GOOGLES ENTRY INTO ONLINE ACCOMMODATION DISTRIBUTION - Hotel Newsroom

117 Pages·2013·6.05 MB·English

by  Nadia Pircher

Degree Program "Innovation and Management in Tourism"
University of Applied Sciences Salzburg

GOOGLES’ ENTRY INTO ONLINE ACCOMMODATION DISTRIBUTION
UNDERSTANDING TRAVELER’S ACCEPTANCE OF THE GOOGLE HOTEL
FINDER

THESIS SUBMITTED TO THE UOAS SALZBURG
IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF
"MASTER OF ARTS IN BUSINESS"

Author: Nadia Pircher, BA
Student number: 1010649032
Date: 1st of December 2012
Supervisor: Prof. (FH) Dr. Roman Egger
Affidavit

I herewith declare on oath that I wrote the present master thesis without the help of third persons and
without using any other sources and means listed herein; I further declare that I observed the
guidelines for scientific work in the quotation of all unprinted sources, printed literature and phrases
and concepts taken either word for word or according to meaning from the Internet and that I
referenced all sources accordingly.
This thesis has not been submitted as an exam paper of identical or similar form, either in Austria or
abroad and corresponds to the paper graded by the assessors.

Salzburg, 1st of December 2012 ___________________________
Nadia Pircher
I. Table of contents

I.
  Table of contents ......................................................................................... I

II.
  List of abbreviations .................................................................................. III

III.
  List of illustrations ................................................................................... IV

IV.
  List of tables ............................................................................................. V

V.
  Abstract ............................................................................................ VII

1.
  Introduction .............................................................................................. 1

1.1
  Background of the research problem .................................................... 1

1.2
  Significance of the research ................................................................ 2

1.3
  Research gap ................................................................................... 3

1.4
  Research objectives ........................................................................... 4

1.5
  Outline of the thesis .......................................................................... 4

2.
  Distribution of tourism accommodations ........................................................ 6

2.1
  The accommodation .......................................................................... 7

2.2
  Distribution channels defined .............................................................. 8

2.3
  Accommodation distribution channels ................................................ 10

2.3.1
  Electronic distribution channels .......................................................... 11

2.3.2
  Computer reservation systems (CRS) and GDS .................................... 12

2.4
  Online distribution channels .............................................................. 13

2.4.1
  Evolution of online distribution channels .............................................. 15

2.5
  Mulitple distribution channels ............................................................ 19

3.
  Google travel technologies and services ....................................................... 21

3.1
  Google information power ................................................................ 21

3.2
  Google travel services ...................................................................... 22

3.3
  The Google Hotel Finder ................................................................... 23

4.
  Online travel decision-making for accommodations ....................................... 26

4.1
  The travel decision-making process ................................................... 26

4.2
  Research on travel decision-making processes .................................... 28

4.2.1
  The role of the Internet in travel decision-making ................................. 31

4.2.2
  Need for information during the decision-making process ...................... 34

4.3
  Purchase decision for accommodations ............................................... 36

4.3.1
  Choice attributes for hotels ................................................................ 36

4.3.2
  Decision process for hotel selection .................................................... 38

4.3.3
  Website attributes affecting online hotel purchase ................................ 39

4.3.4
  Hotel purchase with the Hotel Finder ................................................... 41

5.
  The Technology Acceptance Model .............................................................. 44

5.1
  Extensions and modifications of TAM ................................................. 48

5.2
  The extended TAM .......................................................................... 49

5.3
  Research purpose ........................................................................... 52

5.4
  Proposed research model ................................................................. 53

5.5
  Research variables and hypotheses ................................................... 54

6.
  Research methodology .............................................................................. 57

6.1
  Research philosophy ........................................................................ 57

6.2
  Research approach and strategy ....................................................... 58

6.3
  Model building ................................................................................ 58

6.4
  Population and sample ..................................................................... 61

UoAS Salzburg, Master Program IMT | Nadia Pircher I
6.5
  Questionnaire ................................................................................. 61

6.6
  Research method ............................................................................ 62

6.6.1
  Model replication .............................................................................. 62

6.6.2
  Validity ........................................................................................... 63

6.6.3
  Reliability ........................................................................................ 64

6.6.4
  Correlation ...................................................................................... 64

6.7
  Results .......................................................................................... 65

6.7.1
  Demographics and experience ........................................................... 66

6.7.2
  Model fit analysis ............................................................................. 67

6.7.3
  Assessment of validity and reliability ................................................... 67

6.7.4
  Assessment of correlation .................................................................. 73

6.7.5
  Discussion ....................................................................................... 75

7.
  Conclusions ............................................................................................ 77

7.1
  Implications ................................................................................... 77

7.2
  Limitations and further research ........................................................ 78

7.3
  Acknowledgements ......................................................................... 79

VI.
  List of references ..................................................................................... VI

VII.
  Annex ............................................................................................ XX

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II. List of abbreviations
AGFI ................................................................................................................. Adjusted Goodness of Fit Index
ATT ............................................................................................................................................................ Attitudes
CRO ............................................................................................................................ Central Reservation System
CRS ........................................................................................................................ Computer Reservation System
GDS ........................................................................................................................... Global Distribution System
GFI ..................................................................................................................................... Goodness of Fit Index
GPS ............................................................................................................................ Global Positioning System
IT .................................................................................................................................... Information Technology
ICT .......................................................................................... Information and Communication Technology
INT ................................................................................................................................................ Intentions to use
OTA ................................................................................................................................... Online Travel Agency
PEOU ................................................................................................................................ Perceived Ease of Use
PP ........................................................................................................................................... Perceived Playfulness
PU ......................................................................................................................................... Perceived Usefulness
RMSEA .................................................................................................... Root Mean Square of Approximation
TAM ................................................................................................................... Technology Acceptance Model
TPB ....................................................................................................................... Theory of Planned Behavior
TRA ........................................................................................................................ Theory of Reasoned Action
UGC ................................................................................................................................ User Generated Content

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III. List of illustrations
Figure 1 The accommodation product ............................................................................................................... 7

Figure 2 The switch company concept ............................................................................................................. 13

Figure 3 Online bookings on the German market .......................................................................................... 16

Figure 4 Online travel distribution pyramid ..................................................................................................... 19

Figure 5 Search engine market share ................................................................................................................. 22

Figure 6 Decision-making process ..................................................................................................................... 26

Figure 7 Travel choice components in the decision-making process .......................................................... 30

Figure 8 Information sources for travel decision-making .............................................................................. 32

Figure 9 Factors influencing the purchase decision for hotels ...................................................................... 34

Figure 10 Information needs in the decision making process ....................................................................... 35

Figure 11 Ranking of important choice attributes .......................................................................................... 37

Figure 12 Hotel decision-making process ........................................................................................................ 39

Figure 13 The Technology Acceptance Model ................................................................................................ 45

Figure 14 The extended TAM ............................................................................................................................ 51

Figure 15 Proposed research model and its relationships .............................................................................. 53

Figure 16 Hypotheses testing ............................................................................................................................. 75

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IV. List of tables
Table 1 Characteristics of tourism services ........................................................................................................ 6

Table 2 Six A's framework for the analysis of tourism destinations .............................................................. 9

Table 3 Examples of online travel agents ......................................................................................................... 18

Table 4 Examples of travel meta sites ............................................................................................................... 19

Table 5 Evaluation of altervative hotel ............................................................................................................. 28

Table 6 Ten-item scale for perceived usefulness ............................................................................................. 46

Table 7 10 item scale for perceived ease of use ............................................................................................... 46

Table 8 Revised six-item scale for perceived usefulness ................................................................................ 47

Table 9 Revised six-item scale for perceived ease of use ............................................................................... 47

Table 10 Perceived usefulness (PU) measurement scale ................................................................................ 59

Table 11 Perceive ease of use (PEOU) measurement scale ........................................................................... 59

Table 12 Perceived Playfulness (PP) measurement scale ............................................................................... 60

Table 13 Attitudes toward using (ATT) measurement scale ......................................................................... 60

Table 14 Intentions to use (INT) measurement scale .................................................................................... 60

Table 15 Model fit analysis .................................................................................................................................. 67

Table 16 Loading estimates of the CFA model ............................................................................................... 68

Table 17 Factor score regression coefficients of the CFA model ................................................................ 69

Table 18 Cronbach's alpha coefficient for PU ................................................................................................. 70

Table 19 Cronbach's alpha coefficient with deleted variable, PU ................................................................. 70

Table 20 Cronbach's alpha coefficient for PEOU .......................................................................................... 70

Table 21 Cronbach's alpha coefficient with deleted variable, PEOU .......................................................... 70

Table 22 Cronbach's alpha coefficient for PP ................................................................................................. 71

Table 23 Cronbach's alpha coefficient with deleted variable, PP ................................................................. 71

Table 24 Cronbach's alpha coefficient for ATT .............................................................................................. 71

Table 25 Cronbach's alpha coefficient with deleted variable, ATT .............................................................. 71

Table 26 Cronbach's alpha coefficient for INT ............................................................................................... 72

Table 27 Cronbach's alpha coefficient with deleted variable, INT .............................................................. 72

Table 28 Inter-item correlation matrix .............................................................................................................. 72

Table 29 Squared multiple correlations of the CFA model ........................................................................... 73

Table 30 Fit summary of the multivariate regression model ......................................................................... 74

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Table 31 Parameter estimates of the multivariate regression model ............................................................ 74

Table 32 Squared multiple correlations of the multivariate regression model ............................................ 75

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V. Abstract
Effective hotel distribution is of significant importance for hotel establishments and can be defined by
two main functions: (1) to provide consumers with information and thus facilitate the purchase
decision-making and (2) enable the purchase itself. How to reach the online customer in the most
effective way and which online distribution channels to use. These are fundamental questions in the
present hotel business. With the launch of the Google Hotel Finder, Google opened a new channel for
accommodations and online travel agents to reach the customer. Furthermore, due to the integration
of the Hotel Finder into other Google services such as search, maps and Google+ local, the travel
search experience of the online consumer is enhanced.
Building on the extended technology acceptance model (TAM), the aim of this master thesis is to
provide insight into this field and investigate the acceptance of the Google Hotel Finder tool for online
hotel reservations. Overall, it was found that the adoption of a particular online reservation website can
be predicted by the extended TAM framework. Perceived usefulness, perceived ease of use and
perceived playfulness have an impact on users’ attitudes toward using the Hotel Finder, while
playfulness was found to be a key predictor. Moreover attitudes are key determinants of travelers’
intentions to use the Hotel Finder for online reservations.

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1. Introduction
1.1 Background of the research problem
Efficient tourism distribution is a crucial factor for the success of tourism organizations and thus has
gained increased attention among tourism researchers and various definitions can be found. They are
the bridge between supply and demand (Alcázar Martínez, 2002), in other words they bring producers
of tourism services and their consumers together (Gartner and Bachri, 1994).
Three main waves of technological developments changed distribution systems in tourism enterprises,
namely computer reservation systems (CRS) in the 1970s; Global distribution systems (GDS) in the
1980s and the Internet in the 1990s (Buhalis, 1998). The major technological progress in the
distribution industry was the Internet.
The internet commenced operation in 1969 with four universities connected, mainly for research and
military purposes (Werthner and S. Klein, 1999a). The commercial usage of the Internet began years
later, when companies started to take advantage of the communication protocol of the world wide
web, which in 1993 has been made freely accessible to the public (Kracht and Wang, 2010). After the
public entrance of the Internet, it has grown as a network of networks and currently records 2.3 billion
users worldwide. This represented about 33% of the population worldwide and a 528.1% growth
compared to the year 2000 (World Usage Patterns & Demographics, 2012).
Throughout the world there has been a tremendous growth in the use of the web. Especially online
shopping and purchase for tourism products is one of the fastest growth areas, with online booking of
hotel rooms experiencing the biggest development (Wong and Law, 2005). The Internet provides 24/7
accessibility and allows travelers to undertake reservations online in a short period of time, at much
lower costs and in a more convenient way then with traditional methods. This advantages of IT
changed the way in which customers look for information and how they purchase tourism products
and services today (Buhalis, 2003). The major part of online tourism sales is generated by air travel,
followed by hotels, package tours, rail and rental cars (Marcussen, 2009).
The tourism product can be defined as an ‘amalgam of factors that are combined to provide the tourist
with something they wish to consume’ (Page, 2012, p. 157). Like the tourism product in general, the
accommodation product is complex and diverse. The accommodation is a sub-sector of the hospitality
sector. Hospitality is the very essence of tourism, involving the consumption of food, drink and
accommodation in an environment away from home. In todays’ society, hospitality has become a
commercialized experience, where the guest pays for the service or good they consume at the tourism
destination. Accommodation is only one component of the hospitality sector that comprises amongst
others the following types of establishments; hotels, restaurants, cafes, camping sites, canteens or take-
away food bars (Page, 2012). Online booking of accommodations, the second most important product
in online tourism sales is the focus of this research.
The Internet has significantly changed the way hotels distribute their products and electronic channels
play an increasingly important role in hospitality distribution (Gazzoli et al., 2008). While hospitality
distribution has traditionally been categorized into direct selling channels and intermediaries, over the
last years developments in information and communication technologies (ICTs) offered new
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