Category: E-business

What causes people to buy from OTAs?

Today millions of travelers around the globe use Online Travel Agencies (OTAs) to plan their leisure and business travel. OTAs are getting popular among travelers even though there are still people who prefer travel agents expertise instead. Although, OTAs evolved their introduction in the 1990s, the corona pandemic provided new and exciting opportunities for them to attract more users and increase revenue. Due to the pandemic, people barely visit travel agents expertise and choose online service for information and booking. According to Statista, the global online travel market is expected to reach $833.52 billion in 2025 at a CAGR of 10%.

What’s OTAs?

An online travel agency (OTAs) is a web-based marketplace that allows consumers to research and book travel products and services, including hotels, flights, cars, tours, cruises, activities and more, directly with travel suppliers (Expedia group). Expedia, Orbitz, Airbnb, bookings.com, tripadvisor, Travelcity, Hopper, and Priceline are some familiar OTAs.

So the question arises, what influence these travelers to purchase from OTAs?

Below we will discuss about five influencing factors with supporting reviewed scientific publications.

Values:

People are certain about getting good value and benefits with the purchase from OTAs. A result imply that quality of benefits, monetary, social status, preference, and information values predict purchase intention toward OTAs, with the chief driver being the quality-of-benefits value, followed by the preference value.1

Payment and refund policies are also important drivers for OTAs. Results from a study show that refund rate has great effect on the customer’s payment decision, while transaction cost has great influence on the hotel’s operational decision.2 When the refund rate is greater than a threshold, the customer prefers online payment.

Additionally, sentiments plays vital role to understand customer buying intention and brand attitudes.3 The qualitative aspects of OTAs can help service-providers understand customers’ brand-attitudes by focusing on the important aspects rather than reading the entire review, which will save both their time and effort.

Price:

Social currency have become an essential factor in motivating the customers to co-creation content related to products and services (Zinnbauer & Honer 2011). Social currency, attitude and subjective norms influence customer experience concerning online travel agencies.4

Quality:

Further, the quality of content on OTAs portal aids as drivers influencing booking intention among travelers. The study explored localization, website quality, product information, perceived interactivity, price and promotion, e-security, customer value, service quality, electronic word of mouth (eWOM), marketing and brand promotion amongst the identified determinants to define the relative dependence and driver powers.5 Another study supported this by showing the positive impact on electronic loyalty from the quality of services, website quality, infrastructure and electronic purchase.6 Research which carried out a questionnaire survey on Chinese tourists visiting Korea with experience of using the online travel agency web also favor that in the e-service quality, convenience, interactivity, information validity, credibility had a positive impacts on perceived value and satisfaction.7

Increasing levels of competition are faced by OTAs thus, experience an ever greater need to evaluate the effectiveness of their Web sites. The study was conducted to examine the influence of perceived Web site quality on willingness to use online travel agencies. Ease of Use was found to be the most important dimension in determining Willingness to Use, followed by Information/Content, Responsiveness, Fulfillment, and Security/Privacy.8

Loyalty:

The result of research conducted to analyze factors that influence e-Loyalty of customers indicates that customer e-Loyalty is predisposed by e-Service Quality through e-Perceived Value and e-Trust. Hence OTAs popularity depends on innovation, convenience it offers as well as how trustworthy it is.9

Sentiments and duration of trip:

Does length of stay, demographic and socio – economic characteristics impact on purchasing behavior of OTAs. It was founded that short-duration travelers were more intended to use online travel agencies, where Long-duration travelers preferred their traditional travel agencies.10

From my point of view, online travel agency is growing popularity not only in developed countries but also in developing countries travel industry. Online travel agencies have rather advantage of reaching out to the larger audience. Fast processing of information and transaction is crucial aspects of OTAs for its popularity. The quality of portal, details about the product and service are another important factors affecting OTAs success. Users also gets best price from OTAs, easy payment and refund policy which aids on its utilizations.

Looking into future if vulnerability in booking system (altering or cancelling service) is improved to ensure trustworthiness, OTAs future is very bright.

References:  

1ShaliniTalwar, AmandeepDhir, PuneetKaur, Matti Mäntymäki (2020) why do people purchase from online travel agencies (OTAs)? A consumption values perspective, International Journal of Hospitality Management 88:102534

2Guang-XinGao, Jian-WuBi (2021) Hotel booking through online travel agency: Optimal Stackelberg strategies under customer-centric payment service, Annals of Tourism Research 86(2):103074

3ArghyaRay, Pradip KumarBala, Nripendra P.Rana (2021) Exploring the drivers of customers’ brand attitudes of online travel agency services: A text-mining based approach, Journal of Business Research 128(2):391-404

4AnuragSingh, Nripendra P Rana,  Satyanarayana Parayitam (2022) International Journal of Information Management Data Insights, Volume 2, Issue 2, 100114

5MahakSharma, RoseAntony, Rajat Sehrawat, Angel Contreras Cruz, Tugrul U. Daim (2022) Exploring post-adoption behaviors of e-service users: Evidence from the hospitality sector /online travel services Technology in Society, Volume 68, 101781

6S. H. Jafarpour, A. Mahmoudabadi and A. Andalib, “The impact of quality of service, website, shopping experience and infrastructure on online customers’ loyalty,” 2017 3th International Conference on Web Research (ICWR), 2017, pp. 163-168, doi: 10.1109/ICWR.2017.7959322.

7G. G. Ronsana, M. R. Shihab, B. H. Syahbuddin and W. R. Fitriani, “Factors Influencing Customer’s E-Loyalty in Tourism E-Marketplace,” 2018 International Conference on Information Technology Systems and Innovation (ICITSI), 2018, pp. 237-241, doi: 10.1109/ICITSI.2018.8696021.

8Young A. Park PhD, Ulrike Gretzel & Ercan Sirakaya-Turk (2007) Measuring Web Site Quality for Online Travel Agencies, Journal of Travel & Tourism Marketing, 23:1, 15-30, DOI: 10.1300/J073v23n01_02

9Niu LX, Lee JH. The Intention of Repurchase on e-Service Quality by Online Travel Agency Site. The Journal of Industrial Distribution & Business [Internet]. 2018 Jul 30; 9(7):61–70

10Sujay Vikram Singh, Rajeev Ranjan, “ONLINE TRAVEL PORTAL AND THEIR EFFECT ON TRAVEL AGENCY: A STUDY ON OUTBOUND VISITORS OF VARANASI.”, IJRAR – International Journal of Research and Analytical Reviews (IJRAR), E-ISSN 2348-1269, P- ISSN 2349-5138, Volume.6

 

Do Not Read This!

Content Marketing?

Yep, I thought you wouldn’t listen. Luckily there is no harm in reading this, quite the opposite. I just wanted to prove a point: In content marketing, you are competing of customers enjoying an overflow of information and suffering lack of time. Therefore, your content marketing needs to be intriguing and catch the attention. Like hopefully this headline did. So, in case you are interested in content marketing, you should stick around and read rest of the post!

Let’s start with discussing the term. It can be mixed up with social media marketing. Creating an ad in Facebook is still not content marketing, just marketing happening in social media. The idea of content marketing is to create different types of content, like blogs, video material and online discussion with customers. The content is shareable and creates interest towards your business, increases your appearance in search engine results and should affect your sales.

How to start

So, let us say that you just established a hotel in Lapland. Should you now open accounts to every other social media outlet and fill them with room pictures and other posts? No, first comes the content marketing plan. For that you need to know your potential customers and their preferences. With bench-marking rival companies, you can learn what content they share and what social medias they use. Referencing the competition is a good start, but also personal goals need to be established. What does your company achieve with all the content you share? Who sees it and what do they do with it? When you can answer these questions, you can proceed with the plan.

Some No No’s

Next, lets dodge some common landmines of content marketing. First, the content can’t be all about the company. Do not always sell something, the customers are not always buying something. The key idea is to be on mind of the customers and when they want to make a purchase that you can provide, they will remember you.

Television was a one-way media, but social media is not. By forgetting this, you miss out on the potential of content marketing and might even do damage. Be attentive to the customers, answer the complaints and discuss the questions.

Do not do too much. If your customers discuss your services in Facebook and like your pictures in Instagram, but Twitter is not working, concentrate on the former. That way your company can be consistent and reliable online, which creates trust also in general.

Do not forget to track the impact of your content marketing: It is essential for you to know how it works and what should be developed or altered.

Entertain, Inspire, Educate and Convince

Content should be useful to both existing and potential customers. In general, you should follow these four guidelines:

  1. Entertain the customer with top quality content to spend time in your media and get them to know you.
  2. Inspire them and help them to create new ideas and new dreams.
  3. Educate the customer on the issues related to your business and create a feeling of trust.
  4. Finally, convince the customer to use your services to retain the best possible solution to his or her problem.

Know your customers to know the preferred social medias and content. Track the impact and you know what to develop. By being consistent and attentive, you are reliable and on people’s mind.

Get a master’s degree in tourism business

Are you looking for an international tourism-focused master’s degree programme in business? Tourism Marketing and Management programme by University of Eastern Finland provides a unique learning experience for students who have finished their bachelor’s degree and are looking for new skills and knowledge in developing tourism industry in a sustainable way. Read more about the programme at www.uef.fi/tmm.

What is online business in tourism?

Online business in tourism, digital tourism business, e-business in tourism, e-tourism; call it what you will, it still has a huge impact on how tourism business is conducted. Most of tourism businesses and large part of marketing are now online. The internet is most often used medium to search for information about a holiday or destination. Skills and knowledge of online tools and channels are critical for the competitiveness of a tourism business or destination.

Director of our master’s degree programme in Tourism Marketing and Management, Juho Pesonen, has made his lectures on the topic freely available for anyone interested in the topic. The course was given for the students of Finnish University Network for Tourism Studies during Fall 2016. You can see the course content and access the lectures on YouTube through the course time table below. YouTube videos have links to SlideShare presentations if you want to take a closer look at them:

Juho Pesonen teaching the course

Thursday 3.11.2016 

9.00-10.30 Introduction to E-business in Tourism: history and context

10.30-10.50 Break

10.50-12.30 Theoretical background: central concepts of E-business

12.30-13.30 Lunch

13.30-14.30 E-business in practice: what to do

– website

– E-commerce

14.30-14.45 Break

14.45- 15.50 E-business in practice: what to do

– social media and content creation

15.50-16.00 Break

16.00-16.45 Practical examples

Friday 4.11.2016

9.00-10.15 E-business in practice: what to do

– analysing and managing online business

10.15-10.30 Break

10.30-11.25 E-business in practice: what to do

– mobile devices

11.25-11.35-Break

11.35-12.30 E-business in practice: what to do

– Search engine marketing

– Security

– Customer Relationship Management

– Marketing automation, artificial intelligence

12.30-13.30 Lunch

13.30-14.30 Destination management and marketing in the era of online business

14.30-14.45 Break

14.45-15.30 Future of tourism in digitalizing world: where are we going?

15.30-16.00 Final conclusions

 

These lectures provide an overview of a wide topic of marketing and managing tourism business in digital environment. A more in-depth view of the topic can be achieved for example in our Master’s Degree Programme.