IndiaTechOnline Special:
By Anand Parthasarathy
August 6 2014: A boutique hotel in Hudson, New York State ( US)  is  facing a barrage of negative publicity after its  bizarre  way of seeking to control negative reviews on the Internet backfired.   Its experience holds many learnings for Indian property owners who are only now grappling with awareness of how  customer  review sites like TripAdvisor  or Hotels.com, can make or mar their reputation.
The Union Guest House in the Catskill mountains in upstate New York is a heritage hotel  with  an olde worlde  ambience that not all guests like.  It is a favourite location for hosting wedding parties -- but while the  bride and groom might be charmed by its attractions, their guests  sometimes  dislike some features -- and say so on Internet   sites.  The Guest House's way of tackling  such negative  reviews or comments  is to fine  the persons making the booking $ 500 for every negative review that is placed on the internet  by anyone in their party! (full text  in box) 
This heavy handed attempt to punish  customers for bad reviews has  led to an avalanche of ridicule after the New York Post carried a  story about the hotel's policy. This has only enraged   more  members of the public and  by  their savage rejoinders  and comments they quickly drove the hotel's rating on one such popular site --  Yelp  -- from 4 star to  one star.
The hotel tried to  retrieve the situation with an  explanation that the policy was a “joke,” but  no one bought this -- and  its   way of taking on  negative customer comments is now the subject of  hundreds of news stories worldwide. Just Google the line " Union Guest House  fines bad reviews" and you will get over 10 pages of news links. 
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Union Guest House Rules (   taken down after the controversy): If you have booked the Inn for a wedding or other type of event anywhere in the region and given us a deposit of any kind for guests to stay at USGH there will be a $500 fine that will be deducted from your deposit for every negative review of USGH placed on any internet site by anyone in your party and/or attending your wedding or event. If you stay here to attend a wedding anywhere in the area and leave us a negative review on any internet site you agree to a $500 fine for each negative review.
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Hotels often have to contend with bad reviews by customers -- and one never knows  how many of the  posts are genuine.  Property owners with  too many bad reviews often subscribes to conspiracy theories   that attribute  bad reviews to  jealous rivals.   There is no sure way of knowing, but    this is not a problem  that you can fight  by  attacking the attackers: That will only make you a victim of what has been known as the Streisand  Effect -- the phenomenon whereby an attempt to hide, remove, or censor a piece of information has the unintended consequence of publicizing the information more widely, usually facilitated by the Internet.  The term  flows from  the experience of  American cinemactress Barbra Streisand, whose 2003 attempt to suppress photographs of her residence in Malibu, California inadvertently generated further publicity of it ( Wikipedia).
The only  sensible way open to  hotels and other properties   is to   dispassionately examine the comment or complaint and   appear contrite or at least helpful  when posting a response.  Aggro is not  the answer.
After all don't you train your front desk staff to be always polite to guests even to the ones who might be a bit  unreasonable?  Just extend this logic when dealing with  online comments  and you will be surprised how often there might be a grain of truth in a guest's posted  comment, even if it is couched in rude language.  Accept it with grace , remedy it and move on.  
When I checked out the website of the NY state hotel which is now at the centre of  this mess, I found that its terms  and conditions are couched in a rude 'take it or leave lt'  language. Its cancellation terms  would be deemed    unenforceable by any Indian hotel.  In effect it says  all  refunds against cancellations are subject to the hotel's discretion and could take 60 days, while on the other hand, the hotel  reserves the right to cancel any  reservation at any time they like without assigning a reason. Our consumer courts will make mincemeat of such anti-customer provisions.   Its responses to negative comments too, are  unrepentent and arrogant... so  its  'fine' policy for adverse reviews  would seem to be part and parcel of a general bad attitude that pervades  its operations  Anyway for us here,  it's a good case study of  mishandling social media.
Because remember, this is a fight you can't win. Trip Advisor, the market leader  gets 250,000 unique visitors every month. You can't take on this number. It may not be fair -- but think of this as the price you have to pay for  operating a business in this Cyber age.
The benefits surely, out weigh the minor irritants like these!

Link to a video news report of the NY hotel here