What a star is worth: research on online reviews, and how to reply

A guest reads your reviews before they read your menu. For a place that cooks well and treats people kindly, that is good news: reviews tell new guests what your regulars already know.

This guide covers what research shows about ratings, sales and manager replies. It then explains the rules on reviews in the new Icelandic Marketing Act and ends with a simple routine for replies. The legal part is as of October 2026.

What the research shows

The best studies come from the United States and use Yelp data that is now 10 to 15 years old.

One star and revenue

Luca matched Yelp ratings with revenue data for restaurants in Seattle from the Washington State Department of Revenue. Yelp rounds each average to the nearest half star, so two places with almost the same average can show different stars. That lets the study separate the effect of the stars from the effect of the food.¹ A one-star increase led to a 5–9 % increase in revenue for independent restaurants. For chain restaurants, the effect was close to zero.¹

Guests also paid more attention to a rating that rested on many reviews.¹

Half a star and a full room

Anderson and Magruder used the same rounding in San Francisco. They checked online table availability for a party of four on Thursday, Friday and Saturday evenings from July to October 2010.² Half a star more made a restaurant sell out its 19:00 tables 19 percentage points more often, or 49 % more often.²

The effect was larger when guests had less other information about the restaurant. For restaurants with more than 500 reviews, the extra half star made no clear difference.² Ratings seem to matter most when guests do not know the place yet, for example a new restaurant or a visitor in an unfamiliar town.

Independent restaurants feel it most

Chains carry a known name, so guests already have an idea of what they will get. Luca found that Yelp ratings moved revenue for independent restaurants and not for chains.¹ If your restaurant is independent, this is the part of the research that fits you best.

Does a reply from the manager help?

Proserpio and Zervas studied hotels, not restaurants. Hotels that started to reply to reviews got a 0,12-star increase in their ratings and a 12 % increase in the number of reviews.³ The hotels replied to positive, negative and neutral reviews at roughly the same rate.³

After the hotels started to reply, they got fewer negative reviews, but the negative reviews were longer.³ The authors think that unhappy guests write fewer short, unfair reviews when they know the manager reads them.³ We know of no similar study of restaurants, but the result suggests that steady, polite replies are worth the time.

Fake reviews

Yelp filters reviews that its software thinks are suspicious. Luca and Zervas found that about 16 % of restaurant reviews on Yelp were filtered. The filtered reviews were more extreme than others, in both directions.⁴ A restaurant was more likely to commit review fraud when its reputation was weak, for example when it had few reviews or had just received bad ones. Chain restaurants were less likely to do it.⁴ Restaurants that faced more competition were more likely to get unfavourable fake reviews.⁴

For an honest restaurant, a steady flow of real reviews is the best protection, because one unusual review counts for less among many real ones.

The rules in Iceland since May 2026

The Marketing Act no. 44/2026 took effect on 16 May 2026. It replaces the old act on business practices and marketing (lög 57/2005), and Neytendastofa supervises it.^{5 9} The act brings the EU rules on reviews from Directive 2019/2161 into Icelandic law.⁵

If you show reviews on your own pages

When a business gives access to consumer reviews, it must tell guests whether and how it makes sure that the reviews come from people who actually used or bought the service. The act treats this as material information.⁵ The explanatory notes say what that means. If you have a process for checking reviews, tell guests how you check them and how you handle them. For example, say whether you publish all reviews, positive and negative alike, and whether any review was paid for.⁶

This applies, for example, when your website or ordering page shows a selection of reviews. A short line under the reviews is enough: where they come from, and that you show them all or how you choose them.

Claims about your rating

A business must not give false or misleading information, including statements or symbols that suggest approval of its service.⁵ A business must also be able to prove its factual claims.⁵ If your menu or website says “4,8 stars on Google”, make sure that the number is true on the day it is shown, and update it.

Fake reviews and the “blacklist”

The EU directive added two items to the list of practices that are unfair in all cases. One is to say that reviews come from real customers without taking reasonable and proportionate steps to check that. The other is to submit fake reviews or have others submit them, or to misrepresent reviews, in order to promote a product.⁷ The directive’s recitals give examples: buying “likes”, and publishing only positive reviews while deleting the negative ones.⁷

In Iceland, this list goes into a regulation from the minister under article 11 of the new act. The explanatory notes say that the new items will be added that way.⁶ Until new regulations come, the old rules stay in force.^{5 9} As of 3 October 2026, the regulation in force for this list is still no. 160/2009, and it does not yet contain the items on reviews.⁸ We found no new regulation on the government’s regulation site.

This does not make fake reviews safe. The general rules against misleading practices in the act apply now, and a fake review is very likely to mislead.⁵ Fines can reach 4 % of the last year’s total turnover or EUR 2 million, whichever is higher.⁵

The platform rules

Google’s rules for Maps reviews forbid paid reviews, in money or in kind. A business must not offer discounts or free goods for a review. It must not discourage negative reviews or ask only happy guests for a review. It must not set staff a quota of reviews.¹⁰ Asking every guest in the same way for an honest review is allowed.¹⁰

A simple routine for replies

For most restaurants, a fixed half hour once a week is a good start.

1. Read all new reviews on the sites your guests use.
2. Reply to good and bad reviews alike. A short thank-you to a happy guest is fine.
3. Thank the guest and be specific. Name the dish or the evening they mention.
4. Say what you will do. If the guest has a point, say what you will change.
5. Take details offline. Give an email address or a phone number. Do not mention the guest’s booking, bill or other personal details in public.
6. Stay calm. Do not argue about facts in public. If a review breaks the site’s rules, report it through the site.
7. Tell the team. Share good reviews with the staff who earned them, and talk about the real problems in the next team meeting.

An example reply

A guest writes: “Lovely food, but we waited 40 minutes for our mains on Saturday.”

A good reply: “Thank you for coming, and for the kind words about the food. You are right that 40 minutes is too long. Saturday was busier than we had staffed for, and we have added a cook on Saturday evenings. We would love to welcome you again. Please email us at [address] before your next visit.”

The reply thanks the guest, agrees with the fair point, says what changed and invites the guest back. It does not make excuses or give personal details.

About the numbers

• All the effect sizes come from the United States, and most of the data is from 2003 to 2010.^{1 2} Guests and review sites have changed since then.
• Luca’s study is a working paper and has not been through peer review in this form.¹
• The study of replies looked at hotels, not restaurants.³
• We found no Icelandic studies of reviews and restaurant sales.