Factors  influencing  the  decision-­‐making  process  of  hotel  customers  buying  opaque  deals  

 A  dissertation  submitted  by  

Ayush  Mittal  in  partial  completion  of  the  award  of    

MSc.  Tourism  &  Hospitality  Management    

 

 

 

 

 

 

 

 

 

‘I  hereby  declare  that  the  dissertation  is  submitted  is  wholly  the  work  of  Ayush  Mittal  

Any  other  contributions  or  sources  have  either  been  referenced  in  the  prescribed  manner  or  are  listed  in  the  acknowledgements  together  with  the  

nature  and  scope  of  their  contribution.’  

 

 

 

 

 

School  of  Tourism  

Bournemouth  University  

  2013  

 

 

 

Declaration  I agree that, should the University wish to retain it for reference purposes, a copy of my

dissertation may be held by Bournemouth University normally for a period of three

academic years. I understand that once the retention period has expired my dissertation

will be destroyed.

Confidentiality  

I confirm that this dissertation does not contain information of a commercial or

confidential nature or include personal information other than that which would

normally be in the public domain unless the relevant permissions have been obtained. In

particular, any information which identifies a particular individual’s religious or political

beliefs, information relating to their health, ethnicity, criminal history or gender, has

been made anonymous, unless permission has been granted for its publication from the

person to whom it relates.

Ethical  and  Health  &  Safety  issues    

I confirm that any ethical considerations associated with the proposed research

dissertation were discussed with my Supervisor and an appropriate research strategy was

developed, which would take them into account. I also confirm that any potential health

& safety risks were discussed with my Supervisor and, where necessary, appropriate

precautions were documented, including an appropriate risk analysis and the submission

to my Supervisor of an ethics checklist form.

Copyright    

The copyright for this dissertation remains with me.

Requests  for  Information    

I agree that this dissertation may be made available as the result of a request for information under the Freedom of Information Act.

Signed:

Name: Ayush Mittal

Date: 02/09/13

Programme: MSc. Tourism & Hospitality

 

 

Abstract  This research defines a unique type of hotel distribution channel, termed opaque selling.

In the past few years, hotel companies have adopted opaque selling strategies to sell their

unsold inventory at the last minute. The expansion of the opaque market in the UK hotel

industry has led to an exploration of factors influencing the decision making process of

hotel customers when buying opaque deals.

The research provides nascent literature about the research problem as this field has not

been greatly covered. Consequently, the study found a research gap and proposed

exploratory objectives to explore the research problem. The exploratory objectives were

examined through primary research, which involved methodological triangulation. A

questionnaire guide was designed for carrying out in-depth interviews and surveys. The

respondents were selected using purposive non-probability sampling for the interviews

and systematic random sampling for the surveys. 151 responses were received (including

141 surveys & 10 interviews). The primary data was analysed statistically and the

qualitative information supported the statistics to increase the validity of findings.

The research findings indicate that hotel customers buying opaque deals possess

differential characteristics in comparison to other hotel customers. Moreover, the

research points out that the decision to buy opaque deals is highly influenced by the

purpose of travel and the opaque deal users are highly price-sensitive. In addition, many

factors have been identified which influence the decision making process of hotel

customers when buying opaque deals.

The study do not only explore the influencing factors but also provides evidence for

understanding the opaque user’s characteristics and needs which will assist online

intermediaries and hotel companies to understand the buying behaviour of hotel

customers purchasing opaque deals. By comprehending the research results, the online

intermediaries and hotel companies will be able to formulate newer and better

distribution strategies accordingly.

 

Keyword: Decision-making process, opaque deals, UK hotel industry

Word Count: 19,469

 

ii    

Acknowledgement  This research could not have been possible without the assistance of the research advisor,

Professor Dimitrios Buhalis, who supported and guided me all throughout the research

methodology. He helped me to frame an appropriate timeline for this research. More

importantly, he consistently indicated confidence in my work as well as advising me on

how to make improvements. His resourceful nature greatly assisted me in progressively

investigating about the research issue and ensuring that it is accurate to the highest level.

To him, I am eternally grateful.

I would additionally like to express my appreciation to Dr.Yeganeh Morakabati who has

helped me to analyse the statistical data. Furthermore, Natalia Lavrushkina played a

significant role throughout the dissertation period. Also, the administration of two hotels

where the primary research was conducted and the academic resources provided by

Bournemouth University were of invaluable help.

Finally, I would like to thank my family and friends who provided me with the moral and

emotional support I needed to complete my dissertation.

 

   

 

iii    

Table  of  Contents    Word  did  not  find  any  entries  for  your  table  of  contents.  In  your  document,  select  the  words  to  include  in  the  table  of  contents,  and  then  on  the  Home  tab,  under  Styles,  click  a  heading  style.  Repeat  for  each  heading  that  you  want  to  include,  and  then  insert  the  table  of  contents  in  your  document.  To  manually  create  a  table  of  contents,  on  the  Document  Elements  tab,  under  Table  of  Contents,  point  to  a  style  and  then  click  the  down  arrow  button.  Click  one  of  the  styles  under  Manual  Table  of  Contents,  and  then  type  the  entries  manually.

 

iv    

List  of  Figures  Figure  1.1:  Changes  in  hotel  adr,  revpar  and  occupancy  levels  since  2005ERROR!  BOOKMARK  

NOT  DEFINED.  

Figure  1.2:  Dissertation  assembly  .....................................  ERROR!  BOOKMARK  NOT  DEFINED.  

Figure  2.1:  Increase  in  buying,  comparing  and  making  travel  &  lodging  reservations  ...  ERROR!  

BOOKMARK  NOT  DEFINED.  

Figure  2.2:  Online  purchase  behaviour  model  ..................  ERROR!  BOOKMARK  NOT  DEFINED.  

Figure  2.3:  Hospitality  distribution  channels  .....................  ERROR!  BOOKMARK  NOT  DEFINED.  

Figure  2.4:  Method  of  booking  hotels  by  travellers  in  uk  .  ERROR!  BOOKMARK  NOT  DEFINED.  

Figure  2.5:  Opaque  or  top  secret  hotel  deal  sample  .........  ERROR!  BOOKMARK  NOT  DEFINED.  

Figure  2.6:  Price  degradation  cycle  ...................................  ERROR!  BOOKMARK  NOT  DEFINED.  

Figure  2.7:  Opaque  hotel  booking  process  ........................  ERROR!  BOOKMARK  NOT  DEFINED.  

Figure  2.8:  Advantages  &  disadvantages  of  ohbm  to  consumers  .....  ERROR!  BOOKMARK  NOT  

DEFINED.  

Figure  2.9:  Advantages  and  disadvantages  of  ohbm  to  hoteliers  .....  ERROR!  BOOKMARK  NOT  

DEFINED.  

Figure  3.1:  Factors  affecting  consumer  behaviour  ............  ERROR!  BOOKMARK  NOT  DEFINED.  

Figure  3.2:  Factors  influencing  hotel  choice  ......................  ERROR!  BOOKMARK  NOT  DEFINED.  

Figure  3.3:  Hospitality  consumer  decision-­‐making  model  ERROR!  BOOKMARK  NOT  DEFINED.  

Figure  3.4:  Shifts  in  desired  and  actual  state  ....................  ERROR!  BOOKMARK  NOT  DEFINED.  

Figure  3.5:  Intervening  factors  before  purchase  decision  .  ERROR!  BOOKMARK  NOT  DEFINED.  

 Figure  4.1:  Proposed  factors  influencing  decision  of  opaque  consumers  .  ERROR!  BOOKMARK  

NOT  DEFINED.  

Figure  4.2:  Proposed  decision  making  model  for  opaque  consumers  .......  ERROR!  BOOKMARK  

NOT  DEFINED.  

Figure  5.1:  Methodology  at  a  glance  .................................  ERROR!  BOOKMARK  NOT  DEFINED.  

 

v      

Figure  5  2:  Types  of  questionnaires  ..................................  ERROR!  BOOKMARK  NOT  DEFINED.  

Figure  5.3:  Sampling  technique  for  this  research  ..............  ERROR!  BOOKMARK  NOT  DEFINED.  

Figure  6.1:  Analysis  process  ..............................................  ERROR!  BOOKMARK  NOT  DEFINED.  

Figure  6.2:  Total  responses  ...............................................  ERROR!  BOOKMARK  NOT  DEFINED.  

Figure  6.3:  Age  of  respondents  .........................................  ERROR!  BOOKMARK  NOT  DEFINED.  

Figure  6.4:  Gender  of  respondents  ...................................  ERROR!  BOOKMARK  NOT  DEFINED.  

Figure  6.5:  Income  level  ....................................................  ERROR!  BOOKMARK  NOT  DEFINED.  

Figure  6.6:  Factors  influencing  hotel  choice  ......................  ERROR!  BOOKMARK  NOT  DEFINED.  

Figure  6.7:  Web  skills  ........................................................  ERROR!  BOOKMARK  NOT  DEFINED.  

Figure  6.8:  Purpose  of  travel  .............................................  ERROR!  BOOKMARK  NOT  DEFINED.  

Figure  6.9:  Influencing  factor  for  opaque  users  ................  ERROR!  BOOKMARK  NOT  DEFINED.  

Figure  6.10:  Control  on  opaque  deals  ...............................  ERROR!  BOOKMARK  NOT  DEFINED.  

Figure  6.11:  Level  of  agreement  of  wom  among  opaque  users  ........  ERROR!  BOOKMARK  NOT  

DEFINED.  

Figure  6.12:  Level  of  agreement  of  wom  among  opaque  users  ........  ERROR!  BOOKMARK  NOT  

DEFINED.  

Figure  6  13:  Risk-­‐taking  characteristics  .............................  ERROR!  BOOKMARK  NOT  DEFINED.  

Figure  6.14:  Adventurous  and  impetuous  characteristics  .  ERROR!  BOOKMARK  NOT  DEFINED.  

Figure  6.15:  Overall  satisfaction  ........................................  ERROR!  BOOKMARK  NOT  DEFINED.  

Figure  6.16:  Buy  opaque  deal  again?  ................................  ERROR!  BOOKMARK  NOT  DEFINED.  

Figure  7.1:  Objective  1  ......................................................  ERROR!  BOOKMARK  NOT  DEFINED.  

Figure  7  2:  Objective  2  ......................................................  ERROR!  BOOKMARK  NOT  DEFINED.  

Figure  7.3:  Opaque  deal  phrases  .......................................  ERROR!  BOOKMARK  NOT  DEFINED.  

 

vi    

List  of  Tables  Table  1.1:  Change  in  occupancy  levels  ..............................  ERROR!  BOOKMARK  NOT  DEFINED.  

Table  3.1:  Comparison  between  sources  of  information  ..  ERROR!  BOOKMARK  NOT  DEFINED.  

Table  5.1:  Qualitative  vs.  quantitative  characteristics  ......  ERROR!  BOOKMARK  NOT  DEFINED.  

Table  5.2:  Pseudo  names  ..................................................  ERROR!  BOOKMARK  NOT  DEFINED.  

Table  6.1:  Kolmogorov-­‐smirnov  z  test  for  purpose  of  travel  .............  ERROR!  BOOKMARK  NOT  

DEFINED.  

Table  6  2:  Chi-­‐square  test  for  price  ...................................  ERROR!  BOOKMARK  NOT  DEFINED.  

Table  6.3:  Mann-­‐whitney  test  for  control  .........................  ERROR!  BOOKMARK  NOT  DEFINED.  

Table  6.4:  Chi-­‐square  test  for  web  skills  ............................  ERROR!  BOOKMARK  NOT  DEFINED.  

Table  6.5:  Mann-­‐whitney  test  for  wom  .............................  ERROR!  BOOKMARK  NOT  DEFINED.  

Table  6.6:  Mann-­‐whitney  test  for  economic  situation  ......  ERROR!  BOOKMARK  NOT  DEFINED.  

Table  6.7:  Friedman  test  for  perceived  risk  .......................  ERROR!  BOOKMARK  NOT  DEFINED.  

Table  6.8:  Friedman  test  for  differential  characteristics  ...  ERROR!  BOOKMARK  NOT  DEFINED.  

Table  6.9:  Characteristics  of  opaque  users  .......................  ERROR!  BOOKMARK  NOT  DEFINED.  

Table  6.10:  Proposed  factors  influencing  ..........................  ERROR!  BOOKMARK  NOT  DEFINED.  

Table  6.11:  Motivating  conditions  .....................................  ERROR!  BOOKMARK  NOT  DEFINED.  

 

7    

List  of  Abbreviations  ADR Average Daily Rate

Assymp. Sig. Asymptiotic Significance

BBC British Broadcasting Corporation

BHA British Hospitality Association

CRS Central Reservation System

DMP Decision Making Process

EO Exploratory Objectives

GBP Great Britain Pound

GDS Global Distribution System

ICT Information and Communications Technology

NYOP Name Your Own Price

OECD Organisation for Economic Co-operation and Development

OFT Office of Fair Trading

OHBM Opaque Hotel Booking Model

ONS Office for National Statistics

OTA Online Travel Agent

PMS Property Management System

QUAN Quantitative Data

QUAL Qualitative Data

RevPAR Revenue per Available Room

SPSS Statistical Package for Social Sciences

UK United Kingdom

WOM Word Of Mouth

ZMOT Zero Moments Of Truth