The Role Of E-Commerce In Facilitating Online Booking In The Hotel Industry Essay

Question:

Write a research report on the topic of the role of e-commerce in facilitating online booking in the hotel industry.

Answer:

Introduction

Statement of the problem and Research Question:

The research report is on the topic of the role of e-commerce in facilitating online booking in the hotel industry. The purpose of this research report is to describe recent development in e-business application in a hospitality industry. It will study the efforts taken by hotel industry to boost online booking and analyze whether these steps are useful for their business or not. The study will be conducted in the form questionnaire by taking feedback from a group of students in the PIHMS University. The objective is to investigate the trend and check if there is any issue of future challenges of e-commerce business. It will be a comprehensive research based on data and surveys on the hotel industry booking. A qualitative analysis will be done based on web surveys and focused interview. The research finding will be useful in developing the hospitality industry and adapting to future challenges.

Literature review

The use of internet application has become a significant trend in the business world. E-commerce gives consumers an opportunity to book hotel rooms easily. One study focused on the online experience of online hotel booking by monitoring service marketing. Different internet technologies like HTML, CSS3, SEO, social media, etc has given companies the chance to improve customer's shopping experience. Successful online booking management strategies include the creation of experience, promoting customer loyalty, improving brand image, promotion by word of mouth praise and satisfying customers. Various studies have investigated consequences of positive online customer experience by analyzing marketing and information system theories. It showed that customer experience enormously benefited e-commerce Company. They utilized a flow theory on customer experience and developed a framework for it. They proposed and tested a measurement model for online customer experience. The result showed that for successful online experience, the shopper needs to focus entirely on the website and enjoy doing it. The traditional ways of attracting customers to brick and mortar stores are losing its sheen now. Therefore, e-commerce industry success depends on interaction, participation, engagement and emotional interest (Bilgihan et al., 2014).

Another literature focused on developing a theoretical model for unified customer experience by literature study on online consumer behavior. Development of e-commerce technology and extensive use of smart phones and social media has propelled customer experience and their interaction with brands and services anytime anywhere. The objective of the paper was to develop consumer behavior model by studying literature based on it and giving valuable strategies to a web site and e-commerce designers. The study findings showed that precursor of unified customer experienced is ease to locate a website and use it, the utilitarian features, social interaction and compatibility of apps in multiple devices. The outcome of increases client experience is positive praise of the brand by word of mouth, repeatedly purchasing or using services and brand engagement. The study identified that potential loss of revenue occurs globally due to poor online experience. It has the effect on the e-commerce industry as they are not able to reach their desired position. Therefore, e-commerce companies should try to engage and lure customers by their attractive website and quality customer experience (Morgan-Thomas & Veloutsou, 2013).

The above study focused more on services of e-commerce to enhance customer experience. This literature study is on what factors keep hotel booking users loyal to on hotel services. Hotels and online travel industry have utilized online booking as an effective distribution channel to advertise their services. So it is important for the hospitality industry to understand the loyalty intention of customers towards this technology. The paper tested a research model that introduces mobile booking loyalty in hotel booking. It was tested by intentional structural modeling by collecting data from hotel booking users. The survey revealed that compatibility and perceived is of use had a large affect on users loyalty intervention towards the e-commerce technology. The study results had useful implications for various hotel owners and travel industry including mobile app developers and hospitality technology suppliers (Ozturk et al., 2016)..

This literature highlighted the importance of online review for a success of hotel and tourism industry. Online reviews are accurate tools that customers search for because before booking hotel rooms. Travelers often use the online review to gain information about the quality of services and options of accommodation in hotels. It affects customer’s choice of booking hotels. This article studied the consequences that online review had on the hotel industry. The study adopted elaboration likelihood model to identify what factors influence people in decision making by exploring online reviews. The influence of information quality and means of persuasion have been investigated. The findings showed that product ranking, accurate information, the relevance of information and its timeliness gives a good estimate to services users for choosing accommodation options. Therefore, it showed that serious travelers check both qualitative and peripheral routes of information from online reviews (Filieri & McLeay, 2014).

Social media has also played a key role in tourism and hospitality industry. The social media tool for the management of tourism operations and travelers decision making. One study analyzed the social media related article in tourism and hospitality fields. Based on analysis of both consumer and supplier, it was found that consumer-centric studies mainly studied the impact of social media during travelers planning phase. The studies related to supplier showed that they concentrated primarily on the supplier's promotion and management of their product and services. The research revealed the importance of social media tools for promoting competitiveness in the tourism industry (Leung et al., 2013).

A case study was done on e-business application in a hospitality industry. One was based on actions taken by local hotels to enhance its marketing and another described the operation and competitive strategy of an online travel agency. The objective of the research was to investigate internet application trends in the hospitality industry by identifying underlying issues and challenges. According to a survey, about 90% entrepreneurs use web applications to enhance their business and get more opportunities. This kind of e-business can prosper only when they can satisfy and meet customers demand. Everyone is trying to lure consumers by offering cheaper products, extensive selection choices, convenience and quality of services. E-business can overcome many obstacles and operational barriers by getting access to global market and easy linking with suppliers. Two priorities for successful online service operation identified was the quick and reliable delivery of duty. Online hotel booking is increasing at a rapid rate now. Every hotel chain now has their website for booking rooms. The study gave useful insight into the development of online e-business applications in the hospitality industry (Yang et al., 2014).

Hotel industry will face stiff competition in the time when almost all company has theory own website for online booking. This study analyzes way of increasing online booking through a multi-channel strategy. There is increased the number of distribution and sales channels. Therefore hotel managers face challenges in deciding which sales channel offer best options and which channel will be beneficial for their business. They evaluate the cost versus benefits of linking with various channels. This study challenged the need for over-optimization by stating that consumers ultimately deal with the information on the web. Therefore all the online platforms are driven by consumer choice and their ultimate booking. Multiple regression samples from hotels in Switzerland were studied from 2009 to 2012 to estimate the importance of internet platforms. The finding showed that increased number of online booking be the consumer in the hotel is dependent on some channels and not the type of channels. So it suggested that survival strategy for the individual hotel would be to maximize their share and utilize interdependency and network effects. The only limitation of this study was that it focused more on online booking but not on the connection between online and offline channels from a consumers perspective. It gave detail on booking volume per channel but not on profit. If the study were done based on profit per channel, it would have provided the better idea on multi-channel strategy (Beritelli & Schegg, 2016).

The current project

My research is on what factors influence consumers to go for online hotel booking and studying consumer behavior. It will be an extensive research on qualitative data collected from comprehensive web survey on a rate of online booking. It seeks to analyze and interpret what factors drive consumers to go for online hotel booking. This research will have valuable insights into the hospitality industry. Their surveys on random people across different age group will help determine what do they consider and look for before booking hotel rooms. The above literature reviewed was on the experience of online hotel booking of a measurement model and on ways of increasing online booking through the multi-channel strategy. Another literature was based on the operation and competitive strategy of an online travel agency. There was also a review of consumers and suppliers perspective of using social media tools for marketing. My research is similar in the aspect that I am investigating the experience of customers in online booking. But I will also check the preference of those who don’t rely on online booking and the reason for it.

Statement of expectations

It is expected that the data will help hospitality industry to identify consumer's demands and implement attractive features on their websites to attract more customers. The research will study different trends in booking hotels based on the different questionnaire. This study will help in determining the success of e-commerce in the hospitality industry and the rate of penetration on online booking in the market. It is expected that the survey will help in determining what factors influence travel to try new hotel or travel brands. The information will help hotel industry to understand consumer behavior and changing trends among travelers worldwide (Kucukusta et al., 2015).

Method

Sample

The research was conducted by survey method to collect and investigate the views of PIHMS students on their choices for hotel booking. The data were collected from students with different level of qualification and specialization. The survey was based on a questionnaire form with questions related to the importance of online booking and the reasons for different preference among customers. After a round of closed-ended questions, it was followed by open-ended issues to explore the response of students on online hotel booking. This open question will be useful to study marketing trends in the hospitality industry. There will be group administered questionnaires via online surveys (Cantallops & Salvi, 2014).

Materials or Resources

The substances or resources for the survey methods were the students studying at PIHMS students, questionnaire forms and web source for investigation. Review data will be collected by online website or mail response. For managing consumer’s response, adequate permission was also taken from University teaching staff to carry out survey in their campus. Linking with the staffs helped in getting a quick response. These were conducted in corridors, classrooms when students were free and in University canteen area.

Procedure

The first round of questionnaire had seven questions. It started with an enquiry on age, sex and educational qualification. Then it moved into specific issues like a method of consumers online booking, had they ever made online booking or not. There were specific questions on how they would rate benefits of booking hotels online. Each respondent had to rate benefits on a scale of 1 to 5 and they also had to state the reason for the response. There was also enquiry on why do they visit the online website. The second round of survey was on what travelers look for in online reviews and the key factors that they consider in trying new travel brands. Visitors selected new brands mainly on the recommendation from family members, promotional offers, positive media coverage, and high ranking search result and media advertisement. They were also enquired about the reason for which they check online reviews.

Method of analyzing data

There were 120 respondents in the study between the age group of 20-50years. The response of customers was measured on a five-point Likert-type scale (Score of 1 meant least beneficial and a score of 5 indicated highly useful). For the question on whether subjects prefer online booking or not, a qualitative analysis was done on the reasons for consumer's choice (Liu & Zhang, 2014). Different reasons were analyzed to conclude consumer behavior and attitude towards hotel booking.

Ethical issues

There is code of ethics and practices in conducting survey research. So during my research, I had to be sure of marinating honesty, respect and integrity while dealing with students and PIHMS Univerisity staff (Denscombe, 2014). Each respondent has clearly explained the purpose of the survey so that they could give a valid response. I had to ensure those who sponsored my survey that I will avoid those methods which will create bias. Correct information on the method of sample selection and the sample size was given (Bryman, 2015).

Results

The survey was conducted among 120 students of PIHMS University. There were 55% male respondents and 45% female respondents between the age group of 20-40 years. The qualification of different student was also enquired this also has an impact on consumers choice. Some were student of English, some were degree level or post graduate students or students undergoing diploma in PIHMS University.

Figure 1: Response to question on whether consumers prefer online booking or other methods.

On enquiry about preference for online booking or other methods, it was found that majority of subjects who preferred online booking belonged in the age group of 20-30 years. All the respondents were asked for the reasons of their preference. Those who preferred online booking gave reasons like online booking gave them flexibility and ease of use. They had more options to choose from and they could read online reviews and feedback to influence their decision making. They also felt that online reviews gave them the opportunity to try new brands or hotels in a hospitality industry. A market research showed what factors influence traveler’s decision while choosing new brands worldwide. The idea of these factors can be taken from the graph given below on market research. It will be useful for hospitality and new entrants in the industry to enhance their brand quality.

Figure 2: Tnooz - Talking Travel technology. (2016). Tnooz. Retrieved 13 June 2016,

For those students who did not prefer online booking, they stated that they considered online platforms could breach their privacy. So they had issues related to security concerns. The respondents who chose this answer were found to be in the age group of 30-40 who either not aware of the benefits of online booking or they are not used to using new technologies like social media tools, etc.

The second round of questionnaires was for those respondents who preferred online booking. When enquired about for what reason they used online travel websites, there were different answers like looking for general information, find contact information, checking online reviews, etc. Some explained that they always check for online reviews before booking hotels. For those respondents who preferred online booking, it was found that about 51 % used online reviews most of the time. They also asked respondents rate benefits of online booking for hotels. The marking on a scale of 1 to 5 was analyzed for it. It showed that majority preferred it beneficial as they gave markings such as 4 or 5.

Figure 3: How often do customers check online reviews for hotel bookings.

When students were asked about what factors they were looking for in online reviews. Majority answered that they wanted to explore the options for a hotel that they could consider for their accommodation. Some had too many choices of hotel and so they looked for online review to narrow down their list of the hotel so that they could choose from fewer and best hotels. So mostly students revealed that they analyzed online reviews to check for prices and confirm their final choice for booking. The results of the review are given below in the bar diagram

Figure 4: Response on reasons for checking online reviews.

Discussion

My research topic was on the factors that influence consumers to go for online booking and analyze the success of e-commerce in online booking in the hospitality industry. The expectation of this research was that data will be beneficial for the hospitality industry and give them an idea of what changes to bring in their website to increase hotel service (Ramanathan & Ramanathan, 2013). The result gave implication for why they prefer online booking. It also explained that reasons on why some people do not prefer online booking. Based on their response, the hotel chain can take steps to create the user-friendly website which all age group can use and reduce security concerns of suppliers.

The result supported some of the information from the literature review. One study related people to people decision making after online review. The literature showed that consumers looked for quality information and persuasion level of hotel chains. They chose hotels according to the ranking of hotels, the accuracy of information and good service review. The only difference is that the study also looked at supplier's perspective for presenting online reviews (Beritelli & Schegg, 2016).. My research was based solely on buyers or consumers perspective of hotel booking. However, it matched with the view of worldwide customer's reasons for going through online reviews.

One unanticipated outcome of the research was of those respondents who did not go for online reviews. The survey was carried further for only those respondents who preferred online booking. I feel more research could also be done on negative respondents. This would further help in the identification of shortcomings of e-commerce service and hotel industry. Identification of features in a website that dissuades buyers to go for online booking would have given a new idea for implementing the unique feature in hotel and travel websites (Enz, & Verma, 2015).

I had a problem convincing respondents to carry out the survey. Many did not answer the questionnaires as they felt it unnecessary. So I felt that I could not collect data from a significant number of the respondent. The survey could be done only by 120 people. Increased sample sized would have helped in getting more information. If given a chance to carry out the research again I will also survey hotel chain supplier’s perspective for online booking service. I would also like to research on popular online hotel review websites and how they carry out the study. I would like to extend my research to other countries too; this will help in understanding the trend globally.

My research data will be useful for improvement and development of hospitality industry. It gives them the idea to create a sustainable infrastructure within countries for online marketing of their product or services (Meli?n-Gonz?lez et al., 2013). One significant finding of the research was that mainly youngster used online booking features. Therefore, the hospitality professional could target young age group who are more likely to spend their disposable income on travel. The hotel brands could go for introducing hotel management software. It helps them keep an eye on negative reviews and responds quickly to the response (Bilgihan, & Bujisic, 2015).

Recommendation

From the survey results, it can be concluded that online reviews and manner by which consumers utilize this data to choose hotels will help hotel industry to manage marketing programs more efficiently. Through renovated and improved websites they can lure the travelers to book their hotels. Technology is now giving consumers the variety of choices thus making service providers vulnerable to immense competitions (Law et al., 2014). Therefore, this form of surveys will be useful for the particular hotel to know the cause for negative reviews and promote good relation with consumers. However, there is a certain disadvantage of online review for evaluating hotels. The review of the certain customer may not be justified. So users should not consider these reviews blindly. Therefore, there should be acceptable review score for rating hotels. Higher review score can be given on grounds of security, cleanliness and locations. Finally, the website should not give misguiding information and hotel manager should incorporate features that stress on customers preference (Agag & El-Masry, 2016).

Reference

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