, customers, marketing professionals, and future researchers.

Restaurant Owners and Managers: This study provides insights into how online
reviews influence customer foot traffic, revenue, and profitability. It helps restaurant
owners develop effective strategies for managing online feedback, improving customer
satisfaction, and maintaining a strong online reputation to boost financial performance.

Customers/Guests: Understanding how online reviews impact restaurant businesses can

help customers make more informed dining decisions. This study highlights the
importance of customer feedback in shaping service quality and overall dining
experiences.

Marketing and Business Strategies: The findings can guide marketing professionals
and business strategists in developing online reputation management strategies. By
understanding the role of online reviews in consumer behavior, they can implement
targeted marketing approaches that enhance brand image and customer engagement.

Local Business Community and Economic Development: Since the food industry
plays a vital role in the local economy, the study provides insights that may help
improve the competitiveness of restaurants in Mandaue City. By leveraging online
reviews effectively, restaurants can attract more customers and contribute to the city’s
economic growth.
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Researchers: This study is a useful resource for researchers examining the connection
between company performance and internet reviews, especially in the restaurant sector.
It offers factual information and analysis that might help future research on customer
behavior, digital marketing, and hotel management.

CHTM Faculty: With practical applications in digital marketing, consumer behavior,

and business management, the CHTM faculty can improve their curriculum by using this
study’s insightful findings about the effect of online reviews on restaurant financial
performance. Along with providing students with pertinent market knowledge, it also
helps mentor them in efficient online reputation methods.

Future Researchers: This study serves as a reference for future studies exploring the
relationship between digital consumer behavior and business performance. It may also
inspire further research on the broader implications of online reviews in other industries.

CHTM Department: This research provides valuable practical insights for hospitality
management, culinary arts, and tourism students, bridging the gap between theory and
practice.

Scope and Limitation of the Study

This study focuses on examining the impact of online reviews on the financial
performance of restaurants in Mandaue City. It specifically analyzes how customer
reviews on platforms such as Google Reviews, Facebook, TripAdvisor, and Zomato
influence restaurant revenue, customer foot traffic, and overall profitability. The study
also explores the strategies used by restaurant owners to manage their online reputation
and customer feedback.

This study is limited to restaurants operating within Mandaue City and does not
include other types of food establishments such as food stalls, cafeterias, or food
delivery services without physical dine-in locations. It primarily considers customer-
generated online reviews and does not assess professional food critic reviews or
advertisements.
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Additionally, the study relies on financial data and review trends from restaurant
owners willing to participate, which may limit the generalizability of the findings.
Factors such as economic conditions, seasonal demand, and marketing strategies beyond
online reviews are not the primary focus of this research, though they may be
acknowledged as external influences.

The study period is also limited to a specific timeframe 1 st semester S.Y. 2025-
2026, making it difficult to capture long-term trends in financial performance related to
online reviews. Moreover, customer perceptions and behavioral responses to reviews
may vary, and the study does not delve into psychological or sociocultural factors
influencing review impact.

Definition of Terms

Assets. Property owned by a person or company, regarded as having value and available
to meet debts, commitments, or legacies.
Demographic Profile. A collection of data about a specific group of people, including
characteristics like age, gender, income, education, and other relevant factors, used to
understand the group’s composition and behaviors
Financial Performance. Refers to how effectively a company uses its resources to
generate revenue, manage assets and liabilities, and maintain overall financial health,
assessed through various metrics and financial statements.
Net Income. Is a company’s profit after all expenses, including taxes and interest, are
deducted from its total revenue.
Online Reviews. Evaluations or feedback provided by customers about their
experiences with products, services, or businesses, typically posted on e-commerce
platforms, social media, or dedicated review websites
Impact: the action of one object coming forcibly into contact with another.
Operating Expenses. Are the ongoing costs a business incurs to run its daily operations,
including things like salaries, rent, utilities, and marketing
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Sales Revenue. Is the total income a company generates from selling its products or
services, representing the top-line figure in an income statement before deducting costs
or expenses.
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RESEARCH METHODOLOGY

Research Design

This study employs a quantitative research design to examine the impact of

online reviews on the financial performance of restaurants in Mandaue City. A
descriptive-correlational approach is utilized to measure the relationship between online
review factors such as review volume, rating scores, and sentiment analysis and
restaurant financial indicators, including revenue and customer foot traffic. The study
will collect and analyze secondary data from online review platforms and financial
reports to identify trends and correlations. Additionally, a survey will be conducted
among restaurant owners and managers to gain insights into their perceptions of online
reviews and their business performance.

INPUT PROCESS OUTPUT

FEEDBACKS
1. What is the Data collection Presentation of results,
demographic profile of throughout online including statistical
the respondents in terms review platforms and findings and correlations
of: financial records.
1.1 Age Development of
1.2 Gender Survey distribution to recommendations for
1.3 Nationality; restaurant owners and restaurant businesses
1.4 Highest educational managers. On leveraging online
attainment; reviews to enhance
1.5 Employment status; Data processing financial performance
1.6 Years of employment; statistical analysis, and
2. What online platforms correlation testing. Conclusion and
used by the restaurants? formulation of strategic
3. What is the impact of Interpretation of action plans for
online reviews in the findings based on restaurant owners in
financial performance of research objectives Mandaue City.
restaurants in Mandaue

Figure 2

The study utilizes the Input-Process-Output (IPO) model as its framework. This
 17

model depicts the research process as a series of connected boxes representing inputs,
processes, and outputs. After gathering data, the researchers will analyze and interpret the
responses to examine the impact of online reviews to financial performance of a
restaurants in Mandaue city.

Research Environment

This study will be conducted at Mandaue City, a highly urbanized area in the
Philippines known for its diverse restaurant industry. The city serves as a commercial
hub with a mix of small, medium, and large-scale dining establishments that cater to
both local residents and tourists. The research environment includes restaurants listed on
major online review platforms such as Google Reviews, Facebook, and TripAdvisor,
where customers frequently leave feedback on their dining experiences. By focusing on
Mandaue City, the study aims to capture the impact of online reviews in a competitive
food business landscape, providing valuable insights into how digital reputation
influences financial performance within this setting.
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Research Respondents

The respondents of the study consist of employes of the selected restaurants in

Mandaue City. These employees will be selected based on their direct involvement
and knowledge of online reviews and financial performance. A survey questionnaire
will be utilized to gather the necessary data targeting the respondents needed such as
chefs, kitchen staff, restaurant managers, and service staff. Who actively participated
in or had insight into online reviews they receive and how it affects their restaurants’’
financial performance.
A total of 100 respondents from various restaurants are Bound to be selected to
participate in the study. The selection for the participant will be on the specific criteria
stated including the highest educational attainment, employment status, and years of
employment. According to a study by Kaur (2021), a sample size determination is
considered to be an important step in research methodology as it is an act of choosing
the number of observers or replicates to include in a specific statistical sample.
Furthermore, a sample size of 100 is considered to be a minimum threshold for
obtaining meaning results in research specifically in surveys as it helps to ensure that
the result is statistically significant.
Table 1
Distribution of Respondents

Selected Restaurant Sample Size Percentage

Restaurant A 20 20%

Restaurant B 20 20%

Restaurant C 20 20%

Restaurant D 20 20%

Restaurant E 20 20%

Total 100 100%

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Table 1 shows how the respondents will be distributed across the restaurants in
Mandaue City. The study will choose 5 restaurants in Mandaue City which are
available on the online review platforms, each with 20 respondents, for 100. Each
establishment is allocated with a 20% percentage, which would bring the total of
100%. The respondents of this study will consist of employee who has direct
involvement on the online reviews and financial management of restaurants in
Mandaue City. They will answer a survey questionnaire designed by researchers to
collect data and information with regard to the impacts of online reviews in the
financial performance of restaurants.

Research Instrument

The researchers will utilize a researcher-made survey questionnaire as the

primary instrument for the data collection. The questionnaire is composed of three
sections designed to cover all variables of the study and will be utilized to gather the
necessary data for discussion.
The first part will prompt the respondents to provide basic survey information
related to their profile. This section covers the demographic data information that the
researcher needs such as age, gender, nationality highest educational attainment,
employment status and years of employment which are all relevant to the study.
The second part of the questionnaire focuses on identifying the online
platforms that the selected restaurants in Mandaue City use to which they can access
reviews written by customers. This is needed in order for the researchers to identify
where do mostly restaurants within Mandaue city seek feedback and reviews from.
The third part will consist of the Impact of Online Reviews on the Financial
Performance of Restaurants to which the section will contain statements that will be
measured using weighted mean and a 5-point Likert Scale, where 5 indicated Strongly
Agree, 4 indicated Agree, 3 indicated Neutral, 2 indicated Disagree, and 1 indicated
Strongly Disagree. This part will explore questions that covers various aspects of the
 20

study such as Sales revenue, Net Income, Assets, Operating Expenses, and Overall
Financial Performance.

Dry-Run Procedure

Before performing the actual data gathering procedure unto the respondents of
the study, a preliminary evaluation known as a pilot testing is conducted in order to
make sure that the survey questionnaire is reliable and accurate to answer the research
questions presented. In achieving this, a selected number of respondents who are
excluded from the main study will be given a questionnaire. This procedure aims into
evaluating the quality and identify issues with the formulated questionnaire that should
be addressed before the formal data gathering procedure starts. In the pilot study, the
researchers will perform an effective trial run before administering the survey
questionnaire to the final respondents of the study. The researcher will not include the
pilot study respondents to the actual data gathering procedure as the pilot study will
only be used to ensure the validity and reliably of the formulated survey questionnaire.
By doing this, it would spot issues or flaws in questions construction in which
researchers can still be able to improve and revise it before the actual data gathering
procedure. The survey questionnaire will be reviewed and revised based on the
feedbacks and observations from the pilot testing ensuring that intended variables are
accurately measured.

Data Sources

A thorough investigation will be conducted to determine the validity of the

business respondents will require meticulous attention in detail. A formal letter will be
sent to the (Identify who will you get the lists of eligible restaurants within Mandaue),
requestion the official list of restaurants within Mandaue City. After receiving the
required list, the data that will be collected ill become the basis for identifying the
eligible respondents for the data collection process. Additionally, a location Map of
the restaurants where the survey will be conducted is included in the appendix.
 21

Research Procedure

The researchers begin the study by conceptualizing a research title coming

from the different topics provided by the research coordinator. Rather than creating a
research title based solely on the topics, the researchers decided to conceptualize a title
that hits a problem as well within the topics given to which the impact of online
reviews on the financial performance of restaurants in Mandaue City resonated. Once
the research title has been finalized and approved by the dean and research
coordinator, the researchers then proceed with the construction of Chapter, the
preliminary section of the manuscript that enables researchers to state the problem and
built foundation of the study.
After the completion of Chapter 1, the researchers will then prepare a formal
transmittal letter addressed to the management of the selected restaurants in Mandaue
City. This letter will request permission to conduct the research and to distribute
survey questionnaires to the employees. Once the transmittal letter will be approved
and signed by the research panels, the researcher will then deliver it to the
management of each restaurant. Upon securing approval, the researchers will schedule
an appropriate time to administer the survey questionnaire to the respondents in order
to avoid disrupting the disturbance of working hours.

Data Gathering

A letter of permission to conduct the study will be submitted to the research

coordinator and school Dean at the College of Hospitality and Tourism Management
University of Cebu Lapu-Lapu and Mandaue.
Once permission is granted to conduct the study, the researchers will coordinate the
chosen respondents. A letter of permission to conduct the study and also informed
consent will be presented to the management of the restaurants in order for them to be
informed of the study’s nature, its purpose and why they are needed for the study.
Each participant has the liberty to refuse into participating to the study if they wish so.
Those who are willing to partake into the study will receive a questionnaire from the
 22

researchers and will be given a period of time to fill out the survey. After they answer
theuestionns from the questionnaire, the researchers will personally collect the
questionnaires from the participants and will assure them that the information will be
keep confidential. After the collection of all the survey forms, the researcher will
analyze, summarize, and interpret the data in order to gather the necessary information
of the study.

Data Analysis

This study applies a variety of statistical tools to interpret and analyze the
collected data namely: simple percentage and frequency, weighted mean, ranking and
chi-square. The aforementioned statistical tools are important as each represent the
statement of the problems presented by the researcher and it makes easier to organize,
interpret and analyze the results in an accurate manner. The application of the
statistical methods would allow the researchers to create a comprehensive and orderly
understanding of the data that will be collected, aiding researchers draw meaningful
insights and conclusions from the study. Lastly, it ensures reliability and validity of
the findings to which ultimately supporting the objectives of the study.

Statistical Treatment

The following statistical tools will be applied in the interpretation and

analyzation of the collected results of the study:
Simple Percentage. This will be used to determine the frequency and
percentage distribution of the demographic profile specifically in terms of age, gender,
nationality, highest educational attainment, employment status and years of
employment.
Weighted mean. This will be utilized to assess the impacts of online reviews
among the selected restaurants in Mandaue City.
Ranking. This will be utilized to identify the online platforms used by
restaurants and also the common problems encountered on the financial performance
for restaurants in Mandue City. Ranking will also present what is the top online
 23

platforms restaurants in Mandaue uise to check reviews and the top three problems
encountered on the financial performance.
Chi-Square. This will be used to determine the significant relationship
between the profile of respondents and the impact of online reviews on the financial
performance of restaurants in Mandaue City.

Ethical Consideration

The researcher will seek and obtain approval for the study to be conducted
outside of school grounds to the administration and/or Dean’s Office. Furthermore,
obtaining approval as well for the study to on the impact of online reviews on the
financial performance of selected restaurants in Mandaue City through an ethics
review process in order to ensure compliance with the established research procedure,
as well as the ethical standards. A formal permission letter addressed to the restaurant
management, requesting authorization to conduct the study within their
establishments. The permission letter, along with the study proposal, will be reviewed
and approved by the ethics committee.
Once authorization is granted for the researcher to perform data collection, an
informed consent form will be distributed to the selected participants of the study.
These forms will outline that their participation in the study is voluntary, assuring the
participants that all data would be treated with strict confidentiality, and emphasizes
their right to withdraw at any time without repercussion. By following the stated
procedures, the researchers will ensure that the study met ethical standards and
protects participants rights throughout the research process.
Informed Consent. Participants will be fully informed about the study’s
nature, the potential risks and benefits in participating, and their rights as participants.
Their agreement to participate will be entirely voluntary.
Respondent Selection. The participants in this study will be (state who are the
respondents
Confidentiality and Privacy. Participant’s personal information and response
for the data collection will be kept confidential, and their privacy will be protected.
 24

Minimizing Harm. By having a selected participants for the study, the

researcher will take steps into reducing possible inconvenience and discomfort that
might arise from their participation in the study.
Fairness and Justice. Participants of the study will be selected fairly and no
bias is formed. The possible risk and benefits of the study will be equitably be
distributed among them. As such, participants will be treated with dignity, and their
autonomy will be respected all throughout the research process.
Scientific Integrity. Researcher will ensure that the study is conducted in a
transparent, scientifically valid and accurate manner to preserve its credibility and
trustworthiness.

Trustworthiness of the Research

Credibility: The study utilizes a reliable researcher-designed questionnaire
with data that will be collected from the selected restaurants in Mandaue City. A
research statistician will analyze the data using the appropriate statistical tools and
method for interpretation and analyzation.
Transferability: The findings will be presented to the faculty at the College of
Hospitality and Tourism Management University of Cebu Lapu-Lapu and Mandaue
Dependability: Future researchers can utilize the study as a basis and may
have the same study to create credibility and consistency in the results presented.
Confirmability: The data in this research will be dependable and accurate.
This research will be strictly adhered to, resulting in objective results, findings and
recommendation without any form of biases form the researchers. The data will be
gathered, and responses will be carefully and impartially evaluated.
 25

REFERENCES

A. Book
Gupta, S. K., & Agrawal, D. P. (Eds.). (2023). Handbook of research on cybersecurity
issues and challenges for business and FinTech applications. IGI Global.

Gitaharie, B. Y., Dewi, M. K., & Yulianti (Eds.). (2020). Research on firm financial
performance and consumer behavior. Nova Science Publishers.

Singh, N., Kansra, P., & Gupta, S. L. (Eds.). (2023). Digital influence on consumer
habits: Marketing challenges and opportunities. Emerald Group Publishing.

B. Journal Articles
Chechi, A., et al. (2021). The Role of Online Reviews in Consumer Decision-Making:
A Study in the Restaurant Sector. Journal of Hospitality Marketing & Management.

Lee, S., & Yoon, H. (2021). The Impact of Online Ratings on Consumer Choice: A
Study of the Restaurant Industry. Journal of Consumer Research.

Liu, Y., et al. (2020). Social Proof and Online Reviews: How They Affect Consumer
Behavior in Restaurants. Journal of Business Research.

Santos, M., et al. (2024). Marketing Strategies for Restaurants: Leveraging Online
Reviews for Financial Success. Journal of Marketing Theory and Practice.

Abdullah, S., Van Cauwenberge, P., Vander Bauwhede, H., & O'Connor, P. (2022).
User-generated reviews and the financial performance of restaurants. International
Journal of Contemporary Hospitality Management, 34(10), 3697–3714.
 26

Kim, J., Lim, H., & Brymer, R. A. (2021). The financial impact of online customer
reviews in the restaurant industry: A moderating effect of brand equity. International
Journal of Hospitality Management, 95, 102895.

Fang, L. (2022). The effects of online review platforms on restaurant revenue,

consumer learning, and welfare. Management Science, 68(2), 1481–1499.

Wang, Y., Kim, J., & Kim, J. (2021). The financial impact of online customer reviews
in the restaurant industry: A moderating effect of brand equity. International Journal
of Hospitality Management, 95, 102895.

C. Internet Sources
Black Box Intelligence. (2024). 4 Impacts of average star ratings & 7 best practices for
restaurants. https://blackboxintelligence.com/blog/impacts-of-average-star-ratings/

Ciancio, D. R. (2021). How important is reputation management? National Restaurant

Association. https://restaurant.org/education-and-resources/resource-library/how-
important-is-reputation-management/

Lima, V. Z., Mainardes, E. W., & Cavalcanti, R. N. (2019). The impact of social
media reviews on restaurant business performance. Sustainability, 12(4), 1646.
https://www.mdpi.com/2071-1050/12/4/1646

Anderson, C. K., & Lawrence, B. (2014). The influence of online reputation and
product heterogeneity on service firm financial performance. Service Science, 6(4),
217–228. https://ecommons.cornell.edu/bitstreams/58c5ca02-738a-44a2-ae51-
408fcf019eb7/download

Motyka, S., & Li, M. (2022). Review ratings, sentiment in review comments, and
restaurant profitability. Cornell Hospitality Quarterly, 63(4), 528–545.
https://journals.sagepub.com/doi/10.1177/19389655231214758
 27

Luca, M. (2016). Reviews, reputation, and revenue: The case of Yelp.com. Harvard
Business School NOM Unit Working Paper No. 12-016.
https://www.hbs.edu/ris/Publication%20Files/12-016_a7e4a5a2-03f9-490d-b093-
8f951238dba2.pdf
 28

APPENDIX E

SURVEY QUESTIONNAIRE

Dear Respondents,

Greetings!

We, the fourth year BSHM students from the university of Cebu Lapu-Lapu and
Mandaue, are conducting a research study entitled “The Impact of Online Reviews
on the Financial Performance of selected Restaurants in Mandaue City”. The
purpose of this study is to assess how online reviews influence the financial
performance of Restaurants in Mandaue City.

Your participation in this survey is highly valuable, as it will contribute to the success
of our research. We assure you that all information provided will be treated with
utmost confidentiality and used solely for academic purposes

We appreciate your time and cooperation in answering this questionnaire

Thank you very much

Sincerely,
The Researchers

This survey is intended to examine the THE IMPACT OF ONLINE REVIEWS

TO FINANCIAL PERFORMANCE OF SELECTED RESTAURANTS IN
MANDAUE CITY. Please fill out the necessary information for these instruments.
The responses gathered in this research will be treated with confidentiality and for
academic purposes.
 29

PART I. DEMOGRAPHIC PROFILE OF THE RESPONDENTS

Please provide information by checking (✓) or writing your answer in the space
provided.

1. Age:
☐ 18-25 ☐ 46-55
☐ 26-35 ☐ 56 and above
☐ 36-45

2. Gender:
☐ Male ☐ Prefer not to say
☐ Female

3. Nationality:
☐ Filipino
☐ Foreign (Please specify: _______)

4. Highest Educational Attainment:

☐ High School Graduate ☐ College Graduate
☐ College Undergraduate ☐ Postgraduate

5. Employment Status:
☐ Employed (Full-time) ☐ Self-employed
☐ Employed (Part-time) ☐ Unemployed

6. Years of Employment:
☐ Less than 1 year ☐ 4-6 years
☐ 1-3 years ☐ More than 6 years
 30

PART II. ONLINE PLATFORMS USED BY THE RESTAURANTS

Which online platforms does your restaurant use for customer reviews? (Check all that
apply)
☐ Facebook
☐ Google Reviews
☐ TripAdvisor
☐ Zomato
☐ Instagram
☐ Yelp
☐ Others (Please specify: ________)

PART III: IMPACT OF ONLINE REVIEWS ON FINANCIAL PERFORMANCE

Instruction: The following questions are related to the Impact of Online Reviews on
the Financial Performance of Selected Restaurants in Mandaue City. Using the scale
below, please rate below and put a checkmark on the column corresponding to your
answer.
Scale Description Verbal Interpretation

4 Strongly Agree “Strongly Agree” means that the respondent

highly supports the statement to great extent

3 Agree “Agree” implies that the respondent

moderately supports the statement to an
average extent
2 Disagree “Disagree” means that the respondent
disagrees to the statement to a low extent
 31

1 Strongly Disagree “Strongly Disagree” means that the

respondent does not support the statement

Sales Revenue 4 3 2 1

1. Positive online reviews lead to higher sales

revenue for business.
2. A Significant number of negative online
reviews reduces sales revenue
3. The frequency of online reviews directly
influences sales revenue
4. Business with better average ratings in online
reviews experience increased sales.
5. Online reviews have a noticeable impact on
short-term sales revenue growth.

Net Income 4 3 2 1

1. Positive online contribute to an increase in net

income.
2. Negative reviews directly affect the net income
of a business.
3. A large number of positive reviews leads to
improved profitability and net income.
 32

4. Online reviews help business identify areas of

improvement, which in turn boosts net income.
5. Business with a higher volume of reviews see
consistent growth in net income.

Assets 4 3 2 1

1. Positive online reviews help increase the value

of a business assets over time.
2. Negative online reviews can lead to a reduction
in the perceived value of a business’s assets.
3. The impact of online reviews on assets is
evident in the overall market valuation of a
business.
4. Online reviews help businesses identify areas of
improvement, which in turn boost net income.
5. Online reviews have little no impact on a
company’s physical or financial assets.

Overall Financial Performance 4 3 2 1

1. Overall financial performance is significantly

affected by the volume and sentiment of online
reviews.
2. Business with consistent positive reviews
generally show better overall financial
performance.
3. Negative online reviews contribute to a decline
 33

in overall financial performance.

4. The financial performance of a business can be
forecasted by analyzing online reviews trends.
5. Companies with a high number of reviews (both
positive and negative) see fluctuations in their
overall financial performance.
Operating Expenses 4 3 2 1

1. Business with negative reviews often incur

higher operating expenses to manage customer
dissatisfaction.
2. Positive online reviews help reduce the need for
costly customer service interventions.
3. Companies often spend more on marketing and
promotions to counter negative online reviews.
4. Business with positive reviews tend to have
more efficient operations and lower operating
expenses.
5. Operating expenses increase when a company is
forced to address the issues highlighted in online
reviews.