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Recommendations' and Preferences' Impact on Online Travel Purchases

A quantitative study investigating Instagram influencers’ travel recommendations and consumers’ travel preferences effect on online travel purchases

Written by L. Aho, S. Jaatinen

Paper category

Master Thesis

Subject

Business Administration>Marketing & Sales

Year

2020

Abstract

Thesis: Internet and online travel sales In recent years, the travel industry has undergone earth-shaking changes due to the Internet. These changes are reflected both at the business level and consumer participation (Serenko & Stach, 2009). The Internet connects people all over the world, and it is recognized as an important computer network system in the modern information society. In addition, the Internet is the main form of collecting information before travel (Bobâlcă, Maha, Tugulea and Maha, 2014). According to Bobâlcă et al. (2014), the main advantage of using the Internet in travel search is that it provides a lot of information. There is no cost to use travel websites, no time or space restrictions. Consumers have more freedom. The website provides pictures of destinations and presents others. Traveler's comment. As of April 2020, 4.57 billion people worldwide use the Internet. It accounts for 59% of the global population (Statista, 2020b). It is hard to imagine that a world without the Internet will become an important basis for online shopping, but not all Internet users will shop online. They may be reluctant to provide personal and transaction information for online electronic payments. The reason for this is because they do not trust e-commerce. An e-commerce study shows that more than 87% of Internet users worry about security and privacy protection when shopping online (Ponte, Carvajal-Trujillo, &Escobar-Rodríguez, 2015). Kotler, Bowen, and Makens (2014, p. 522) also describe online privacy issues by showing that most people care about it. In addition, Bobâlcă et al. (2014) pointed out that the main disadvantage of the Internet in the tourism environment is the lack of trust in websites. Figure 1 below shows the growth of global online travel sales from 2014 to 2020. Since 2015, the annual growth rate has been declining (Statista, 2016). The figures show the forecast for 2016 to 2020. It can be predicted from the timeline that global online travel sales will continue to grow year by year. If Internet usage increases in the future, online travel purchases are likely to continue to increase (Amaro, 2014). When planning to purchase a trip, travelers can choose to contact a travel agency or go online (Bobâlcă et al., 2014). Since most travel purchases are made online, the largest platform for booking travel in December 2019 was Booking.com, with sales of 801 billion U.S. dollars, the second largest was Trip.com, with sales close to 20 billion U.S. dollars, and the third It is Expedia, with sales close to US$16 billion (Statista, 2020a). Amaro (2014) believes that the Internet is an important distribution channel for tourism products and services, and its success has been recognized earlier in previous studies. Nowadays, anyone with access to the Internet can compare travel prices from the numerous websites of online travel providers. 2.1.2 Consumer behavior in online travel purchases Travel purchase intentions have been extensively studied and are considered to be the best predictors of actual purchase behaviors. The stronger the purchase intention, the more likely the purchase intention will lead to actual purchases (Amaro & Duarte, 2015). Despite this, there is a lot of information about consumers' travel purchase intentions, and actual travel purchases are still relatively unresearched. According to Kotleret al. (2014, p. 167), the factors that strongly influence consumer behavior are culture, society, individual and psychology. In addition, Amaro (2014) described that in order to understand consumers' online travel purchase behavior, it is necessary to consider people's personal characteristics. Kotler et al. (2014, p. 167) show that culture is the most important factor in determining consumers, needs and behaviors. Social factors such as family, reference groups, online social networks, social roles, and status have an impact on consumer behavior (Kotler et al., 2014, pages 170-173). In addition, personal factors such as age, occupation, economic status, personality, and lifestyle will also have an impact (Kotler et al., 2014, pp. 174-176). Finally, the four psychological factors of motivation, perception, learning, belief, and attitude have an impact on consumers' behavior and purchasing choices (Kotler, et al., 2014, pp. 178–181). Amaro (2014) suggests that demographics, personal characteristics, travel-related behaviors, and Internet and usage knowledge are the most important characteristics of consumers' travel purchase behavior. According to Kotleret et al. (2014, p. 166) Researchers have been trying to understand consumers' buying behavior and its concepts because it is the model below (Figure 2). This model is applicable to all types of consumer buying behaviors, and also to travel purchases. From model marketing stimuli and other influences into the buyer's "black box", the result is the buyer's reaction during the trip. According to Kotler and others. (2014, pp. 166–167) Marketing incentives consist of 4Ps: product, location, location, and promotion. Other influences include five important environmental forces: economy, technology, politics, culture, and ecology. The buyer’s black box is a response to these impulses and circumstances. Buyer characteristics realize these stimuli, and the buyer's decision-making process shows how consumers are affected by them. At the same time, all these factors will affect the buyer's response. Consumer characteristics and decision-making processes lead to buying attitudes and preferences, such as product, brand, and distributor choice, as well as the time and quantity of purchase (Kotler et al., 2014, pp. 166-167). Read Less