Influences on Decision Making for Online Bookings

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Table of Contents

List of Figures

Preface

Acknowledgement

Chapter 1 – Introduction

Overview

Choice of subject

Aim and Objectives

Chapter 2 – Literature Review

Evolution of online purchasing – Customers’ perspective

Benefits of Internet

Benefits of Online Distribution for Hotels

Determinants influencing the Online Booking Behavior

Consumer behaviors towards online shopping

Personal Characteristics

Psychological Characteristics

Social Characteristics

Cultural Characteristics

Internet and Social Media Usage behavior

Social Media

Social Media Optimization

Mobile Internet Usage Worldwide

Website and Convenience

Information quality

Security, Privacy & Perceived Risks

Responsiveness and Website functionality

Customer Relationship

Price and Promotion

Consumer Psychology and Pricing

Promotions

Chapter 3 – Research & Methodology

The research approach

Target Population

Source of data

Limitations of the survey

The survey

Chapter 4 – Results and Analysis of the research work

General

Perceived Risks in Online Purchasing

Responsiveness and Website Functionality

Price and Promotion

Chapter 5 – Recommendations

Chapter 6 – Conclusion

Reference List

List of Figures

Figure 1 – Number of digital buyers worldwide from 2014 to 2019 (in billions) 9
Figure 2 – Share of internet users who have ever purchased products online as of November 2016, by category 10
Figure 3 – Share of travelers using meta-search when travel planning online as of April 2014, by generation 12
Figure 4 – Selling and marketing expenses of Expedia, Inc. worldwide from 2009 to 2016 (in billion U.S dollars) 13
Figure 5 – Advertising, sales and marketing expenses of Priceline Group Worldwide from 2010 to 2016 (in billion US dollars) 13
Figure 6: Socio-Economic status of consumer of online shopping 16
Figure 7 – Total number of internet users across the world during the period of 2005 to 2017) 20
Figure 8 – Global digital population as of August 2017 (in Millions) 21
Figure 9 – Most famous social network sites worldwide as of August 2017, ranked by number of active users (in millions) 22
Figure 10 – Number of monthly active Instagram users from January 2013 to April 2017 (in millions) 23
Figure 11 – The most important social platforms for hoteliers-to-be on 24
Figure 12 – Average daily time spent online via mobile by internet users worldwide as of 2nd quarter 2016, by generation (in minutes) 26
Figure 13 – Mobile share of total digital minutes in leading online markets as of January 2017 26
Figure 14 – Worldwide internet usage via mobile v/s desktop 27
Figure 15 – Mobile v Desktop in the UK 28
Figure 16 – Internet usage in the United States (October 2009 to October 2016) 28
Figure 17 – Share of online bookings by device type 30
Figure 18 – Likelihood of travel booking by device type 31
Figure 19 – Share of online bookings by device type v/s length of stay (in number of nights) 31
Figure 20 – Smartphone share of online travel bookings 32
Figure 21 – Smartphone share of online bookings by country 33
Figure 22 – Expected growth rates for booking, check-in, boarding pass in 2016 34
Figure 23 – Level of fear according to different type of risks when consumers do online shopping/booking 40
Figure 24: Summary of previous researches on dimensions of perceived risks in online shopping, between 2003 and 2012 41
Figure 25 – % Increase in page abandonment v/s Change in page response time 45
Figure 26 – Responsive design improves annual performance results 47
Figure 27 – CRM systems are known to improve customer retention by as much as 27% 50
Figure 28 – 3 out of 4 consumers say they spent more money with a company because of a positive customer experience 51
Figure 29 – The first bundle is likely the entry-level room. The second is another category of room within the same property. The third is a premium package including the base room and add-ons like breakfasts or late check-out 54

Preface

Chapter 1 – Introduction

This chapter gives an overview of the chosen topic and outlines the reasons for my choice of this particular subject, as well as the goal and objectives of the research work.

Chapter 2 – Literature Review

This section provides a review of the literature related to the topic. The current study is supported by previous researches that have been conducted. Literature review is a secondary source and the goal of presenting past and genuine researches is to allow the reader to understand and analyze the subject better.

Chapter 3 – Research Methodology

The methods that have been used to collect data and to assess the strengths and limitations related to the study are exposed here. The chapter also presents the web-based survey questionnaire that has been shared with a number of persons and provides reliable analysis of the collected data.

Chapter 4 – Findings, Analysis and Discussions

In this section, the findings from the investigations and survey conducted are presented. When analyzing data, both an interpretation and a summarization of the collected data have been necessary. Consequently, various solutions can be proposed and a conclusion derived.

Chapter 5 – Recommendations

Based on the results obtained from the data analysis, recommendations are put forward so as to tackle the different problems or weaknesses that are found.

Chapter 6 – Conclusion

This last chapter is a brief summary on the topic selected and is useful to provide evidence to the solutions for the issue.

Chapter 1 – Introduction

Overview

Internet technology has been the revelation of the past decades. It has completely transformed the method of conducting business and is considered as the most used tool by travellers for the online purchase of tourism products and services (Nunkoo & Ramkisoon, 2012).

Travel-related products and services are ranked among the top three most prevalent online shopping categories around the world, with an online purchase rate of 55% globally. According to Statista, the number of digital shoppers in the US, for example, has been growing constantly and in 2016, 211.1 million US citizens were online shoppers and had browsed products, compared prices or proceeded with an online purchase at least once (Statista, 2017).

Jin Lim et al. (2016) stated that with the implementation and operation of internet technology resulting in the consequent success of powerhouses like Alibaba, Amazon or Ebay, hotels and online travel agencies had to shift their style of business from ‘brick-and-mortar to brick-and-click’. Chen Tan (2015) suggested that it is a must for hotels and travel agencies to have their own website so that potential customers can benefit from a better communication and this would facilitate the promotion of tourism products and services. Furthermore, according to Bakar & Hashim (2008), it is crucial for hoteliers to use electronic distribution channels since past studies showed that most rooms that were booked online did not come from the existing customer databases. These electronic distribution channels, therefore, contribute in attracting new market segments.

Consumers, on the other hand, get more deals, can compare between products and preview those of better value. Tan (2015) and Hasslinger, Hodzic & Opazo (2007) mentioned that customers are no longer limited to opening hours or specific locations since they can purchase any product or service from any place at any time.

However, according to Cho (2006) and Nunkoo & Ramkisoon (2012), despite the availability of necessary infrastructure for online transactions and the growing number of Internet users, this does not necessarily mean a rise in the volume of online shopping since there are other factors that make consumers hesitant to get involved in online transactions.

Choice of subject

My interest in this particular topic developed mainly during my internship at Hospitality Plus Ltd, a company actively engaged in providing a menu of digital solutions to the hospitality industry with the aim of sustainably improving hotel profitability. I was granted the opportunity to be an intern in this organization during my fourth year of study at Vatel International Business School, Hotel & Tourism Management of Mauritius. During my brief time there, I learnt a lot about how the digital world of hotels operates and how online bookings and shopping can help in maximizing sales.

Aim and Objectives

This study aims at understanding the factors which influence the decision-making of an Internet user in connection with online booking. It analyzes customer behaviors (personal, psychological, social and cultural characteristics), Internet and social media usage behaviors (e-commerce experience and hours of Internet use), website and convenience (information quality, security, website responsiveness and customer relationships) and price and promotion and, consequently, determines how these affect consumers’ attitude towards online booking. In the light of the findings, recommendations are proposed for hotels to adjust to consumers’ behaviours, satisfy their needs and thus, improve sales.

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