Advertising medium effect on tourist satisfaction

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Advertising medium effect on tourist satisfaction Chiang-Ming Chen 1, Lin Lin 2, Hsien-Hung Chiu ⇑ National Chi Nan University, Taiwan

Introduction Due to the removal of certain political restrictions on Chinese tourists and the active promotion of tourism from both the public and private sectors, the tourism industry in Taiwan has experienced a two-digit annual growth rate in terms of the number of tourists in the past few years. This rapid change increases the competiveness of tourism industry, triggers the demands for new products/tour packages, and reshapes the scope and scale of related businesses such as hotels and transportation. It also leads to a recent adjustment to social recognition, and attracts academic interests on the tourists’ satisfaction as it has a significant impact on tourists’ destination choice, consumption decision, and revisit intention (Kozak & Rimmington, 2000). All of these are keys to the prosperity of tourism industry here (Gursoy, McCleary, & Lepsito, 2003). Tourist satisfaction may be affected by tour prices, tour quality, and the interaction between them (Dapkevicˇius & Melnikas, 2011). It can be also viewed as a post host evaluation of tourists’ experience based on a specific subset of product attributes including the quality of tours, the service of travel agencies, the infrastructure of destinations, and the interaction experiences between tour products and these product providers (Anderson, 1986; Oliver, 1980; Ostrom & Iacobucci, 1995). It is widely accepted in the marketing literature that advertising can greatly influence consumer’s perceived quality (Kirmani, 1990, 1997; Kirmani & Wright, 1989; Moorthy & Hawkins, 2005; Moorthy & Zhao, 2000), create brand royalty and thus decrease price sensitivity (Bagwell, 2007), which, in turn, improves customer satisfaction (Anderson, 1986). As a result, Harrison, Juric, and Cornwell (2001) argue that there is a strong link between the level of customer satisfaction and the choice of advertising media. The selection of advertising media for tour products is strategic because not all advertising media have the same influence on potential customers. Therefore, it is always a process of choosing the most cost-effective medium for advertising and promotion campaigns (Clow & Baack, 2007). As to the efficiency of various media, Kaplan (2003) reports that 63% of respondents are more attracted by word-of-mouth messages, followed by in-store messages (32%). People seem to be less impressed by online and direct mail (DM) advertising (10% and 7%). The primary focus of this study is to investigate an exploratory question about the main factors (including price, media, and other demographic factors) that affect tourist satisfaction, and further examine the interaction between the price effect on satisfaction and various advertising media such as television, radio, internet, and newspapers. Previous studies in this line of research have yielded inconclusive results about whether the choice of advertising media strengthens or moderates the link between price and tourist satisfaction; for example, see Chen, Gupta, and Rom (1994) and Campo and Yagüe (2008a, 2008b). In contrast to empirical findings, theoretically advertising and pricing strategies enhance customers’ recognition of service quality (Chiu & Chen, 2014), and consequently influence the cognitive component of tourist satisfaction. From this perspective, advertising is likely to intensify the price effect on satisfaction. With little knowledge about the role of advertising media in the relationship between price and consumers’ satisfaction with tour products, this study may fill this gap in the literature.

⇑ Corresponding author. Tel.: +886 49 2910960x4619. E-mail addresses: [email protected] (C.-M. Chen), [email protected] (L. Lin), [email protected] (H.-H. Chiu) 1 2

Tel.: +886 49 2910960x4629. Tel.: +886 49 22910960x4965.

Research Notes and Reports / Annals of Tourism Research 57 (2016) 234–278

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Data and modeling The data used in this study are based on the ‘‘2009 Annual Survey Report on Visitor Expenditure and Trends”, published by the Taiwan Tourism Bureau. This dataset includes the interviews of 5784 inbound tourists. Removing those answered by business travelers, we include 3458 leisure travelers in our sample. Among these travelers surveyed, 1993 of them have purchased tour packages. The interviewees are requested to rate the influence of various information sources on their travel decisions. The information sources investigated in this survey include the following: (1) newspapers, magazines, books; (2) advertisement on public transportation; (3) television and radio; (4) internet; (5) international travel exhibitions; (6) outdoor advertisement or billboards; (7) tourism leaflets of travel agencies; (8) word-of-mouth recommendations from friends or relatives. The interviewees’ responses are measured on the scale of 0–5, where a higher score represents a stronger influence, and zero score indicates that the source was never seen. Table 1 lists the definitions of all variables used in this study, and Table 2 reports their descriptive statistics. In Table 2, the mean of the variable Satisfaction is 0.9353 for inbound tourists without purchasing package tours, whereas the corresponding sample mean for inbound tourists participating package tours is 0.8941. This indicates that inbound tourists that purchase package tours tend to be less satisfied. Using only the portion of leisure travellers that purchase package tours, we formulate a probit model with sample selection described as follows:

TOUR ¼ b01 þ b11 X 1 þ l1 ;

ð1Þ

Table 1 Definitions of variables. Variable

Definition

Price Satisfaction Tour News

Tour package price (unit: U.S. dollar) Satisfied with travel in Taiwan (1 = yes; 0 = no) Whether to buy tour packages (1 = yes; 0 = no) How much would inbound visitors rate the influence of the information from newspapers/magazines on their decision to visit Taiwan? (5 = very strong; 4 = strong; 3 = moderate; 2 = slight; 1 = very slight; 0 = never seen) How much would inbound visitors rate the influence of the information from advertisement on public transportation on their decision to visit Taiwan? (5 = very strong; 4 = strong; 3 = moderate; 2 = slight; 1 = very slight; 0 = never seen) How much would inbound visitors rate the influence of the information from TV/radio on their decision to visit Taiwan? (5 = very strong; 4 = strong; 3 = moderate; 2 = slight; 1 = very slight; 0 = never seen) How much would inbound visitors rate the influence of the information from internet on their decision to visit Taiwan? (5 = very strong; 4 = strong; 3 = moderate; 2 = slight; 1 = very slight; 0 = never seen) How much would inbound visitors rate the influence of the information from international travel exhibitions on their decision to visit Taiwan? (5 = very strong; 4 = strong; 3 = moderate; 2 = slight; 1 = very slight; 0 = never seen) How much would inbound visitors rate the influence of the information from outdoor advertisement on their decision to visit Taiwan? (5 = very strong; 4 = strong; 3 = moderate; 2 = slight; 1 = very slight; 0 = never seen) How much would inbound visitors rate the influence of the information from tourism leaflets of travel agencies on their decision to visit Taiwan? (5 = very strong; 4 = strong; 3 = moderate; 2 = slight; 1 = very slight; 0 = never seen) How much would inbound visitors rate the influence of the information from word-of-mouth recommendations on their decision to visit Taiwan? (5 = very strong; 4 = strong; 3 = moderate; 2 = slight; 1 = very slight; 0 = never seen) Age Yearly income (unit: U.S. dollar) At least a college degree (1 = yes; 0 = no) 1 = male; 0 = female Individuals who are not in the labor force (1 = yes, 0 = no) Whether first visit Taiwan (1 = yes, 0 = no)

Trans

TV INT EXH

OUT

AGY

Mouth

Age Income College Male Non-labor First visit

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Table 2 Descriptive statistics. Full sample

Price Satisfaction News Trans TV INT EXH OUT AGY Mouth Age Income College Male Non-labor First visit n

TOUR = 0

TOUR = 1

Mean

S.E.

Mean

S.E.

Mean

S.E.

– 0.9115 1.9392 0.7690 2.7155 1.8384 0.5420 0.6608 1.9829 1.5200 41.6729 21016.3120 0.6880 0.4320 0.2973 0.7464 3458

– 0.2840 2.0177 1.5175 2.0570 2.1385 1.3303 1.3949 2.0927 2.0305 13.7071 23652.3681 0.4634 0.4954 0.4571 0.4351

– 0.9352 2.3485 1.0946 3.0710 2.5086 0.7671 0.8617 1.2721 2.0227 36.9106 25457.1863 0.7365 0.4546 0.2608 0.5618 1465

– 0.2463 2.0569 1.7300 2.0362 2.1763 1.5342 1.5503 1.8860 2.2145 12.9427 25831.1357 0.4407 0.4981 0.4392 0.4963

986.5246 0.8941 1.6062 0.5041 2.4264 1.2931 0.3590 0.4974 2.5611 1.1110 45.1736 17751.9463 0.6523 0.4155 0.3241 0.8821 1993

1768.6307 0.3077 1.9227 1.2595 2.0291 1.9444 1.1052 1.2310 2.0750 1.7658 13.1912 21338.0859 0.4764 0.4929 0.4682 0.3226

where TOUR is a binary dependent variable used to capture a tourists’ decision about participating in a tour package. If a tourist decides to purchase a tour package (the latent variable TOUR > 0), we assign a value of 1 for the dependent variable TOUR, and 0 otherwise (i.e., the latent variable TOUR 6 0). The reason why we include only the tourists who purchase package tours is that it allows us to better estimate the price effect of tour packages on tourist satisfaction. The observations with a high value of 1 are sampled for a conditional tourist satisfaction model, as specified in Eq. (2):

Satisfaction ¼ b02 þ b21 X 2 þ l2 if TOUR ¼ 1 

ð2Þ

Let q denote the covariance of the error terms in Eqs. (1) and (2). To examine the fitness of the probit model with sample selection, we test the statistical significance of q by adopting the likelihood-ratio test (LR test). Empirical results Table 3 reports the empirical results of this study. Before we proceed to the discussion of the empirical results, we first conduct the likelihood ratio test for the null hypothesis of q = 0. This test yields a v2 -statistic of 3.96, indicating that the probit model with sample selection employed in this study is an appropriate empirical specification (see the bottom of Table 3). The first column in Table 3 presents the estimation results for Eq. (1). The coefficients of the variables Age and First visit are both positive and statistically significant at the 1% level, suggesting that the elderly and first-time visitors are more likely to purchase tour packages designed by travel agencies. This is probably because the elderly and the first-time visitors tend to be more reliant on travel agencies for arranging their travelling logistics. The coefficients of the variable Income and Male are significantly negative, indicating that tourists with higher income and male tourists are less likely to purchase tour packages. The second column in Table 3 presents the estimation results for Eq. (2). The coefficients of the variable Internet and Age are positive and statistically significant. This indicates that the elderly tend to be more satisfied with their tours, and internet advertising enhances tourist satisfaction. The coefficient of the variable Price is insignificant, which is consistent with the findings in Campo and Yagüe (2008a). However, the coefficient of the interaction term, Price times TV, is significantly positive, suggesting that the link between tour price and tourist satisfaction is strengthened when tour information is broadcasted on TV or radio. As argued in Mlozi and Pesämaa (2013), tourists’ expectations and motivation at the stage of planning may have a significant impact on the level of satisfaction.

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Research Notes and Reports / Annals of Tourism Research 57 (2016) 234–278 Table 3 Empirical results from the probit model with sample selection. Variable

Tour package

Satisfaction

Coefficient

t statistics

Coefficient

t statistics

Price

–

–

3.87E06

0.02

Advertising media News Trans TV INT EXH OUT AGY Mouth Price * NEWs Price * Trans Price * TV Price * INT Price * EXH Price * OUT Price * AGY Price * Mouth

– – – – – – – – – – – – – – – –

– – – – – – – – – – – – – – – –

0.0059 0.0005 0.0002 0.1243 0.0620 0.0050 0.0146 0.0051 9.56E06 7.43E05 8.73E05 8.10E05 2.44E05 3.74E05 3.17E05 2.18E05

0.15 0.01 0.01 3.07*** 0.66 0.08 0.45 0.13 0.17 0.79 2.00** 1.41 0.23 0.48 0.83 0.47

Demographic factors Age Income College Male Non-labor First visit Constant LR test (p value)

0.0303 9.50E06 0.0870 0.1222 0.2787 0.9723 1.5846 3.96 (0.0467)**

15.20*** 7.47*** 1.52 2.28*** 4.18*** 16.39*** 14.64***

0.0100 1.31E06 0.0131 0.1216 – – 0.1370

2.17** 0.49 0.14 1.26 – – 0.40

Note:

***

Significance at the 1% level;

**

Significance at the 5% level.

Because television is a typical one-to-many advertising medium, it ensures that travelling messages are received by most relevant audiences and help tourists form their expectations more reasonably. By contrast, internet advertising improves tourist satisfaction, whereas it does not significantly strengthen this price effect on tourist satisfaction. Conclusion Despite the existence of several related conceptual models in the tourism and wider consumer marketing literature, the impact of various advertising media on tourist satisfaction and their role in the link between pricing strategies and tourist satisfaction remain unclear. This study proposes a probit model with sample selection to investigate the aforementioned questions using the data from the ‘‘2009 Annual Survey Report on Visitor Expenditure and Trends” in Taiwan. We argue that internet advertising has a significant impact on tourist satisfaction, and advertising on TV/radio significantly strengthens the link between tour price and tourist satisfaction. These results suggest that the pricing decisions on tour products and the selection of advertising medium need to be decided simultaneously. Additionally, because internet advertising has a significant impact on enhancing tourist satisfaction, this study provides empirical evidence to justify the promotion of the ‘‘Doubling Tourist Arrival Plan”, implemented by Taiwan Tourism Bureau as of the year of 2006, which aims to build an e-tourism infrastructure to attract more international tourists. References Anderson, E. W. (1986). Customer satisfaction and price tolerance. Marketing Letter, 7(3), 265–274. Bagwell, K. (2007). The economic analysis of advertising, Handbook of industrial organization (Vol. 3, pp. 1701–1844).

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Campo, S., & Yagüe, M. J. (2008a). Effect of price on tourist satisfaction. Tourism Economics, 14(3), 657–661. Campo, S., & Yagüe, M. J. (2008b). Exploring non-linear effects of determinants on tourists’ satisfaction. International Journal of Culture, Tourism and Hospitality Research, 3(2), 127–138. Chen, I. J., Gupta, A., & Rom, W. (1994). A study of price and quality in service operations. International Journal of Service Industry Management, 5(2), 23–33. Chiu, H. H., & Chen, C. M. (2014). Advertising, price and hotel service quality: A signalling perspectives. Tourism Economics, 20(5), 1013–1025. Clow, K. E., & Baack, D. (2007). Integrated advertising, promotion and marketing communications (3rd ed.). Pearson Education. Dapkevicˇius, A., & Melnikas, B. (2011). Influence of price and quality to customer satisfaction: Neuromarketing approach. Science—Future of Lithuania, 1(3), 17–20. Gursoy, D., McCleary, K. W., & Lepsito, L. R. (2003). Segmenting dissatisfied restaurant customers based on their complaining response styles. Journal of Food Service Business Research, 6(1), 25–44. Harrison, G., Juric, B., & Cornwell, T. B. (2001). The relationship of advertising model attractiveness and body satisfaction to intention to purchase an exercise product. Asia Pacific Advances in Consumer Research, 4, 217–222. Kaplan, D. (2003). Study: Masses still turned in to mass media. Adweek, 44(42), p12. Kirmani, A. (1990). The effect of perceived advertising costs on brand perceptions. Journal of Consumer Research, 160–171. Kirmani, A. (1997). Advertising repetition as a signal of quality: If it’s advertised so much, something must be wrong. Journal of Advertising, 77–86. Kirmani, A., & Wright, P. (1989). Money talks: Perceived advertising expense and expected product quality. Journal of Consumer Research, 344–353. Kozak, M., & Rimmington, M. (2000). Tourist satisfaction with Mallorca, Spain, as an off-season holiday destination. Journal of Travel Research, 38(1), 260–269. Mlozi, S., & Pesämaa, O. (2013). Adventure tourist destination choice in Tanzania. Current Issues in Tourism, 16(1), 63–95. Moorthy, S., & Hawkins, S. A. (2005). Advertising repetition and quality perception. Journal of Business Research, 58, 354–360. Moorthy, S., & Zhao, H. (2000). Advertising spending and perceived quality. Marketing Letters, 11, 221–233. Oliver, R. L. (1980). A cognitive model of the antecedents and consequences of satisfaction decisions. Journal of Marketing Research, 17, 460–469. Ostrom, A., & Iacobucci, D. (1995). Consumer trade-offs and evaluation of services. Journal of Marketing, 59(1), 17–28. Received 2 December 2014; Revised 15 November 2015; Accepted 23 November 2015

Ó 2015 Elsevier Ltd. All rights reserved. Available online 12 December 2015 http://dx.doi.org/10.1016/j.annals.2015.11.016

Youth hostel parents in Germany Gabriella Nagy University of Otago, Dunedin, New Zealand

Introduction Youth hostels play a significant role in the tourist accommodation industry today. Hostelling International, the youth hostels’ parenting organisation, is the sixth largest provider of travel accommodation with more than 4000 youth hostels in 90 countries around the world (‘‘About Hostelling International”, 2015). Despite their importance, popularity, and the dramatic ways they have changed since they were first established, studies on youth hostels have been largely absent from tourism literature. The first youth hostels, established in Germany in the 1910s, were distinctly different in their purpose and setup from what they are today. They offered very simple, inexpensive accommodation for school-aged children wanting to experience the countryside (Heath, 1962). They had a common room that also functioned as a kitchen, very basic sanitary facilities, and two gender-segregated dormitories. Regardless of their frugality, they all had a very intimate atmosphere. The hostel guests formed one big community, shared the chores, and gathered for the evening meal and entertainment (Schirrmann, 1940). While carrying out a larger longitudinal study on the evolution of youth hostel facilities, I discovered that in keeping up this family-like atmosphere and making the guests’ stay pleasant the role of