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Consumer Behavior of Hotel Deal Bookings through Online Travel Intermediaries

By

Hsiang-Ting Chen, M.S.

A Dissertation
In
Hospitality Administration
Submitted to the Graduate Faculty of
Texas Tech University
In Partial Fulfillment of the Requirement for the Degree of
Doctor of Philosophy

Approved

Dr. Kelly Virginia Phelan


Chair of Committee

Dr. Tun-Min Jai

Dr. Hyo Jung Chang

Dr. Mark Sheridan


Dean of the Graduate School

May, 2014
Copyright 2014, Hsiang-Ting Chen
Texas Tech University, Hsiang-Ting Chen, May 2014

ACKNOWLEDGEMENT
There are many people who have contributed to my pursuit of the doctoral

degree, and I sincerely thank all of you. I would not have made it this far through such

a challenging and stressful process without your support and encouragement.

I am fortunate to have Dr. Kelly Virginia Phelan as my mentor, the dissertation

chair and my boss. I would be perplexed in my quest for a PhD if she was not the one

who led me in the right direction. More than just an advisor, she is also my role model

and good friend. I thank her for spending a numerous amount of time and effort

guiding my research and editing my articles. Without her continuous support and

encouragement, I would not be able to see my potential to be successful in my pursuit.

I am grateful to have Dr. Tun-Min (Catherine) Jai and Dr. Hyo Jung (Julie)

Chang to be my committee members. I sincerely appreciate your counsel, guidance

and inspiration. Thank you for your wise insight and generous help during this whole

process.

I also want to give thanks to my fellow graduate students in the “KVP” PhD

support group. The time we spent sharing our graduate student life will always be a

precious and memorable moment to me. Special thanks to Dr. James Brian Aday, who

always stands by me and willingly supports me no matter what I may ask.

Thanks to my family with their unconditional love and support. I always think

about my mother when I am writing because she was the first teacher who taught me
Texas Tech University, Hsiang-Ting Chen, May 2014

how to write. It has been 18 years since I lost her and I miss her every day of my life.

She is the reason I keep striving toward my dream of completing the doctoral degree.

Finally, to my soul mate, Joseph Arthur Fiscus, thank you for your

understanding and support during the whole process. You always listen to my

complaints, deal with my emotions and respond to my annoying requests. You are an

amazing person, and I cannot ask for anything more. I am so blessed to have you in

my life.

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TABLE OF CONTENTS
ACKNOWLEDGEMENT ............................................................................................. ii

LIST OF TABLES ......................................................................................................... x

LIST OF FIGURES ..................................................................................................... xii

I. CHAPTER 1: INTRODUCTION ............................................................................... 1

1.1 Background ....................................................................................................... 1

1.2 Statement of the Problem ................................................................................. 5

1.2 Purpose of Study ............................................................................................... 5

1.4 Study Objectives ............................................................................................... 6

1.5 Significance of the study................................................................................... 6

1.6 The definitions of key terms ............................................................................. 7

II. CHAPTER 2: REVIEW OF LITERATURE ............................................................ 9

2.1 E-commerce in the tourism industry................................................................. 9

2.1.1 Online travel agencies .................................................................................. 10

2.1.2 Meta-search websites ................................................................................... 11

2.1.3 Social media websites .................................................................................. 12

2.1.4 Flash sale, private sales and last-minute websites ....................................... 12

2.1.5 The impact of Internet on pricing strategies ................................................ 13

2.2 Online consumer decision-making process .................................................... 16

2.2.1 Consumer perceived value and awareness of sales promotions .................. 19

2.2.2 Deal searching.............................................................................................. 20

2.2.3 Consumers’ deal proneness ......................................................................... 22

2.2.4 Evaluation and comparison process ............................................................. 24

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2.3 Theoretic foundation of research .................................................................... 25

2.3.1 Transaction and acquisition utility theory ................................................... 25

2.3.2 Goal-setting theory ...................................................................................... 27

2.3.3 Theory of planned behavior ......................................................................... 27

2.3.4 The model of goal-directed behavior (MGB) .............................................. 29

2.3.5 Proposed conceptual framework and research propositions ........................ 32

III. CHAPTER 3: METHODOLOGY ......................................................................... 46

3.1 Model development ........................................................................................ 46

3.2 Measurement development and procedure ..................................................... 47

3.3 Pilot study ....................................................................................................... 53

3.3.1 Data collection ............................................................................................. 53

3.3.2 Data screening.............................................................................................. 54

3.4 Full study ........................................................................................................ 54

3.4.1 Questionnaire revision ................................................................................. 54

3.4.2 Data collection ............................................................................................. 56

3.4.3 Data screening.............................................................................................. 57

IV. CHAPTER 4: RESULTS ....................................................................................... 58

4.1 Pilot study ....................................................................................................... 58

4.1.1 Sample ......................................................................................................... 58

4.1.2 Assumption testing ...................................................................................... 60

4.1.3 Exploratory factor analysis (EFA) ............................................................... 62

4.1.4 Confirmatory factor analysis (CFA) ............................................................ 66

4.2 Full Study........................................................................................................ 69

4.2.1 Sample ......................................................................................................... 69

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4.2.2 Assumption testing ...................................................................................... 71

4.2.3 EFA .............................................................................................................. 73

4.2.4 CFA .............................................................................................................. 77

4.2.5.1 Structural Equation Model ........................................................................ 80

4.2.5.2 Gender comparisons ................................................................................. 84

4.2.5.3 Age group comparisons ............................................................................ 87

V. CHAPTER 5: CONCLUSION AND IMPLICATIONS ......................................... 88

REFERENCES............................................................................................................. 98

APPENDIX A ............................................................................................................ 114

APPENDIX B ............................................................................................................ 116

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ABSTRACT

Electronic commerce has revolutionized the distribution of travel products and

affected the way travelers search and purchase those products. The prevalence of

Internet usage energizes the rapid growth and potential business opportunities of the

online travel market. The emerging operators of online travel bookings have become a

global phenomenon and represent a significant percent of global travel sales.

Online travel intermediaries are third-party websites that provide travel

information and reservation services for consumers. Such websites not only provide

consumers with one-stop shopping, but also allow them to compare a variety of

product choices, brands and prices. Since online travel intermediaries feature the

convenience of variety seeking and competitive pricing, they attract an enormous

amount of online consumers to search for product deals and promotions. Consumers

have been educated and encouraged to look up prices and compare product values

extensively before making a final purchase decision. In this highly competitive

environment, an understanding of online consumer behavior is vital for developing

effective marketing strategies. Previous studies have widely investigated consumer

purchase intentions in online shopping. However, limited research addresses consumer

behavior in the deal-purchasing segment.

The current research aimed to examine consumers’ motivation and intention to

search and book hotel deals through online travel intermediaries. Specifically, this

research examined: (1) how the cognitive, emotional and social factors influence

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consumers’ decision making process while they search and book hotel deals through

online travel intermediaries; (2) how consumers’ deal proneness influences their

motivation and intention to book hotel deals and (3) what characteristics influence

consumers’ deal-purchasing behavior through online travel intermediaries.

The research framework proposed a modified Model of Goal-Directed

Behavior (MGB) theory to comprehend the causes of deal-purchasing behavior in the

tourism industry. A quantitative research method was employed to measure the

cognitive, emotional and social factors that influenced motivation and also how

motivation mediated these factors toward booking intention.

Based upon the findings, consumers’ attitudes and perceived self-efficacy were

two substantial factors that influenced motivation to book hotel deals online, which in

turn, impacted their future intention. The results indicated that consumer deal

proneness and value consciousness drove them to search and book hotel promotions

online. Also, the ability to acquire information from sales promotions and comparison

shopping significantly influenced consumers’ tendency toward deal-purchasing. To

help consumers easily navigate the site and recognize product value, online travel

intermediaries may address the quality of information, usability and functionality of

the websites. In this way, consumers’ positive attitudes and self-confidence may

increase and positively influence their purchase intention.

Overall, the emotional state did not show a direct or significant relationship in

consumers’ motivation to book hotel deals. However, the male consumers’ motivation

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toward hotel deal bookings was influenced by the positive emotion construct.

Surprisingly, female consumers were not influenced by emotional components. The

traditional view of gender differences in consumer behavior states that females are

more greatly influenced by emotional gratification, and they perceive higher deal

proneness than males. These extant studies contradict the current research, which

found males show a higher tendency toward booking hotel deals when they perceived

positive emotional involvement.

The social influence was shown to have different results in terms of the

consumers’ ages. The Millennial Generation tended to proactively share information

and interact with other consumers via the Internet; they showed a tendency of being a

marketplace influencer. However, Baby Boomers preferred to receive information,

opinions and advice from a trusted source, which provide a social conformity in their

decision making process. Therefore, hospitality marketers should differentiate the age

differences and develop appropriate online marketing strategies.

Finally, motivation played a mediating role that strongly effected consumers’

attitudes and perceived self-efficacy in regards to their intent to book hotel deals. This

research provided a theoretical and practical contribution of MGB theory applied to

explain the causal-effect relationship between motivation and intention in the field of

consumer behavior.

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LIST OF TABLES

1. Table 3.1 Measurement Items in the pilot study…………………………….58

2. Table 3.2 Measurement Items in the full study……………………………...65

3. Table 4.1 Pilot Study demographic information…………………………….69

4. Table 4.2 Pilot study: number of online travel websites visited before booking

a hotel and frequency of travel within the past 12 months…………………..70

5. Table 4.3 Pilot study: means, standard deviation and construct inter-

correlations………...........................................................................................71

6. Table 4.4 Pilot study: mean, standard deviation, factor loading and Cronbach’s

Alpha of indicators……………………………………………………………73

7. Table 4.5 Pilot study: unstandardized and standardized coefficients for

CFA…………………………………………………………………………..76

8. Table 4.6 Full study: demographic information……………………………...79

9. Table 4.7 Full study: number of online travel websites visited before booking a

hotel and frequency of travel within the past 12 months……………………..70

10. Table 4.8 Full study: means, standard deviation and construct inter-

correlations………............................................................................................71

11. Table 4.9 Full study: mean, standard deviation, cactor loading and Cronbach’s

Alpha of indicators……………………………………………………………73

12. Table 4.10 Full study: unstandardized and standardized coefficients for

CFA…………………………………………………………………………...76

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13. Table 4.11 Unstandardized coefficients, standardized coefficients and

significance levels of direct effects…………………………………………...91

14. Table 4.12 Unstandardized coefficients, standardized coefficients and

significance levels of indirect effects…………………………………………91

15. Table 4.13 Decomposition of effects with standardizes values………………92

16. Table 4.14 Structural equations results for age effect models…...…………...97

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LIST OF FIGURES

1. Figure 1: A modified model of online consumer behavior and decision

making………………………………………………………………………...30

2. Figure 2: The theory of model of goal-directed behavior………………….....42

3. Figure 3: The proposed framework……………………………………...........45

4. Figure 4.1 The CFA results from the pilot study…………………………......80

5. Figure 4.2 The CFA results from the full study………………………………91

6. Figure 4.3 The structural equation model…………………………………….96

7. Figure 4.4 The structural equation model of the male group…………………97

8. Figure 4.5 The structural equation model of the female group……………….98

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CHAPTER 1

INTRODUCTION

1.1 Background

The growth of e-commerce over the past decade has significantly influenced

product distribution channels within the hospitality and tourism industry (Green &

Lomanno, 2012; Kracht & Wang, 2010). Due to the rapid development of the digital

era, Internet saturation has become paramount, allowing travel products to

predominately shift from offline to online distribution channels. The emerging online

travel booking operators has become a global phenomenon and represents one third of

total global travel sales (yStats, 2012). This quickly expanding trend has increased

20% in Europe and 50% in the Asia-pacific region between 2010 and 2011 (yStats,

2012). The online travel booking phenomenon is even more apparent in the United

States, where 83% of leisure travelers and 76% of business travelers utilize the

Internet as a major tool for arranging their travel plans (Google & Ipsos Media CT,

20121). Online travel booking in the United States grossed $103 billion in 2012, an

increase of 9% over the previous year (comScore, 2013).

Since the online environment provides flexibility and accessibility, it is easy

for travelers to browse and purchase travel products and services with only a few

clicks of the mouse. Air tickets, car rentals or accommodation can be researched,

evaluated and reserved through the Internet 24 hours a day, seven days a week. Online

consumers tend to utilize numerous websites as a primary tool for booking travel

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products due to the variety of product offerings, quick price comparisons, time savings

and ease of use when requesting services to fulfill their needs (Toh, Raven & DeKay,

2011). Online booking availability not only benefits customers by making travel

arrangements easier, it also increases the profits of businesses such as airlines, hotels

and other package tour companies (Hotelmarketing, 2012).

Research shows 32% of hotel revenue is generated through online bookings

(TravelClick, 2012). Not only do hotels use their own websites as a major distribution

channel, but they also utilize online travel intermediaries because these third-parties

have the ability to reach worldwide customers and boost occupancy rates (Travel

Technology Association, 2012). In addition, online travel intermediaries have been

viewed as effective marketing channels to sell distressed inventory and reach

customers hotels may not be able to connect with directly (Kotler, Bowen, & Makens,

2010). Hotel bookings through online travel intermediaries increased 14% in 2013 and

continue to demonstrate demand by customers (TravelClick, 2013).

The so-called “billboard effect” of online travel intermediaries indicates there

are advantages of offering hotels market access (O’Connor, 2003). However, hotels

have been facing the challenge of attracting consumers to book directly through their

reservation systems. With the rapid growth of e-commerce business in the hospitality

and tourism industry, hotels have struggled with maximizing revenue and managing

consumer relationships due to the expansion of online travel intermediaries (McCartan,

2013). The controversial arguments of business partnerships between hotels and online

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travel intermediaries raise concerns that hotels struggle to maintain profitability in the

long term (Green & Lomanno, 2012; Lee, Guillet, & Law, 2012). In addition, price

transparency of online channels adds more pressure to hotel room rates and thereby

forces hotels to keep rate parity in all channels, keep online rates as low as possible, or

provide “low price guarantees” on hotel websites (Green & Lomanno, 2012). To cope

with these challenges, researchers suggest hotels should rethink their pricing strategies,

identify the value proposition from consumers, understand consumers’ responsive

behavior toward deal offerings and improve hotels’ sales and promotional tactics

(Buhalis & Law, 2008; McCartan, 2013).

Online travel intermediaries are perceived by customers as offering a variety of

choices at low prices. As such, they are considered by many as the dominant choice

when it comes to making travel arrangements (Law, Chan, & Goh, 2007). These

travel intermediaries consist of third-party travel agencies (e.g., Hotel.com), social

media sites (e.g., Tripadvisor.com), search engines (e.g., Google), meta-search sites

(e.g., Kayak.com) and flash sale sites (e.g., Groupon Getaway). The earning potential

of online travel intermediaries should not be neglected. In 2010 online travel agencies

(OTA) earned nearly $40 billion in sales in the U.S. which was equivalent to 15% of

the total U.S. travel market (PhoCusWright, 2011). One of the biggest OTAs, Priceline,

had a profit growth of 59% in 2011 (CNN Money, 2011) while Expedia enjoys 60

million visits to the company’s website each month (Expedia Annual Report, 2011).

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Since the Internet provides consumers the opportunity to retrieve extensive

information, consumers’ propensity to search for discounted travel products has been

heightened. Sixty-six percent (66%) of travelers claim they are willing to search for

deals before booking travel products and seek the best value for their money (Google

& Ipsos Media CT, 2012). In addition, research shows customers visit 17 travel

websites on average to search product information before booking (eMarketer1, 2013).

Third party intermediaries such as online travel agencies and meta-search engines

have become particularly effective channels for finding attractive hotel discounts in

recent years (Bennett, 2007; Schaal, 2012).

However, there is still little evidence which suggests how to transform

browsers into buyers. Research indicates most consumers are concerned with

acquiring good value for their money instead of solely seeking the lowest possible

price (Gupta & Kim, 2010; Peterson, 2011). More than half of Internet users tend to

search and redeem coupons to obtain discounts while purchasing products online;

travelers will visit travel-coupon websites and look up deal information while planning

their trips (eMarketer2, 2013). Another study showed 80% of affluent travelers

frequently compare online travel pricing before making a purchase decision (Google

& Ipsos Media CT, 20122). Understanding consumers’ perceptions regarding product

value and how consumers evaluate discounted products may prove valuable

information to online travel service providers. However, most service providers still

focus on how to slash prices as their main promotional marketing strategies instead of

understanding consumer deal-searching behavior (Peterson, 2011). Misaligning

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customers’ needs and wants may cause online intermediaries to struggle to maintain

competitive pricing and profitability.

1.2 Statement of the Problem

Despite these staggering figures which showcase the prevalence of online

travel bookings, there is limited research regarding consumers’ deal-purchasing

behavior. Specifically, there is no published scholarly research related to consumer

behavior on searching and purchasing discounted products from online travel

intermediaries. The factors which motivate consumers to engage in searching for hotel

deals online and the causes leading to bookings are still unexplored. Thus, this current

research is designed to bridge this gap in the literature and provide marketing

implications for hospitality researchers.

1.2 Purpose of Study

The primary goal of this study was to (1) define deal-purchasing behavior by

combining the various perspectives which have been utilized in the consumer decision

making process and (2) develop an integrated model to understand consumer deal-

purchasing behavior in hotel bookings through online travel intermediaries. The

results of this study aimed to contribute theoretical and managerial implications of

online consumer behavior in the hospitality industry.

This research examined the following research questions:

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1. How do cognitive, emotional and social factors influence consumers’

decision making process while they search and book hotel deals through

online travel intermediaries?

2. How does a consumer’s deal proneness influence their motivation and

intention to book hotel deals?

3. What demographic characteristics influence consumers’ deal-purchasing

behavior through online travel intermediaries?

1.4 Study Objectives

This research examined consumer behavior related to online hotel deal

purchases, particularly through online travel intermediaries such as online travel

agencies (OTA) and meta-search sites. Based on the perspectives from consumer

psychology, the quantitative survey research method was developed and employed to

discover the latent factors of deal purchasing behavior, understand how these factors

influence purchase motivation and intention, and acquire information regarding the

demographic characteristics of deal-prone consumers. A pilot study and full study

were used to test the hypotheses and answer the research questions. Specific details

regarding the data collection and analysis were discussed in the methodology section.

1.5 Significance of the study

Online travel intermediaries play a significant role in the development of e-

tourism; it has transformed the distribution channel of travel products and changed the

way consumers search for product information. Pricing has been a critical issue in the

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online travel market due to price transparency, which allows consumers to easily

obtain information about market offerings. Although some hospitality operators have

implemented rate parity across different distribution channels, consumers tend to look

for more choices and switch products or channels in hopes of identifying a better deal.

It is indubitable that consumers have gained more bargaining power in the online

marketplace.

This research is important as it focuses on understanding the consumer

decision making process in purchasing online travel products. Previous research

related to e-tourism addressed the evolution of the Internet within the hospitality and

tourism industry, the concentration on improvement, effectiveness and usefulness of

suppliers’ websites. There is limited research related to consumer psychological

factors which incite their motivation to purchase discounted travel products.

Investigating such latent motives and consumers’ characteristics may provide useful

insight for hospitality operators in shaping their marketing strategies aimed at long-

term profitability.

1.6 The definitions of key terms

A. E-commerce: The general term for an industry where the buying and selling

process is supported by an electronic medium such as the Internet or another

type of computer network system (Kotler et al., 2010).

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B. E-tourism: The tourism industry that is supported by Information

Communication Technology (ICTs) and applies e-commerce developments for

tourism organizations and destinations (Buhalis & Law, 2008).

C. Meta-search site: Meta-search websites simultaneously gather information

from multiple websites based on customer preferences to generate a list of

travel products best suited to the individual consumer (Christodoulidou et al.,

2007).

D. Online travel agencies: Internet-based firms that provide and sell travel

arrangement services to consumers. They are business partners, vendors or

wholesalers for tourism-related companies, such as hotels, airlines and car

rentals (Carroll & Siguaw, 2003; Law et al., 2007; Lee et al., 2012).

E. Online travel intermediaries: Tourism companies that are Internet-based and

use an electronic medium as a major distribution channel. These include

Internet companies, global-distribution systems, travel agencies and

distribution-service companies (Carroll & Siguaw, 2003; Law et al., 2007).

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CHAPTER 2

REVIEW OF LITERATURE

2.1 E-commerce in the tourism industry

Due to the rapid development of information technology in the past two

decades, the growth of tourism e-commerce has expanded dramatically (Buhalis &

Law, 2008; Dale, 2003). Before the explosion of the Internet era, global distribution

systems (GDS) fulfilled a significant role in coordinating functions between brick-

and-mortar travel agencies and travel suppliers (i.e., airlines and hotels).

Since the late 1990s, the development of Internet and information

communication technologies evolved, changing the way hospitality firms conduct

business in the global competitive market. Hospitality organizations, travel

destinations and tourism enterprises shifted their business operations toward electronic

distribution. Major hotel chains adopted aggressive direct sales techniques via their

websites, rather than depending on travel intermediaries as was traditionally practiced.

The replacement of traditional travel intermediaries by an organization taking back

control of its own distribution is referred to as “disintermediation” (Kracht & Wang,

2009; Tse, 2003). Disintermediation is now widely practiced as hotels and airlines

often prefer to utilize direct electronic distribution to reduce costs and enhance

customer satisfaction and retention (Carroll & Siguaw, 2003).

Online direct distribution is especially valuable for those hospitality companies

with loyalty programs as a visit to a firm’s website exposes visitors to special reward

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program incentives. Conversely, loyalty programs allow firms to maintain a database

with customer information which is helpful in improving service and sales

performance (Toh et al, 2011). Engaging customers through developing online loyalty

programs not only permits service providers to offer individualized services to meet

customers’ needs, but also provides more intimate communication with customers

(Carroll & Siguaw, 2003). Thus, researchers have suggested that travel service

providers should take advantage of using the Internet to build effective customer

relationships and increase customer loyalty (Dunn, Baloglu, Brewer & Qu, 2009).

The prevalence of Internet usage has also resulted in increasing online business

opportunities. Online travel retailers, such as online travel agencies, account for more

than half of online travel sales (Rao and Smith, 2005). The term “reintermediation” is

used to describe the role online travel intermediaries play as a middleman in

distributing travel products for hospitality suppliers. There are four different

classifications of online travel intermediaries: online travel agencies, meta-search

engine sites, social media sites and flash sale sites (Kracht & Wang, 2010; Rao &

Smith, 2005).

2.1.1 Online travel agencies

Online travel agencies (OTAs) include companies such as Orbitz.com,

Expedia.com, Hotel.com, Travelocity.com and Priceline.com. OTAs adopt one or

more business models: a merchant, commissionable or opaque selling model (Lee et

al., 2012; Starkov & Price, 2003). In the merchant model, OTAs purchase travel

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products at a discounted rate and market those products to the consumer at a higher

price. This is different from a commissionable model where the OTAs arrange

bookings for suppliers and received a percentage of the sale in the form of commission

on each transaction (Law et al., 2007; Lee et al., 2012). In the opaque selling model

consumers purchase travel products by stating their preferred price point without

knowing any product information until the purchase is completed. Opaque selling

offers a deep discount since the purchased product has many limitations. For instance,

the consumer may be unaware of the hotel name and exact location before purchase

and the inability to receive a refund or exchange means the customer is subject to

considerable risk (Anderson & Wilson, 2011).

2.1.2 Meta-search websites

Meta-search websites simultaneously gather information from multiple

websites based on customer preferences to generate a list of travel products best suited

to the individual consumer (Christodoulidou et al., 2007). Kayak,com,

Bookingbuddy.com, Google.com and Momondo.com are some of the most popular

meta-search sites. These sites streamline the search process for customers, allowing

them to easily view and compare information for numerous products simultaneously.

Meta-search websites are limited in that customers cannot complete booking

transactions, but they are referred to the specific travel website where the purchase

may be completed. Researchers state some customers may feel they receive a better

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value in terms of price and convenience by using meta-search websites

(Christodoulidou et al., 2007).

2.1.3 Social media websites

Social media websites represent user-generated-content platforms for

customers to share travel-related information, product reviews and comments and

personal experience (Xiang & Gretel, 2010). Major hotel chains have recognized

social media as an important marketing channel and subsequently launched their own

social media pages on Facebook and Twitter to encourage customers to utilize the

direct booking function (Revinate, 2012). Tripadvisor.com, one of the most popular

travel social media websites, incorporates user-generated-content and information

search functions on its website. Hotel customers provide comments and ratings based

on their experience, satisfaction and revisit intention (Jeong & Jeon 2008). In addition,

customers are able to search hotels based on prices, location and star level. Other

social media sites, such as Biddingfortravel.com and Betterbidding.com provide

enormous user-generated-content from experienced customers who have booked

through online travel agencies. These customers share their experiences, giving

readers advice on searching and booking a better value of travel products online.

2.1.4 Flash sale, private sales and last-minute websites

Flash sale and private sale websites offer products for sale at a reduced cost

during a limited time period, typically in 24 to 48 hours (Martinez & Kim, 2012).

Consumers must register as members and subsequently receive daily deal offers via e-

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mail, text message, or notifications via mobile applications. Product offerings through

flash and private sale websites are often discounted travel packages. These websites

target bargain shoppers who desire inclusive products with greatly discounted prices

(Martinez & Kim 2012). Groupon-Getaways, Living Social-Escape and Gilt-JetSetter

are some of the most commonly utilized flash and private sale websites. There are

several reasons hotels offer flash sales including increasing off-season occupancy,

raising the property’s profile, reaching a new segment of customers and competition

(TravelClick1, 2012).

Last-minute deal websites, such as Lastminute.com and Travelzoo.com

provide competitive prices designed to sell distressed inventory before the

perishability date (Last minute travel, 2013). These websites target consumers who are

highly flexible with their travel plans, and who prefer to wait for last-minute sales

instead of booking in advance at a higher price.

2.1.5 The impact of Internet on pricing strategies

Price-discrimination is prevalent in the hospitality industry; it is a significant

tool for stimulating demand and maximizing revenue opportunities for organizations

(Kotler et al., 2010). Hotels, airlines and other travel providers employ different

pricing strategies to generate desired profits. For example, hotels employ a room rate

structure based on demand and consumers’ price sensitivity. Research shows price

dispersion and differentiation is common among tourism providers in the online

environment (Clemons, Hann, & Hitt, 2002; Toh, Raven, & DeKay, 2011). However,

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this can be challenging for hotels as room rates and product information can be easily

retrieved by online consumers. In a recent study, hotel revenue managers reported

“price wars” were the most critical issue for management (Kimes, 2009). In order to

stay competitive, hotels have to consistently monitor market conditions and make

room rate adjustments accordingly.

In the online travel market, travelers tend to make decisions strategically to

ensure the purchased product is worth the money (Lee, Bai, & Murphy, 2012).

Consequently, consumers’ perceived values and risks are major factors which

influence their behavior while they shop online (Forsythe, Liu, Shannon, & Gardner,

2006). Moreover, online consumers tend to have different risk-reduction strategies to

reduce perceived risk caused by uncertainty while purchasing products online (Kim,

Qu, & Kim, 2009; Schindler, 1989; Zheng, Favier, Huang, & Coat, 2012). Some

consumers who hesitate to book a hotel room while they browse online travel websites

believe good deals will eventually show up if they just wait (Mayock, 2011). Chen,

Schwartz and Vargas (2011) investigated how deal-seeking travelers utilize searching

and booking strategies against hotel cancellation policies. Their research indicated

deal-seeking travelers continue to search for better deals to optimize their booking

decision (Chen et al., 2011). As a result, tourism suppliers are facing more

knowledgeable and strategic consumers who understand how to take advantage of

suppliers’ pricing strategies (Anderson & Wilson, 2011; Smith & Rupp, 2003).

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Since consumers have become technologically savvy and quickly learn how to

find the best prices via various Internet platforms, hotels must embrace dynamic

pricing strategies across all distribution channels (Forgacs, 2010). Dynamic pricing is

not only a useful tool in attracting price-sensitive customers, but also can effectively

increase hotel revenue by using analytical pricing models which focus on real-time

reservations, customer booking history and customers’ characteristics (Mourier, 2013).

To reach price optimization, dynamic pricing requires hotels’ understanding of

customers’ willingness to pay and the perceived value of a hotel room (Forgacs, 2010;

Noone, McGuire and Rohlfs, 2011). As a result, hotels’ pricing strategies have

encompassed a customer-centric approach which addresses consumer buying behavior,

preferences and expectations in terms of the effect of promotional activities (Noone et

al., 2011).

Dynamic pricing strategies are also embraced by online travel agencies when

selling excess inventory (Kasavana & Singh, 2001; Sahut & Hikkerova, 2009) Sahut

& Hikkerova (2009) summarized four main types of pricing strategies used by online

travel product distributors: low cost products with a minimum level of quality or

within a limited time period, last-minute selling, selling opaque products and

providing auction sales. Perhaps the best dynamic pricing practice among online travel

agencies is the reverse auction technique used by Priceline.com. Priceline’s reverse

auction allows buyers to determine a price they are willing to pay. Through a

negotiation process the seller and buyer reach an agreed upon price and complete the

sale. Thus, online travel agencies can instantly adjust prices according to what a

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customer is willing to pay. Since hotel rooms are perishable products, online travel

agencies must consider the lifespan of a product and adopt innovative pricing

strategies to maximize revenue.

2.2 Online consumer decision-making process

Traditionally, the consumer decision-making process (CDP) model stated that

consumers go through three stages before they decide to purchase a good or service:

need recognition, search for information and evaluation of alternatives (Blackwell,

Miniard, & Engel; 2006). These three stages are considered a cognitive function which

guides consumers through the purchase decision. Consumers first recognize their

needs and desires, then begin searching for solutions to satisfy their wants. The

external search, which plays an important role in acquiring information, involves

consumers reviewing all possible alternatives.

The widespread use of the Internet has directly affected the traditional CDP,

and it now often plays an integral role in assisting consumers with their information

search process. According to one study, more than 40% of consumers believe the

Internet strongly influences their decision making (Blackwell et al., 2006, p.115).

Since the Internet and new technologies evolve with time, online consumer behavior is

expected to become increasingly more complex. The factors, such as economics (time

spent and monetary cost), computing (search engines or online third-party agents) and

psychology (search efforts) all influence online consumers’ decision making processes

(Punj, 2012). Researchers suggest it is necessary to investigate different facets to

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understand the complexity of consumer decision-making (Hansen, 2005; Grant, Clarke,

& Kyriazis, 2007).

Darley, Blankson and Luethge (2010) presented a comprehensive model and

review of online consumer behavior and the decision making process. By extending

the traditional CDP model, the modified model of online consumer behavior

recognized that external factors (i.e. individual characteristics, social influences,

situational and economic factors and online environment) impact the decision-making

process in an online environment. Consumer decision-making has evolved into a

sophisticated and dynamic process in the online environment. In Figure 1, the model

demonstrates exactly how the online and traditional consumer behavior and decision

making has transformed (Darley et al., 2010). In particular, information processing

and alternative evaluation are important factors which need more research to

contribute a better understanding of online consumer behavior (Darley et al., 2010;

Grant et al., 2007).

In terms of purchasing online travel products, Beldona, Morrison and O’Leary

(2005) argued that a consumer’s motivation to book online travel products depends

upon the consumer’s past experience and the heterogeneity of travel products.

Consumers attach both informational (e.g., product detailed descriptions) and

transactional aspects (e.g., ease of booking) to evaluate travel products. While

consumers evaluate complex alternatives, such as accommodations or travel packages,

their motivations are driven by informational aspects. Specifically, consumers are

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more willing to search and acquire detailed information before booking

accommodations or bundled travel products online.

Figure 1: A modified model of online consumer behavior and decision making.

Source: Darley, Blankson, & Luethge (2010).

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2.2.1 Consumer perceived value and awareness of sales promotions

The concept of consumer perceived value has been recognized as an important

component in setting pricing strategies. A value-based pricing strategy focuses on

enhancing consumers’ perception of value; that is, consumers’ overall assessment of

the product value should be greater than the price they actually pay. Hospitality

marketers often apply this concept when developing sales promotions to increase

revenues and consumer satisfaction (Shoemaker, Lewis & Yesawich, 2007).

Sales promotions in hositality e-commerce includes numerous formats such as

price-reductions, coupon codes, premiums, sweepstakes, extra loyalty program points,

milliage accumulation and bundling packages (Christou 2011;, Kotler et al., 2010).

Online sales promotions possess appealing features and innovative ways to attract

consumers to visit suppliers’ websites (Sigala, 2013). For instance, the emerging trend

of promoting online deals available for a certain time period and with limited

inventory has become popular with the rise of LivingSocial and Groupon. These sales

generate a feeling of product scarcity and increases consumers’ likelihood of

impulsive purchases (Sigala, 2013).

Researchers have also investigated how promotional messages act as stimuli

which affect a consumer’s evaluation process (Choi, Ge & Messinger, 2010; Dastidar

& Datta, 2008; Nusair, Yoon, Naipaul & Parsa, 2010). Price formats, advertisements

and types of incentives influence whether consumers respond favorably or

unfavorably to marketing messages. Therefore, marketers have focused on developing

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various forms of sales promotions to trigger consumers’ psychological processes and

manipulate their attitudes toward acquiring products (Dastidar & Datta, 2008; Raju &

Hastak, 1980).

Nevertheless, some research indicates consumers avoid acquiring discounted

products due to their inferences of product quality based upon price (Tellis & Gaeth,

1990). Price is perceived as an indicator of quality; consumers tend to equate low

prices with low quality, thus prompting concerns about undesirable outcomes if they

purchase discounted products (Zeithaml, 1988; Lichtenstein, Ridgway & Netemeyer,

1993).

2.2.2 Deal searching

Consumers’ deal-searching behavior can be categorized as either active or

passive (Schneider & Currim, 1991). In active deal-searching, consumers are sensitive

to sales promotions and willing to enthusiastically search for deals. By contrast,

passive searching refers to consumers who wait to receive promotional information

distributed by companies. Instead of proactively seeking deal-relevant information,

passive customers tend to respond to direct contacts by marketers, such as marketers

sending out individual e-mails to connect with customers. Hospitality firms have

recognized the value of both types of customers and instituted methods for attracting

each segment through Internet marketing campaigns (Hawkins & Mothersbaugh, 2010;

Shoemaker et al., 2007). For instance, hotels use paid advertisements on travel

websites to target the consumers who tend to actively search for deals on these sites.

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However, passive customers will not be exposed to these ads as they don’t visit travel

sites. In order to reach the passive customer segment hotel marketers may attempt a

more direct distribution method by sending promotional incentives (i.e., digital

coupons) through electronic mail using customer contact information.

Deal searching involves a trade-off between benefits (i.e. potential savings)

and costs (i.e. search efforts). Search efforts represent opportunity costs, which include

time, as well as physical and psychological efforts. In other words, consumers must be

able to attribute these efforts with a monetary savings (Blackwell et al., 2006;

Hawkins & Mothersbaugh, 2010; Punj, 2012). According to the cost-benefit paradigm,

consumers search for decision-relevant information until the perceived benefits

outweigh search efforts (Fortin, 2000; Jiang, 2003; Stigler, 1961). Online consumers

tend to utilize the Internet as a major information search tool to help them make a

quality decision and generate different search strategies, such as using third-party

websites or search engines as facilitated tools to match consumers’ needs and reduce

search efforts (Jiang, 2003; Punj, 2012). As a result, E-commerce marketers have

realized that providing convenient, easy to use and time-saving features on their

websites can reduce consumers’ time spent searching, assist them in comparison

shopping and motivate them to make a purchase (Blackwell et al., 2006; Park &

Gretzel, 2010; Punj, 2012). Alternatively, due to the development of information

transparency and rapid data transmission on the Internet, consumers are encouraged to

do more price and product comparisons in the stage of pre-purchase evaluation

(Buhalis & Law, 2008; Jiang, 2003; Sharma and Krishnan; 2001). Therefore,

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consumers’ deal-searching proneness has been increasingly fostered and affects

individuals’ decision-making.

2.2.3 Consumers’ deal proneness

Deal proneness is defined in psychology as a propensity to respond sensitively

to discount pricing such as coupons or other types of sales promotions (Lichtenstein,

Netemeyer & Burton, 1990). Lichtenstein et al., (1993) identified five major factors

that influence consumers’ increased propensity to respond to sales promotions: value

consciousness, price consciousness, coupon proneness, sale proneness and price

mavenism. Value consciousness refers to consumers’ perceptions of price and quality

evaluation. Price consciousness is related to consumers’ emphasis on low prices as

opposed to product quality. Coupon and sale proneness reflect consumers’ propensity

to apply coupons and take advantage of sales promotions. Price mavenism is defined

as consumers’ sensitivity to price information and their tendency to forward that

information along to other consumers. These factors all associate with consumers’

positive attitudes toward responding to sales promotions. Not only do these factors

depict the psychological traits of deal-prone consumers, but can also be used to

explain consumer deal-responsive behavior (Lichtenstein et al., 1993).

For deal-prone consumers, finding the “best deal” is their shopping goal; they

seek value which exceeds the price they pay for a product or service (Kwon & Kwon,

2013). There are two different perspectives regarding how deal-prone consumers

evaluate promotions: heuristic processing and heightened processing (DelVecchio,

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2005). With heuristic processing deal-prone consumers tend to respond to promotional

cues in an effort to simplify decisions. Since consumers are often trying to optimize

outcomes and minimize mental efforts while making a decision, they select promoted

brands instead of assessing price and quality (DelVecchio, 2005). A good application

of heuristic processing is showcased by online travel agencies with opaque selling

features, such as Hotwire. The website simply provides a single discounted price for a

certain star-level hotel room and consumers can choose a hotel room based upon their

budget. Thus, the selling price is most important. This practice is different from

heightened processing in which deal-prone consumers tend to carefully evaluate all

costs and benefits and integrate this information into their decision making process

(DelVecchio, 2005). Both heuristic and heighted processing influence deal-prone

consumers while they are exposed in a shopping environment.

Research has extensively studied coupon usage and purchase intention, word-

of-month, customer relationship and brand loyalty (Bawa, Srinivasan & Srivastava,

1997; Fortin, 2000; Kwon & Kwon, 2013; Lichtenstein et al., 1993; Martinez &

Montaner, 2006; Yi & Yoo, 2011; Wirtz & Chew, 2002). The tendency of deal

proneness not only predisposes consumers to have a more favorable attitude towards

deal hunting, but also motivates consumers to proactively respond to sales promotions,

leading to actual purchase and showing higher brand loyalty. It has been argued that

consumers respond to promotion types differently; however, research indicates

consumers who have the high tendency toward deal proneness have more favorable

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attitudes toward the brand with sales promotions than a brand without, regardless of

the type of promotion (Lichtenstein, Burton, & Netemeyer, 1997; Yi & Yoo, 2011).

2.2.4 Evaluation and comparison process

Rational choice theory states that a consumer’s evaluation of alternatives is “to

identify or discover the one optimal choice” through searching relevant information

and weighing costs and values ((Hawkins & Mothersbaugh, 2010, p.550). It also

indicates consumers are expected to engage in rational and logical processes that assist

them in making decisions during an evaluation and comparison process (Tversky &

Kahneman, 1986). However, other researchers have suggested that consumers’

decision-making process also involves emotional responses, such as their feelings or

experience in terms of the product features. As an affective system, these emotional

responses influence consumers’ judgment (Darke, Chattopadhyay & Ashworth, 2006;

Hansen, 2005). Furthermore, cognitive and affective systems are also underlined in

the concepts of utilitarian and hedonic shopping values which are the paradigm in

consumer behavior research explaining how consumers make brand choices (Sarkar,

2011).

Chandon, Wansink, & Laurent (2000) distiguish how consumers perceive

utiliarian and hedonic benefits when they evaluate sales promotions. Utilitarian

benefits are “instrumental, functional and cognitive,” whereas hedonic benefits are

“experiential and affective” (p.66). Marketers utilize these two types of benefits when

featuring sales promotions. For example, a promotional message focusing on utiliarian

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benefits may address the savings, values of quality or convience. In constrast,

marketers address the entertainment or emotional gratification achieved when

browsing sales promotions as hedonic benefits (Chandon et al., 2000).

Other researchers conclude that utilitarian values comprise consumption utility,

news utility, anticipation utility and memory utility (Hsee & Tsai, 2008). Consumption

utility refers to a consumer’s perception of the value gained from the consumption. An

example of consumption utility would be when a customer books a hotel room and

receives monetary savings through coupon redemption. News utility refers to

perceived benefits associated with informed messages (e.g., advertisements of

monetary savings) while anticipation utility is the perceived value during consumption

(e.g., desired discounted levels). Finally, memory utility shows consumers’ past

experience creates assimilation effects by responding to the current experience. These

five dimensions have been utilized to explain consumer evaluation processes and

decision-making.

2.3 Theoretic foundation of research

2.3.1 Transaction and acquisition utility theory

Thaler (1985) proposed that consumer behavior is shaped by a series of

cognitive activities that are combined with possible consequences during a consumer’s

decision making process. This evaluative process is modeled by a mental accounting

system and referred to as “transaction utility” and “acquisition utility” (Thaler, 1985).

Transaction utility refers to the difference between the selling price and the reference

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price which a consumer expects to pay; it represents the feeling of pleasure or

disappointment with the deal (Gupta & Kim, 2010; Fortin, 2000; Thaler, 1985). The

value of transaction utility depends on whether or not a consumer subjectively

perceives that he or she is getting a good deal for the product or service.

Conversely, acquisition utility refers to the economic aspect of the sales

transaction (Gupta & Kim, 2010; Fortin, 2000; Thaler, 1985). Transaction and

acquisition utility theory has been widely applied in consumer behavior and marketing

research (Liu & Soman, 2008). The theory has been used to explain how consumers

evaluate and react to different types of promotions by sellers and why some consumers

avoid purchasing discounted products (Liu & Soman, 2008; Thaler, 1985). Research

related to coupon usage and deal assessment has also applied transaction and

acquisition utility theory to understand value conscious and deal prone consumers

(Lichtenstein et al., 1990).

Researchers have argued that traditional economic theories fail to fully explain

why consumers positively or negatively respond to sales promotions (Lichtenstein et

al., 1990, Liu & Soman, 2008). Consumers may be influenced by relevant information

and experience, and they continuously consider both the utilitarian and hedonic

benefits while evaluating the sales promotions. Gupta & Kim (2010) adopted

transaction utility theory to interpret online consumers’ perceived value and purchase

intentions. In their study, both monetary and non-monetary benefits influenced

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consumers’ value perception which was an intrinsic factor motivating them to

purchase products online (Gupta & Kim, 2010).

2.3.2 Goal-setting theory

The goal-setting theory of motivation was originally developed to describe the

relationship between goal attainment and job performance; it also provides an

explanation of workplace motivation (Lunenburg, 2011). Goal-setting theory specifies

that an individual’s values and intentions are cognitive components influencing

behavior (Baumgartner & Pieters, 2008). Specifically, goals lead people to persist in

accomplishing a task and avoiding an undesireable outcome. In addition, one’s

satisfaction of achieving goals gives him or her further motivation to continue

pursuing these goals (Lunenburg, 2011). Goal-setting theory is also applied in the field

of consumer psychology (Baumgartner & Pieters, 2008, Bagozzi & Dholakia, 1992).

Pavlou & Fygenson (2006) stated that purchasing a certain product from a website is a

goal-oriented behavior, and obtaining product information is a consequence in order to

achieve this goal. While consumers recognize their desires, they form intentions to

pursue a purchasing behavior, which assists in fulfilling their desires (Baumgartner &

Pieters, 2008; Pavlou & Fygenson, 2006). Thus, the goal-setting has been viewed as

an important stage in activating consumers’ motivation and influencing their behavior.

2.3.3 Theory of planned behavior

The theory of reasoned action (TRA) and theory of planned behavior (TPB)

are both based on expectancy-value theories of goal setting and designed to predict

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voluntary behavior. In TRA, there are two determinants of consumer behavior: 1.)

attitude influences one’ intention toward buying a product and 2.) social subjective

norms determine one’s intention to purchase or not buy a product (Fishbein and Ajzen,

1975). Later, Ajzen modified TRA and proposed perceived behavioral control as

another major determent of predicting one’s behavior. The TPB as an extension of

TRA explains how one’s judgment of a behavioral difficulty affects his or her

behavioral intention (Ajzen, 1991). In sum, attitudes, subjective norm and perception

of behavior control lead to the formation of a behavioral intention (Ajzen, 1991).

TRA and TPB have been widely applied in the field of social psychology of

consumer behavior. Many TRA and TPB research has focused on buying familiar

versus unfamiliar products (Arvola, Lahteenmaki, & Tuorlia, 1999), examining

travelers’ behavior and destination choices (Lam & Hsu, 2004), clipping coupons

online (Fortin, 2000), e-commerce adoption (Pavlou & Fygenson, 2006), online

grocery buying intention (Hansen, Jensen, & Stubbe Solgaard, 2004) and online

consumers’ behavior (Wen, 2006).

TRA and TPB address how people’s cognitive evaluation of consequences

leads to either pursuing a certain behavior or not. However, it has been argued that

they do not specify how intentions are produced to influence actions. Researchers have

argued that most consumer behavior is goal-oriented (Bagozzi & Dholakia, 1992). A

goal is an “internal representation of desirable states that people try to attain and

undesirable states that they try to avoid” (Baumgartner & Pieters, 2008, p.368). In an

attempt to attain a desirable state, consumers need to trade something in exchange for

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achievingwhat they want. For instance, consumers search relevent information and

consider all possible alternatives in order to make a decision which is best fit to their

goals. Since TRA and TPB were not designed to be goal-directed models, the goal

attainment was ignored in these theories. Thus, TRA and TPB are not applicable to

explain goal-directed behavior and do not explicitly describe the psychological

process of intention formation (Bagozzi, Gurhan-Canli, & Priester, 2002; Baumgartner

& Pieters, 2008).

2.3.4 The model of goal-directed behavior (MGB)

Perugini and Bagozzi (2001) extended TRA and TPB to provide a

comprehensive perspective of consumer behavior called the model of goal-directed

behavior (MGB) (Bagozzi et al., 2002). Similar to TRA and TPB, MGB addresses

human intention and behavior; however, there are several differences between TPB

and MGB. MGB proposes that a volatile desire provides a motivational impetus to

influence an individual’s intentions (Perugini & Bagozzi, 2001). From the

psychological perspective, motivation is a desired state which elicits intention and

provides direction to a particular behavior (Bagozzi & Dholakia, 1992). Thus, given a

strong motivational impetus, an individual’s intrinsic attitudes, emotions, subjective

norms and perceived behavior control will be energized and transformed toward a

behavioral intention (Perugini & Bagozzi, 2001). During the consumer decision

making process, an individual’s motives will be driven toward the intention once the

need is recognized. Consequently, an intention is targeted at a specific outcome

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through “the execution of instrumental acts” (Bagozzi et al., 2002, p.83). The MGB is

displayed in Figure 2.

Figure 2: Model of Goal-Directed Behavior. Adapted from Perugini & Bagozzi (2001).

According to the model, desires can be explained by one of three motivations:

attitudes, anticipated emotions and subjective norms. Desires also play a mediating

role between these three latent factors and perceived behavior control toward intention

and behavior (Bagozzi, Gopinath, & Nyer, 1999; Wang, Hong, & Wei, 2010).

Secondly, MGB postulates that frequency of past behavior is a predictor of desires,

intentions and behavior (Perugini & Bagozzi, 2001). Frequency of past behavior

stands that an individual’s past experience will reflect his or her behavioral patterns,

thus, affecting the individual’s intentions and future behavior. Recency of past

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behavior indicates that the individual’s most recent experience will constantly

influence his or her future behavior (Perugini et al., 2001).

The MGB provides a greater understanding of how intention and behavior are

produced, expanding the TPB and providing a more powerful explanation of human

behavior than TRA or TPB (Bagozzi et al., 2002; Kim, Lee, Lee, & Song, 2012).

Hunter (2006) utilized MGB to examine how the role of anticipated emotion, desire

and intention interact with a shopping center image and frequency of consumers’ visits.

The results showed that desire and positive anticipated emotions were important

variables in predicting consumers’ intention to visit the shopping center. Taylor,

Hunter and Longfellow (2006) adapted MGB and examined consumer loyalty in a

business-to-business (B2B) service context. In their study desires were strongly

influenced by attitudes, positive anticipated emotions and subjective norms. Recent

studies also applied MGB to examine tourist behavior in the hospitality industry (Kim,

Lee, Lee, & Song, 2012; Song, Lee, Norman, & Han, 2012; Xie, Bagozzi, & Ostli,

2013). These studies provide satisfactory support that desire is a vital impetus in the

intention-formation process.

Although MGB has been credited as broadening and deepening the traditional

attitude-behavior paradigms to explain consumer behavior, it has not been extensively

applied in consumer or marketing research (Baumgartner & Pieters, 2008; Hunter,

2006). Presently, there is no research which utilizes MGB to investigate online

consumer behavior and buying intention. Thus, the current study is designed to

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combine salient factors which may influence online deal-searching behavior, along

with the variables from MGB to produce a holistic framework of online consumer

behavior.

2.3.5 Proposed conceptual framework and research propositions

The proposed framework for this study is displayed in Figure 3. This study

proposed a modified MGB model to investigate consumer deal-searching motivations

and booking intentions.

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Figure 3: The proposed framework

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Attitudes

Based on TRA and TPB, attitude has a direct effect on an individual’s behavior

(Ajzen & Fishbein, 1980; Ajzen, 1991). Attitude is defined as “the degree to which a

person has a favorable or unfavorable evaluation or appraisal of the behavior in question”

(Ajzen, 1991, p.188). A consumer’s perception and belief about the consequence of

evaluation and actions determines one’s attitude (Bagozzi et al., 2002). Social

psychologists stated that attitdues are determined by beliefs and values which are

associated with certain attributes, objects, or events (Ajzen, 1991; Bagozzi et al., 2002).

These beliefs and values reflect a person’s subjective attributes and explain why

someone makes a particular choice when selecting among multiple alternatives.

Consumers’ attitudes toward brand perferences can be an important determinant of their

purchase decisions (Ajzen, 1991). In the field of consumer behavior, the construct of

attititude plays a central role in explaining consumers’ buying motivations, particularly in

the area of product evaluation, changing attitudes and determinants of brand opinion

(Ajzen, 2008).

A consumer’s belief and evaluation of a subject are determined primarily through

learning and knowledge acquisition (Perugini & Bagozzi, 2001). While consumers

evaluate possible alternatives prior to making a purchase decision, they are highly

engaged in a cognitive thinking process (Hawkins & Mothersbaugh, 2010). Research has

shown that perceived benefits, costs and risks are major constructs in cognitive attitude

formation (Forsythe et al., 2006; Hansen, 2005; Javadi, Dolatabadi, Nourbakhsh,

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Poursaeei & Asadollahi, 2012; Jayawardhena, 2004; Kim et al., 2009; Pires, Staton, &

Eckford, 2004). Forsythe et al. (2006) summarized the main constructs of perceived

benefits and risks through a comprehensive literature review and a qualitative inqury. In

their study, four percieved benefits (shopping convenience, product selection, comfort of

shopping and enjoyment) and three percieved risks (financial risk, product risk and

time/convenience risk) were identified as the determinants of influencing consumer

online shopping behavior (Forsythe et al., 2006). Jayawardhena (2004) also conducted

research regarding how personal values influence online consumer shopping attitudes and

behaviors. The research indicates that the significant constructs of attitudes include

considering a variety of products, comparison shopping, finding the best price for goods

and a quick purchase determination.

One of the behavioral theories related to consumers’ attitudes and beliefs structure

is the theory of cognitive dissonance. The theory of cognitive dissonance was first

introduced by Festinger in 1957 and based upon the belief that individuals seek to

maintain consistency between information obtained and internal beliefs (Festinger, 1957).

Dissonance arises when individuals have an experience that contrasts their preconceived

notions. When consumers observe a price which is different from what they expected

they utilize strategies to reduce the feeling of dissonance. Continuous information

searching, shopping-around for savings, or changing price expectations are strategies

adopted by consumers when they perceive diverse prices in a marketplace (Lindsey-

Mullikin, 2003). Consumers who are demanding low prices continuously seek

information among online travel websites (Christodoulidou et al., 2007).

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When consumers search hotel deals or related discount information, their ultimate

goal is to locate the best deal. Value-maximization, justification of spending and other

benefits (i.e. quality benefit, convenience benefit) frame consumers beliefs to continue

searching deals (Chandon et al., 2000; Kwon & Kwon, 2013). In addition, consumers’

attitudes toward deals are related to deal pronesses and value consiousness (Lichtenstein

et al., 1990; Sigala, 2013). The increased propensity of deal pronesses and value

consiousness directly affects consumers’ attitudes toward purchase (Lichtenstein et al.,

1990). Thus, the more positive benefits consumers perceive, the more favorable attitudes

they hold, resulting in stronger motivations to make a purchase decision. In order to

measure consumers’ attitudes toward booking deals, the propensity of spending time and

effort, the preception of searching hotel deals online and the price/quality evaluations are

considered in this research.

H1: Attitudes (ATT) have a significant positive influence on a consumer’s

motivation to book hotel deals through online travel intermediaries.

Emotions

Emotions are defined as a mental state of readiness that is affected by an

individual’s appraisal of events and thoughts (Bagozzi et al., 2002). Specifically,

emotions are subjective feelings that relate to individuals’ needs, motivation and

experience. These feelings (i.e. joyful, excited, guilty, etc.) are associated with how

consumers feel when they evaluate, buy and consume a product (Hawkins &

Mothersbaugh, 2010; Ruth, 2001). Previous studies indicate emotional experiences can

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be evoked and aroused by different environmental stimuli (Eroglu, Machleit & Davis,

2003; Kawaf & Tagg, 2012). For example, virtual layout and design of a travel website

may influence consumers’ feelings of pleasure while browsing the site (Manganari,

Siomlos, Rigopoulou & Vrechopoulos, 2011). Moreover, consumers’ positive and

negative emotions may influence their perceptions toward sales promotions and product

advertisements, which in turn, influences their purchase decisions (Chuang & Lin, 2007).

Thus, consumers’ emotional state has been viewed as a vital factor that affects decision-

making.

Researchers have argued that anticipated emotions are different from affective

attitudes (Perugini & Bagozzi, 2001). While affective attitudes are attained by

experience acquisition or through repeated behavioral reinforcement, emotions are

dynamic and directly affect an individual’s desire to complete a certain task (Baggozi et

al., 1999; Hansen, 2005; Kim et al., 2012). By performing a behavior, a consequence and

subsequent feedback will generate emotional responses. These anticipated positive and

negative emotions are the result of consumers’ information processing, evaluation and

decision justification. Researchers have suggested possible emotional responses should

be examined when attempting to understand consumer behavior (Bettman, Luce, &

Payne, 2008; Hansen, 2005). The effects of emotions have been found to significantly

influence consumers’ purchase decisions about food products (Hansen, 2005), grocery

products (Chuang, Kung, & Sun, 2008), online merchandise (Mazaheri, 2012) and other

various product categories (Hawkins & Mothersbaugh, 2010).

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Maximizing the positive emotion and minimizing the negative emotion

experienced while making a decision are two metagoals in the decision making process

(Bettman et al., 2008, p.590). Bagozzi, Baumgartner, & Pieters (1998) proposed that

different types of emotions will be produced when a decision maker pursues a certain

behavior. Positive emotions are hypothesized to affect a consumer’s willingness and

motivation to pursue a particular behavior. When consumers recognize positive emotions

while seeking sales promotions their feelings of pleasure and enjoyment may be

enhanced, inducing the purchase (Fortin, 2000).

However, a consumer is unlikely to pursue a certain behavior which he or she

anticipates would cause negative emotional outcomes. Previous research argued that a

consumer may experience negative emotions while facing choices (Bettman et al., 2008;

Cai and Cude, 2011). Consumers try to avoid the feeling of regret or disappointment from

making a wrong choice such as when buying discounted products and worrying that the

lower price indicates poor quality. While it is believed positive emotions entice time and

effort spent deal-searching, negative emotions may cut the search short.

H2: Positive Emotions (PEM) have a significant positive influence on a

consumer’s motivation to book hotel deals through online travel intermediaries.

H3: Negative Emotions (NEM) have a significant negative influence on a

consumer’s motivation to book hotel deals through online travel intermediaries.

Market Mavens

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Texas Tech University, Hsiang-Ting Chen, May 2014

The concept of market mavens is defined as individuals who willingly acquire

product-related information and share that knowledge and information with other

consumers (Feick & Price, 1987). Market mavens are characterized as information

seekers, highly involved in the purchase process and heavy coupon users who are easily

reached through advertisements. Consumers who have higher market maven propensities

are more aware of new product offerings and actively respond to promotions than

consumers with low market maven propensity (Barnes & Pressey, 2012; Williams &

Slama, 1995).

The consumer segment of market mavens draw a special interest to the online

market because they are capable of influencing other consumers. Market mavens perceive

themselves as experts or smart shoppers who influence other people’s purchase decisions

(Clark & Goldsmith, 2005; Feick & Price, 1987; Williams & Slama, 1995). They also

tend to gather and share information with others in order to gain appreciation and

approval from their peers (Lichetenstein, Ridgway, & Netemeyer, 1993; Schindler, 1989;

Hawkins & Mothersbaugh, 2010). Market mavens not only represent a type of normative

influence on other consumers by providing their opinion, they are also heavily influenced

by marketing information (Clark & Goldsmith, 2005). According to Clark & Goldsmith’s

research, market mavens are more likely to conform to expectations and be influenced by

others. This indicates that the market maven can be a type of “subjective norm,” which

determines how an individual feels and reacts to perceived normative influence (Bagozzi

et al., 2002).

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The concept of the market maven is also applied in investigating why consumers

search online hotel promotions. In Christou’s study (2011), the market maven was a

critical variable that influenced consumers when searching and purchasing hotel deals

online. The consciousness of retrieving promotions fuels consumers to actively look for

more deal information and enhance their feeling of competence about getting good deals

(Christou, 2011). Therefore, the construct of market mavens is considered a factor that

affects consumers’ motivation to book hotel deals.

H4: Market Mavens (MM) have a significant positive influence on a consumer’s

motivation to book hotel deals through online travel intermediaries.

Subjective norms

In TRA, TPB and MGB, subjective norms have been examined as a salient

predictor which determines an individual’s intention and behavior (Bagozzi et al., 2002).

Subjective norms are defined as a person’s obligation to perform or not perform a

behavior based on perceived social pressure (Ajzen, 1991). Normative belief indicates

that obtaining other people’s approval and agreement is vital to one’s behavioral intention.

Previous studies have confirmed subjective norms affect online shopping behavior (Chen

& Chang, 2005; Shim, Eastlick, Lotz, Warrington, 2001) and coupon usage (Fortin, 2000;

Sigala, 2013). Xie et al. (2013) found many consumers’ consumption decisions were

strongly affected by social influences. Zhang, Pan, Smith and Lee (2009) stated most

travelers actively seek online reviews and recommendations before making a hotel

reservation. In addition, price-sensitive customers tend to collect price-related

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Texas Tech University, Hsiang-Ting Chen, May 2014

information from other customers in user-generated content websites, such as social

media sites (Toh et al., 2011). Thus, in this research, subjective norms are defined as the

extent to which consumers will engage in deal-purchasing behavior when they perceive

approval from others. These norms are hypothesized to influence consumers’ motivation

to book hotel deals.

H5: Subjective norms (SN) have a significant positive influence on a consumer’s

motivation to book hotel deals through online travel intermediaries.

Perceived self-efficacy

In TPB, perceived behavior control (PBC) is defined as “people’s perception of

the ease or difficulty of performing the behavior of interest” (Ajzen, 1991, p.183). PBC

can be interpreted as the degree that people believe whether or not they have control over

an action (Bagozzi et al., 2002). Although Ajzen states the concept of perceived behavior

control is close to the concept of self-efficacy, researchers have argued they are not

entirely synonymous (Armitage & Conner, 2001; Bagozzi et al., 2002). Perceived self-

efficacy is viewed as one’s ability and confidence to complete a certain task, similar to

the concept of “outcome expectancies” (Bagozzi et al., 2002, p.73). Armitage & Conner

(1999) have distinguished the differences between perceived behavior control and self-

efficacy. In their study, perceived behavior control and self-efficacy represent the

different facet of performing a particular behavior. Self-efficacy can be defined as

confidence in one’s ability to carry out a behavior; it also indicates consumers’ abilities to

acquire marketplace information (Armitage & Conner, 1999; Bearden & Hardesty, 2001;

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Clark, Goldsmith, & Goldsmith, 2008). Vijayaharathy (2004) defined the concept of self-

efficacy as “ a consumer’s self-assessment of his/her capabilities to shop online” (p.751).

Self-efficacy was found to have positive and significant influence on consumers’

intention toward online shopping (Vijayaharathy, 2004). Therefore, in deal-purchasing

behavior, one’s competence in searching information and obtaining online deals may

influence that individual’s motivation and subsequently, booking intention.

H6: Perceived self-efficacy (PSE) has a significant positive influence on a

consumer’s motivation to book hotel deals through online travel intermediaries.

Frequency of past behavior

Past behavior contributes directly to desire and intention because consumers have

favorable or unfavorable behavioral propensities due to past experiences (Perugini &

Bagozzi., 2001). The frequency of past behavior reflects strength of various habits and

the likelihood of repeated performance; thus, it has been suggested as an indicator of

intention which induces an individual to pursue a certain behavior (Bamberg, Ajzen, &

Schmidt, 2003; Lam & Hsu, 2004; Kim et al., 2012; Perugini & Bagozzi., 2001).

Researchers state that the more often previous behavior has been performed, the more

likely it influences an individual’s motivation to pursuing the same behavior in the future.

Past behavior was also found to have a strong and direct impact on consumers’ intention

to conduct online information searches and shopping (Shim et al., 2001).

In a study of consumers’ e-coupon redemption while shopping online, the

frequency of past behavior played an important role in predicting usage intentions (Chen

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& Lu, 2011). Based on previous studies, there is a reasonable assumption that consumers’

motivation and intention may be affected by their past experience searching and booking

hotel deals through online travel intermediaries.

H7: Frequency of past behavior (FPB) has a significant positive influence on a

consumer’s motivation to book hotel deals through online travel intermediaries.

H8: Frequency of past behavior (FPB) has a significant positive influence on a

consumer’s intention to book hotel deals through online travel intermediaries.

Motivation

Several researchers have examined which factors fuel consumers’ motivation to

purchase products online (Smith, 2004). Previous studies identified information and

economic motivations as being the primary influences upon consumers’ purchase

intentions while using the Internet as a preferred shopping channel (Ganesh, Reynolds

Luckeet, & Pomirleanu, 2010; Joines, Scherer, & Scheufele, 2003; Smith, 2004; Parsons,

2002).

Information motivation refers to online consumers’ tendency to search for

information about a product and service to help them make a better or more efficient

purchase decision (Joines et al., 2003). Consumers may continue to search for

information to reinforce and justify their decisions (Jiang, 2002). For online travelers,

information motivation affects comparison shopping behavior (Chatterjee & Wang, 2012;

Park & Gretzel, 2010). Consumers’ comparison shopping behavior is also related to

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economic motivation, which involves evaluating deals to save money and maximize the

value of money spent (Joines et al., 2003). For instance, price-oriented consumers who

desire a hotel room with a discount price are motived to search around until they are

satisfied with an advertised deal.

Intention

Intention refers to the likelihood that an individual will do something; it is an

expectation that he or she will act a certain way in the future (Bagozzi et al., 2002). Based

on TRA and TPB, behavioral and normative beliefs facilitate and guide one’s intention,

which is the most accurate predictor of actual behavior (Ajzen, 1991). Gollwitzer &

Brandstätter (1997) states that an intention is defined as “people’s attempts to realize

their wishes and desires,” and it stimulates behavioral responses (p.148). Intention

promotes the initiation and execution of goal-directed behavior (Gollwitzer

&Brandstätter 1997).

From the psychological perspective, motivation is a desired state which elicits

intention and provides direction to a particular behavior (Bagozzi & Dholakia, 1992).

Given a strong motivational impetus, an individual’s intrinsic attitudes, emotions,

subjective norms and self –efficacy will be energized and transformed toward a

behavioral intention (Perugini & Bagozzi, 2001). In other words, motivations are the

proximal causes of intentions (Xie et al., 2013). During a consumer decision making

process, an individual’s motives are driven to the intention once the need is recognized.

Consequently, an intention is targeted at a specific outcome through “the execution of

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instrumental acts” (Bagozzi et al., 2002, p.83). It is assumed a stronger motivation will

incite a more pronounced intention, which eventually leads to performing a behavior.

H9: Consumers’ motivation (MOV) has a positive significant influence on

consumers’ intention (BI) to book hotel deals through online travel intermediaries.

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CHAPTER 3

METHODOLOGY
The purpose of this study was to identify: (1) the factors that influence consumer

decision making while searching and booking hotel deals through online travel

intermediaries; (2) how cognitive, emotional and social components motivate consumers

to book online hotel deals; and (3) how consumers’ intention to purchase hotel deals is

stimulated. The hypothesized model was structured based on MGB and a literature

review relevant to consumer behavior. In an attempt to understand consumers’ propensity

for searching and booking hotel deals, a self-reported survey method was utilized in this

research. A pilot study was conducted to test the construction of measurement items. An

initial structural model was identified. Based upon the findings from the pilot study, the

survey and model were modified. The full study was subsequently implemented to

examine the stated research questions.

3.1 Model development

An extensive literature review regarding consumer behavior provided the

foundation for the hypothesized model. The model consisted of nine constructs: attitudes,

positive emotions, negative emotions, market mavens, subjective norms, perceived self-

efficacy, frequency of past behavior, motivation and intention. Based upon previous

behavioral theories, attitude is considered as a cognitive mechanism in an evaluation

process. Emotional states also influence one’s volitions and initial action (Bagozzi et al.,

2002). Market mavens and subjective norms represent individuals’ expectations or social

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pressures from others which affect whether a consumer performs a certain behavior or

chooses not to do so (Clark & Goldsmith, 2005). Thus, cognitive, emotional and social

components are three main aspects to predict one’s behavior. Perceived self-efficacy was

established to measure an individual’s confidence and ability to pursue a behavior

(Armitage & Conner, 1999).

Motivation plays a mediating role, which is influenced by cognitive, emotional

and social components toward an intention to engage in a behavior. Motivation also

serves as an important and supportive role to induce one’s behavioral intention. Intention

indicates one’s commitment to pursue a goal, which ultimately leads to actual behavior.

Finally, frequency of past behavior reflects a determinant based on prior experience,

which has a significant effect on an individual’s motivation and intention to book hotel

deals through online travel intermediaries.

3.2 Measurement development and procedure

The measurements in the proposed theoretical model of this research were

developed based upon extant scholarly literature related to consumers’ decision-making

and purchase process, tendency toward deal acquisitions, transaction and acquisition

utility theory, Model of Goal-Directed Behavior (MGB) and other behavior related

theories. The measure of attitudes was established to recognize consumers’ perceptions

toward deal acquisitions, including perceived benefits, perceived risks, cognitive

evaluation and affective attitudes (Harris & Mowen (2001); Jayawardhena (2004); Kim et

al., 2009; Lichtenstein et al., 1993). Positive and negative emotions identified consumers’

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emotional expectations toward booking hotel deals online (Kim et al., 2012; Taylor, 2007;

Tsang, Tsai & Leung, 2011; Perugini & Bagozzi, 2001). The market mavens variable

detected consumers’ propensity to obtain information related to product promotions and

be experts/opinion leaders in the marketplace (Lichetenstein et al., 1993). Subjective

norms represent social obligations which allow consumers to comply with normative

pressure (Perugini & Bagozzi, 2001). The construct of perceived self-efficacy is adapted

from previous studies (Armitage & Conner, 1999; Bearden, Hardesty, & Rose, 2001) to

identify self-confidence and the ability to search for hotel deals online. Motivation

indicates the likelihood and willingness to search and book hotel deals online (Laroche,

Zgolli, Cervellon & Kim, 2003; Perugini & Bagozzi, 2001). Finally, intention determines

the likelihood of booking hotel deals in the near future (Perugini & Bagozzi, 2001). A

total of 45 items were included in the questionnaire. Table 3.1 shows the development of

measurement scales based upon previous research.

Table 3.1 Measurement Items in the pilot study


Measures and Items Source Cronbach’s Alpha
Attitude(ATT)
ATT1 When I book a hotel online, I Adapted from Lichtenstein .84; .86
like to ensure I get the best et al. (1993); Harris &
value. Mowen (2001)
ATT2 I always check hotel prices Adapted from Lichtenstein .84; .86
through travel websites to be et al. (1993); Harris &
sure I get the best value. Mowen (2001)
ATT3 Finding a good deal is usually Adapted from Lichtenstein .84; .86
worth the time and effort. et al. (1993); Harris &
Mowen (2001)
ATT4 When purchasing a product, I Adopted from Lichtenstein .84; .86
always try to maximize the et al. (1993); Harris &
quality I get for the money I Mowen (2001)

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spend.
ATT5 Using travel websites is a Adapted from Shim et al., .78
convenient way to search (2001)
product/price information.
ATT6 Using travel websites is easy Adapted from Shim et al., .73
for finding a good deal on a (2001)
hotel room.
ATT7 When I book a discounted Adapted from Kim et al., .78
hotel room through travel 2009
websites, I am concerned that
these websites may not
provide the level of
quality/service I am
expecting.
ATT8 When I book a hotel room Adapted from Kim et al., .87
through travel intermediaries, 2009
I am concerned about the
security of my personal
information (e.g. credit card
details).
ATT9 Searching hotel deals over the Adapted from Kim et al., .78
web takes too long or is a 2009
waste of time.
ATT10 I enjoy spending time Adapted from .79; .94
comparing prices through Jayawardhena (2004);
different websites. Lee(2000)
ATT11 Searching online deals gives Adapted from Lee (2000) .94
me pleasure.
ATT12 Searching online deals is Adapted from Harris & .93
exciting. Mowen (2001)
Positive emotions (PEM)
PEM1 I am happy when I am able to Adapted from Tsang et al. .80
find a hotel room with a (2012)
lower price than I expected.
PEM2 I am satisfied when I am able Adapted from Tsang et al. .80
to secure a lower price than (2012)
others who pay full price.
PEM3 I am excited when I am able Adapted from Perugini & .75
to find a good deal for my Bagozzi (2001)
money.
PEM4 I am thrilled when I book Adapted from Taylor .95
hotel deals through online (2007)
travel websites.

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Negative emotions (NEM)


NEM1 I regret booking hotel deals Adapted from Taylor .95
through travel websites. (2007)
NEM2 I feel uncomfortable booking Adapted from Taylor .95
hotel deals through travel (2007)
websites.
NEM3 When I don’t find a good deal Adapted from Kim et .88
through travel websites, I am al.(2012)
disappointed.
NEM4 When I didn’t find a good Adapted from Kim et .88
deal through travel websites, I al.,(2012)
feel angry.
Market Mavens (MM)
MM1 People ask me for Adapted from Lichetenstein .90
information about prices on et al., (1993)
different types of products.
MM2 I am considered somewhat of Adapted from Lichetenstein .90
an expert when it comes to et al., (1993)
knowing the prices of
products.
MM3 I think I am better able than Adapted from Lichetenstein .90
most people to tell someone et al., (1993)
where to shop and how to
find the best deal.
MM4 My friends think of me as a Adapted from Lichetenstein .90
good source of price et al., (1993)
information for online deals.
MM5 I like helping people by Adapted from Lichetenstein .90
providing them with price et al., (1993)
information about online
deals.
Subjective norms (SN)
SN1 People whose opinions I Adapted from Perugini & .91
value approve of me Bagozzi (2001)
searching for deals online.
SN2 People whose opinions I Adapted from Perugini & .91
value approve of me Bagozzi (2001)
searching for hotel deals
before booking.
SN3 Most people who are Adapted from Perugini & .91
important to me search for Bagozzi (2001)
hotel deals through travel

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websites.
SN4 Most people who are Adapted from Perugini & .91
important to me think I Bagozzi (2001)
should book hotel deals
through travel websites.
Perceived self-efficacy
PSE1 I know where to find the Adapted from Bearden, .80
information I need prior to Hardesty, & Rose (2001)
making a purchase.
PSE2 I trust my own judgment Adapted from Bearden, .72
when selecting products to Hardesty, & Rose (2001)
purchase.
PSE3 I believe I can effectively Adapted from Armitage & .83
search for information online. Conner (1999)
PSE4 I am confident I am able to Adapted from Armitage & .87
find good deals online. Conner (1999)
Motivation
MOV1 I am likely to use travel Adapted from Laroche et .92
websites to search for hotel al., (2003)
deals.
MOV2 I am likely to visit different Adapted from Laroche et .92
travel websites to take al., (2003)
advantage of low prices.
MOV3 I prefer to search hotel deals Adapted from Perugini & .97
online before making a Bagozzi (2001); Taylor et
reservation. al., (2007)
MOV4 I am more likely to make a Adapted from Perugini & .94
purchase on a website that Bagozzi (2001); Taylor et
provides good deals. al., (2006)
Intention
BI1 In the future, I plan to book a Adapted from Tsang et al., .80
hotel room through travel (2011)
websites.
BI2 In the future, I plan to book Adapted from Tsang et al., .80
hotel rooms through travel (2011)
websites that provide good
deals.
BI3 After searching hotels Adapted from Perugini & .92
through travel websites, I Bagozzi (2001); Taylor et
consider booking a hotel al., (2006)
room on one of the websites

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which I visited.
BI4 I am willing to book hotel Adapted from Perugini & .92
deals online in the near Bagozzi (2001); Taylor et
future. al., (2006)

A pilot study was conducted to test the appropriateness of the measurement items.

Internet users with experience booking hotel rooms through online travel intermediaries

were the target population. Therefore, the questionnaire included two filter questions. The

first filter question was used to determine whether participants primarily use online travel

websites for travel booking. Those participants who did not use online travel

intermediaries were thanked for their interest and excluded from taking the questionnaire.

For those participants who answered the first filter question positively, they were asked a

second filter question that confirm their age to be 18 years or older.

In order to allow participants to evoke a buying situation regarding searching and

booking hotel deals through online travel intermediaries, participants were presented with

a scenario, which indicated they were the decision makers. The buying situation specified

that participants were going to book a hotel room for a leisure trip. In addition, they had

enough time for search and compare various hotel deals. The scenario presented to

respondents at the start of the survey follows:

“There are many different choices regarding prices and features of hotel rooms

on online travel websites. Suppose you were going to have a leisurely vacation

with one of your close friends. Your friend put you in charge of making the travel

arrangements. Thus, you can select the price, location and star level of the hotel

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yourself. Since you and your friend intend to share all the expenses during the trip,

you would like to obtain the best deal by searching for hotel rooms online. You

have plenty of time, about three months prior to the trip, to make all the travel

arrangements. Keep these details in mind as you answer the following questions.”

Participants were asked to answer questions designed to address the nine

constructs pertaining to consumer deal-purchasing behavior via travel websites. A 7-point

Likert scale ranging from 1 (strongly disagree) to 7 (strongly agree) was used to record

participants’ responses. The question related to frequency of past behavior of online hotel

deal bookings was measured from 1 (never) to 7 (every time). The final section of the

survey included demographic questions, such as gender, age, education level, online

shopping frequency, preferences of promotion types, participation of hotel/online travel

website loyalty programs, times of travel in the last year, household annual income and

ethnicity.

3.3 Pilot study

3.3.1 Data collection

Data collection was conducted from April to June, 2013. The pilot study applied

a convenience sampling technique; a self-report questionnaire was distributed to a student

population in a southwestern university. College students have been identified as being

technologically savvy, particularly because they tend to search for information via the

Internet (Seock & Bailey, 2008). Therefore, the student population was utilized for the

pilot study. The participants either filled out hard copy questionnaires or an online survey

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accessed via a link provided. The survey was distributed to approximately 400 students.

A total of 305 questionnaires were collected, yielding a 76% response rate. Since the

survey consisted of two filter questions to ensure the sample met the requirements, a total

of 162 participants had positive responses to both filter questions. Thus, the usable

response rate was 53%.

3.3.2 Data screening

The frequency check of all variables was conducted to identify mis-entered and

missing data. There was no mis-entered data found. However, eight surveys included

more than 5% missing data. Thus, these 8 surveys were removed from the data set.

Normality tests identified the 9 univariate outliers which were deleted from the data set.

Multivariate outliers were assessed using Mahalanobis distance. There was one

multivariate outlier found and removed. After deleting the outliers, the sample size was

reduced to 144. Tests for the assumption of linearity indicated nothing out of the norm.

The test for multicollinearity revealed no variable was highly correlated (r <|.70|). Thus,

the muliticillinearity was not an issue in this study.

3.4 Full study

3.4.1 Questionnaire revision

Based on CFA, EFA and reliability results from the pilot study, the measurement

items in the questionnaire were revised. The initial questionnaire consisted of 45

measurement items. However, only 33 items were utilized in the full study. A total of 9

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Texas Tech University, Hsiang-Ting Chen, May 2014

items were removed due to the inadequate fitness of the CFA. The questions related to

frequency of past behavior were revised to a single question which represented an

observed variable. The revised items, codes and descriptions which were used in the full

study are displayed in Table 3.2.

Table 3.2. Measurement Items in the full study

Factor Item code Measures and Items


When I book a hotel online, I like to ensure I get the best
Attitudes ATT1
value.
I always check hotel prices through travel websites to be sure
ATT2
I get the best value.
ATT3 Finding a good deal is usually worth the time and effort.
When purchasing a product, I always try to maximize the
ATT4
quality I get for the money I spend.
Using travel websites is a convenient way to search
ATT5
product/price information.
Using travel websites is easy for finding a good deal on a
ATT6
hotel room.
Positive I am happy when I am able to find a hotel room with a lower
PEM1
Emotions price than I expected.
I am satisfied when I am able to secure a lower price than
PEM2
others who pay full price.
I am excited when I am able to find a good deal for my
PEM3
money.
Negative
NEM1 I regret booking hotel deals through travel websites.
Emotions
I feel uncomfortable booking hotel deals through travel
NEM2
websites.
People ask me for information about prices on different types
Market Mavens MM1
of products.
I am considered somewhat of an expert when it comes to
MM2
knowing the prices of products.
I think I am better able than most people to tell someone
MM3
where to shop and how to find the best deal.
My friends think of me as a good source of price information
MM4
for online deals.
I like helping people by providing them with price
MM5
information about online deals.

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Subjective People whose opinions I value approve of me searching for


SN1
norms deals online.
People whose opinions I value approve of me searching for
SN2
hotel deals before booking.
Most people who are important to me search for hotel deals
SN3
through travel websites.
Most people who are important to me think I should book
SN4
hotel deals through travel websites.
Perceived self- I know where to find the information I need prior to making
PSE1
efficacy a purchase.
I trust my own judgment when selecting products to
PSE2
purchase.
PSE3 I believe I can effectively search for information online.
PSE4 I am confident I am able to find good deals online.
I am likely to use online travel websites for searching hotel
Motivation MOV1
deals.
I am likely to visit different online travel websites to take
MOV2
advantage of low prices.
I prefer to search hotel deals before making an online
MOV3
reservation.
I am likely to make a purchase on a website that provides
MOV4
good deals.
In the future, I plan to book a hotel room through travel
Intention BI1
websites.
In the future, I plan to book hotel rooms through travel
BI2
websites that provide good deals.
After searching hotels through travel websites, I will
BI3 consider booking a hotel room on one of the websites which
I visited.
BI4 I am willing to book hotel deals online in the near future.

3.4.2 Data collection

The revised questionnaire was distributed via Qualtrics Survey Software

Company. Participants were recruited from a panel of Internet users developed by

Qualtrics. Since the purpose of this study was to understand online consumer deal-

purchasing behavior through travel intermediaries, an online survey distribution method

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Texas Tech University, Hsiang-Ting Chen, May 2014

was considered appropriate (Bosnjak et al., 2007; Park & Gretzel, 2010). The full study

utilized non-probability, web-based quota-sampling from a nationwide consumer panel.

The type of sampling technique was utilized due to the desire to solicit responses from

participants who had online hotel booking experience in the past 12 months. As this

research aimed to identify online consumer behavior, the quota-sampling represented a

specific portion of the population. In addition, employing a convenience quota-sampling

method provided representative samples in conducting online travel research (Lohmann

& Schmücker, 2009). The data collection was conducted in September, 2013. A total of

603 completed responses were collected.

3.4.3 Data screening

The data were examined for univariate and multivariate outliers. By conducting

an analysis of normal distribution, a total of 9 univariate outliers were identified and

deleted from the dataset. In addition, 13 multivariate outliers were found and deleted by

using Mahalanobis distance. A total of 581 usable questionnaires were utilized in the full

study. Reliability and validity was tested using Crobabch’s alpha. The alpha coefficients

ranged from .848 to .919. The test for multicollinearity revealed that no variables were

highly correlated (r <|.70|). The data confirmed no straight lining problem, such as

selecting 7=strongly agree on all questions, or having missing answers on more than 5%

on all questions. The statistical software IBM SPSS (version 21) was used to analyze the

data for normality, outliers and test statistical assumptions. Mplus (version 7) was utilized

to run confirmatory factor analysis (CFA) and structural equation modeling (SEM).

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CHAPTER 4

RESULTS

4.1 Pilot study

4.1.1 Sample

The survey was distributed to approximately 400 students. A total of 305

questionnaires were collected, yielding a 76% response rate. Since the survey consisted

of two filter questions to ensure the samples were over 18 years old and had hotel

booking experience through online travel websites in the past 12 months , only 162

responses were usable. Thus, the usable response rate was 53%. A total of 144 usable

questionnaires were collected between April and June 2013. As the aim of the pilot test

was to determine the appropriateness and effectiveness of the survey instrument a small

sample size was sufficient. Since the participants in the pilot study were primarily

recruited from a student population, the majority of the sample (65%) was between 21

and 25 years of age and in college pursuing a bachelor’s degree (65%) at the time of data

collection. The remaining respondents possessed a bachelor’s degree (22%) or master’s

degree or higher (13%). Most individuals identified themselves as Caucasian (64%). As

expected from the young sample, 43% reported their household income to be less than

$24,999 annually. Table 4.1 shows the participants’ demographic information regarding

to their age, ethnicity, education and income level.

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Table 4.1
Pilot Stud: demographic information (N=144)

Variable Frequency Percent


Age
18-20 15 10%
21-25 93 65%
26-29 20 14%
30+ 16 11%
Ethnic Group
African/African American 10 7%
Asian 16 11%
Caucasian 92 64%
Hispanic 20 14%
Other 6 4%
Education
In College 93 65%
Bachelor's Degree 32 22%
Master's Degree or Beyond 19 13%
Household Income
Less than $24,999 62 43%
$25,000-$49,999 24 17%
$50,000-$74,999 16 11%
$75,000-$99,999 10 7%
$100,000-$124,999 9 6%
Greater than $125,000 23 16%

Table 4.2 provides information related to the frequency of travel within the past

12 months. More than one-third of participants (35%) stated they had traveled 3-4 times

within the past year. When asked about how often they visit travel websites before

booking a hotel, 67% claimed they browse 3-4 websites before purchasing.

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Table 4.2
Pilot study: number of online travel websites visited before booking a hotel and
frequency of travel within the past 12 months (N=144)
Variable Frequency Percent
Number of visits to online travel websites
1-2 24 17%
3-4 97 67%
5-6 18 13%
7+ 5 3%
Trips taken within the past 12 months
1-2 29 20%
3-4 50 35%
5-6 40 28%
7-8 8 6%
9+ 17 6%

4.1.2 Assumption testing

A frequency check of all variables was conducted to identify incorrectly entered

data. There were no inaccuracies found in the data entry. For the assumption of

multivariate normality, the Kolmogorov-Smirnov (K-S) test was conducted. The

subscales of negative emotion, perceived self-efficacy, motivation and intention

demonstrated negatively skewed layout with leptokurtic tendencies. However, the

Kurtosis value in the pilot study ranged from -0.14 to 1.81 and the Skewness ranged from

-1.21 to 0.24. Based on Kline’s (2005) recommendations that Kurtosis measure below 10

and Skewness under 3, the data was considered to be normally distributed. To test the

relationship among the variables, an inter-correlation test was conducted (Table 4.3). The

results indicated the variables were correlated. Further tests revealed VIF<3, which

indicate multicollinearity was not a concern (O’Brien, 2007).

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Table 4.3
Pilot study: Means, Standard Deviation and Construct Inter-Correlations

Variables Mean SD 1 2 3 4 5 6 7 8
1. SubATT 62.24 .63 
2. SubPEM 23.90 .27 .59** 
3. SubNEM 12.85 .27 .14 -.02 
4. SubMM 20.49 .54 .42** .35** .17* 
5. SubSN 19.75 .38 .32** .44** .03 .53** 
6. SubPSE 23.01 .29 .28** .47** -.31** .37** .51** 
7. SubMOV 24.47 .29 .44** .62** -.10 .27** .39** .53** 
8. SubBI 24.90 .27 .44** .56** -.02 .26** .41** .54** .77** 
Note: N=114, SubATT= Attitudes sub score; SubPEM=Positive emotions sub score; SubNEM=Negative emotions sub score; SubMM=Market Maven
sub score; SubSN=Subjective norms sub score; SubMOV=Motivation sub score; SubBI=Behavioral intention sub score. * p<.05, **<.01.

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4.1.3 Exploratory factor analysis (EFA)

Exploratory factor analysis (EFA) was performed by utilizing principal factor

extraction with oblique rotation (direct oblimin). Principal axis factoring extraction was

used prior to principal factors extraction to estimate the number of factors and

factorability of the correlation matrices. To meet the standard requirement of factor

loading, the cutoff point was set at .40 and the eigenvalues over Kaiser’ criterion of 1 was

applied. Based on the results of the EFA, six indicators were identified for attitudes, three

positive emotion indicators, two negative emotion indicators, five market maven

indicators, four social norm indicators, four perceived self-efficacy indicators, four

indicators of motivations and four indicators of behavioral intention. These indicators

were subsequently selected to perform the confirmatory factor analysis. The

measurements for each indicator were sufficiently reliable according to Cronbach’s alpha

which ranged from .81 to .90. The result of the factor loadings is shown in Table 4.4.

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Table 4.4
Pilot study: Mean, Standard Deviation, Factor loading and Cronbach’s Alpha of Indicators

Constructs Code Indicators Mean SD Factor Loadings 


Attitudes ATT1 When I book a hotel online, I like to 6.39 .97 .61 .87
ensure I get the best value.
ATT2 I always check hotel prices through 6.18 1.04 .78
travel websites to be sure I get the best
value.
ATT3 Finding a good deal is usually worth the 6.29 .88 .75
time and effort.
ATT4 When purchasing a product, I always try 6.20 .89 .72
to maximize the quality I get for the
money I spend.
ATT5 Using travel websites is a convenient 6.38 .79 .74
way to search product/price information.
ATT6 Using travel websites is easy for finding 6.17 .89 .63
a good deal on a hotel room.
Positive Emotions PEM1 I am happy when I am able to find a 6.23 .88 .79 .89
hotel room with a lower price than I
expected.
PEM2 I am satisfied when I am able to secure a 6.26 .92 .86
lower price than others who pay full
price.
PEM3 I am excited when I am able to find a 6.33 .79 .92
good deal for my money.

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Negative NEM1 I regret booking hotel deals through 2.30 1.18 .82 .81
travel websites.
Emotions
NEM2 I feel uncomfortable booking hotel deals 2.45 1.26 .84
through travel websites.
Market Mavens MM1 People ask me for information about 3.99 1.56 .70 .88
prices on different types of products.
MM2 I am considered somewhat of an expert 3.65 1.54 .78
when it comes to knowing the prices of
products.
MM3 I think I am better able than most people 4.25 1.51 .82
to tell someone where to shop and how
to find the best deal.
MM4 My friends think of me as a good source 4.10 1.63 .87
of price information for online deals.
MM5 I like helping people by providing them 4.59 1.65 .73
with price information about online
deals.
Subjective norms SN1 People whose opinions I value approve 5.01 1.28 .86 .87
of me searching for deals online.
SN2 People whose opinions I value approve 5.08 1.33 .81
of me searching for hotel deals before
booking.
SN3 Most people who are important to me 4.94 1.37 .79
search for hotel deals through travel
websites.
SN4 Most people who are important to me 4.83 1.33 .73
think I should book hotel deals through
travel websites.
Perceived PSE1 I know where to find the information I 5.46 1.04 .65 .87
need prior to making a purchase.

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Self-efficacy PSE2 I trust my own judgment when selecting 5.73 1.00 .78
products to purchase.
PSE3 I believe I can effectively search for 5.94 1.02 .90
information online.
PSE4 I am confident I am able to find good 5.92 .98 .84
deals online.
Motivations MOV1 I am likely to use online travel websites 6.08 1.00 .79 .89
for searching hotel deals.
MOV2 I am likely to visit different online travel 6.11 .97 .77
websites to take advantage of low
prices.
MOV3 I prefer to search hotel deals before 6.17 1.02 .84
making an online reservation.
MOV4 I am likely to make a purchase on a 6.19 .89 .86
website that provides good deals.
Behavioral BI1 In the future, I plan to book a hotel room 6.23 .93 .85 .90
through travel websites.
Intentions BI2 In the future, I plan to book hotel rooms 6.31 .83 .88
through travel websites that provide
good deals.
BI3 After searching hotels through travel 6.20 .92 .76
websites, I will consider booking a hotel
room on one of the websites which I
visited.
BI4 I am willing to book hotel deals online 6.24 .86 .80
in the near future.

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4.1.4 Confirmatory factor analysis (CFA)

A confirmatory factor analysis (CFA) was conducted using Mplus (version 7).

Based on the results of the CFA, eight variables were identified: attitude, positive

emotion, negative emotion, market mavens, social norms, perceived self-efficacy,

motivation and behavioral intention. The model was estimated by using the maximum-

likelihood method. The results indicated the model had a mediocre fit to the data, χ 2

(436) = 878.33, p < .0001, CFI = .870, RMSEA = .084 (90% CI .076-.092). MacCallum,

Browne, & Sugawara (1996) noted that RMSEA values ranging from .08 to .10 is

acceptable. According the MacCallum et al.’s requirements, all factor loadings were

significant, which supported the convergent validity of the model (Anderson and

Gerbing, 1988). Unstandardized and standardized coefficients estimates are provided in

Table 4.5. Figure 4.1 demonstrates the results of CFA.

Table 4.5
Pilot study: unstandardized and standardized coefficients for CFA
Observed
Latent Construct B SE β Est/S.E. p-value
Variable
ATT1 Attitude 1 0 0.63 11.38 <.001
ATT2 Attitude 1.404 0.175 0.828 25.24 <.001
ATT3 Attitude 1.077 0.145 0.75 17.68 <.001
ATT4 Attitude 1.116 0.147 0.766 19.00 <.001
ATT5 Attitude 0.994 0.133 0.764 18.83 <.001
ATT6 Attitude 0.89 0.143 0.614 10.68 <.001
PEM1 Positive Emotion 1 0 0.851 29.13 <.001
PEM2 Positive Emotion 1.02 0.087 0.824 25.47 <.001

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PEM3 Positive Emotion 0.937 0.071 0.891 36.27 <.001


NEM1 Negative Emotion 1 0 0.986 14.92 <.001
NEM2 Negative Emotion 0.757 0.121 0.695 10.95 <.001
MM1 Market Maven 1 0 0.678 13.50 <.001
MM2 Market Maven 1.08 0.133 0.742 17.28 <.001
MM3 Market Maven 1.193 0.136 0.837 26.24 <.001
MM4 Market Maven 1.347 0.147 0.878 32.81 <.001
MM5 Market Maven 1.163 0.147 0.747 17.42 <.001
SN1 Subjective norms 1 0 0.95 54.31 <.001
SN2 Subjective norms 0.976 0.055 0.896 42.57 <.001
SN3 Subjective norms 0.734 0.08 0.652 12.53 <.001
SN4 Subjective norms 0.646 0.082 0.591 10.03 <.001
PSE1 Perceived Self-efficacy 1 0 0.654 12.24 <.001
PSE2 Perceived Self-efficacy 1.105 0.141 0.756 18.70 <.001
PSE3 Perceived Self-efficacy 1.368 0.158 0.913 38.92 <.001
PSE4 Perceived Self-efficacy 1.208 0.142 0.844 28.23 <.001
MOV1 Motivation 1 0 0.79 22.14 <.001
MOV2 Motivation 0.931 0.095 0.758 19.13 <.001
MOV3 Motivation 1.002 0.099 0.779 21.06 <.001
MOV4 Motivation 0.98 0.083 0.876 35.61 <.001
BI1 Behavioral Intention 1 0 0.892 41.83 <.001
BI2 Behavioral Intention 0.931 0.057 0.912 48.28 <.001
BI3 Behavioral Intention 0.81 0.076 0.724 16.88 <.001
BI4 Behavioral Intention 0.789 0.069 0.76 19.67 <.001

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Figure 4.1 The CFA results from the pilot study

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4.2 Full Study

4.2.1 Sample

A total of 603 completed questionnaires were collected from a nationwide online

consumer panel in September 2013. After data screening, 22 questionnaires were

identified as outliers and removed from the data set. Only 581 usable questionnaires were

included in the data analysis. Table 4.6 shows the participants’ demographic information

regarding their age, ethnicity, education and income level. Fifty-two percent (52%) of the

participants were 45 and above. Most participants held Associates and Bachelor’s degrees

(57%). The second largest group of participants held a Master’s degree or higher (28%).

The ethnic background of the sample was overwhelmingly Caucasian (78%). The largest

group of participants (23%) reported their annual income as between $50,000 and

$74,999 annually. Exactly half of the participants (50%) reported their annual income

was $75,000 or above.

Table 4.6
Full study: demographic information (N=581)

Variable Frequency Percent


Gender
Male 290 50%
Female 291 50%
Age
18-24 71 12%
25-34 102 18%
35-44 104 18%
45-54 113 19%
55 and above 191 33%
Ethnic Group

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Texas Tech University, Hsiang-Ting Chen, May 2014

African/African American 35 6%
Asian 50 9%
Caucasian 451 78%
Hispanic 25 4%
Other 18 3%
Education
High school graduate 67 12%
In college 16 3%
College associate degree 172 30%
Bachelor's Degree 154 27%
Master's Degree 132 23%
Beyond Master’s Degree 31 5%
Annual Income
Less than $24,999 40 7%
$25,000-$49,999 119 20%
$50,000-$74,999 132 23%
$75,000-$99,999 117 20%
$100,000-$124,999 73 13%
$120,000-$149,999 40 7%
$150,000-$174,999 22 4%
$175,000-$199,999 17 3%
Greater than $200,000 20 3%

The largest group of participants (30%) stated they had traveled 1-2 times within

the past year, followed by the group of participants who had traveled 3-4 times (27%) and

5-6 times (22%). When asked about how often they visit online travel websites before

booking a hotel, fifty-seven percent (57%) claimed they browse 3-4 websites before

purchasing. Both of these figures were similar to findings from the pilot test. Table 4.7

provides information related to the frequency of travel and online travel information

search within the previous 12 months.

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Table 4.7
Number of online travel websites visited before booking a hotel and frequency of travel
within the past 12 months (N=581)
Variable Frequency Percent
Number of visits to online travel websites
1-2 121 21%
3-4 333 57%
5-6 92 16%
7+ 29 5%
Missing data 6 1%
Trips taken within the past 12 months
1-2 175 30%
3-4 156 27%
5-6 127 22%
7-8 43 7%
9+ 72 12%
Missing data 8 1%

4.2.2 Assumption testing

The Kolmogorov-Smirnov (K-S) test was conducted to assess normality. All

subscales of the constructs showed negatively skewed layout with leptokurtic tendencies.

Kurtosis values ranged between -0.46 and 1.38 and Skewness ranged from -1.31 to -.31;

both were within acceptable limits (Kline, 2005). To test the relationship between

variables an inter-correlation test was conducted (Table 4.8). Results indicated the

variables were correlated to one another. The attitude construct was highly correlated

with several variables: positive emotions, perceived self-efficacy, motivation and

behavioral intention (r > |0.70|). Field (2009) stated that a critical multicollinear problem

exists if a correlation between two variables is greater than .90. In addition, while

conducting a multicollinearity test, the results showed that VIF ranged from 1 to 4, which

indicated multicollinearity was not a concern (O’brien, 2007; Myer, 1990).

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Table 4.8
Full study: Means, Standard Deviation and Construct Inter-Correlations

Variables Mean SD 1 2 3 4 5 6 7 8
1. MeanATT 6.17 .80 
2. MeanPEM 6.31 .82 .81** 
3. MeanNEM 5.48 1.56 .41** .05* 
4. MeanMM 5.05 1.19 .36** .32** .35** 
5. MeanSN 5.32 1.00 .52** .47** .15** .46** 
6. MeanPSE 6.04 .83 .75** .68** .37** .40** .52** 
7. MeanMOV 6.13 .82 .82** .76** .36** .34** .54** .79** 
8. MeanBI 6.16 .83 .74** .67** .49** .33** .51** .72** .77** 
Note: N=581, MeanATT= Attitudes mean score; MeanPEM=Positive emotions mean score; MeanNEM=Negative emotions mean score;
MeanMM=Market Maven mean score; MeanSN=Subjective norms mean score; MeanMOV=Motivation mean score; MeanBI=Behavioral intention
mean score. * p<.05, **<.01.

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4.2.3 EFA

Exploratory factor analysis (EFA) was performed by utilizing principal factor

extraction with oblique rotation (direct oblimin). The technique of principal axis factoring

extraction was selected due to its ability to estimate communalities among factors (Pett,

Lackey, & Sullivan, 2003). Thus, principal factor extraction determined the number of

factors and factorability of the correlation matrices. To meet the standard requirement of

factor loading, the cutoff point was set at .40 and the eigenvalues over Kaiser’s criterion

of 1 was applied. Based on the result of the EFA, six indicators measured attitude, three

positive emotion indicators, two negative emotion indicators, five market maven

indicators, four social norm indicators, four perceived self-efficacy indicators, four

motivation indicators and four indicators of behavioral intentions emerged. These

indicators were subsequently selected to perform the confirmatory factor analysis. These

results were identical to the EFA results from the pilot study, thus the hypothesized

model with 33 indicators was considered appropriate for use in the full study. Moreover,

the measurements indicated sufficient reliability according to Cronbach’s alpha which

ranged from .85 to .92. The factor loadings are shown in Table 4.9.

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Table 4.9
Full study: Mean, Standard Deviation, Factor loading and Cronbach’s Alpha of Indicators

Constructs Code Indicators Mean SD Factor 


Loadings
Attitudes ATT1 When I book a hotel online, I like to 6.21 .89 .80 .92
ensure I get the best value.
ATT2 I always check hotel prices through 6.14 .99 .83
travel websites to be sure I get the best
value.
ATT3 Finding a good deal is usually worth the 6.25 .96 .85
time and effort.
ATT4 When purchasing a product, I always try 6.15 1.00 .79
to maximize the quality I get for the
money I spend.
ATT5 Using travel websites is a convenient 6.21 .94 .82
way to search product/price information.
ATT6 Using travel websites is easy for finding 6.09 .96 .73
a good deal on a hotel room.
Positive Emotions PEM1 I am happy when I am able to find a 6.38 .91 .83 .92
hotel room with a lower price than I
expected.
PEM2 I am satisfied when I am able to secure a 6.22 .94 .82
lower price than others who pay full
price.
PEM3 I am excited when I am able to find a 6.32 .89 .87
good deal for my money.

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Negative NEM1 I regret booking hotel deals through 5.44 1.65 .88 .88
travel websites.
Emotions
NEM2 I feel uncomfortable booking hotel deals 5.52 1.66 .88
through travel websites.
Market Mavens MM1 People ask me for information about 4.97 1.40 .81 .91
prices on different types of products.
MM2 I am considered somewhat of an expert 4.82 1.40 .86
when it comes to knowing the prices of
products.
MM3 I think I am better able than most people 5.20 1.29 .82
to tell someone where to shop and how
to find the best deal.
MM4 My friends think of me as a good source 5.06 1.39 .88
of price information for online deals.
MM5 I like helping people by providing them 5.25 1.38 .80
with price information about online
deals.
Subjective norms SN1 People whose opinions I value approve 5.40 1.20 .83 .88
of me searching for deals online.
SN2 People whose opinions I value approve 5.50 1.19 .83
of me searching for hotel deals before
booking.
SN3 Most people who are important to me 5.23 1.23 .69
search for hotel deals through travel
websites.
SN4 Most people who are important to me 5.18 1.21 .72
think I should book hotel deals through
travel websites.
Perceived PSE1 I know where to find the information I 5.85 1.03 .73 .85
need prior to making a purchase.

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Self-efficacy PSE2 I trust my own judgment when selecting 6.02 .95 .84
products to purchase.
PSE3 I believe I can effectively search for 6.20 .90 .87
information online.
PSE4 I am confident I am able to find good 6.11 .96 .83
deals online.
Motivations MOV1 I am likely to use online travel websites 6.17 .96 .83 .89
for searching hotel deals.
MOV2 I am likely to visit different online travel 6.15 .96 .86
websites to take advantage of low
prices.
MOV3 I prefer to search hotel deals before 6.15 1.01 .76
making an online reservation.
MOV4 I am likely to make a purchase on a 6.07 .95 .71
website that provides good deals.
Behavioral BI1 In the future, I plan to book a hotel room 6.13 .93 .87 .87
through travel websites.
Intentions BI2 In the future, I plan to book hotel rooms 6.20 .93 .88
through travel websites that provide
good deals.
BI3 After searching hotels through travel 6.12 .93 .84
websites, I will consider booking a hotel
room on one of the websites which I
visited.
BI4 I am willing to book hotel deals online 6.18 1.00 .79
in the near future.

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4.2.4 CFA

A confirmatory factor analysis was conducted using Mplus (version 7). Eight

variables, the same eight variables from the pilot test, were identified in the CFA:

attitudes, positive emotions, negative emotions, market mavens, social norms, perceived

self-efficacy, motivations and behavioral intentions. The model was estimated using the

maximum-likelihood method. Results indicated the model had a good fit to the data, χ 2

(528) = 14993.596, p < .0001, CFI = .934, TLI=.926, RMSEA = .06 (90% CI .056-.063),

SRMR=.08. All factor loadings were significant, which supported the convergent validity

of the model (Anderson and Gerbing, 1988). Unstandardized and standardized coefficient

estimates are provided in Table 4.10. Figure 4.2 demonstrates the results of the CFA from

the full study.

Table 4.10
Full study: unstandardized and standardized coefficients for CFA
Observed
Latent Construct B SE β Est./S.E p-value
Variable
ATT1 Attitude 1 0 0.800 48.67 <.001
ATT2 Attitude 1.147 0.050 0.825 55.82 <.001
ATT3 Attitude 1.102 0.048 0.823 55.24 <.001
ATT4 Attitude 1.116 0.052 0.791 46.71 <.001
ATT5 Attitude 1.116 0.049 0.829 57.26 <.001
ATT6 Attitude 1.018 0.051 0.749 38.15 <.001
PEM1 Positive Emotion 1 0 0.849 59.25 <.001
PEM2 Positive Emotion 0.981 0.042 0.812 48.52 <.001
PEM3 Positive Emotion 0.956 0.040 0.819 50.03 <.001
NEM1 Negative Emotion 1 0 0.857 34.54 <.001

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NEM2 Negative Emotion 1.051 0.063 0.897 36.41 <.001


MM1 Market Maven 1 0 0.807 47.71 <.001
MM2 Market Maven 1.046 0.044 0.846 58.41 <.001
MM3 Market Maven 0.944 0.042 0.828 53.92 <.001
MM4 Market Maven 1.087 0.045 0.88 72.43 <.001
MM5 Market Maven 0.986 0.046 0.805 47.58 <.001
SN1 Subjective norms 1 0 0.977 55.93 <.001
SN2 Subjective norms 0.977 0.038 0.730 54.32 <.001
SN3 Subjective norms 0.730 0.048 0.782 21.49 <.001
SN4 Subjective norms 0.782 0.046 0.977 25.23 <.001
PSE1 Perceived Self-efficacy 1 0 0.726 33.38 <.001
PSE2 Perceived Self-efficacy 1.026 0.053 0.810 48.96 <.001
PSE3 Perceived Self-efficacy 1.029 0.051 0.854 62.21 <.001
PSE4 Perceived Self-efficacy 1.075 0.054 0.850 61.43 <.001
MOV1 Motivation 1 0 0.85 63.59 <.001
MOV2 Motivation 0.941 0.04 0.792 45.00 <.001
MOV3 Motivation 0.924 0.044 0.741 36.12 <.001
MOV4 Motivation 0.866 0.041 0.748 37.89 <.001
BI1 Behavioral Intention 1 0 0.855 63.85 <.001
BI2 Behavioral Intention 1.019 0.037 0.871 70.36 <.001
BI3 Behavioral Intention 0.974 0.039 0.833 55.93 <.001
BI4 Behavioral Intention 1.008 0.044 0.79 44.89 <.001

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Figure 4.2 The CFA results from the full study

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Texas Tech University, Hsiang-Ting Chen, May 2014

4.2.5.1 Structural Equation Model

After completing the CFA, a structural model was tested utilizing Mplus (Version

7). Maximum likelihood estimation was employed to estimate the model. The result of

the structural equation model indicates the hypothesized model was a good fit, χ 2 (528) =

14993.596, p < .001, CFI = .935, TLI=.927,RMSEA = .059 (90% CI .055-.063),

SRMR=.087. The results from SEM also indicate the model paths yield significant

parameter estimates. The construct of attitude, subjective norms and perceived self-

efficacy had a significant and positive relationship with motivation (βatt→mov =.423, p<.01;

βsn→mov =.093, p<.01; βpse→mov =.46, p<.01). Therefore, Hypotheses 1, 5, 6 were supported.

However, the positive and negative emotion constructs were not statistically

significant for predicting motivation (βpem→mov =.118, n.s.; βnem→mov =-.033, n.s.) Thus,

Hypothesis 2 and 3 were not supported. The market maven construct produced a

significant but negative relationship with motivation (βmm→mov=-.059, p<.01). Hypothesis

4 proposed that the market maven construct had a positive relationship toward motivation;

however, the result indicated an opposite outcome. Thus, Hypothesis 4 was not supported.

The frequency of past behavior had significant and positive relationships with both

motivation and behavioral intention (βfqb→mov=.093, p<.01; βfqb→bi=.069, p<.05).

Therefore, Hypotheses 7 and 8 were supported. Finally, the motivation construct

strongly influenced participants’ intention on booking hotel deals (βmov→bi=.884, p<.01).

Thus, Hypothesis 9 was supported.

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It was hypothesized that motivation played an important mediator and influenced

behavioral intentions to book hotel deals. The construct of negative emotions and

subjective norms were not found to have any effect on the motivation which influences

behavioral intention (p>.01). Other constructs, including attitudes, positive emotions,

market mavens and perceived self-efficacy had significant indirect effects on behavioral

intention through motivation. The results indicated that the construct of motivation fully

mediated attitudes, market mavens and perceived self-efficacy toward behavioral

intention. A summary of direct and indirect effects are demonstrated in Table 4.11 and

Table 4.12.

Table 4.11
Unstandardized Coefficients, Standardized Coefficients and Significance levels of Direct
Effects

Hypothesis Direct Effect B β Est/S.E. p Result


Path
H1 ATT MOV .466 0.423 3.97 .00 Supported
H2 PEM MOV 0.118 0.118 1.28 .20 Not supported
H3 NEMMOV -0.018 -0.033 -1.24 .21 Not supported
H4 MMMOV -0.059 -0.085 -3.14 .00 Not supported
H5 SNMOV 0.07 0.093 3.03 .00 Supported
H6 PSEMOV 0.482 0.46 8.51 .00 Supported
H7 MOVBI .854 .884 57.93 .00 Supported
H8 FPBMOV .053 .093 3.67 .04 Supported
H9 FPBBI .038 .069 2.10 .00 Supported

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Table 4.12
Unstandardized Coefficients, Standardized Coefficients and Significance Levels of
Indirect Effects

Hypothesis Indirect Effect B β Est/S.E. p Result


Path
H1 ATT MOVBI .427 .400 2.29 .02 Supported
H2 PEM MOVBI .077 .079 0.87 .38 Not supported
H3 NEMMOVBI -.038 -.072 -1.95 .05 Not supported
H4 MMMOVBI -.063 -.094 -2.25 .02 Supported
H5 SNMOVBI .039 .054 1.58 .11 Not supported
H6 PSEMOVBI .431 .425 2.74 .00 Supported

Table 4.13
Decomposition of Effects with Standardizes Values

Constructs Direct Effect Indirect Effect Total Effect


BI BI BI
ATT -.123 .40* .277*
PEM .079 .079 .162
NEM .155 -.072 .082*
MM .072 -.094* -.022*
SN .095* .054 .148**
PSE -.095 .425** .330**
MOV .884** -- --
Note: * p<.05, **<.01.

The structural equation model is shown in Figure 4.3. The final structural paths

explained approximately 94% of the variance in motivation (R2=.944) and 80% of the

variance in motivation which influenced behavioral intentions (R2=.797).

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Figure 4.3 The structural equation model. χ 2 (528) = 14993.596, p < .001, CFI = .94, TLI=.93, RMSEA = .059 (90% CI .055-
.063), SRMR=.08.
Note: →significant ---> non-significant *p<.05 **p<.01

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4.2.5.2 Gender comparisons

Since previous studies indicate that gender differences have effects on consumer

deal-purchasing behavior (Hill & Harmon, 2007), in this current research, male and

female respondents were compared to test the effect of gender. Among male participants,

positive emotions showed a positive and significant relationship on motivation (β=.21,

p<.01). This finding contradicted females who displayed no significance between

positive emotions and motivation.

Past behavior proved to be another variation between the sexes. While males

demonstrated positive and significant relationships between past behavior and motivation

and behavioral intention (βmalefpb→mov =.10, p<.01; βmalefpb→bi =.14, p<.01), past behavior

only affected motivation of females (βfemalefpb→mov =.07, p<.01), not their behavioral

intention (βfemalefpb→bi=.01, n.s.). Overall, the model for the male group explained 3%

higher variance on motivation and 11% higher variance on behavior intention than the

females. The structural equation models of the male and female groups are shown in

Figure 4.4 and 4.5, respectively.

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Figure 4.4 The structural equation model of the male group. χ 2 (468) = 926.696, p < .001, CFI = .94, TLI=.93, RMSEA = .058
(90% CI .053-.064), SRMR=.09.
Note: →significant ---> non-significant *p<.05 **p<.01

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Figure 4.5 The structural equation model of the female group. χ 2 (466) = 938.280, p < .001, CFI = .94, TLI=.93,RMSEA =
.059 (90% CI .054-.064), SRMR=.08.
Note: →significant ---> non-significant *p<.05 **p<.01

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4.2.5.3 Age group comparisons

The result of the correlational analysis indicated there was a statistically

significant and negative relationship between age and the construct of market maven, r

=-22, p (two-tailed) <.01. Therefore, three age groups were compared to see the effect

of age: 18 to 34 year olds, 35 to 54 and 55 year olds and above. In the youngest age

group only attitudes and perceived self-efficacy were found to have a significant effect

on motivation (β =.50, p<.01; β =.37, p<.01). The market maven construct showed a

positive parameter estimate, but it did not significantly affect motivation. In the 35-44

age group, attitudes, market mavens and perceived self-efficacy showed significant

relationships towards motivation (β =.38, p<.01; β =-.17, p<.01; β =.68, p<.01). However,

the constructs of positive emotions, negative emotions and subjective norms were not

significant. In 55 year olds and older, market mavens, social norms and perceived self-

efficacy showed significant relationships toward motivation (β =-.11 p<.05; β =.23,

p<.01; β =.38, p<.01). Yet, the constructs of attitudes, positive and negative emotions

fail to support the relationships toward the motivation. Overall, perceived self-efficacy

was the only variable which was significant across all age groups. A summary of age

groups are compared in Table 4.13.

Table 4.14
Structural Equations Results for Age Effect Models
Age groups N χ2 df CFI RMSEA SRMR p
18 to 34 173 939.749 472 .90 .08 .09 <.01
35 to 54 217 941.308 472 .92 .07 .09 <.01
55 and above 191 843.743 472 .93 .06 .09 <.01

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CHAPTER 5

CONCLUSION AND IMPLICATIONS


This research examined the process by which consumers form an intention

toward deal-purchasing and their decision-making when booking hotel deals online.

Specifically, this study aimed to identify: (1) the factors that influence consumer

decision making while searching and booking hotel deals through online travel

intermediaries; (2) how cognitive, emotional and social components motivate

consumers to book online hotel deals; and (3) how consumers’ intent to purchase hotel

deals is stimulated. In addition, the study aimed to identify the demographic

characteristics that influence consumers’ deal-purchasing behavior with online travel

intermediaries.

Findings demonstrated consumers’ attitudes and perceived self-efficacy were

two substantial factors that influenced consumers’ motivation toward booking hotel

deals, which in turn, impacted future intention. Motivation played a mediating role

that strongly drove consumers’ attitudes and perceived self-efficacy in regard to their

intent to book hotel deals. Both subjective norms and frequency of past behavior

directly influenced motivation and intention to book hotel deals online. The findings

also showed that gender and age differences existed in consumers’ deal-purchasing

behavior.

In this research, attitudes represented the cognitive component that

significantly influenced consumers’ motivation. It indicated that consumer deal

proneness and value consciousness drove them to search and book hotel promotions

online. Since consumers recognized the variety of sales promotions and the ease of

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comparison shopping in the online travel market, they tended to utilize online

information to seek a better deal and engage in assessments of sales promotions. This

research also elaborated on previous studies which showed that consumers’ deal-

purchasing behavior was determined through a series of cognitive tasks (Chandon et

al., 2000; Christou, 2011; Lichtenstein et al., 1993). Consumers’ judgment of value

was mainly determined by comparing the market value of a product and the

attractiveness of the deal offered. Therefore, hospitality marketers should take into

account consumer perception of price and value evaluation when developing the

features of hotel deals to persuade a purchase. The presentation of sales promotions,

the reference pricing points and the depth of price discounts may influence consumers’

deal evaluations. Marketers may find this information beneficial in developing

effective pricing and promotional strategies.

Two emotional components, positive and negative emotions, did not show a

direct or significant relationship in consumers’ motivation to book hotel deals, which

indicated that consumer deal-purchasing behavior was mainly influenced by their

cognitive state instead of affective state. However, the strength of the relationship

between attitudes and positive emotions was strong at .93. This finding showed there

was a notable correlation between the cognitive and affective components. Prior

research applied the cognitive-affective-conative approach to examine how consumers’

deal evaluation and deal proneness directly influenced consumers’ emotional states

(Christou, 2011; Laroche et al., 2003). Consumers’ attitudes toward deal-purchasing

may increase their emotional gratification, which induces their purchase intention.

Thus, a further analysis of the causal relationship between attitudes and positive

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emotions can be investigated to understand how consumers’ cognitive evaluations

induce their inclination toward deal-purchasing behavior.

The concept of market maven represented the individual’s propensity to

acquire product-related information and share that knowledge and information with

other consumers (Feick & Price, 1987). This notion was based on an individual’s

perception of what his or her behavior symbolized in a social sense. In this research,

market maven was hypothesized as having a positive influence on consumers’

motivation toward hotel deal bookings. However, the result showed that market maven

held a negative and weak relationship toward motivation. The possible interpretation

regarding this result is the age difference among participants.

Since the construct of market maven demonstrated a negative correlation with

participants’ ages, the scale of market maven may be affected by age differences.

Compared to other generations, the Millennial Generation tends to proactively share

information and interact with other consumers by using Internet-based platforms

(Sago, 2010). Due to the majority of participants (70%) in this research being from

both the Generation X and the Baby Boomer Generation, there may have been skewed

results that showed a negative relationship between market maven and motivation. In

contrast to previous research which claimed there was no age difference in terms of

consumers with the market maven propensity, this research established age difference

may influence consumers’ tendency to be a marketplace influencer.

This research suggests that marketers should differentiate customer

segmentation by generation. Differences in age may influence consumers’ preference

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toward selecting online travel websites as an information resource, thereby also having

an influence on their strategies of searching for and booking discounted travel

products. For instance, since Millennials are characterized as technology adopters and

savvy shoppers, they are more likely to share their purchase experience on user-

generated content websites (e.g., social network or consumer review sites) (eMarkter,

2012). In contrast, Baby Boomers rely on receiving information from experts who

they know and trust (Business Wire, 2008). Thus, marketers should adopt different

online marketing strategies and select appropriate communication channels in terms of

age differences. Marketers could create a marketing campaign via social media

targeted toward Millennials to encourage them to share their travel experiences. Baby

Boomers, who often prefer to pass product information to their friends and family via

the emails (eMarkter, 2012) could be targeted by sending personalized email messages.

Subjective norms showed a direct effect on motivation and intention; it also

indicated that motivation partially mediated the relationship between subjective norms

and intention. The construct of subjective norms represented the influence of

perceived social pressure associated with performing a certain behavior. The results

from this research echoed previous consumer behavior studies that found social

conformity was an important factor in a decision making process. Hospitality

marketers could use this information to develop word-of-mouth marketing strategies.

Designing a referral incentive program to encourage customers to recommend their

purchase to other customers may be one such initiative. Referral incentive programs

encourage existing customers to spread positive word-of-mouth and attract new

customers. Online travel intermediaries could offer a referral reward that would

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motivate customers to recommend their purchases to others. New customers who are

susceptible to social conformity often seek endorsement before purchasing. Thus,

online travel intermediaries could optimize their word-of-mouth strategies in order to

promote sales. Furthermore, research indicates that providing referral incentives to

customers is a more effective marketing tactic than price reductions (Biyalogorsky,

Gerstner & Libai, 2001; Ryu & Feick, 2007).

Perceived self-efficacy demonstrated a strong influence on consumers’

motivation to book online hotel deals. The concept of perceived self-efficacy involved

consumer self-confidence and perceived ability to facilitate consumers in a decision-

making process. The ability to acquire information from sales promotions and

comparison shopping significantly influenced consumers’ tendency toward deal-

purchasing. Moreover, the results from the SEM analysis showed perceived self-

efficacy and attitudes were highly correlated (β=.86). This analysis indicated that

consumers’ cognitive evaluations connect with their capacities to process information

while they search online hotel deals. This result was also consistent with Chatterjee &

Wang’s study (2012), which showed that hotel customers required increased effort

when inspecting hotel deals and were inclined to buy from the website that delivers

the best value. While consumers perceive high competency when searching and

comparing hotel deals, they have more positive attitudes toward acquiring these deals.

For deal-seeking consumers, meta-search websites and search engines have been

viewed as the most efficient tools for searching product pricing and information

(eMarketer3, 2013). Thus, the implication for hotels is to consider creating strategic

alignments with the meta-search websites to drive potential consumers directly to the

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hotels’ own websites. Hotels’ online marketing strategies could focus on increasing

brand awareness and highlighting product value on meta-search sites.

This current research also provided evidence that consumers’ need for

information and engagement during search activities were critical aspects in the pre-

purchase stage of consumer behavior. This information could provide insight for

hospitality marketers offering sufficient promotional information for deal-seeking

consumers. Online travel intermediaries may address the quality of information,

usability and functionality of the websites to help consumers easily navigate the site

and recognize product value. In this way, consumers’ positive attitudes and self-

confidence may increase, stimulating purchase intention.

Motivation was hypothesized as a mediator that led cognition, emotion,

subjective norms and perceived self-efficacy toward intention. Findings showed

motivation fully mediated attitudes and perceived self-efficacy and partially mediated

subjective norms toward intention. Consistent with previous research that applied

MGB theory, motivation is an important impetus when forming intention in this

research. It also explains how motivation is influenced by antecedents and entices

consumers’ intention to book hotel deals. Once an individual’s motivation is induced,

his or her behavioral tendency can be predicted. Since the MGB is a relatively new

behavioral theory, this research provides a theoretical and practical contribution of

MGB theory applied to explain the causal-effect relationship between motivation and

intention in consumer behavior.

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Results also demonstrated gender differences existed in consumers’ deal-

purchasing behavior. The proposed model accounted for more variance in motivation

and intention among males than females. Of particular note, male consumers’

motivation toward hotel deal bookings was influenced by the positive emotion

construct. Surprisingly, female consumers were not influenced by emotional

components. The traditional view of gender differences in consumer behavior states

that females are more influenced by emotional gratification and perceive higher deal

proneness than males (Lee et al., 2012; Harmon & Hill, 2003). These extant studies

contradict this research which found males show a higher tendency toward booking

hotel deals when they perceive positive emotional involvement. In addition, past

experience created a larger impact on males than females. These findings suggest

travel service providers should profile their customers in terms of gender and past

purchases to tailor appropriate promotional messages.

Regarding age comparisons, three generations: Millennials (18-34 age group);

Generation X (35-54 age group) and the Baby Boomers (55 and above age group)

showed different influencing factors toward deal-purchasing behavior. Millennials

were strongly influenced by cognitive attitudes toward acquiring sales promotions, yet

Baby Boomers were affected by social components in their decision-making process.

Generation X was significantly influenced by both cognitive and social components.

Previous research indicated Millennials and younger Generation Xers are

characterized by “a strong sense of independence and autonomy” (Williams & Page,

2011, p6). They tend to trust their own judgments, which are what ultimately lead to

make a purchase decision. Alternatively, Baby Boomers prefer to obtain information

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in the form of trusted opinions and advice. Listening to people’s experience and

consultation will help them alleviate any perceived risk and uncertainty before

purchasing travel products (Beldoba, Nusair & Demicco, 2009).

This demographic meaning of consumers’ deal-purchasing behavior can

provide beneficial insight for hospitality marketers. In order to develop effective

marketing messages, online travel intermediaries need to recognize the different

purchase behaviors across generations. For Millennials, the overall value assessment

of a deal offer was the determinant while searching and booking hotels. Since

Millennials are more technologically savvy and proactively seek information via the

Internet, the functionality, navigation, and interaction of an online travel website may

be important to them. Conversely, in this research, Baby Boomers were more

influenced by obtaining other people’s approval and agreement. Baby Boomers may

prefer to maintain ties with their family and friends they have known for a long time,

instead of building new ties with people (Nyemba, Mukwasi, Mosiane & Chigona,

2011). Therefore, word-of-mouth marketing could be a more powerful tactic while

targeting the Baby Boomer segment. For instance, hospitality marketers could

encourage customers to share their opinions and personal experiences about products

and services, or refer promotional messages to their friends and family. Using personal

recommendations could reinforce the credibility and trust of online travel websites,

which in turn, could influence purchase decisions.

Limitations and future research

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This research consisted of several limitations. One limitation was that the type

of hotel deals provided by online travel intermediaries were not specified. Consumers

may have had different behavioral responses if different types of sales promotions

were presented. For instance, research suggests consumers may have the tendency to

make impulsive purchases when they see time-limited or scarcity of online deals

(Sigala, 2013). Consumers’ affective responses, such as the anxiety of missing a deal,

may have encouraged and motivated them to immediately make a purchase decision.

Therefore, the emotional aspect may significantly influence consumers’ motivation to

book deals. This concept may provide a direction for future research to investigate the

relationships between the design of hotel deals and consumers’ preferences, intent to

purchase and satisfaction.

Secondly, online travel intermediaries include Internet companies, global-

distribution systems, travel agencies and distribution-service companies. While a filter

question was used to ensure participants had booking experience through online travel

intermediaries in the past 12 months, it did not specify which websites they had

utilized. Consumers’ experiences may vary significantly depending on the website

visited, thus influencing their perceptions of deals purchased. In future research,

studies could investigate consumer perceived benefits and risks of acquiring hotel

deals through a certain type of travel channel, such as through search-engines.

In this research, the concept of market maven was hypothesized as a latent

variable that affects consumers’ motivation with booking hotel deals. However, some

research suggests a dichotomy should be used to measure personality traits of the

market maven (i.e., using a mean score to divide non-market mavens and market

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mavens). Therefore, the group comparison could be conducted to interpret the

relationships between market mavens and consumer deal-purchasing behavior. In

addition, the concept of market maven may be influenced by individuals’ personality

and cultural backgrounds. Cal (2003) indicated cultural differences may cause some

market mavens to resent being labeled as shopping experts always in search of better

deals. Jin & Sternquist, (2003) stated that individualism and collectivism influence

consumers’ propensity to be a market maven. Thus, future research could address

cultural differences and obtain a better understanding of how the concept of market

maven influences consumer deal-purchasing behavior. Finally, this research only

utilized a quantitative research method. Future studies could include a qualitative

component which would be valuable in obtaining more in-depth information regarding

deal-prone consumers’ psychological characteristics and behavioral tendencies.

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APPENDIX A

IRB Approval Letter

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APPENDIX B

IRB Proposal

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PROPOSAL FORMAT FOR RESEARCH USING HUMAN SUBJECTS


Primary Investigator: Kelly Phalen, Ph.D. email: kelly.phelan@ttu.edu
Co-investigator: Hsiang-Ting (Shatina) Chen email: shatina.chen@ttu.edu
Department: Nutrition, Hospitality, and Retailing
Phone number: (806) 742-3068
Mail stop: 1240
Proposal Title: Consumer Behavior on Booking Hotel Deals through Online Travel
Intermediaries

I. Rationale

The growth of e-commerce over the past decade has significantly influenced
product distribution channels within the hospitality and tourism industry (Green &
Lomanno, 2012; Kracht & Wang, 2010). Due to the rapid development of the digital
era, Internet saturation has become paramount, allowing travel products to
predominately shift from offline to online distribution channels. In the United States,
83% of leisure travelers and 76% of business travelers utilize the Internet as a major
tool for arranging their travel plans (Google & Ipsos Media CT, 2012). Since the
online environment provides flexibility and accessibility, it is easy for travelers to
browse and purchase various travel products by a few clicks of the mouse. Air tickets,
car rental, or accommodation can be arranged and reservations made through the
Internet 24 a day, seven days a week. Additionally, customers can search
product/service information, read reviews, and compare prices or promotions using
numerous online platforms. Online travel booking not only benefits travelers by
making travel arrangements easier, it also increases the profits of businesses such as
airlines, hotels, and other package tour companies (Hotelmarketing, 2012).

Hotels utilize online travel intermediaries because these third-parties have the
ability to reach worldwide customers and boost occupancy rates (Travel Technology
Association, 2012). Online travel intermediaries consist of third-party travel agencies,
social media sites (e.g., Tripadvisor.com), search engines (e.g., Google), meta-search
sites (e.g., Kayak.com), and flash sale sites (e.g., Groupon Getaway). The earning
potential of online travel intermediaries should not be neglected. For example, the
emergence of online travel agencies (OTA) reached nearly $40 billion sales in the U.S
in 2010, which was equivalent to 15% of the total U.S. travel market (PhoCusWright,
2011). Online travel intermediaries are perceived by customers as offering a variety of
choices at low prices. As such, they are considered by many as the dominant choice

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when it comes to making travel arrangements (Law, Chan, & Goh, 2007). Since the
Internet provides consumers the opportunity to retrieve extensive information,
consumers’ propensity to search for discounted travel products has been heightened
and rapidly accelerated in an online travel market. Sixty-six percent (66%) of travelers
claim they spend more time searching for deals before booking travel products, and
they seek the best value for their money (Google & Ipsos Media CT, 2012). In
addition, research shows on average travelers visit 17 travel websites to search product
information before booking (eMarketer, 2013). However, research shows most online
travel intermediaries focus on developing price-cutting strategies, instead of
understanding consumers’ perceptions of product value and how consumers evaluate
discounted products (Peterson, 2011). Misaligning customers’ needs and wants will
consequently cause these online intermediaries to struggle to maintain competitive
pricing. In other words, most consumers are concerned with acquiring good value for
their money, rather than solely seeking a low price.

Despite these staggering figures which showcase the prevalence of online


travel bookings, there is limited research regarding consumers’ deal-purchasing
behavior. Specifically, there is no published scholarly research related to consumer
behavior on searching and purchasing discounted online travel products. Thus, the
primary goal of this study is to (1) define deal-purchasing behavior by combining the
various perspectives which have been utilized in the consumer decision making
process and (2) develop an integrated model to understand consumer deal-purchasing
behavior of hotel bookings through online travel intermediaries. The results of this
study aim to contribute theoretical and managerial implications of online consumer
behavior in the hospitality industry.

This research intends to examine the following research questions:

1. How do cognitive, emotional, and social factors influence consumers’


decision making while they search and book hotel deals through online
travel intermediaries?
2. How does a consumer’s deal proneness influence their motivation and
intention to book hotel deals?
3. What demographic characteristics influence consumers’ deal-purchasing
behavior through online travel intermediaries?
This research examines consumer behavior related to purchasing online hotel
deals, particularly through online travel intermediaries such as online travel agency
(OTA) sites and meta-search sites. Based on the perspectives from consumer
psychology, the quantitative survey research method is developed and employed to
discover the latent factors of deal purchasing behavior, understand how these factors
influence purchasing motivation and intention, and acquire information of deal-prone
consumers’ characteristics. A pilot study and a full study will be used to test the

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hypotheses and answer the research questions. The specific details regarding the data
collection and analysis will be discussed in the methodology section.

This research is important as it focuses on understanding the consumer


decision process when purchasing online travel products. Previous research related to
e-tourism has addressed the phenomenon of Internet evolution and transformation in
the hospitality and tourism industry, which has concentrated on the improvement,
effectiveness, and usefulness of suppliers’ websites. There is limited research related
to the psychological factors which affect consumers’ motivation to purchase
discounted travel products. Investigating such latent motives and consumers’
characteristics may provide useful insight for hospitality operators to reevaluate their
marketing strategies and their value chains for a long-term profitability.

II. Subjects

(a) Sample for the survey method


A sample of approximately 300 students will be recruited to participate in the
pilot study. In the full study, approximately 600 participants from a nationwide
consumer panel will be recruited through Qualtrics Survey Company. All
participants must be 18 or older and have experience booking hotel rooms
through online travel websites within the past 12 months.

(b) Recruitment procedures


In the pilot study, survey distribution and collection will occur in classrooms at
Texas Tech University. Hospitality faculty will be contacted ahead of time and
asked permission to distribute a paper survey following their classes. Hospitality
students will be invited to participate in the survey and be asked to return the
survey before the next class session begins. i.e. the next day or the next class
meeting (such as Monday if the survey is distributed on a Friday). An oral
presentation explaining the purpose of the study will be delivered before
distributing the survey (Attachment A). A drop box to collect the surveys will
be located near the door on the way out. The researcher will pick up the box
containing the completed surveys the end of the next class.

In the full study, a website link containing the online survey will be distributed
by Qualtrics Survey Company. The participants will read a brief description of
the survey information before answering the survey questions (Attachment B).

III. Procedures:

(a) Describe step-by-step all procedures involving these subjects


Data will be collected by utilizing a self-administered survey during a specified
data collection period. Each survey will contain a total of 60 questions. The printed

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Texas Tech University, Hsiang-Ting Chen, May 2014

survey is identical to the online questionnaire (Attachment C). Participants in the


pilot test will have the printed version of the survey. If they disagree with the
survey information sheet or select “No” for any of the filter questions, text
included in the survey will direct them to stop immediately and return their survey.
A similar procedure will be utilized in the online survey. Participants will read a
paragraph which includes the survey information, if they disagree with the survey
instructions or select “No” to the filter question, they will be thanked and exit the
survey.

This survey is intended to understand consumer perceptions related to booking


hotel deals through online travel intermediaries. For the purpose of this study, it is
vital that the participants have booked hotels through online travel intermediaries
within the past 12 months. Thus, the survey will contain a filter question which
asks participants about this detail. If the participant selects “No” as their answer
choice they will be asked to return the survey (in-person) or will be redirected to
the Qualtrics webpage (online). Additionally, the online and paper surveys will
have a disclaimer appear asking them to verify they are at least 18 years of age
before they are able to take the survey. If the participant is younger than 18, they
will be thanked for their interest, but not allowed to fill out the survey. Online
participants will be redirected back to Qualtrics webpage and those filling out the
survey in person will be asked to return their incomplete survey.

In order to control situational variables or other effects of compounding


variables which are not intended to be tested in this study, participants will be
presented with a scenario about a buying situation before they start to answer
related questions. The scenario is also shown in Attachment C.

The online survey information sheet (Attachment B) will be located on the


introductory webpage of the online survey and on the cover page of the printed
survey. Particularly, the statement will specify that:

(1) Participation is voluntary and participants can withdraw at any time, even
in the middle of the survey, and still be included in the raffle.
(2) The study is conducted strictly for research purposes. There is no selling,
nor will the participants be contacted at a later date for any sales or solicitation.
(3) All responses will be kept anonymous. No personal data will be asked and
the information obtained will be recorded in such a manner that participants cannot
be identified.
(4) The data will be used solely for statistical and no other purposes and will be
available only to the research group working on this project.

(b) Potential risks: This research presents no risks beyond those of everyday life.

(c) Benefits to participants: Participants will not be compensated for their


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Texas Tech University, Hsiang-Ting Chen, May 2014

participation in this research.

IV. Adverse Events and Liability

The proposed research does not involve risks exceeding the ordinary risks of
everyday life and no specific liability plan is offered.

V. Consent Form

None

References
eMarketer (2013). Hotels strive to own organic search results. Retrieved March 1 2013
from http://www.emarketer.com/Article/Hotels-Strive-Own-Organic-Search-
Results/1009694.

Green C.E., & Lomanno, M.V. (2012). Distribution channel analysis: a guide for
hotels. An AH&LA and STR spcecial repor, HSMAI Foundation.

Goolge and Ipsos MediaCT. (2012).The Traveler's Road to Decision. Avaliable


at:www.thinkwithgoolge.com.

Hotelmarketing (2012). Online travel market projected to reach US$533.8 billion by


2018. Avalible at:
http://hotelmarketing.com/index.php/content/article/online_travel_market_proj
ected_to_reach_us533.8_billion_by_2018

Law, R., Chan, I., & Goh, C. (2007). Where to find the lowest hotel room rates on the
internet? The case of Hong Kong. International Journal of Contemporary
Hospitality Management, 19(6/7), 495-506.

Phocuswright (2012). U.S. Online Travel Overview Twelfth Edition. PhoCusWright


Inc.

Travel Technology Association. (2012). Online travel to represent a third of total


global travel market. Retrieved February 24, 2013 from

http://traveltechnologyassociation.org/news/online-travel-to-represent-a-third-
of-total-global-travel-market-1

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Texas Tech University, Hsiang-Ting Chen, May 2014

Attachment A: An oral presentation before the survey distribution

Hello,

My name is Shatina Chen, and I am currently a doctoral candidate in


Hospitality Administration program at Texas Tech University. I am conducting a
study to obtain information on consumers’ perspectives toward searching and booking
hotel deals through online travel websites. We are interested in participants who are at
least 18 years old and have booked hotels through online travel websites within the
past year. The survey will take approximately 15-25 minutes to complete. Please drop
the completed survey in a drop box before the next time this class meets. The drop box
is located near the door on the way out. I will pick up the box containing the
completed surveys at the end of the next class meeting (tomorrow). Participation is
voluntary and anonymous. The survey is not designed to sell you anything, or solicit
money from you in any way. You will not be contacted at a later date for any sales of
solicitations. All responses will be kept anonymous. No personal data will be asked
and the information obtained will be kept confidential for the research purpose.

This study has been approved by the Texas Tech University Human Research
Protection Program.

If you have any questions or if you would like to know the results of the study, please
contact Dr. Kelly Phelan or Shatina Chen at 806-742-3068 or email at
shatina.chen@ttu.edu.

For questions about your rights as a subject, contact the Texas Tech University
Institutional Review Board for the Protection of Human Subjects, Office of Research
Services, Texas Tech University, Lubbock, Texas 79409 (806-742-2064).

Thank you for your participation.

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Texas Tech University, Hsiang-Ting Chen, May 2014

Attachment B: An information sheet for online consumer survey

We are conducting a study to obtain information on consumers’ perspectives toward


searching and booking hotel deals through online travel websites. We are interested in
participants who are at least 18 years old and have booked hotels through online travel
websites within the past year. The survey will take approximately 15-25 minutes to
complete. Participation is voluntary and anonymous. The survey is not designed to sell
you anything, or solicit money from you in any way. You will not be contacted at a
later date for any sales or solicitations. All responses will be kept anonymous. No
personal data will be asked and the information obtained will be kept confidential for
the research purpose.

Participants must be at least 18 years of age to participate in the survey. Please follow
the link below to access the survey:
[LINK]

This study has been approved by the Texas Tech University Human Research
Protection Program.

If you have any questions or if you would like to know the results of the study, please
contact Dr. Kelly Phelan or Shatina Chen at 806-742-3068 or email at
shatina.chen@ttu.edu.

For questions about your rights as a subject, contact the Texas Tech University
Institutional Review Board for the Protection of Human Subjects, Office of Research
Services, Texas Tech University, Lubbock, Texas 79409 (806-742-2064).

Thank you for your participation.

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Texas Tech University, Hsiang-Ting Chen, May 2014

Attachment C: Consumer Survey

We are conducting a study to obtain information on how consumers search and book
online hotel deals and which criteria most influences purchase decision. Online travel
intermediaries include online travel agency websites, such as Hotels.com,
Expedia, Orbitz, Travelocity or Priceline, and meta-search websites, such as
Kayak, Bookingbuddy, or Travelzoo. This survey will take approximately 15-25
minutes to complete. Participation in this survey is voluntary. The study is conducted
strictly for research purposes. There is no selling, nor will the participants be contacted
at a later date for any sales or solicitation. All responses will be kept anonymous. No
personal data will be asked and the information obtained will be recorded in such a
manner that participants cannot be identified. The data will be used solely for
statistical and no other purposes and will be available only to the research group
working on this project. We would appreciate complete responses as they will help
with this research and provide information regarding online consumer behavior. If you
have any questions, please contact Dr. Kelly Phelan or Shatina Chen at 806-742-3068
or email at shatina.chen@ttu.edu. For questions about your rights as a subject, contact
the Texas Tech University Institutional Review Board for the Protection of Human
Subjects, Office of Research Services, Texas Tech University, Lubbock, Texas 79409
(806-742-2064).

 Yes, I am willing to respond to the survey (Please go to the next page)


 No, I am not willing to respond to the survey (If selected, STOP HERE,
Return survey to the drop box) (Online version: Exit the survey)

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Texas Tech University, Hsiang-Ting Chen, May 2014

1. Have you booked a hotel room from an online travel website such as Hotels.com,
Expedia, Orbitz, Priceline, Hotwire, Kayak, Bookingbuddy, or Travelzoo within
the past 12 months?

 Yes
 No (If selected, STOP HERE, Return survey to the drop box) (Online version:
Exit the survey)

2. Age Verification: Participants must be 18 years of age in order to participate in the


survey. Please indicate whether or not you are at least 18 years of age.

 Yes, I am at least 18 years of age


 No, I am not at least 18 years of age (If selected, STOP HERE, Return survey to
the drop box) (Online version: Exit the survey)

3. Before deciding to book a hotel room on the website, I will

 search hotel deals/promotions on two or more online travel websites


 search hotel deals/promotions on only one specific online travel website

Please read the following scenario and then select the answer which best suits you.
(Choose only one answer per question)

There are many different choices regarding prices and features of hotel rooms
on online travel websites. Suppose you were going to have a leisurely vacation
with one of your close friends. Your friend put you in charge of making the
travel arrangements. Thus, you can select the price, location, and star level of
the hotel yourself. Since you and your friend intend to share all the expenses
during the trip, you would like to obtain the best deal by searching for hotel
rooms online. You have plenty of time, about three months prior to the trip, to
make all the travel arrangements. Keep these details in mind as you answer the
following questions.

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Texas Tech University, Hsiang-Ting Chen, May 2014

Strongly Disagree Somewhat Neither Somewhat Agree Strongly


Disagree Disagree Agree Agree Agree
nor
Disagree
When I book a       
hotel online, I like
to ensure I get the
best value.
I always check       
hotel prices
through online
travel websites to
be sure I get the
best value.
Finding a good       
deal is usually
worth the time
and effort.
When purchasing       
a product, I
always try to
maximize the
quality I get for
the money I
spend.
Using travel       
websites is a
convenient way to
search
product/price
information.
Using travel       
websites is easy
for finding a good
deal on a hotel
room.
When I book a       
discounted hotel
room through
online travel
websites, I am
concerned that
these websites
may not provide
the level of
quality/service I
am expecting.
When I book a       
hotel room
through travel
intermediaries, I
am concerned
about sending the

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Texas Tech University, Hsiang-Ting Chen, May 2014

security of my
personal
information (e.g.
credit card
details).
Searching hotel       
deals over the web
takes too long or
is a waste of time.
I enjoy spending       
time comparing
prices through
different websites.
Searching online       
deals gives me
pleasure.
Searching online       
deals is exciting.
I am happy when       
I am able to find a
hotel room with a
lower price than I
expected.
I am satisfied       
when I am able to
secure a lower
price than others
who pay full
price.
I am excited when       
I am able to find a
good deal for my
money.
I am thrilled       
when I book hotel
deals through
travel websites.
I regret booking       
hotel deals
through travel
websites.
I feel       
uncomfortable
booking hotel
deals through
travel websites.
When I don’t find       
a good deal
through online
travel
intermediaries, I
am disappointed.

Strongly Disagree Somewhat Neither Somewhat Agree Strongly


Disagree Disagree Agree Agree Agree
nor

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Texas Tech University, Hsiang-Ting Chen, May 2014

Disagree
When I didn’t       
find a good deal
through online
travel websites, I
feel angry.
People ask me for       
information about
prices on different
types of products.
I am considered       
somewhat of an
expert when it
comes to knowing
the prices of
products.
I think I am       
better able than
most people to tell
someone where to
shop and how to
find the best deal.
My friends think       
of me as a good
source of price
information for
online deals.
I like helping       
people by
providing them
with price
information about
online deals.
People whose       
opinions I value
approve of me
searching for
deals online.
People whose       
opinions I value
approve of me
searching for
hotel deals before
booking.
Most people who       
are important to
me search for
hotel deals
through online
travel websites.
Most people who       
are important to
me think I should
book hotel deals
through online
travel websites.

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Texas Tech University, Hsiang-Ting Chen, May 2014

I know where to       
find the
information I
need prior to
making a
purchase.
I trust my own       
judgment when
selecting products
to purchase.
I believe I can       
effectively search
for information
online.
I am confident I       
am able to find
good deals online.
In the past, I       
searched for hotel
deals via the
Internet prior to
making a
reservation.
In the past, I       
looked for hotel
deals through
travel websites.
I have purchased       
products online in
the past 12
months.
I have booked       
hotel rooms
through travel
websites in the
past 12 months.
I am more likely       
to use travel
websites for
searching hotel
deals.

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Texas Tech University, Hsiang-Ting Chen, May 2014

Strongly Disagree Somewhat Neither Somewhat Agree Strongly


Disagree Disagree Agree Agree Agree
nor
Disagree
I am likely to visit       
different travel
websites to take
advantage of low
prices.
I prefer to search       
hotel deals before
making an online
reservation.
I am more likely       
to make a
purchase on a
website that
provides good
deals.
In the future, I       
plan to book a
hotel room
through travel
websites.
In the future, I       
plan to book hotel
rooms through
online travel
websites that
provide good
deals.
After searching       
hotels through
online travel
websites, I will
consider booking
a hotel room on
one of the
websites which I
visited.
I am willing to       
book hotel deals
online in the near
future.
When I search       
hotel deals online,
I only consider
booking a brand-
name hotel
through an travel
website.
When I search       
hotel deals online,
I only consider

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Texas Tech University, Hsiang-Ting Chen, May 2014

the value which I


will get,
regardless of the
hotel brand.

 Which star level of hotels do you usually book online? (Check all that apply)

 1 star
 2 stars
 3 stars
 4 stars
 5 stars and above

 What types of sales promotion do you prefer to use on a travel agency website?
(Check all that apply)

 Percentage price-cut ( e.g., 20% off)


 Coupon codes
 Price-reduction (e.g., $200$160)
 Gift/reward card
 Free-booking fee
 Earn points on the loyalty program

 Do you belong to any hotel loyalty program, such as Hilton HHonors /Choice
Hotel Privileges/ IHG Priority Club Rewards?
○ Yes ○ No

 Do you belong to any online travel websites loyalty program, such as Expedia
Rewards/Hotels.com Welcome Rewards/Priceline Rewards?
○ Yes ○ No

 How many online travel websites may you visit in order to search for hotel
information? Please enter the number of websites:_________________

 How many times did you travel last year? __________times

 In the past year, how often you did book hotel rooms through online travel
intermediary sites prior to travel?

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Texas Tech University, Hsiang-Ting Chen, May 2014

○ Never ○ Rarely ○ Occasionally ○ Sometimes ○Frequently ○


Usually ○Every time

 Please enter your age:_____________

 Your average annual household income:


 Less than $24,999
 $25,000 - $49,999
 $50,000 - $74,999
 $75,000 - $99,999
 $100,000 - $124,999
 $125,000 - $149,999
 $150,000 - $174,999
 $175,000 - $199,999
 Greater than $200,000

 Gender
 Male
 Female

 Which best represents you education level?


 High School Graduate
 In College
 Some College
 Bachelor Degree
 Some Master's level
 Master Degree
 Beyond Master Degree

 Ethnicity
 African/African American
 Asian
 Caucasian
 Hispanic
 Other

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