The Effect Of Perceived Risk On The Adoption Of Online Hotel Bookings In The Thai Market

Online hotel reservation has grown very rapidly in the last decade.This is because internet becomes faster and more accessible,especially in developing countries.At the same time,the banking and online payment infrastructure has also improved tremendously in term of security and convenience.This dissertation's goal is to point out factors that affect the amount of usage and spending on the online booking system rather than through conventional way of booking which is through phone or agency.The research question itself is therefore “What are the factors that influence the intention of the consumer to book accommodations online? The result of this dissertation can be used to gain understandings of factors that affect online hotel reservation attitude,which in turn affect online booking usage.The online booking provider can use this result to improve its service by attempting to minimize negative factors that lead to worse online booking attitude and maximize those that increase online booking attitude.In searching for information on how perceived risk affects the adoption of online booking,we looked at all the potential factors which have been known to impact the online ecommerce business as a whole,specific factors which have been known to impact the online booking market in different countries in the online booking industry as well as factors which have been known to have an impact on the domestic(Thai)consumer market.From this information we were able to have a broader understanding of how the online booking markets work and how the mentalities of consumers have changed throughout the years.What we found during our study into literature was that information on the adoption of online commerce as a whole has seen a very rapid rise to success.From our research into the factors affecting perceived risks,it is clear that the element of trust plays a big part when deciding on buying products and services online,and bookings are noexception.The consumer has to be able to trust the brand before making the ultimate decision to book online.This is perhaps why the big-name websites own such a large market share in the online booking market.That said the majority of the research done in this field available at the time of study has been done prior to the recent surge in online purchases,largely due to the influx of technology as well as the improvement in internet and mobile technology in recent yearsIn Thailand,little public research has been done in this field and hence in attempting to answer the questions,we carried out a survey to over 900 recipients with our main goal to find a wide variety of answers from all over the country.To ensure that the answers we received from the surveyors indeed represented their standpoints made several variations of the same question.The survey was intentionally done so that all the answers from the responders were quantifiable.Fromthat we gathered the results based on our online surveyors and after summing up the data of all variables,ran several regressions on the variables to find out how positive(perceived benefits)and negative(perceived risks)factors affect the adoption of online booking.We also took into account the factor of trust generated by previous experience.The questionnaire was distributed through a web-based survey site(www.surveymonkey.com),which is one of the most trusted sites in distributing surveys around the world.The survey was distributed in both English and Thai,and the responders were limited to Thai nationals.From the results gathered,we found that while perceived risk still have a negative impact on peoples view of online bookings as security and the unwillingness to provide card information is cited as the main issue which responders still distrust,the results showed that the impact is quite minimal.It is clear that people are aware of the benefits of online booking and these perceived benefits do have an impact on people choosing to switch to online booking.The basic conclusion of the research,as derived by the structural equation modeling(SEM)method showed that Thai consumers are willing to adapt to the use of online bookings as long as the following criteria is met: the user feels that there is adequate benefit from purchasing from the site,an interesting point is that price is one of the lower scored motive in the result as the respondents were more focused such as easy access of information,easy comparison and time convenience.That said the results may not be interpreted as straightforward as the numbers imply.After collecting the surveys,we found that using the World Wide Web as a means to distributing the survey to responders in Thailand created the problem of self-selection.We found that the majority of our responders fell under the category of middle class and higher.The probable cause of this being the fact that the having internet and are proficient enough to answer English questionnaires online possibly are characteristics which are also present in the subset of people who in Thailand would require to have a higher social status.The impact of self-selection on the overall results is ambiguous.On one hand the replies have been much more useful for this particular research as we have filtered into account the “early adopters” in this country whohave booked online before.On the other hand,people who possess are willing to do our surveys may have a higher appetite for risk.Hence our answers may be more skewed towards a more progressive response.What is clear is the fact that there is not enough information would be enough to indicate that further research needs to be done in order to find a more comprehensive result which reflects the whole country.While our findings may be quite radical in the sense that we are assuming that perceived risk no longer plays a part in a country where the majority of people still prefer cash to online payments.It is clear that the online booking attitude and the openness to change in very predominant in Thais.With the high number of responders who have used online booking before,it is clear that online booking has a future in the country.A fact worth noting from the research was that the higher the income of the responder,the lower the level of booking intention seemed to be.Before concluding on the point,we looked at the level of income distribution of our responders and found the result to be quite spread out.However upon closer examination we found that the income of our responders seems to have a linear trend,where the lower the age group people have lower income while higher age groups have higher income.That said,when comparing age and booking intention,we found that there was a pretty even spread.As the impact was evident but not extremely high,we were able to conclude that the people with higher income can afford the luxury of hiring someone else to book the hotels for them.This would be consistent with the fact that these people still have a positive attitude towards online booking,which means that they still use the internet for informational purposes.A future implication of the research is that there is definitely potential online bookings market in Thailand.That said,it is important for current and future operators to realize that pricing is not the main factor in attracting customers in the online booking,in fact the model shows that it is actually the fifth most relevant benefit out of five.Although perceived risk played a very small part,it is clear that the benefits will become the main driver in the business once trust is established.