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HUMAN FACTORS AND THEIR INFLUENCE ON THE IRISH ONLINE HOSPITALITY CONSUMER PROCESS

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The purpose of this chapter was to examine how consumers use the Internet to purchase Irish hospitality products specifically trips, holidays or breaks and to monitor how these purchases are influenced by human factors. The aim was to examine the
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  HUMAN FACTORS AND THEIR INFLUENCE ON THE IRISH ONLINE HOSPITALITY CONSUMER PROCESS Manus Ward  Defence Forces School Of Catering   McKee Barracks Blackhorse Ave.   Dublin 7, Ireland ++353 86 8185829 manus@hotelconsultant.com   Mathew Shafaghi Research and Enterprise Bolton Business School University of Bolton Deane Road, Bolton BL3 5AB, UK ++44 1204 903654 M.Shafaghi@bolton.ac.uk  HUMAN FACTORS AND THEIR INFLUENCE ON THE IRISH ONLINE HOSPITALITY CONSUMER PROCESS Abstract The purpose of this chapter was to examine how consumers use the Internet to purchase Irish hospitality products specifically trips, holidays or breaks and to monitor how these purchases are influenced by human factors. The aim was to examine the process sequentially in order to attempt to model or structure this behaviour. Irish consumers attitudes were to be contrasted with international consumer research starting with their acceptance or rejection of the Internet medium and online factors such as price, trust and loyalty. The purchase decisions were then to be examined to determine the effects of human factors on the purchase method and subsequently the Irish hospitality stakeholders. Quantitative research was gathered from two main groups, offline consumers and their acceptance and adoption of the Internet medium and online consumers who were observed for their online human factors of their online search and decisions. The research found that Irish hospital ity consumers’ online behaviour is consistent with international developed nations’ norms. Using the Technology Acceptance Model (TAM) and Flow Theory consumers were found to be very competent and comfortable with the Internet medium. Price, trust and loyalty were determining factors in the method in which the consumer decided to purchase the Irish hospitality product. The navigational pathway chosen using these human factors in turn determined whether the consumer booked directly with the Irish hospitality industry stakeholder or booked using an international intermediary resulting in revenue being lost to the Irish hospitality industry. Keywords:  Online consumer behaviour, trust, price, loyalty, technology acceptance model, flow, human factors.  Introduction The Internet is fast becoming the hospitality purchase and information source for consumers world wide (Ward and Shafaghi, 2008). The purpose of this chapter is to examine if consumers of Irish hospitality products specifically trips, holidays or breaks have fully accepted and adopted the Internet as their medium of choice and to examine if human factors such as price, trust and loyalty have any implications for the Irish Hospitality industry. International literature was gathered and augmented to the limited Irish specific literature in these particular areas. Research was carried out on online and offline Irish hospitality consumers with contrasting research carried out on owner / general managers to access the divergence or convergence of opinions. This chapter concludes discussing the implications of the observed human factors on the Irish online hospitality consumer process. Acceptance and Adoption of the Internet Medium Bonn et al. (1999: 333) found that “the people who use the Internet to search for information are likely to be people who are (a) college educated owners of computers, (b) less than 45 years of age, (c) stay more often in commercial lodging establishments, and (d) spend more money each day while traveling” This is supported by Heung (2003) who found that Internet travel consumers were highly educated with high incomes. Heung (2003) to an extent is contradicted by Lohse, Bellman and Johnson, (2000) who found as early as 2000 the Internet population was already beginning to mirror the general population, at least in the U.S (one of Irish tourism’s main markets) thus from a diffusion theory point of view the internet has moved from early adaptors (higher income) to being a more early / late majority (normal income) mainstream tool. Given the recent significant reduction in Irish tourism revenue (Fáilte Ireland, 2010) the adaption of Irish hospitality  providers’  websites to the online search and decision making methodologies of these higher average spending consumers is becoming increasingly importance. Pre- recession Fáilte Ireland research concluded that “ In comparing Irish prices with prices in their own country, almost two in three considered Irish prices to be higher, and this view was particularly evident among U.S. (79%) and German (85%) holidaymakers”(Millward Brown IMS, 2006 : 13). The importance of maximum utilisation of the online medium has recently been highlighted as it was noted in our closest neighbour that even in recession, shopping volumes in the UK are continuing with double-digit growth where traditional channels are experiencing zero growth or less (Dennis et al, 2010).  In order to identify these higher income consumers it is important to understand their acceptance and adoption of the Internet medium as a tool to search for or purchase Internet tourism products. The principal theory on which most Internet technology acceptance and adoption is based is the Technology Acceptance Model (Davis et al, 1989). The Technology Acceptance Model was used initially to explain computer and spreadsheet technology adoption. This model or variations of the model has used extensively to explain online channel adoption as Internet tourism is a predominantly technology dependant behavioural process. Figure 1 The Technology Acceptance Model (TAM) from (Davis, 1989) The basis of the TAM is that the perceived usefulness and the perceived ease of use of a technological system lead to the actual use of the system. In the case of the Irish Tourism industry this implies that if the online systems are perceived as being easy to use and useful then higher income tourists will use the Internet to search for or purchase Irish tourism products online. This chapter proposed to see if this is the case and indeed to see if the 1989 pre-internet research is currently appropriate and if it applies to Irish etourism. Research supports this accretion, Moon and Kim (2001) and Teo, Lim and Lai (1999) suggest that TAM is indeed currently appropriate and helps us understand website use. In an attempt to quantify and indeed access if Irish etourism consumers have accepted and adopted the medium research was conducted to access the level of TAM and flow. In order to measure the adoption of the medium, an Internet usage standard must be applied. For the purpose of this chapter, Irish etourism consumer users were accessed as having adopted and accepted the medium as if they have achieved a state of flow. Flow was accessed using criteria taken from figure 2. Csikszentmihalyi (1990) proposed the Flow construct as a state in which the user is in full interaction with the computer technology. Forbes and Rothchild (2000) characterises the flow construct as an internal state that people experience when they fully utilise and extend their capabilities. Flow is a process that leads to optimal Perceived Usefulness Perceived Ease of Use External Variables Attitude toward Use Behavioural Intention to Use System   Use    experience. A person in flow experiences a merging of action and awareness, where one maintains control over but loses awareness of the actions of the body. Novak, Hoffman, and Yung (2000) state that when the online challenge can match the skills of the online consumers, flow state will occur. However if the challenges exceed skills or the individual’s skills are much superior to challenges, frustration and boredom will occur accordingly (Hahn, 2002).  C h  a l  l   e n g e  s   High Critical Threshold Anxiety Flow Apathy Boredom Low Critical Threshold High Skills Figure 2 Flow Diagram adapted from (Forbes and Rothchild, 2000) Human Factors Literature in this section was examined in order to identify if consumers online control factors have any significantly impact the Irish etourism industry. Novak, Hoffman and Yung (2000) found that the success of ecommerce relies heavily on the online experience provided by the ecommerce site to the customer. Thus consumers have very tangible controls over Irish tourism businesses transacting using the Internet medium. They have the simple choice of using or not using the Internet medium or deciding who will be the payment recipient. While this may seem insignificant, an intermediary may receive a commission larger than the net profit margin of the business owner. Should the purchase of Irish hospitality products become predominantly intermediated and internet based, the industry may have to significantly increase its prices to cover these intermediation costs despite them currently being considered an overpriced commodity (Millward Brown IMS, 2006). It is therefore essential that we identify and understand the main Irish etourism human factors that influence the purchase choice. Extensive online human factors have been proposed. Jarvenpaa and Todd (1997: 61-64) describes four main groups of factors, “Product perceptio ns, price, quality and variety. Shopping experience, described as a mixture of effort, compatibility and playfulness. Customer service, including responsiveness, assurance, reliability, tangibility and empathy.
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