Influence of E-Trust on Direct Online-Bookings of Recreational Activities in Turkey

Transcription

1 Wirtschaftswissenschaftliche Fakultät der Leibniz Universität Hannover Institut für Wirtschaftsinformatik Influence of E-Trust on Direct Online-Bookings of Recreational Activities in Turkey Diplomarbeit zur Erlangung des Grades eines Diplom-Ökonomen der Wirtschaftswissenschaftlichen Fakultät der Universität Hannover vorgelegt von: Timur Öztuna Geboren am in Hannover Erstprüfer: Prof. Dr. Michael H. Breitner Hannover, den 15.August 2011

2 Inhaltsverzeichnis Table of Content List of Figures... IV List of Tables... V Abbreviations... VI 1. Introduction Motivation Objective Structure Overview of the Tourism Industry Definition of Tourism Economical Importance World Germany Turkey Characteristics of Touristic Services Participants of the Tourism Industry External Environment Tourism Service Suppliers Tourism promoters The Influence of the Internet on the Tourism Industry Characteristics of E-commerce Changes induced by the Internet Figures and Facts: The E-Tourist Tourism and Web Social Media Sources The Value of Social Media for the Tourism Industry Determinants of E-Trust in the Context of E-Tourism Websites... 32

3 Inhaltsverzeichnis 4.1. Definition of Trust Definition of E-Trust Factors affecting E-Trust Calculus-based Trust Website Characteristics Institution-based Trust Case Study: The Sollare Sailing School in Marmaris, Turkey Research Methodology Introduction into the Case The Company s Services Revenues and Expenditures Competition on the Sailing Market The Customers Characteristics of Sailing The typical Sailing Trip The current Setting Reputation Website Characteristics Institution-based Trust Conclusion of the Website Assessment The Necessity for Improvement Chances Risks and Limitations Management Recommendations Increase of Calculus-based Trust Improvement of Website Characteristics Suggestions for Institution-based Trust... 77

4 Inhaltsverzeichnis Conclusion Implementations by the Company Calculus-based Trust Website Characteristics Institution-based Trust Summarizing the Implementations Generalization of Case Study Findings Emergent Theory Generalizations for Calculus-based Trust Generalizations for Website Characteristics Generalizations for Institutional-based Trust Modified E-Trust Framework Additional Conceptions Conclusion Summary Recommendations & Outlook References List of Appendices... CIV Erklärung...CXII

5 Introduction 1. Introduction The present paper is primarily concerned with the merchandising of touristic services on the internet. For this purpose factors such as the advancement in the tourism industry, the internet usage for gathering information and processing of bookings as well as the configuration of websites will be analyzed and valued. Based on a case study practical suggestions will be pointed out and implementations shall be rated Motivation The choice of the topic has been influenced by two interacting factors. First of all, the author s father has been working in the tourism industry for about thirty years. Therefore the author was able to gain insights into the industry. As changes and developments within this industry were noticed, the question where the trend is heading to in the future seemed to be an interesting issue and influenced the preparation of the thesis. The growing significance of the internet, concerning the marketing of goods and services with its given opportunities for both - suppliers as well as consumers - has been recognized as being a major factor for future growth of the tourism industry. Analyzing and valuing factors influencing the actions and interactions of these two seemed to be an interesting and instructive issue. Moreover, the second factor that steered the interests and influenced the choice was the ability to guide a case study. The author s father manages a sailing school in Turkey since The business is run successfully, but it is not yet able to attract customers over the internet. The analysis of problems causing this issue could support the company in overcoming current limitations when constructing and implementing a new website. Generalizing the findings of this analysis can help to show the connection between the use of e-commerce and the increase of a company s profits Objective In diesem Jahrtausend wird es zwei Arten von Geschäften geben: Die im Internet, und die, die es nicht gibt. (Bill Gates) 1

6 Introduction Since the beginning of the 90 s when IT and internet have emerged and gained influence they changed every single aspect of live. People obtained the ability to work, shop, communicate or simply gather information ubiquitously and used these opportunities with increasing interest and casualness. In Germany, 70% of the population over 14 years of age is connected to the internet and the number will keep rising in the next few years. 1 This development highlights the importance of being online not only for individuals for private use but also for companies to pursue online business. So thereby, businesses have the opportunity to enhance their profits and competitiveness. One of the industries which is most strongly influenced by the internet is the tourism industry. In Germany, tourism is one of the most favored leisure activities proved by the fact that 75,7% of the population over 14 years have at least traveled once in A trend which has been quite stable in the last years and forecasts predict no changes of process. And when it comes to the purchase of goods and services, consumer decisions which are influenced deepest by the internet are services related to touristic activities as figure 1 illustrates. Purchase of train and flight tickets Reservation of hotelroom Booking of vacation Purchase of books/cd's/dvd's Purchase of Digicam Purchase of Notebook Purchase of MP3-Player Reservation of rental car Purchase of event tickets Purchase of LCD-TV 89% 88% 87% 83% 81% 77% 76% 75% 74% 74% 0% 20% 40% 60% 80% 100% Figure 1: Consumer decisions which are influenced through the internet Source: Own representation according to Fleischmann, Hillard (2008), p Cf. VIR (2011), p Cf. FUR (2010), p.4. 2

7 Introduction Thereby, the tourism industry is still not fully profiting from increased use of the internet. Although flights and hotels are increasingly booked online smaller vendors often struggle to set up online commerce. One of the main reasons for this deficit is the lack of trust, due to the anonymous character of the internet. The perceived risk of dealing with an unknown supplier that might be untrustworthy appears to be a major issue in conducting electronic business. To increase online commerce it is therefore vital to identify and analyze factors that influence and support electronic trust on a touristic website with the goal to attain direct bookings from this site. As sources that affect trust this thesis expands on online reputation, website characteristics and institution-based trust factors which have a major ascendancy on this issue. The influence of consumer characteristics and knowledge-based factors upon trust is not the scope of the present thesis so it will be treated marginally. The practical value arises from the case study which will be conducted. To keep the matter and give a frame to the topic, the website a Turkish vendor which offers recreational activities will be examined and the impact of e-trust onto this site will be viewed and weaknesses of e-trust will be revealed and demonstrated. Suggestions made in this thesis will be implemented and findings will be generalized Structure The thesis paper is divided into basic information about tourism and its relation to the internet and the main part where the case study is conducted. Chapter 1 introduces the topic to the reader, describes the objectives and illustrates the personal motivation. The second chapter gives an overview about the tourism industry. Tourism is defined and the economical importance is shown. Further on, tourism products and services are characterized and the importance of information gathering will be highlighted. The industry s shape is illustrated and its participants are named. Chapter 3 views the influence of the internet upon the tourism industry. E-commerce is defined and changes within the industry are shown. Online tourists are characterized by providing relevant data. Moreover, the chapter expands on web 2.0 and describes social media tools and applications. Additionally the importance of these tools for the tourism industry is illustrated by using statistics and graphics. Chapter 4 concentrates on 3

8 Introduction the development of electronic trust. After the definitions of trust and e-trust are provided the paper deepens the understanding of factors affecting the creation of online trust. Specifically, calculus-based trust, website characteristics and institution-based trust are viewed as factors that have immense effects on e-trust. After the fundamentals have been viewed the main chapter follows, in which a case study of a sailing school in Turkey is conducted. The introduction into the case is followed by the evaluation of the current online appearance of the company. The website s reputation, characteristics and structural assurances are analyzed and rated in an objective manner. Thereafter, general implications to raise the websites perceived e-trust are suggested and concrete implementations that are viewed. Finally, generalizations of case study findings are presented. In chapter seven a summary and outlook are provided. Figure 2 illustrates the structure of this thesis graphically. Figure 2: Structure of the thesis Source: Own representation 4

9 Conclusion 6.2. Additional Conceptions After generalizations have shown how vendors are able to increase the e-trust on their website, further ideas are shown up that could be performed by vendors in order to successfully strengthen e-trust. Cooperation s with other regional vendors that offer similar services could, if correctly handled, increase the trust perceived by tourists. Local online communities or portals could be implemented enhancing interaction between suppliers and thus leading to a gain in e-trust. There are two ways to approach the permutation. The first one is to assemble all regional vendors of a specific activity and the second one is to include all regional vendors that offer recreational activities. Positive effects would be, that through cooperation more money could be spend enhancing the websites trustworthiness and thus enabling the site to reach more tourists and conduct more business. Furthermore, this community could follow upcoming trends like 3D-marketing of destinations and areas. The benefits would be, that quality of services and prices could be balanced on a higher level and in the case of over-bookings customers could easily decide to choose another vendor that offers a similar service at the specific date. The community must include a central booking mechanism, an internal review system and must be designed according to visitor s expectations. This idea has been implemented on an international level for several services such as the hostel industry where sites like hostelworld.com or hostelbookers.com have been operating successfully in the last years. Another way that small vendors could pursue the conduction of direct bookings is to place links and ads on the homepages of regional hotels. Accommodations have already achieved to have a high direct booking rate therefore cooperation appears to be a reliable source for an increase of traffic and bookings. 7. Conclusion Through the intensified use of the internet in daily life and especially in the business world, its economical importance has increased immensely. The growing availability, the possibility of flexible and independent information gathering and the ability to purchase goods and services twenty-four-seven makes the use of the web attractive for every industry as much as for privates to attend their interests. 92

10 Conclusion One of the industries which profited most from these features is the tourism industry. Figures have shown that the number of people using the internet to collect information about travel related topics or pursue bookings is steadily increasing as customers are already spending large amounts of money for online bookings. Though direct bookings increase some branches of the tourism industry have jet not fully profited from the available chances. Nowadays mainly accommodations and flights are booked via the internet while recreational activities are still lacking in online bookings. The major reason for this issue has been identified to be the lack of electronic trust towards these touristic vendors. So one of the conclusion of this thesis is that e-trust in the context of tourism is a specific issue which recreational activity vendors should carefully consider to increase their profits through e-commerce Summary In chapter 1 the thesis stated the objectives, which were to identify and analyzed factors which support the increase of electronic trust in the context of touristic websites of recreational vendors in Turkey. Chapter 2 gave an overview of the tourism industry. After the term tourism was defined, the economical importance of tourism was highlighted by providing global figures as well as facts from Germany and Turkey. Further on the thesis characterized touristic services and pointed out the role of information. Thereafter, additional knowledge was provided by introducing the participants of the tourism industry. A model showed and separated the participants into three groups: external environment, tourism service suppliers and tourism promoters. Chapter 3 illustrated the influence of the internet on the tourism industry. E- commerce is defined and its advantages for businesses are presented. It was specifically shown how SME s can benefit from e-commerce. Changes of the industry that are induced by the internet are named before the paper proceeded to identify the e- tourist. Figures and facts clearly visualized that online information gathering and bookings have picked up in the last years. Immediately after the chapter has depicted how internet users access touristic websites, social media is identified as a main source for online reputation. They are briefly presented and their value for the tourism industry is revealed by introducing statistics that show which social media is used 93

11 Conclusion in the context of tourism, the age groups who use social media and how UGC and supplier generated content are rated. In chapter 4 the thesis expands on the issue of e-trust. To understand the importance of electronic trust for online commerce the terms trust and e-trust were defined and based on Chens trust framework sources for electronic trust were identified. Mainly calculus-based trust, website characteristics and institution-based trust have been identified to strengthen e-trust in the context of touristic websites of recreational vendors. So the paper then deepens the understanding of these factors. Further on in chapter 5, a case study about a Turkish sailing school was conducted. After basic knowledge about the company and its services was provided the paper analyzed the current setting of the company s online appearance. First of the company s online reputation is looked at, before the website s usability is rated. Finally the availability of certificates and authorized logos was evaluated. Strength and weaknesses of these factors were identified before chances, limitations and risks of improving the online business were shown. Management recommendations to boost the sites perceived online trustworthiness are stated before the thesis gave an overview about the current implementations that were realized by the sailing school. In the final chapter, key findings from the case study were generalized upon other, more precisely Turkish vendors, within the tourism industry. It is shown how to solve the issue of low online trustworthiness by fulfilling expectations of the consumer concerning the online reputation, the usability of the website and the availability of trustedthird-parties. To relate these generalizations to Chens e-trust framework, a modified trust model was illustrated. The chapter is concluded by naming additional conceptions on how to improve e-trust Recommendations & Outlook The internet offers touristic vendors great abilities to enhance their online trustworthiness. Through web 2.0 and social media companies can directly profit from reviews, feedbacks and contents that are spread over the internet. The decreasing prices for programming a professional website, and the availability of a large number of certification authorities and payment services helps to make online commerce conductible 94

12 Conclusion for every touristic company. Therefore, it is recommended to follow the suggestions derived from the case study findings in chapter 6. Though e-trust is not the only factor that influences the intention of customers to purchase services over the internet, it is obviously an important one. Since e-tourism is forecasted to keep growing in the future, recreational vendors have the ability to enhance their profits derived from online business by improving their online trustworthiness. For vendors who are used to distribute their services over intermediaries, the availability of e-commerce could make them reconsider their business structure. If more resources are spent to achieve a higher online booking rate, the vendor could lower its bonds to tour operators and travel agencies and thus decrease commission payments. Recreational companies which do not distribute services over intermediaries but through WOM, the internet could support not only the completion of online bookings but also the promotion over social media can be enhanced and be a supportive factor for advertisement. However, the investment into a professional website with all requirements for e-trustworthiness is not recommended to all recreational vendors. Vendors which offer activities which are performed within one day will expectably most likely not be successful by implementing a professional website, as tourists often do these activities instinctively without gathering information beforehand. As an outlook it can certainly be claimed that the use of internet will keep growing in the next years. Its economical importance for the tourism industry will thereby rise conditionally. Therefore it is advisable for touristic vendors to keep an eye on developments induced by the internet and react and adjust in a flexible way towards these proceedings. 95