Lifestyle Segmentation for Boutique Accommodation in Relation to the Service Quality and Customer Satisfaction

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1 Lifestyle Segmentation for Boutique Accommodation in Relation to the Service Quality and Customer Satisfaction Tidti Tidtichumrernporn Hotel & Tourism Management Department, Payap University Chiang Mai, Thailand Abstract In this research, the researcher investigates (1) how the development of hotel segmentation in the Thai hotel industry is related to the concept of the boutique hotel, (2) the relationships between the categories boutique, chic, hip and lifestyle hotels and the characteristics of members of their target customer market, (3) the impacts of guest characteristics and behavior patterns vis-à-vis products and services provided by so-called boutique hotels, and finally, the researcher considers (4) the key components of the boutique hotel category insofar as they impinge upon the management and ownership styles, the hospitality marketing mix, service quality, and the levels of satisfaction of guests. In this investigation, theories of market segmentation and service quality developed in hospitality management research are used to explain relationships between lifestyles and levels of satisfaction. The researcher additionally attends to the utilization of management tools which would be implied by findings concerning the characteristics and behaviors of guests as determined by lifestyle and preferences and how these factors affect levels of guest satisfaction. The researcher has determined that boutique accommodations are characterized in terms of smallness, adherence to themes, particular concepts of design, and efforts to appear unique in products and services offered and provided. It was also ascertained that there are differences between Thai and international tourists as evidenced by lifestyles and preferences. These differences affect expectations concerning the dimension of service quality. Significant differences between the characteristics and behavior patterns (lifestyles) of Thai and international tourists were identified through an application of the Strategic Business Insights (SBI) Values and Lifestyles or VALS TM model. In applying this model, the researcher determined that the largest majority of the Thai tourists surveyed had a lifestyle that can be best summarized under the rubric of the category of strivers, i.e., those who were primarily motivated by achievement motivation. In contrast, however, the researcher additionally found that the lifestyle of the largest majority of international tourists surveyed manifested a lifestyle that can be best summarized under the rubric of the category of innovators, i.e., those who had a high level of resources and a high level of the capacity to produce innovations.

2 In addition, in applying this model to the next largest majority of both the Thai and international tourists surveyed, the researcher uncovered differential characteristics dependent upon a contrast between Eastern and Western cultural matrices. Thus, in terms of lifestyle, the researcher found that the majority of Thai tourists in this second group belonged to the category of thinkers, i.e., those who were primarily motivated by ideals. However, this second group of international tourists belonged to the lifestyle category of survivors, i.e., those with low resources and low innovation. The researcher is of the opinion that the results of this inquiry can constitute a useful tool for hotel entrepreneurs and managers who must be concerned with the relationships between the lifestyles of members of target groups and their preferences. For provided are vital data that can prove useful in determining the appropriateness of hospitality products and services for guests and which provide guidance in efforts to engender higher levels of guest satisfaction with the quality of services provided. Key words: Boutique Accommodation, Lifestyle Segmentation, VALS TM model and SERQUAL model. Introduction Boutique hotel are believe to have been invented in the early 1980s. Two of the first boutique hotels in the world opened their doors to the public in 1981: Blakes Hotel in South Kensington, London (designed by celebrity stylist Anouska Hempel) and the Bedford in Union Square, San Francisco (the first in a series of 34 boutique hotels currently operated under the flag of one of the most eminent players in the boutique hotel world today, the Kimpton Group). In 1984, Ian Schrager opened his first boutique hotel in Murray Hill, New York City, named Morgans Hotel, designed by French stylist Andrée Putnam (Anhar, 2006). This was also when the entrepreneur Ian Schrager and Steve Rubell opened Morgans on Madison Avenue. It was quirky and individual, unlike the big brand-name hotels that were dominant at the time (The independent, 2006). A boutique hotel has the kind of accommodation favored by high-end visitors nowadays. With architectural beauty, luxury and a unique decor, aspects which distinguish these hotels from others of their kind, the boutique hotel has become a tourism magnet, drawing a greater number of visitors to Thailand each year. At present, Thailand boasts many boutique hotels which are recognized by visitors for their beauty. The Tourism Authority of Thailand (TAT) has produced the publication Thailand 100 Best Boutique Hotels, which presents a list of charming boutique premises located in the major tourist destinations in Thailand, and is a helpful source for visitors who wish to make their own choice (Services Promotion Department, TAT, 2007). Chiang Mai has been promoted by tourists and travelers alike as a good destination choice, with its reputation as an ancient and cultural city, but still

3 does not attract enough repeat travelers. According to the TAT publication Thailand s 100 best Boutique Hotels, in the northern region, Chiang Mai has 7 of the best boutique hotels out of a total of 12 hotel properties, and in Thailand Chic Vanity (Marketing Service Department, 2007); Chiang Mai was also named as having a total number of 9 out of 21 chic boutique hotel properties. Since hotels consisting of a new style of accommodation have been launched as destinations tailored to tourists needs, a tremendous number of new hotels with a boutique, chic hip and lifestyle concept have been built, with 40 to 50 properties posted on various travel and tourism websites, such as: and according to a research survey (Tidti, 2009). The first hotel in Chiang Mai to be called a boutique hotel was Tamarind Village, and other hotel developments related to the boutique hotel concept have since been built. This research aims to study the development of the boutique, chic, hip and lifestyle hotel concepts, the characteristics of these terms with respect to boutique hotels in Chiang Mai, and how perceptions differ among the management, staff and hotel guests. It also aims to explore the ownership characteristics of the hotel segment and the hotels management concepts. Lastly, the study explored the characteristics and behavior patterns of the hotels guests in terms of value, attitudes and lifestyle (VALS TM ), with respect to service quality (SERVQUAL), plus their level of satisfaction with regard to this hotel sector. Theory and Conceptual Framework Market segmentation seeks to identify some easily identifiable characteristics with which the purchasing behavior of subgroups within a market may be predicted and targeted (Johns & Gyimothy, 2002). According to Johns and Gyimothy, the marketers increasingly augment these secondary segmentation factors with psychometric measures of attitudes and values, but these are themselves of limited predictive value, though the science of segmentation has concentrated on comparing them. This segmentation will allow one to narrow down to sub-group target in terms of their preferences, lifestyle choices and behavior in relation to travel and hotel products. Travel market segmentation can be achieved in various ways. In the tourist industry, most producers have no other choice but to deal with certain segments, mainly because of the location and nature of their business. Segmentation enables marketers to define homogeneous groups of consumers according to one or more variables, and it is then possible to describe these segments and to develop specific marketing actions aimed at one or more

4 groups. Segmentation criteria are usually divided into two categories: general consumer characteristics and situation-specific and behavioral characteristics (Legoherel, 2006). According to Ernest & Young (2008), hotel companies strive to distinguish themselves while satisfying ever-expanding consumer needs and desires. Boutique or lifestyle hotel concepts have emerged across the globe in every size, style, segment and market. This segment of the market has particular challenges, as consumer tastes are becoming increasingly sophisticated and diversified; brands must keep pace with cutting-edge technology while being environmentally responsible; new lifestyle brands face the challenge of appealing to a wide, international audience, while at the same time differentiating them. Service is considered the fundamental foundation for any operator, and the fusion of indigenous service, design, culture, food, entertainment and even religion into lifestyle hotels, has emerged as a central trend in the segment. Lifestyle hotels are expanding into emerging and other markets across the globe, including secondary markets, as people increasingly search for new and different lodging alternatives. The lifestyle or boutique hotel has emerged in response to changes in consumer tastes, trend and behavior. Traditionally, psychographic characteristics include social class, personality and lifestyle. The latter concept is held to embody an understanding of individuals needs, the benefits sought and their motivations (Middleton, 1997, 2001). Psychographic segmentation is based on lifestyle profiles normally derived from survey responses to AIO (Attitudes, Interests, and Opinions) statements. Psychographics seeks to describe the human characteristics of consumers that may have a bearing on their responses to products, packaging, advertising, promotions and public relations efforts. Such variables may range from self-concepts and lifestyles, to attitudes, interests and opinions, as well as perceptions of product attributes (Reid et al. 2006, 2010). Lifestyle segmentation is used by hoteliers and hotel management for the design of products and services, for differentiating consumer needs or hotel guests demanding personalized services in a unique setting; even traditional hotel companies are introducing lifestyle segments. The lifestyle niche has become an established sub-category among the upper upscale and luxury segments, and is making headway into the select-service segment. This segment targets the personal values of customers in terms of their decisionmaking on the hotel category or classification they wish to frequent, based on their preferences and satisfaction levels. Hospitality Marketing Mix; The hospitality marketing mix is used as a tool for hoteliers and hotel management staff in the design and provision of their

5 products and services (the mix of marketing activities that are directed toward an identified target market), those used to attract hotel customers and guests. Ford et al. (2000) describe a hospitality marketing mix as the effort to align an organization s strategy, staff and systems to meet or exceed customer expectations with respect to the three facets of a guest s experience: service product, service setting (service environment) and service delivery. These three aspects or elements need to be carefully woven together to give guests what they want and expect. Lifestyle Concepts According to Plummer (Plummer, J.T. (1974); cited in Bowie et al. (2008)), lifestyle used in lifestyle segmentation research measures people s activities in terms of: 1) how they spend their time, 2) their interests, what they place importance on in their immediate surroundings, 3) their opinions in terms of their view of themselves and the world around them, and 4) some basic characteristics such as their stage in the life cycle, income, education and where they live (demographics and geographic locations). For the discussion on lifestyle segmentation, this research will apply these terms to the hospitality segmentation in terms of products and services design, based on the characteristics of boutique accommodation concepts and guest values and behavior patterns. Lifestyle segmentation has been referred to as having the same meaning as psychographic segmentation. Lifestyle market segmentation offers a way to combine both psychological and behavioral variables into a single segmentation approach (Moscardo, 2004). Lifestyle segmentation can be defined as representing the goals that people shape for themselves and the means they employ to reach them (Lawson et al., 1999). This method of segmentation will be used to define those guest characteristics and behavior patterns that relate to products and services, and also those that relate to the ownership or management style of the boutique accommodation concept. VALS TM Concept and Framework VALS can be defined as a method that separates types of customers based on psychological characteristics and four key demographics. The US VALS system classifies customers into eight segments using primary motivations (e.g., thinking experiences) and levels of financial resources (high or low) (Bowie et al., 2008). The VALS TM system (VAL stands for "Values, Attitudes and Lifestyles") is a psychographic segmentation. It was developed in the 1970s to explain changing US values and lifestyles. It has since been reworked to enhance its ability to predict consumer behavior. Segmentation research based

6 on VALS is a product of SBI Consulting Business Intelligence (SBI, 2010). It is considered to be generally applicable as a product specific lifestyle segmentation scheme developed to inform decision-making about specific products and services (Mitchell, 1983). The VALS TM framework can be used to predict consumer behavior on the basis of attitudes and lifestyles. VALS states that consumer s purchasing behavior is an expression of their personalities. The VALS framework allows marketers to identify meaningful market segments based on consumer personality traits and provide a means to predict purchasing behavior (Reid & Bojanic, 2010). VALS TM Segments 1. Innovators are successful, sophisticated, take charge people with high self-esteem. 2. Thinkers are motivated by ideals. They are mature, satisfied, comfortable and reflective people who value order, knowledge and responsibility. 3. Believers are motivated by ideals. They are conservative, conventional people with concrete beliefs based on traditional, established codes; family, religion, community and the nation. 4. Achievers are motivated by the desire for achievement. Achievers have goal oriented lifestyles and a deep commitment to career and family. Image is important to achievers; they favor established, prestige products and services that demonstrate success to their peers. 5. Strivers are trendy and fun loving. Because they are motivated by achievement, Strivers are concerned about the opinions and approval of others. 6. Experiencers are motivated by self-expression. As young, enthusiastic, and impulsive consumers, Experiencers quickly become enthusiastic about new possibilities, but are equally quick to cool. 7. Makers are motivated by self-expression. They express themselves and experience the world by building a house, raising children, fixing a car or canning vegetables, and have enough skills and energy to carry out their projects successfully. 8. Survivors live narrowly focused lives. With few resources with which to cope, they often believe that the world is changing too quickly. They are comfortable with the familiar and are primarily concerned with safety and security.. The VALS TM framework can be used to predict consumer behavior on the basis of attitudes and lifestyles. VALS states that consumer s purchasing behavior is an expression of their personalities. The VALS framework allows

7 marketers to identify meaningful market segments based on consumer personality traits and provide a means to predict purchasing behavior (Reid & Bojanic, 2010). I have applied the VALS TM framework to investigate the differentiation in lifestyles and characteristics between Thai and international tourists, those who stay in boutique hotels. Researcher applied the VALS TM framework to investigate the differentiation in lifestyles and characteristics between Thai and international tourists, those who stay in boutique hotels. The Concept of Service Quality Parasuman, Zeithaml and Berry (1985, 1988) define service quality as a perception resulting from attitudes formed by customer s long term, overall evaluations of performance, and as the degree and direction of discrepancy between the consumer s perceptions and expectations, or the extent to which a service meets or exceeds customer satisfaction. Douglas and Conner (2003) state that consumer perceptions are based on the actual service they have received, while consumer expectations are based on past experiences and information received. These statements represent the determinants or dimensions of service quality. There are five key dimensions (Berry and Parasuman, 1991), as follows: 1) Reliability - the ability to perform the promised service dependably and accurately. 2) Tangible - the appearance of physical facilities, equipment, personnel and communications materials. 3) Responsiveness - the willingness to help the consumers and to provide a prompt service. 4) Assurance - the knowledge and courtesy of employees and their ability to convey trust and confidence. 5) Empathy the provision of caring, individualized attention to consumers. The SERVQUAL instrument was first introduced by Parasuman, Zeithaml and Berry in They attempted to develop an instrument that would measure service quality across a range of service industries and to ascertain the level of service quality based on the five key dimensions (above). Researcher has reviewed the concepts and theoretical framework to explain the concept of boutique accommodation, in relation to hospitality market segmentation and the hospitality marketing mix, and linked to hotel management or proprietor characteristics. The literature review has also studied the VALS TM model as a tool that can be used to explain customer or

8 guest characteristics, attitudes and behaviors pattern, through the use of eight segments. Finally, researcher also discussed the relationship between the SERVQUAL model and guest satisfaction levels in terms of the relationship between the product and service, and the hospitality mix and segmentation. This will present the methodology and research framework, and will also explain a conceptual model based on the theoretical framework that guided the studies discussed as the conceptual model presented. Figure 1 Conceptual Model and Hypotheses Testing

9 The research questions of this study were; RQ 1: How does the Thai hotel industry develop the boutique hotel concept as a hotel segment, and what is the relationship between the boutique, chic, hip and lifestyle hotels in terms of hotel segmentation? RQ 2: What are the guests characteristics and behavior patterns, those affecting their perception and satisfaction with respect to the service and quality of the products and services provided by the boutique hotel concept? The specific hypotheses for this study are as follows; H 0, 1: There are significant differences between the boutique, chic, hip and lifestyle segments of the Thai hotel industry. H 0, 2: There are significant differences in management and ownership styles within the boutique accommodation concept. H 0, 3: There is a significant relationship between ownership style and the products and services offered by boutique accommodation. H 0, 4: There is a significant relationship between Thai and international tourists in terms of their lifestyles. H 0, 5: There is a significant relationship between guests satisfaction levels and their lifestyle. H 0, 6: There are differences in hotel guests characteristics and behavior patterns between the boutique hotel concepts H 0, 7: The target markets for the boutique accommodation concept reveal significant differences in terms of hotel guest characteristics and behavior patterns. H 0, 8: There are significant differences in terms of guest satisfaction levels with regard to the boutique accommodation concept. H 0, 9: There are significant differences in terms of services quality features valued by Thai and international tourists within the boutique accommodation concept H 0, 10: There are significant differences in terms of the purpose of travel and service quality features required from the boutique accommodation concept. Methodology The investigation was based on 50 hotels in Chiang Mai, which differentiate themselves by marketing their product using a boutique accommodation (hotel) concept based on uniqueness. The research and interviews collected information from hotel owners, hotel managers and heads

10 of department, in order to investigate their perception of the boutique hotel concept in terms of how they differentiate their products and services, how they perceive the characteristics and differentiations of their customers, and to investigate the effectiveness of their management and marketing strategies in terms of hotel competitiveness trends. A qualitative and quantitative research method was used to collect the information while carrying out the investigation. A primary survey was also used to collect the hotel sample size data, as selected by a purposive sampling method. This sample could be identified in relation to the following concepts: boutique, chic, hip and lifestyle. This survey was conducted by reviewing their websites, brochures and fact sheets (Tidti, 2009). Research Design, Population, Sampling and Data gathering Method Phase A: The research focused on the hotel management, heads of department and selected service staff working in the 50 sample properties that identify themselves as boutique, chic, hip or lifestyle hotels. The purposive sampling method was used to collect information from the sample properties which operate hotel businesses registered within an overall population of 299 hotels in Chiang Mai (Chiang Mai, National Statistics Office, 2007). Phase B: The research focused on Thai and international tourists who visited Chiang Mai and stayed overnight at boutique accommodation during the period of the survey. The total tourist population size was about 766, 354 tourists that year (Office of Tourism Development, 2008) and the primary sample were determined using the Stratified Random Sampling method and a secondary sample using the Simple Random or Accidental Random Sampling Method. The resulting sample of 400 used in the study was selected by a Stratified Random Sampling method and the sample size calculated using the Yamane Method (1973) and also calculated using the Krejcie & Morgan method (1970). Using both methods helped to produce a correlated number for the sample size. Thus, the sample size set was 400 respondents, and this was then used to calculate the sample size in each sub-group. This research thus used 400 respondents: 200 Thai tourists and 200 international tourists. Research Instrument Use of the self-administered questionnaire was divided in two phases, as follows; the questionnaire for Phase A developed key questions based on segmentation theory and the hospitality marketing mix, and consisted of three sections as detailed; the respondents demographics and personal data; the respondents perceptions and understanding of the boutique accommodation (hotel) concept, ownership styles, hotel management and marketing strategies

11 and the differentiation of products and services based on hospitality segmentations and the hospitality marketing mix- all related to customer satisfaction and the open-ended questions was designed to investigate other issues related to the boutique hotel concept and its management style. The questionnaire for Phase B contained key questions based on the VALS TM model and SERVQUAL instrument, and consisted of four sections, as detailed; The respondents demographic, the second section, using multiple choice 35 questions, covered the values, attitudes and lifestyles of the respondents, based on the VALS TM model, by describing the opinions of the respondents using the answer sets: Mostly disagree, Somewhat disagree, Somewhat agree and Mostly agree, The third section used the Likert Scale measurement 7-point scale, where 1 equaled Strongly Disagree and 7 equaled Strongly Agree, based on the SERVQUAL Model (Parasuman et al., 1985). This section contained 22 questions regarding the tourists perceptions of service quality, plus questions related to satisfaction levels, and were designed to measure the customers attitudes towards the products and services offered by the boutique accommodation, the management, service quality, and their general satisfaction levels with regard to the boutique accommodations and last sections, containing open-ended questions. Research Variables Independent Variables Ownership & Management style Tourists profiles Dependent Variables Characteristics of Boutique Hotel concept Products and Services Characteristic and behavior patterns Value, Attitude and lifestyles Perceptions and Satisfaction Guest s satisfaction Data Analysis Descriptive statistics were used to provide means and percentages of demographic characteristics and other variables in the study, both for the Phase A and Phase B questionnaires. In addition, inferential statistic techniques, including the analysis of Chi-square, variance (ANOVA) and correlations were used to test the relationship between the variables used for hypothesis testing. A correlation coefficient was employed to measure the strength of association.

12 Results Phase A: A total of 40 responses were returned and the response rate was thus 80% within a sample size of 50 (hotel owners/hotel management staff). For Phase B, a total of 411 surveys were administered, representing an 82.20% response rate out of the sample size of 500 (Thai and international tourists). The data was manually entered into SPSS 15.0 for Windows, for statistical analysis. And details were presented as follows; The Owner and Hotel Management Perspectives In relation to the demographic profiles of the owners and hotel management, the results reveal more females (59%) than males (41%), with the majority of the hotel owners or management staff in this survey (30%) being young adults between 30 and 35 years of age. The work experience of the owners or hotel management staff in this survey shows that the majority of the respondents (75%) had previous hotel work experience. The majority of respondents (36.7%) had less than 5 years hotel work experience. In terms of work position held, the results show that the majority of respondents (owners and hotel management staff) had work experience as a Head of Department (44.8%), followed by Hotel Managers (37.9 %) and Supervisors (27.6 %). Others indicated that they had had no previous direct work experience in the hotel business. The Hotel Management Profiles The majority of respondents (56.8%) had work experience in the hotel business of between 1 and 3 years, followed by 4 to 6 years (29.7%). An in terms of the position held, the majority of respondents (41.2%) were hotel owners/managers. The majority of hotels had been operating for between 3 and 6 years (47.4. The average number of hotel employees and hotel rooms was 22.3 people and rooms respectively. The respondents (52.8%) indicated an average length of stay of customers of between 3 and 4 nights, while 41.7% indicated a stay of between 1 and 2 nights. The average occupancy rates indicated in this survey were 32.79% for the low season and 67.89% for the high season. The majority of room types in the hotels are deluxe rooms (85%), followed by superior rooms (57.50%) and suites (37.50 %). The room rate survey showed that the average room rates were as follows: deluxe rooms 4, Baht (700 to 8,532 baht), superior rooms 3, Baht (1,100 to 7,410 baht), junior suites 7, Baht (3,000 to 16,000 baht), family suites 5, Baht (2,250 to 10,000 baht), deluxe suites

13 4, Baht (2,800 to 6,960 baht) and suites 11, Baht (3,000 to 25,000 baht). Other room types could not be identified using the standard terms. Hotel Management Perspectives The majority of hotels (33.37%) were independently owned, while almost one-quarter (23.44%) were company owned. The majority of company owned hotels were owned by Thai nationals (93.33%). The majority of both independently and company owned hotels (66.7%) were participating as members of the Chiang Mai Boutique Hotels group, whilst 14.81% were not. The hotel/accommodation concept/design survey showed that the majority of respondents (73%) were operating in the boutique style, while 16.2% were operating in the lifestyle segment. The key variable affecting hotel design was building style (89.7%), within which the presence of a cultural building stood at 53.8%, a contemporary building design at 33.3% and a historic building design at 17.9%. The second key variable affecting the hotel design was location (82%), within which having a city location was seen as most important at 33.3%, followed by a riverside location (17.9%) and a rural location (7.7%). The third key variable to impact the design was atmosphere (71.8%). The survey required that respondents rank the most important key variables for their hotel design, and as a result, the majority of respondents (64.1%) indicated that service quality was most important variable. Hotel management responses regarding the profile of the target customers and the age of the customers showed that the majority of target customers (62.2%) were Foreign Independent Travelers (FIT). In terms of the age of the target customers showed that the majority (65%) were aged between 35 and 44 years old. The hotel management staff provided similar products, facilities and services to their guests. The survey showed that the products and services most often provided to guests were WIFI and high-speed internet access (95%), followed by mini bar services (90%), a flat screen TV with cable or satellite access and a walk in shower room (both 80%). Provision of an in-room electric kettle with a variety of coffees and teas provided scored 72.5%. In terms of key influences on hotel concepts and designs, the key influences given were tourist demands (56.4%), followed by individual preferences (51%), and economic situation and competitive advantage factors (both 35.9%).

14 Tourists Profiles and Perspectives Part 1: Demographics The majority of Thai tourists (54.3%) were female, as were the majority of international tourists (52%). The ages of the Thai tourists were 33.3% between 25 and 29 years old. For the international tourists the majority (21.5%) were aged between 35 and 44 years of age. These results are representative of the total of the average ages of the tourists, with the majority (25.5%) aged between 25 and 29 years of age. The profile of Thai tourists by education level shows that the majority (63.5 %) held a college degree. For the international tourists the majority (44.7%) held a graduate degree. In total, the respondents education levels showed that 45.6% held a college degree, 36% held a graduate degree and 9.1% had attended 1 to 3 years at college. The occupational survey showed that the majority of Thai respondents (48.7%) were professionals and also the majority of international respondents (19%) were professionals. In total, the majority of respondents (32.4%) were professionals, followed by 16.1% who were self-employed and 12.5% who were managers or administrators in a company. The profile of the respondents by household income is divided into Thai and international respondents. The results show that the majority of Thai respondents (30.5%) had an average income of less than 30,000 Baht, followed by 26.3% with an average income of 30,001 to 50,000 Baht and 11.1% with an average income of 50,001 to 70,000 Baht. Total household income before taxes for the previous calendar year show that the majority of international tourists (14.5%) had an average income of between US$100,000 and US$199,999, followed by 13.5% for both those with an average income of US$30,000 to US$39,999 and US$40,000 to US$49,999, and that 13% had an average income of between US$50,000 and US$74,999. The profile of the Thai respondents in terms of purpose of travel shows that the majority of respondents (50%) were travelling for leisure purposes. For international respondents, the majority of respondents (64.5%) were traveling for leisure purposes. In total, the majority of respondents (58.8%) were travelling for leisure purposes, followed by 28.8% on family matters or VFR. According to the reasons for selecting the hotel, the majority of Thai respondents (54.5%) said that they chose the hotel due to its theme or concept, followed by 33.9% due to the convenient location and 20.1% due to the hotel s uniqueness. The majority of international respondents (28%) stated uniqueness, followed by 27.6% who chose the hotel s theme and concept and 25.4% due to the hotel s convenient location. In total, the total majority of

15 respondents (39.7%) selected their hotel due to its theme and concept, followed by 29.2% who chose it due to its convenient location and 24.5% who chose it due to its uniqueness. The country of origin survey of the respondents showed that the majority (53.5%) were international tourists, of whom the majority were from Europe (45.9%), followed by 46.5% who were Thai tourists. VALS Demographics by Mean Value (4 Scale) The majority of Thai tourists were Strivers (3.33), followed by Believers (3.36, 3.31), whilst the majority of international tourists were Experiencers (3.45), followed by Strivers (3.28) and Innovators (3.23) Service Quality Section 1: Expected Values Shown by an Excellent Hotel (7 scale) The majority of Thai tourists had higher expectations than the international tourists, for all items. And the majority of Thai tourists (a value of 6.23) valued empathy (caring, individual attention provided to guests), followed by responsiveness (6.25, 6.23), that is, the hotel s willingness to help hotel guests and provide a prompt service. Service Quality Section 3: Perceived Values (7 scale) The majority of international tourists (a value of 6.22) valued reliability (the hotel s ability to perform the promised service dependably and accurately), followed by tangible factors (6.16), including the appearance of the hotel s physical facilities; the equipment, personnel and communication materials at the hotel. Result of Hypotheses Tests Hypothesis 1: There are significant differences between the boutique, chic, hip andlifestyle segments of the Thai hotel industry. Hypothesis 1 used a test of independent variables (Chi-Square:χ 2 ), to statistically determine, the relationship between hotel concept (boutique, chic, hip and lifestyle) and hotel segmentation were detailed first ranked variables (χ 2 =12.461,Sig. =0.644), target customer (χ 2 =16.110, Sig. =0.585) and age of target (χ 2 =14.555, Sig. =0.692). The results show that the hotel concept revealed no relationship with hotel segmentation (at the Statistical Significances level of acceptances = *α 0.05). Thus, the Null Hypothesis is rejected. Hypothesis 2: There are significant differences in management and ownership styles within the boutique hotel concept.

16 According to the statistical testing present (χ 2 =0.666, Sig. =0.881). The results show that accommodation concepts have no relationship with the management and ownership styles of the hotel (at the Statistical Significances level of acceptances = *α 0.05). The Null Hypothesis is thus rejected. Hypothesis 3: There is a significant relationship between ownership style and the products and services offered by boutique accommodation. According to the statistical testing present χ 2 =.468, Sig. =0.926*, the results show that ownership style has no relationship with the products (facilities) and services offered (at the Statistical Significances level of acceptances = *α 0.05). The Null Hypothesis is rejected. Hypothesis 4: There is a significant relationship between Thai and international tourists in terms of their lifestyles. Hypothesis 4: A T-test was used to investigate two groups of variables; to compare the differences in lifestyle between Thai and international tourists. Also a test of independent variables was used (Chi-Square:χ 2 ), to statistically determine the relationship in terms of lifestyles between Thai and international tourists.the differences found in lifestyle groups between the Thai and international tourists, show a significance level of 0.01 in the Innovator, Striver, Achiever and Thinker groups. The T-test values found for these groups were 3.178, 2.451, and respectively. This shows that Thai tourists had higher values in each lifestyle group than the international tourists. These Thai tourists with the highest values were Strivers, followed by Thinkers. International tourists with the highest values were in the lifestyle group Strivers, followed by Survivors. The results also show that the relationship between the lifestyle group and the type of tourists shows a significant difference of The majority of Thai tourists (69.7%) were in the lifestyle group Believers, followed by Innovators (58.9%). Further to this, the majority of international tourists (76.0%) were in the lifestyle group Experiencers, followed by 72.7% in the Survivors group. Null Hypothesis is accepted. Hypothesis 5: There is a significant relationship between guests satisfaction levels and their lifestyle. According to the 22 attributes of service quality, the statistical testing present α 0.05, the results show that differences in lifestyle groupings have no significant link to differences in satisfaction levels. Null Hypothesis is rejected. Hypothesis 6: There are differences in hotel guests characteristics and behavior patterns between the boutique hotel concepts.

17 Hypothesis 6 used a variance analysis (One-Way ANOVA) to determine if there was a significant relationship between hotel guests characteristics and behavior patterns (lifestyles) and the hotel concept chosen. According to the 8 groups lifestyle, the statistical testing presentα 0.05, the results show that differences in the hotel concept had no impact on the hotel guests characteristics and behavior patterns (lifestyle). Null Hypothesis is rejected. Hypothesis 7: The target markets for the boutique accommodation concept reveal significant differences in terms of hotel guests characteristics and behavior patterns. Hypothesis 7 used a variance analysis (One-Way ANOVA) to determine if there was a significant relationship between hotel guests characteristics and behavior patterns (lifestyle), and the hotels target markets and if the variance analysis (One-Way ANOVA) represents differences in means (for at least one group), a multiple comparison test between groups using the LSD (Least Significant Difference) method can be used to test samples between groups that show differences in mean values. The results show that the lifestyle groups Achievers, Survivors, Thinkers and Makers have a Sig F value less than The differences in target markets reveal differences in terms of the values for the lifestyle group of Achievers, Survivors, Thinkers and Makers, with a statistically significant difference level of There were significant differences to a level of 0.05 between the target market (family group), with an average mean for Achievers higher than in for the leisure travel group. For the target market (business travel) there was a higher average mean for Survivors than for the leisure travel group. In addition, the lifestyle group (Believers) with a target market of leisure travel, revealed a lesser value than the family groups and business travelers. Also, the lifestyle group (Makers) with a target market of business travel revealed a higher value than the leisure travelers and family groups, to a statistically significant level. Null Hypothesis is accepted. Hypothesis 8: There are significant differences in terms of guests satisfaction towards boutique accommodation. Hypothesis 8 used a variance analysis (One-Way ANOVA) to determine if there were a significant difference guest satisfaction levels and the hotel concept and if a variance analysis (One-Way ANOVA) represents differences in the mean values (for at least one group), a multiple comparison test between groups using the LSD method can be used to test those samples

18 between groups that reveal differences in mean values. The results show that the satisfaction levels with the service attributes F1 (the hotel has modern equipment), F3 (personnel at the hotel are neat in appearance), and F4 (materials associated with the services [such as brochures or statements] are visually appealing) have a Sig F. value of less than This means that different hotel concepts also reveal different values in terms of the guest satisfaction levels, with a statistically significant difference value of The results show that the hotel concepts (boutique, hip and others) revealed an average satisfaction with f1 service attributes (the hotel has modern equipment) with a higher value than lifestyle, to a statistical significance of Furthermore, satisfaction with the f3 service attributes (the hotel is neat in appearance) for the boutique hotel concept revealed a higher level of satisfaction than for the lifestyle concept. Also, the level of satisfaction for f4 service attributes (materials associated with the services [such as brochures or statements] are visually appealing) was higher for the boutique hotel concept than the lifestyle concept. Null Hypothesis is accepted. Hypothesis 9: There are significant differences in terms of services quality features valued by Thai and international tourists within the boutique accommodation concept. Hypothesis 9 used a variables independence test (Chi-Square:χ 2 ) to statistically determine the differences between Thai and international tourists in terms of those service quality features valued within the boutique accommodation concept. The results show that service quality features have a significant relationship with the type of tourists, to a level of The majority of Thai tourists (60.2%) associated with feature 5: empathy (the caring, individualized attention the hotel provides to its guests), followed by 46.7% for feature 3: responsiveness (the hotel s willingness to help hotel guests and provide a prompt service). Also, the majority of international tourists (77.6%) associated with feature 2: reliability (the hotel s ability to perform the promised service dependably and accurately, followed by 54.9% for feature 1: tangible (the appearance of the hotels physical facilities: the equipment, personnel and communication materials of the hotel). Null Hypothesis is accepted. Hypothesis 10: There are significant differences in terms of the purpose of travel and the service quality features valued within the boutique accommodation concept. Hypothesis 10 used an independent variables test (Chi-Square:χ 2 )

19 to statistically determine the relationship between the purpose of travel and the service quality features valued. The result shows the five service quality features that revealed a relationship with purpose of travel (or Target MK) producing a statistical significance of The majority of business travelers (17.3%) stated feature 5: empathy (the caring, individualized attention the hotel provides its guests), followed by 14.5% for feature 3: responsiveness (the hotel s willingness to help hotel guests and provide a prompt service). Also, the majority of leisure travelers (77.8%) rated feature 4: assurance (the knowledge and courtesy of the hotel personnel and their ability to convey trust and confidence), followed by 70.7% for feature 2: reliability (the hotel s ability to perform the promised service dependably and accurately). The majority of family travelers (38.3%) rated feature 5: empathy (the caring, individualized attention the hotel provides its guests), followed by 36% for feature 1: tangible (the appearance of the hotels physical facilities; the equipment, personnel and communication materials of the hotel). Null Hypothesis is accepted. Summary and Discussions The goal of this research was to adapt lifestyle segmentation theories in terms of the characteristics and behavior patterns provided by the VALS TM model, and to study those tourist characteristics and behavior patterns that influenced their decision to stay in boutique accommodation, further taking into account the influence of hotel ownership and management styles. The results of this research study show that boutique hotels are generally of a small size, and deliver a theme and concept in terms of their design, as well as unique products and services. Boutique hotel entrepreneurs and hotel management teams were shown to be independent (of large hotel chains) but were members of a boutique hotel group to aid marketing activities they tended to be young adults with previous hotel work experience. The study also found differences between the Thai and international tourists in terms of their lifestyles and preferences with regard to service quality. Significant differences in characteristics and behavior patterns in this regard were identified using the VALS TM model, which suggests that the majority of Thai tourist were Strivers (whose primary motivation is Achievement), whereas the majority of international tourists were Innovators (high resource levels and highly innovative). The results also reveal differences in characteristics between the eastern and western cultures, as the second largest group of Thai tourists were in the Thinkers group (whose primary motivation is Ideals), whereas the second largest group of international tourists was in the lifestyle group Survivors (low resources and low levels of innovation).

20 This research provides a tool for hotel entrepreneurs and managers to explore the lifestyle preferences of guests in their target market, and to manage their products and services in order to achieve high guest satisfaction levels based on service quality. Since the research tool used in this research was developed by Vals TM model that applied from the US consumer market. Therefore, the hotel entrepreneurs should apply this tool for an accurate measurement only for guests identified as having a similar context. Thus, hotel managers should also apply other tools when planning marketing strategies for other customer nationalities, in order to accurately identify their lifestyles and preferences. However, boutique hotels are expanding rapidly, so factors in addition to uniqueness and service quality, and the tourist season in question, might influence consumer decision making on the choice of accommodation in the future. Limitations of the Study The data used in this investigation into boutique accommodation was collected from hotel management staff or owners, and from tourists who arrived at Chiang Mai and stayed overnight at boutique accommodation between December 2009 and March The data was collected across a range of boutique hotels for all of the Chic, Hip and Lifestyle concepts, which allowed me to cover various types of hotel, as well as the tourists staying in them during that time. The data represented only a single point in time and presented information for boutique accommodation in Chiang Mai. This research only identified differences between two broad groups of tourists (Thai and international tourists) in terms of what lifestyle characteristics they possessed and also what they felt was important in terms of their stay in the boutique hotels. The VALS TM model, which was first applied in the US.consumer market, might not have been appropriate for the different national groups that were a part of this study. And another limitation is that the applications of the VALS TM model, which applies to hotel guests in a western cultural context, might not be suitable for hotel guests who represent an Oriental cultural context. In addition, the SERVQUAL model might also be applied separately for Thai and international tourists, due to differences in lifestyle. Recommendations for Future Research The question is whether the attitude towards staying in hotels varies significantly between guests with different economic resources and from different backgrounds. Any future research examining lifestyle characteristics might consider either conducting a parallel study in the off-peak season as a

21 comparison, or alternatively conducting another investigation using a longitudinal data collection method, with the data being collected over different periods of time. This study attempted to control these issues by using a comparison of the sample data against the population data as a whole. However, it is likely that the model derived from the data collected in this research may not be wholly appropriate when exploring lifestyle characteristics and relationships across other nationalities. Each group in this study was generally representative of the Eastern and Western cultural context; however, in order to produce an appropriate and effective marketing strategy for tourists from other nationalities, future research may need to explore the determinants of boutique accommodation and search for comparative studies among the same group of people on a repeat visit, staying in similar accommodation and at a similar time to their first visit. What are the guests expectations in relation to the accommodation style and the products and services provided the second time around, when compared to the first? Future research might also need to explore the determinants of Western and Eastern cultural contexts, in order to develop a model appropriate for the management of boutique accommodation that caters to both sets of tourists. Finally, the differences found between international and Thai guests in terms of the lifestyle segmentation created by the VALS TM model in this study, highlights the need to explore other areas of hospitality segmentation. References Anhar, L. (2001). The definition of boutique hotels. Retrieved December 13, 2008, from, Berry, L. L. & Parasuman, A. (1991). Marketing services: Competing through quality. New York: The Free press. Bowie, D., & Buttle, F. (2004). Hospitality marketing: An introduction. Amsterdam, Italy: Elsevier Butterworth-Heinemann. Chiang Mai, National Statistics Office. (2007) NUMBER OF HOTELS AND VISITOR: Retrieved March 2009 from /nso/project/table/files/chmai/o-src- 16/2551/000/chmai-O-src-16_2551_000_ xls Douglas, L., & Conner, R. (2003). Attitudes to service quality-the expectation gap. Nutrition & Food Service Science, 33(4), Ernest, R., & Young G. L. (2008). Following the lifestyle trend: Global Hospitality Insights: A Publication for the Hospitality Industry. New York: EYGM. Ford, Robert C. and Heaton, Cherrill P. (2000). Managing the Guest Experience in Hospitality. Canada: Delmar Thomson Learning.