The Riverside Hotel and Restaurant in Evesham, Worcestershire, is facing ruin after it was 'red flagged' by the popular travel website TripAdvisor.
Officials from the travel review site believed that hotel management had posted a glowing review themselves because it came from an internal computer.
As a result a 'message from TripAdvisor' was posted in bright red on the top of the page about the hotel.
It read: "TripAdvisor has reasonable cause to believe that individuals or entities associated with or having an interest in this property may have interfered with traveller reviews and/or the popularity index for this property.
"We make our best efforts to identify suspicious content and are always working to improve the processes we use to assess traveller reviews."
However the hotel owner, Deborah Sinclair, says that the review was posted by a customer using the hotel's Wi-fi internet connection, meaning its IP address showed it was written on an internal computer.
Since the hotel was red flagged, Mrs Sinclair says that there has been a "catastrophic collapse in bookings".
Previously the hotel was ranked number one in the area and charged from £125 per night, but now Mrs Sinclair has been forced to reduce prices by almost 70 per cent to fill rooms that always used to be full.
Mrs Sinclair said that an unnamed customer, who stayed for a month after his home was flooded, was so pleased with his stay that he wrote the review almost immediately after checking out and also bought her flowers in thanks.
She says: "When it [the red flag] went up, the phone stopped ringing. I guarantee 100 per cent I've not written anything about my hotel on there."
Within its advice section, TripAdvisor recommends that "guests submit a review when they return home from their trip. A review submitted from a hotel lobby computer may appear to be written by staff."
The website is currently being investigated by the Advertising Standards Authority following thousands of complaints from hoteliers about allegedly misleading and fraudulent reviews.
A spokesperson for TripAdvisor told AOL Travel: "The red badge was not applied as a result of an isolated review posted by a guest from the hotel's lobby. As a result of our investigation, we have reasonable cause to believe that the owner and/or individuals associated with the owner fraudulently posted positive reviews on the Riverside Hotel & Restaurant and negative reviews on a competitor's property. We issued warnings to the owner on 16 March and 23 August and have since received communications from the owner. The identified activity continued despite our warnings and, as the activity is against our policies, we applied the red badge to protect consumers."
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