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Outbound tourists’ selection criteria for choosing all-inclusive package tours
ARTICLE IN PRESS
Tourism Management 25 (2004) 581–592
Outbound tourists’ selection criteria for choosing all-inclusive package tours Chak-keung Simon Wonga,*, Wai-Yan Yan Kwongb a
School of Hotel & Tourism Management, GH 807, 8 Floor, H core, Then Hong Kong Polytechnic University, Hong Kong b Kuoni Travel Limited, 13/Floor, New T&T Building, Harbour City, Gateway, Hong Kong Received 15 November 2002; accepted 27 June 2003
Abstract This study was designed to identify important selection factors for all-inclusive package tours as perceived by outbound tourists—residents normally in Hong Kong. A total of 30 selection criteria were identified in this study, with the safety of the tour being viewed as the most important item for package tours selection, followed by the possibility of departing successfully and the service quality offered by the travel agency. By using factor analysis, eight dimensions for package tours selection were derived, namely, tour arrangement and service quality, attractions, hotels and airlines, TV promotions and customer care, routing, personal interests, word-of-mouth, and time. Results of independent sample t-test and one-way ANOVA revealed that travel-related behaviors were significantly related to the choice of all-inclusive package tours. Recommendations for travel agencies, included safety and ‘guarantees’ of departure, training for escorts and tour-guides, and customer care services, will, it is argued, enhance the attractiveness of package tours and their competitiveness. r 2003 Elsevier Ltd. All rights reserved. Keywords: Outbound tourists; All-inclusive packages tours; Hong Kong; Selection criteria
1. Introduction All-inclusive package tours are the most popular traveling mode for Hong Kong residents and have become a part of the local life style (Luk, 1993; Mok & Armstrong, 1995). Christmas, Lunar New Year and summer holidays are the reported peak times of outbound travel for Hong Kong residents. Reports published by the Hong Kong Tourism Board and the Hong Kong Tourist Association (HKTB, 2001; HKTA, 2000) showed that 5.9 million Hong Kong residents departed for oversea destinations in 2000, as compared with 3.4 million in 1995 and 2.4 million in 1990. It was also found that 87% of Hong Kong outbound travelers are adopting package tours as their prime mode of traveling (Ap & Mok, 1996). With the popularity of package tours, potential profits accrue for travel agencies. To gain these profits, travel agencies need to carefully design and promote package tours. *Corresponding author. E-mail addresses: [email protected] (C.k.S. Wong), [email protected] (W.Y. Kwong). 0261-5177/$ - see front matter r 2003 Elsevier Ltd. All rights reserved. doi:10.1016/j.tourman.2003.06.002
Fundamentally, there are two types of package tours: a basic package tour and an all-inclusive package tour. The classification of the types of package tours depends on the degree of prearranged travel services (Yamamoto & Gill, 1999). A basic package tour typically only includes transportation and accommodation (Mok & Armstrong, 1995). An all-inclusive package tour is defined as a trip planned and paid for a single price in advance, which covers commercial transportation and accommodation, meals and sightseeing, and sometimes with an escort or guide (Sheldon & Mak, 1987; Morrison, 1989). It is believed that the selection criteria for all-inclusive package tours are different from that for basic package tours because of the differences in composition. As this report only focuses on the selection criteria for all-inclusive package tours, basic package tours are excluded from the study. The term ‘‘package tours’’ in this paper will therefore refer solely to allinclusive package tours. According to the travel industry council (TIC, 2001), there are approximately 1200 travel agencies in Hong Kong. The market is highly competitive. During the first 8 months in 1996, 9 out of 84 travel agencies ceased
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business (Ng, 1996). Nevertheless, all the package tours presented to the market are very similar. Itineraries offered by travel agencies possess high degrees of similarity with reference to entertainment and food. Besides, travel agencies are not only competing with other travel agencies in the market, but also their products are competing with products in the same product line or for the same destination. Undoubtedly, how people select their tours is an important issue for travel agencies. Economic theory presumes that consumers have special preferences consistent with their choice among alternatives. Economists also assume that consumers are interested in value maximization by making choices best suited to their goals, budget constraints and earning power (Roberston, Zielinski, & Ward, 1984). Thus, it is proposed that people would have a set of criteria for the selection of tours. However, many travel agencies believe the market simply accepts whatever they supply. This may reduce operational costs as people have to take the product because no alternative exists as most all-inclusive tour packages are very similar in Hong Kong but it might also mean that other opportunities for sales were being missed. Effective tourism marketing strategies and development plans require marketers to not only understand what people do on vacation, but also how they make their travel decisions (Fodness, 1992; Josiam & Hobson, 1995; Lang, O’Leary, & Morrison, 1997). In addition, satisfied customers are likely to return and make positive word-of-mouth recommendations about the company (Duke & Persia, 1996). Berry (1995) suggested that the cost of retaining current customers is much lower than the cost of acquiring new customers in the service industry. By understanding the selection criteria by which customers select their package tours, travel agencies could retain existing customers and save the higher cost of acquiring new customers. Thus, the purposes of this study are to identify selection criteria that are frequently used by Hong Kong residents to select package tours.
1.1. Study objectives The specific objectives of this study are: 1. To identify the selection criteria that Hong Kong residents use to select outbound package tours. 2. To investigate any underlying dimensions of the identified criteria. 3. To discover any significant differences among travel behavioral groups within the underlying dimensions. 4. To make suggestions to travel agencies about tailormaking package tours for outbound tourists.
2. Literature review 2.1. Reasons for package tours Touche! Ross (1975) stated that overall convenience and tour economies are the most frequently cited reasons for travelers purchasing a package tour. Travelers normally expect package tours to be the best method of seeing as much as possible combined with comfort, scenery and experienced tour guides (Duke & Persia, 1993). Enoch (1996) indicated that a package tour is a rational and effective way for tourists to visit the largest number of sites on a trip in a given period, to travel in a relatively safe way to faraway countries with strange cultures, to avoid unreliable transportation and doubtful standards of hygiene, while being usually less expensive than taking an individual trip to the same destination. With convenience in planning and departure dates, economic pricing, friends’ recommendations, and the desire for specialized activities and experience, tourists can literally sit back and enjoy their trips by taking package tours (Cohen, 1972; Middleton, 1991; Hsieh, O’Leary, & Morrison, 1992, 1994; Liberson, 1994). Personal safety is another major reason for taking package tours. Tourists who participate in package tours can take advantages of having a feeling of safety, and the ease of getting to know each other (Quiroga, 1990). Mok and Armstrong (1995), Wong and Lau (2001) claimed Hong Kong tourists like to travel in groups because this creates feeling of security and familiarity, and serves as a means to reduce perceived risk. 2.2. Chinese cultural values and Hong Kong tourists Previous studies clearly report that people from different cultures have different preferences, expectations, and so travel consumption patterns (Reimer, 1990; Mok & DeFranco, 1999). The population of Hong Kong is more than 6 million of which 98% is ethnic Chinese (Hsieh et al., 1992). Despite the fact that Chinese cultural values in Hong Kong are actually westernized, some traditional cultural values are still firmly rooted in the mind of Hong Kong Chinese, and have influenced them in the selection of package tours (Bond & Hofstede, 1998). Deeply affected by Chinese cultural values, the Chinese are group oriented (Yau, 1988; Mok & DeFranco, 1999). Compared with Western tourists, Chinese tourists are more willing to travel in groups, and therefore take more all-inclusive package tours (Mok & Armstrong, 1995; Qu & Li, 1997; Wong & Lau, 2001). Plog (1974) classified Hong Kong travelers as near psychocentrics, who prefer complete tour packages with a heavy scheduling of arranged activities, comfort
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seeking, a familiar atmosphere and undertaking a low level of physical activities. When they join a package tour, they strongly emphasize courtesy, prudence, trustworthiness and contentedness (Wong & Lau, 2001). Kaynak and Kucukemiroglu (1993), and Pacific Asia Travel Association (1995) indicated that Mainland China has become the most popular travel destination for Hong Kong residents mainly because of the similar cultural background allowing them to find suitable attractions and activities in which to engage. Chinese consumers also tend to pursue top brand goods (Yau, 1998; Mok & DeFranco, 1999). A study by Ap and Mok (1996) found that prestige is an important motive for Hong Kong residents traveling abroad. Patronizing five-star international hotels and visiting Disneyland are viewed as status and prestige boosting activities by Hong Kong people (Mok & DeFranco, 1999). They also tend to have great brand loyalty. A high proportion of them is likely to repeat travel to the same vacation destination (Kaynak & Kucukemiroglu, 1993). In addition, the Chinese rely significantly on word-ofmouth communication, and are easily affected by opinion leaders (Yau, 1988). Family and friends’ recommendations have been viewed as a major consideration for Hong Kong travelers selecting a vacation destination and travel agency, especially for first-time travelers (Kaynak & Kucukemiroglu, 1993; Heung & Chu, 2000). 2.3. Travel product preferences Goodrich (1977) identified scenic beauty, pleasant attitudes of local people, suitable accommodation, rest and relaxation as the top four benefits that tourists seek from their journey. Stevens (1992) pointed out that beautiful scenery, quality of accommodation and different cultures are important at the initial stage of tourists vacation destination selection. A survey conducted by Holiday Which (2001) showed that accommodation, convenience of travel arrangements, value for money, brochure description and services of a representative are the five important considerations for consumers choosing their tour operators. Cai, Boger, and O’Leary (1999) indicated that shopping locations, historical sites, places of worship, museums, theme parks, and river cruises are the most popular places for Chinese outbound travelers. Facilities and safety are the most important factors for Taiwanese in selection of their travel destinations, followed by attractions, practical accessibility, quality and symbolic accessibility (Lai & Graefe, 2000). Mok and Armstrong (1995) concluded that Hong Kong people perceive safety as the most important attribute when choosing their travel destinations, followed by scenic beauty, price of the trip, and the service quality of hotels and restaurants. Recreational and sport facilities, and destination distance are less important considerations
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for them. It is also found that Hong Kong tourists place high values on novelty and authenticity of attractions, visiting historical places, sampling local food, participating in sport activities, and experiencing other environments and cultures during their trips (Hsieh et al., 1992; Wong & Lau, 2001). 2.4. Travel-related behaviors and package tours In addition to travel product preferences, travelrelated behaviors also play an important role in the package tours selection. Quiroga (1990) stated that the necessities and interests of people who travel alone are very different from those who travel with relatives or friends. In fact, most package travelers are accompanied by their spouses, family members or friends. It is suggested that this is probably because package tours permit them to avoid family clashes and compatibility problems (Smith, 1979; Crompton, 1979; Pearce, 1982). Besides, people who are traveling with family members tend to place more emphasis on facilities and safety, and symbolic accessibility factors than those who are traveling alone (Lai & Graefe, 2000). It is also suggested that people are more willing to take a package tour for their first-time international pleasure travel, and normally place a higher value on word-of-mouth communication than more experienced repeat travelers (Sheldon & Mak, 1987; Enoch, 1996; Andereck & Caldwell, 1993; Lai & Graefe, 2000). Compared with multiple-time travelers, Hong Kong first-time travelers display greater aversion to risk. They prefer geographically nearer countries and are usually highly dependent on advice from friends and travel agencies (Kaynak & Kucukemiroglu, 1993).
3. The study 3.1. Development of the instrument A survey questionnaire, which comprised a list of package tours selection criteria, was used as an instrument for data collection of this study. To ensure the selection criteria in the questionnaire were relevant to Hong Kong residents, a qualitative and dichotomous pilot test were separately conducted prior to the construction of the final questionnaire. In the qualitative pilot test, 10 Hong Kong residents were asked two openended questions about the frequency of joining package tours, and their selection criteria for such a tour. There were 42 statements generated in this pilot test. 3.2. Dichotomous pilot test In order to identify the important selection criteria for Hong Kong residents choosing a package tour, a
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dichotomous pilot test was conducted one week after the qualitative pilot test. An English language questionnaire which included the 42 statements was developed for this pilot test. A total of 50 respondents were interviewed outside seven major travel agencies in Shatin (one of the mostly densely populated areas in Hong Kong). In this pilot test, respondents were required to answer either ‘‘Yes’’ or ‘‘No’’ for each of the 42 statements to identify the important criteria for their selections. The results showed that there were 30 statements with 50% or more respondents regarding the item as important criteria in package tour selection. All of these statements were included in the final questionnaire, except two statements: ‘‘Prefer not to join the tour that departs by air from Shenzhen’’ and ‘‘Sun and beach included in the tour’’, because these two statements are relatively destination specific in nature. As this study aims to identify general selection criteria for Hong Kong residents choosing package tours, these two destination specific statements were excluded. Previous studies about room type (Kaynak & Kucukemiroglu, 1993; Heung & Chu, 2000) and visiting theme park/amusement park described in outbound travel brochures (China Travel Service, CTS, 2001; Hong Tai Citizen Travel, HTCT, 2001; Morning Star Travel, MST, 2001; Sunflower Travel, SFT, 2001; Wing On Travel, WOT, 2001) suggested that these items were critical in destination and tour selection. These two statements were therefore also included in the final questionnaire. Thus, there were altogether 30 package tours selection criteria in the final questionnaire.
(very unimportant) to 5 (very important). The third section of the questionnaire focused on the demographic background of the respondents. Items relating to age, gender, marital status, personal income level, education level and occupation were included in this section. A pilot test was applied before the survey was conducted. Ten consumers were chosen outside two out of the seven major travel agencies for checking their understanding of the questionnaire. The questionnaire was rephrased after the testing interview in order to ensure that the questionnaire contained no ambiguous phrases.
3.3. Final questionnaire
4. Results and findings
Since the targeted respondents of the survey are Hong Kong residents who joined outbound tours, a bilingual questionnaire in both English and Chinese was developed as an instrument for data collection. The final questionnaire used in the survey consists of three sections. The first was designed to gather general information relating to travel-related behaviors, such as frequency of joining package tours, travel destination for their next package traveling, the size of the travel party and so on. Data from this part were linked to the second section for studying relationships between these factors and the criteria used for selecting package tours. The second section included the 30 selection criteria for package tours, which were developed from the qualitative pilot test and the dichotomous pilot test. These statements were also supported by previous research on travel product preferences, election criteria for destination and travel agency and information of outbound package tours in Hong Kong. In the survey, interviewees were asked to rate the importance for each of the 30 statements affecting their choice of package tours using a 5-point Likert-type scale, ranging from 1
4.1. Profile of the respondents
3.4. Sampling A total of 280 respondents were chosen outside the seven major travel agencies in Shatin, Mong Kok, and Tsim Sha Tsui. This was mainly because the seven travel agencies are centrally located in these districts, each having high pedestrian flows. Respondents were selected only when they fulfilled the following three conditions: 1. they must be a Hong Kong permanent resident; 2. their ages must not be less than 18; and 3. they indicated that they planned to travel abroad within 3 months from the date of the survey. Convenience sampling was applied. On average, 40 respondents were interviewed outside the selected travel agencies each day within a one-week survey period in January 2002.
Among the 280 subjects in the study, 275 (98.2%) completed the questionnaires. After data ‘‘housekeeping’’, there were finally 220 valid questionnaires used for data analysis. The demographic profile of the respondents is presented in Table 1. It showed that males constituted 53.6% of the participants and 67.7% of the respondents were aged between 25 and 44 years. More than half of the respondents were married (57.3%) and 51.8% respondents had personal monthly incomes of not less than HK$15,000. About 58% of the respondents had secondary education level, while 36.8% had a post-secondary or above education level. In terms of occupation, the majority of the respondents were white collar (40.5%) and managers or professionals (36.4%). 4.2. Travel-related behaviors of the respondents Table 2 summarizes the travel-related behaviors of the respondents. It shows that almost all the respondents (93.2%) had experience of joining an all-inclusive
ARTICLE IN PRESS C.k.S. Wong, W.Y. Kwong / Tourism Management 25 (2004) 581–592 Table 1 Demographic profile of respondents (N=220)
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Table 2 Travel related behaviors of respondents (N=220)
Characteristics
Respondents (%)
Frequency
Sex Male Female
53.6 46.4
118 102
Age 18–24 25–34 35–44 45–54 >54
11.8 34.1 33.6 15.5 5.0
26 75 74 34 11
Marital status Single Married
42.7 57.3
94 126
Personal monthly income oHK$8,000 HK$8,000–HK$9,999 HK$10,000–HK$14,999 HK$15,000–HK$19,999 >HK$19,999 Missing values
9.5 19.5 18.2 25.0 26.8 0.9
21 43 40 55 59 2
Education level Primary or below Secondary Postsecondary or above
5.9 57.3 36.8
13 126 81
Occupation Business owner Manager/professional White collar Blue collar
10.4 36.4 40.5 12.7
23 80 89 28
package tour. Exactly half of the sample (50%) indicated they would take a tour to Southeast Asia within the next three months at the time the survey was conducted. China was the second most popular destination for package traveling (20.5%). Over 70% of the respondents would take a tour of 4–7 days and would like to travel with others. Only seven respondents would travel alone for the forthcoming package tour. Family and relatives (36.8%) and friends (36.4%) were the two most important groups of traveling companions. Among 220 respondents, 42 (19.1%) would travel with their children and most of them (88.1%) would travel with 1 or 2 children. With regard to the number of traveling companions, the majority of the respondents (62.9%) preferred to be accompanied by 2–4 people.
Characteristics
Respondents (%)
Times of joining package tours 0 6.8 1–3 25.0 4–6 24.5 7–9 15.9 >9 27.7
Frequency 15 55 54 35 61
Destination of the coming package traveling China 20.5 Southeast Asia 50.0 Europe 12.3 United States & Canada 6.8 New Zealand & Australia 4.5 Other 5.9
45 110 27 15 10 13
No. of days of the coming package traveling 2–3 7.7 4–6 40.9 6–7 30.0 >7 21.4
17 90 66 47
Traveling partners Travel alone Spouse Friends Family & relatives Family & relatives & spouse & friends
3.2 11.4 36.4 36.8 12.3
7 25 80 81 27
19.1 80.9
42 178
No. of children travel with (n=42) 1 42.9 2 45.2 >3 11.9
18 19 5
No. of traveling partners (n=213) 1 18.3 2–4 62.9 >4 18.8
39 134 40
Travel with child(ren) Yes No
second, followed by ‘‘service quality of travel agency’’, ‘‘relaxing tour itinerary’’, and ‘‘air-conditioned coach’’. All of these criteria were viewed as important with mean score greater than 4 (Table 3). ‘‘TV advertisements and travel programs’’, ‘‘visiting a theme park and amusement park’’ were viewed as not important for choosing a tour, with mean scores of 2.79 and 2.93, respectively. 4.4. Factor analysis of the package tours selection criteria
4.3. Mean ratings of the selection criteria for package tours Among the 30 selection criteria, ‘‘the safety of the tour’’ was rated as the most important criterion for package tours selection. ‘‘Guaranteed Departure’’ came
In order to ensure the suitability of using factor analysis, several statistical tests were employed. The Kaiser–Meyer–Oklin measure of sampling adequacy was found to be 0.776, and the Bartlett’s test of sphericity was 1635.915, with 0.000 significance level.
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Table 3 Mean ratings of the selection criteria for package tours (N=220) Selection criteria
Meana
Std. Dev.
Safety of the tour Guaranteed departure Service quality of travel agency Relaxing itinerary Air-conditioned coach Reputation of travel agency Hotel’s quality & grading Escorts, tour-guides quality & experiences Sightseeing points included Flight schedule Time for traveling Choice of destination Items included in the tour price Price of the tour Non-repeated routing Airlines used Visiting natural environment Freedom to join or not join self-paid activities Number of days of the tour Visiting cultural characteristics Weather of the destination Number of meals included Traveling partners’ opinions & interests Personal interests Season of traveling Family’s & friends’ word-of-mouth recommendations Hotel’s facilities Allowance of special request for room or bed Visiting a theme park & amusement park TV advertisements & travel programs
4.43 4.30 4.23 4.14 4.13 4.09 4.03 4.03 3.97 3.94 3.86 3.86 3.85 3.84 3.78 3.75 3.69 3.67
0.75 0.73 0.65 0.74 0.77 0.68 0.78 0.80 0.83 0.82 0.96 0.82 0.76 0.82 0.79 0.87 0.93 0.86
3.63 3.59 3.55 3.53 3.50 3.50 3.45 3.41
0.78 0.84 0.91 0.86 0.89 0.84 0.83 0.86
3.19 3.09
1.04 0.94
2.93 2.79
0.81 0.88
a Remark: Five-point Likert scale was used for rating the importance of each criterion, ranging from 1 (very unimportant) to 5 (very important). The lowest mean among the 30 criteria. The highest mean among the 30 criteria.
These figures suggested that the use of factor analysis was appropriate for this study. Principal component analysis with varimax rotation was applied. A factor loading, which is greater than 0.5, was used as a criterion to select a statement into a factor (Hair, Anderson, Tatham, & Black, 1998). From the varimax rotated factor matrix, originally nine factors were extracted from the 30 statements. The selection criterion of an eigenvalue above 1.0 was used (Hair et al., 1998). All nine factors represented 58.7% of the total explained variance. However, the ninth factor was deleted since it had only one statement; ‘‘season of traveling’’ in the factor. The remaining eight factors covered 54.3% of the total variance. Four statements; ‘‘number of meals included’’, ‘‘items included in the tour price’’, ‘‘air-conditioned coach’’, and ‘‘weather of the destination’’ were then excluded because their factor
loadings were lower than 0.5. Except for the two statements: ‘‘relaxing itinerary’’; and ‘‘choice of destination’’, all the remaining statements had a factor loading greater than 0.5. These two statements were kept mainly because their factor loadings were marginally acceptable (0.48, and 0.49, respectively), and the limitation imposed by the small sample size of this study (N=220). Hence the result was eight factors comprising 25 items. Reliability analysis was then conducted to test the internal reliability of items in a factor. Cronbach’s alpha was calculated for each factor. ‘‘Price of the tour’’ with a factor loading 0.58 was deleted from factor 5 since it decreased the reliability coefficient from 0.50 to 0.49. The reliability coefficients of the eight factors were ranged from 0.50 to 0.73, which are considered as being ‘‘acceptable’’. Table 4 summarizes the results of factor analysis of the selection criteria and the reliability analysis of each factor. Factor 1—tour arrangements and service quality. Criteria included in this factor were: ‘‘reputation of travel agency’’, ‘‘service quality of travel agency’’, ‘‘escorts, tour-guides quality and experience’’, ‘‘guaranteed departure’’, ‘‘safety of the tour’’ and ‘‘relaxing itinerary’’. All of these criteria were associated with the tour arrangements and quality of the tour. This factor exhibited a factor mean of 4.20, accounted for 9.1% of the total variance and had an eigenvalue of 2.72. It was therefore the most important package tours discriminatory factor for Hong Kong package travelers. Factor 2—attractions. ‘‘Visiting natural environment’’, ‘‘visiting cultural characteristics’’ and ‘‘sightseeing points included’’ were the three criteria loaded onto this factor. Its factor mean was 3.75, covered 7.3% of the total variance, and possessed an eigenvalue of 2.19. Factor 3—hotels and airlines. This factor recorded an eigenvalue of 2.13 and represented 7.1% of the total variance. It had a factor mean of 3.66, slightly less than factor 2. Items in this factor were ‘‘hotel’s quality and grading’’, ‘‘hotel’s facilities’’ and ‘‘airlines used’’. Factor 4—TV promotions and customer care. ‘‘TV advertisements and travel programs’’, ‘‘allowance of special request for room or bed’’ and ‘‘freedom to join or not join self-paid activities’’ were items included in this factor. Since the last two items are associated with the issue of customer care delivered by travel agencies, the factor was named as ‘‘TV promotions and customer care’’. This was the least important selection factor for Hong Kong residents in choosing their package tours. Its factor mean was 3.12, it explained 7.1% of the variance and possessed an eigenvalue of 2.13. Factor 5—routing. This factor concerned the routing of the tour. It contained two selection criteria: ‘‘nonrepeated routing’’ and ‘‘flight schedule’’. It explained 6.8% of the variance, with an eigenvalue of 2.04 and a factor mean of 3.86. It was the second most important selection factor, when measured by mean score.
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Table 4 Factor analysis with varimax rotation and reliability analysis of the package tour selection criteria used by Hong Kong residents (N=220) Criteria
Factor loading
Factor & overall mean
Eigen-value
% of Variance
Reputation of travel agency Service quality of travel agency Escorts, tour-guides quality & experience Guaranteed Departure Safety of the tour Relaxing tour itinerary
0.70 0.62 0.62 0.60 0.57 0.48
Factor 1: Tour arrangements & service quality 4.20
2.72
9.1
9.1
0.73
Visiting natural environment Visiting cultural characteristics Sightseeing points included
0.78 0.72 0.72
Factor 2: Attractions 3.75
2.19
7.3
16.4
0.67
Hotel’s quality & grading Hotel’s facilities Airlines used
0.78 0.72 0.51
Factor 3: Hotels & airlines 3.66
2.13
7.1
23.5
0.64
TV ads & travel programs Allowance of special request for room/bed Freedom to join/not join self-paid activities
0.74 0.59 0.55
Factor 4: TV promotions & customer care 3.12
2.13
7.1
30.6
0.59
Non-repeated routing Flight schedule
0.66 0.50
Factor 5: Routing 3.6
2.04
6.8
37.4
0.50
Personal interests Visiting a theme park/ amusement park
0.79 0.69
Factor 6: Personal interests 3.22
1.79
5.9
43.3
0.53
Traveling partners’ opinions & interests Family’s & friends’ word-of-mouth recommendations
0.75
Factor 7: Word-of-mouth 3.46
1.64
5.5
48.8
0.53
0.56
Time for traveling No. of days of tour Choice of destination
0.79 0.58 0.49
Factor 8: Time 3.78
1.64
5.5
54.3
0.50
Factor 6—personal interests. ‘‘Personal interests’’ and ‘‘visiting a theme park or amusement park’’ were the two items integrated in this factor. These items were strongly related to personal interests and experiences in traveling. The mean of this factor was 3.22. It covered 6.0% of the total variance, and the eigenvalue was 1.79. Factor 7—word-of-mouth. This factor contained 5.5% of the variance, with an eigenvalue of 1.64, and a factor mean of 3.46. It was composed of two items which incorporate the opinion of other people. They were ‘‘traveling partners’ opinion and interests’’ and ‘‘family and friends word-of-mouth recommendations’’. Factor 8—time. Three criteria associated with time were included in this factor; these being ‘‘time for traveling’’, ‘‘number of days of the tour’’ and ‘‘choice of
Cumulative variance
Cronbach alpha
destination’’. This factor explained 5.5% of the variance and had an eigenvalue of 1.64. Its factor mean was 3.78. It was the third important package tours selection factor for Hong Kong travelers when measured by mean score. 4.5. Mean differences of package tours selection factors by travel-related behaviors Four out of eight travel-related behaviors were found to be significantly different among package tours selection factors. They were: 1. times of joining package tour, 2. traveling partners,
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3. travel with child(ren), and 4. number of traveling partners. Times of joining package tour. Mean ratings of the times of joining package tours were significantly different on factor 1Btour arrangement and service quality (p=0.034). Respondents who have never joined a package tour and joined less than 3 times differed significantly from those who had joined 7 times or more. Respondents with more previous experiences of joining package tour tended to pay more attention to the tour arrangement and service quality. Traveling partners. Respondents traveling with different partners differed greatly on the ratings of package tours selection factors. It revealed that factor 1 (p=0.022), factor 2 (p=0.010), factor 3 (p=0.018), factor 4 (p=0.001) and factor 7 (po0.001) were significantly related to traveling partners. Individuals traveling with family and relatives were more likely to place higher ratings of importance than those traveling alone and with friends on factor 1Btour arrangement and service quality and factor 3Bhotels and airlines. It was also found that people traveling with friends were less concerned with factor 2Battractions than those traveling with spouse, family and relatives. Besides, participants traveling with a spouse paid more attention than those accompanied by family relatives and spouse and friends on the factor 2. Similar to factors 1 and 3, respondents traveling with family and relatives placed higher emphasis than people accompanied with others and traveling alone on factor 4BTV promotions and customer care. Respondents traveling alone viewed factor 7BWord-of-mouth as not important in package tours selection. However, people traveling with others considered factor 7 as fairly important for tours selection. Travel with child(ren). Significant differences were found between those traveling with and without children on factor 1Btour arrangement and service quality (p=0.016) and factor 4BTV promotions and customer care (p=0.027). Respondents traveling with children tended to place higher importance on both factors 1 and 4 than those who planed not to travel with children. Number of traveling partners. Significant differences only appeared in the factor 4BTV promotions and customer care (p=0.030). The results illustrated that factor 4 was more likely to be considered as important package tours selection factor by respondents traveling with more partners than those traveling with only one companion (Table 5).
5. Discussions The results of this study are consistent with findings that all-inclusive package tours are the most popular
traveling mode for Hong Kong people (Mok & Armstrong, 1995). It also found that Southeast Asia and China were the two major travel destinations for Hong Kong residents and that they would mostly travel with 2–4 companions. These results are consistent with those generated by Hong Kong Tourism Board (2000) and Pacific Asia Travel Association (1995). A finding similar to previous research (Lai & Graefe, 2000; Wong & Lau, 2001) was that safety was the most important package tours selection criterion. Due to the 9/11 incident and frequent car crashes of tours in China (Oriental Daily 2001a–c), the demand for safety in package tours is easily understood. ‘‘Guaranteed departure’’ was considered as the second most important selection criterion for Hong Kong people choosing package tours. This is quite specific for Hong Kong package travelers because not all tours are guaranteed departure even though full payment has been made in advance. Most tours will depart only if the number of travelers reaches a certain level. It is quite common in Hong Kong to see that many travel agents ‘‘transfer’’ their customers to another similar package, but depart on a different date, when the number of travelers cannot reach a minimum level. Therefore, it reflects clearly from this study that customers dislike this arrangement although travel agents may argue it is necessary for survival. On the other hand, customers may cancel the tour. However, there is a stringent penalty system practised by the travel agents in Hong Kong for such cancellations. There are five stages for the penalty system commonly used in Hong Kong. For cancellations made within 7 days before departure, no refund is made to customers. For cancellations made from 8 to 21 days before departure, a 25% refund is made. For cancellations made from 22 to 27 days before departure, 50% is refunded. For cancellations made from 28 to 34 days before departure, HKD 3000 will be deducted as administration charge. For cancellation made 35 days before the departure, HKD 300 will be charged as administration fee (P&O Travel, 2003; Jetour, 2003). Although it may be argued that inequity exists between the customers and the product providers, this has become a market’s norm. In addition, Hong Kong residents tend to have a ‘‘tight’’ schedule for holiday time. Therefore, adhering to the original itinerary is important while at the same time the case of canceling the tour is rare from the customer side in Hong Kong. The least important criterion for tours selection was TV advertisements and travel programs. Many respondents reported that TV advertisements and travel programs were viewed as entertainment only which did not affect their choices of package tours. Tour arrangements, service quality and routing were the important factors for Hong Kong residents in selecting their package tours. It could be explained by
Table 5 Results of independent t-test and one-way ANOVA on mean difference of package tour selection factors by the travel-related behaviors of the respondents (N=220) Travel-related behaviors
Factor 1 Tour arrangement & service quality
Factor 2 Attractions
Factor 3 Hotels & airlines
Factor 4 TV promotion & customer care
Factor 5 Routing
Factor 6 Personal interests
Factor 7 Word-ofmouth
Factor 8
Times of joining package tour
F=0.034 0o7–9 (3.96o4.33) 0o>9 (3.96o4.29) 1–3o7–9 (4.12o4.33) 1–3o>9 (4.12o4.29)
F=0.255
F=0.109
F=0.356
F=0.772
F=0.403
F=0.491
F=0.543
No. of days of the coming tour
F=0.506
F=0.109
F=0.165
F=0.758 F=0.579 No significant difference
F=0.633
F=0.380
F=0.744
Traveling partners
F=0.022 TAaoF&Rb TAoF&R (3.90o4.33) FriendsoF&R TAoFRSF
F=0.010
F=0.018
F=0.001
F=0.224
Fo0.001
F=0.996
TAoF&R (3.60o4.04)
(3.10o3.82)
(2.81o3.41)
(4.12o4.33)
(3.58o4.04) FriendsoF&R (3.60o3.86)
(3.10o3.72) FriendsoF&R (3.55o3.82)
(2.95o3.41) FriendsoF&R (3.15o3.41) FRSFoF&R (3.15o3.41)
Travel with child(ren)
t=0.016 NooYes (4.17o4.36)
t=0.337 No significant difference
t=0.077 No significant difference
t=0.027 NooYes (3.14o3.39)
No. of children
F=0.696
F=0.082
F=0.687
No of traveling partners
F=0.072
F=0.200
F=0.967
SpouseoF&R
No significant difference
TAoSpouse
(1.93o3.54)
TAoFriends
No significant difference No significant difference
t=0.627 No significant difference
t=0.306 No significant difference
t=0.446 No significant difference
F=0.265 F=0.386 No significant difference
F=0.773
F=0.168
F=0.692
F=0.030 1o2–4 (2.95o3.25) 1o>4 (2.95o3.28)
F=0.916
F=0.701
F=0.721
F=0.097
No significant difference
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Remark: aTA is travel alone. bF&R is family & relatives. cFRSF is family & relatives & spouse & friends. Mean ratings are bolded and in italic fonts. po0.05, po0.01.
t=0.152 No significant difference
(1.93o3.50) TAoF&R (1.93o3.56) TAoFRSF (1.93o3.33)
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FRSFcoSpouse
F=0.176
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FriendsoSpouse
No significant difference
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the market being experienced consumers of package tours. The more experience one has, the more requirements and values one demands. Additionally, human want is arguably unlimited, so clients who are satisfied at one time may well desire more the next time. Time was found to be the third most important selection factor. Under the culture of feeling ‘‘rushed’’, Hong Kong residents, especially those in work, normally bear in mind that ‘‘time is money’’. Thus, time has become one of the major considerations for Hong Kong people traveling abroad. People with more package traveling experience were found to pay more attention to tour arrangements and service quality, implying that people become more discerning through experience of past experiences of ill-conceived schedules and poor service quality. The results also indicate that Hong Kong people generally pay higher attention and impose higher requirements on tour selection when they plan to travel with their family, relatives and with children. Since the needs of children were different from adults, some special services and facilities might be needed for children, especially for children less than three years of age. Besides, package tours are priced on a per person basis (Sheldon & Mak, 1987). Although the price of package tours for children is lower than that for adult, children are still required to pay separately. Therefore, it was rational for people traveling with children to be more concerned with tour arrangements and the value of tours. Finally, the number of those traveling together produced relationships that were statistically significant when related to TV promotions and a customer care factor. It was believed that the room arrangements for Hong Kong package tours affected the importance rating on this factor. Almost all the package tours in Hong Kong offer twin rooms for travelers, and a handling charge is imposed for room changing. It may be inconvenient for odd numbered traveling groups to share rooms with other unfamiliar people in the tour. Hence, the travel group with more than two people would pay more attention to TV programs and customer care factors.
6. Recommendations and conclusions Price wars, adding exciting activities and new attractions into tours are the general practice for Hong Kong’s travel agencies operating in the market’s state of keen competition. Whenever a travel agency or operator makes small changes in its package tours, others will follow immediately, with the result that almost all the travel agencies are offering the same products. However, in order to meet tourist demand a number of recommendations might be proposed.
Safety and guaranteed departure. Safety and guarantee of departure are the two most important criteria for Hong Kong package travelers in selecting tours. In order to compete with the others in the market, travel agencies are strongly advised to pay more attention to these two areas and improve the situation. To improve the safety issue of tours, travel agencies could design safer itineraries, provide more first aid training to escorts and tour-guides and employ experienced drivers for the tours. To guarantee departure, they could reduce the variety of tours to the same destination, thereby concentrating numbers and increasing the possibility of departure, sustaining profitability and reducing insurance costs against cancellation. Training for escorts and tour-guides. The quality and experience of escorts and tour-guides is one of the major components for Hong Kong residents choosing a package tour. It is therefore suggested that comprehensive and professional training that covers the knowledge of destinations, interaction skills and skills of handling emergencies should be provided to escorts and tourguides. Additionally, incentives could also be applied as a motivator to encourage them to deliver high quality services and thus, indirectly generate repeat business for the travel agency. Customer welfare services. TV promotions and customer care factor was the least important for package tours selection in this study. Travel agencies might save much money and resources from TV promotions, but improving customer care services could be a way for them to increase their competitiveness. They are highly recommended to pay attention to customer welfare, especially when they deal with odd numbers within traveling groups and those traveling with children. Customer care services could be enhanced by reducing the supplemental charge for room changing and catering for the special needs of children traveling aboard.
7. Conclusions Identifying the important selection criteria for outbound tourists (in this study—Hong Kong residents) choosing package tours is the primary objective of this study. A total of 30 package tours selection criteria were identified in the study. Among the 30 selection criteria, safety of the tour was the most important criterion, followed by adherence to departure dates and the service quality of travel agency. TV advertisements and travel programs were found to be the least important criteria, and were just viewed only as entertainment that might not affect consumption decisions. Eight factors of package tours selection criteria were successfully derived by the use of factor analysis. They were tour arrangements and service quality, attractions, hotels and airlines, TV promotions and customer care,
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routing, personal interests, word-of-mouth and time. Among these factors, tour arrangements and service quality were considered as the most important items. Routing was the second most important factor, while TV promotions and customer care were the least important items for Hong Kong people selecting packages tours. With regard to the relationships between travelrelated behaviors and package tours selection factors, times of joining package tours, destination of the coming tour, traveling partners, traveling with children and number of traveling partners were significantly related to package tours selection factors. It was concluded that travel-related behaviors would affect the choice of package tours for Hong Kong residents. Finally, marketing suggestions were made for Hong Kong’s travel agencies in this study. Safety and guaranteed departures, training for escorts and tourguides, and customer care services were the three areas to which travel agencies should pay attention. By emphasizing these three areas, the attractiveness of package tours and the competitiveness of travel agencies could be improved. However, caveats exist that may limit these recommendations. It can be argued that in a fiercely competitive market structure, those that initiate these policies would well by quickly imitated by competitors. It is common to see this phenomenon in Hong Kong that a 100% copy of the itinerary appears in the next day’s newspaper when another travel agency discovers their competitors’ new initiatives. Nevertheless, this study had successfully identified the selection criteria in a macro sense, that is, to show the overall preference of outbound tourists. All travel agents can benefit by understanding holistically how their customers choose their products. Having said that, any introduction of these policies would need to be carefully considered within a wider schedule of product enhancement and market strategies. Individual travel agents or operators should not just simply copy competitors’ new initiatives. Each travel agent should have its own strengths and weakness. A direct copy without taking self evaluation and product development may, on the contrary, lose market share in the long run. Finally, the conventional limitation should be observed—that is the study is of 220 respondents out of a market of over 3 million, thereby necessitating obvious caution in implementing the recommendations and generalizing the findings; thereby re-iterating a familiar call for yet more research to confirm these findings. By the same token, further research can be extended to investigate other cultures such as residents in USA and Europe and even Chinese people living in Mainland China, Taiwan, Singapore and Malaysia. Such comparisons to see any differences or similarities between different cultures in the selection criteria would possess
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interest while permitting tailor-made marketing strategies appropriate to each market segment.
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Tourism Management 25 (2004) 581–592
Outbound tourists’ selection criteria for choosing all-inclusive package tours Chak-keung Simon Wonga,*, Wai-Yan Yan Kwongb a
School of Hotel & Tourism Management, GH 807, 8 Floor, H core, Then Hong Kong Polytechnic University, Hong Kong b Kuoni Travel Limited, 13/Floor, New T&T Building, Harbour City, Gateway, Hong Kong Received 15 November 2002; accepted 27 June 2003
Abstract This study was designed to identify important selection factors for all-inclusive package tours as perceived by outbound tourists—residents normally in Hong Kong. A total of 30 selection criteria were identified in this study, with the safety of the tour being viewed as the most important item for package tours selection, followed by the possibility of departing successfully and the service quality offered by the travel agency. By using factor analysis, eight dimensions for package tours selection were derived, namely, tour arrangement and service quality, attractions, hotels and airlines, TV promotions and customer care, routing, personal interests, word-of-mouth, and time. Results of independent sample t-test and one-way ANOVA revealed that travel-related behaviors were significantly related to the choice of all-inclusive package tours. Recommendations for travel agencies, included safety and ‘guarantees’ of departure, training for escorts and tour-guides, and customer care services, will, it is argued, enhance the attractiveness of package tours and their competitiveness. r 2003 Elsevier Ltd. All rights reserved. Keywords: Outbound tourists; All-inclusive packages tours; Hong Kong; Selection criteria
1. Introduction All-inclusive package tours are the most popular traveling mode for Hong Kong residents and have become a part of the local life style (Luk, 1993; Mok & Armstrong, 1995). Christmas, Lunar New Year and summer holidays are the reported peak times of outbound travel for Hong Kong residents. Reports published by the Hong Kong Tourism Board and the Hong Kong Tourist Association (HKTB, 2001; HKTA, 2000) showed that 5.9 million Hong Kong residents departed for oversea destinations in 2000, as compared with 3.4 million in 1995 and 2.4 million in 1990. It was also found that 87% of Hong Kong outbound travelers are adopting package tours as their prime mode of traveling (Ap & Mok, 1996). With the popularity of package tours, potential profits accrue for travel agencies. To gain these profits, travel agencies need to carefully design and promote package tours. *Corresponding author. E-mail addresses: [email protected] (C.k.S. Wong), [email protected] (W.Y. Kwong). 0261-5177/$ - see front matter r 2003 Elsevier Ltd. All rights reserved. doi:10.1016/j.tourman.2003.06.002
Fundamentally, there are two types of package tours: a basic package tour and an all-inclusive package tour. The classification of the types of package tours depends on the degree of prearranged travel services (Yamamoto & Gill, 1999). A basic package tour typically only includes transportation and accommodation (Mok & Armstrong, 1995). An all-inclusive package tour is defined as a trip planned and paid for a single price in advance, which covers commercial transportation and accommodation, meals and sightseeing, and sometimes with an escort or guide (Sheldon & Mak, 1987; Morrison, 1989). It is believed that the selection criteria for all-inclusive package tours are different from that for basic package tours because of the differences in composition. As this report only focuses on the selection criteria for all-inclusive package tours, basic package tours are excluded from the study. The term ‘‘package tours’’ in this paper will therefore refer solely to allinclusive package tours. According to the travel industry council (TIC, 2001), there are approximately 1200 travel agencies in Hong Kong. The market is highly competitive. During the first 8 months in 1996, 9 out of 84 travel agencies ceased
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business (Ng, 1996). Nevertheless, all the package tours presented to the market are very similar. Itineraries offered by travel agencies possess high degrees of similarity with reference to entertainment and food. Besides, travel agencies are not only competing with other travel agencies in the market, but also their products are competing with products in the same product line or for the same destination. Undoubtedly, how people select their tours is an important issue for travel agencies. Economic theory presumes that consumers have special preferences consistent with their choice among alternatives. Economists also assume that consumers are interested in value maximization by making choices best suited to their goals, budget constraints and earning power (Roberston, Zielinski, & Ward, 1984). Thus, it is proposed that people would have a set of criteria for the selection of tours. However, many travel agencies believe the market simply accepts whatever they supply. This may reduce operational costs as people have to take the product because no alternative exists as most all-inclusive tour packages are very similar in Hong Kong but it might also mean that other opportunities for sales were being missed. Effective tourism marketing strategies and development plans require marketers to not only understand what people do on vacation, but also how they make their travel decisions (Fodness, 1992; Josiam & Hobson, 1995; Lang, O’Leary, & Morrison, 1997). In addition, satisfied customers are likely to return and make positive word-of-mouth recommendations about the company (Duke & Persia, 1996). Berry (1995) suggested that the cost of retaining current customers is much lower than the cost of acquiring new customers in the service industry. By understanding the selection criteria by which customers select their package tours, travel agencies could retain existing customers and save the higher cost of acquiring new customers. Thus, the purposes of this study are to identify selection criteria that are frequently used by Hong Kong residents to select package tours.
1.1. Study objectives The specific objectives of this study are: 1. To identify the selection criteria that Hong Kong residents use to select outbound package tours. 2. To investigate any underlying dimensions of the identified criteria. 3. To discover any significant differences among travel behavioral groups within the underlying dimensions. 4. To make suggestions to travel agencies about tailormaking package tours for outbound tourists.
2. Literature review 2.1. Reasons for package tours Touche! Ross (1975) stated that overall convenience and tour economies are the most frequently cited reasons for travelers purchasing a package tour. Travelers normally expect package tours to be the best method of seeing as much as possible combined with comfort, scenery and experienced tour guides (Duke & Persia, 1993). Enoch (1996) indicated that a package tour is a rational and effective way for tourists to visit the largest number of sites on a trip in a given period, to travel in a relatively safe way to faraway countries with strange cultures, to avoid unreliable transportation and doubtful standards of hygiene, while being usually less expensive than taking an individual trip to the same destination. With convenience in planning and departure dates, economic pricing, friends’ recommendations, and the desire for specialized activities and experience, tourists can literally sit back and enjoy their trips by taking package tours (Cohen, 1972; Middleton, 1991; Hsieh, O’Leary, & Morrison, 1992, 1994; Liberson, 1994). Personal safety is another major reason for taking package tours. Tourists who participate in package tours can take advantages of having a feeling of safety, and the ease of getting to know each other (Quiroga, 1990). Mok and Armstrong (1995), Wong and Lau (2001) claimed Hong Kong tourists like to travel in groups because this creates feeling of security and familiarity, and serves as a means to reduce perceived risk. 2.2. Chinese cultural values and Hong Kong tourists Previous studies clearly report that people from different cultures have different preferences, expectations, and so travel consumption patterns (Reimer, 1990; Mok & DeFranco, 1999). The population of Hong Kong is more than 6 million of which 98% is ethnic Chinese (Hsieh et al., 1992). Despite the fact that Chinese cultural values in Hong Kong are actually westernized, some traditional cultural values are still firmly rooted in the mind of Hong Kong Chinese, and have influenced them in the selection of package tours (Bond & Hofstede, 1998). Deeply affected by Chinese cultural values, the Chinese are group oriented (Yau, 1988; Mok & DeFranco, 1999). Compared with Western tourists, Chinese tourists are more willing to travel in groups, and therefore take more all-inclusive package tours (Mok & Armstrong, 1995; Qu & Li, 1997; Wong & Lau, 2001). Plog (1974) classified Hong Kong travelers as near psychocentrics, who prefer complete tour packages with a heavy scheduling of arranged activities, comfort
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seeking, a familiar atmosphere and undertaking a low level of physical activities. When they join a package tour, they strongly emphasize courtesy, prudence, trustworthiness and contentedness (Wong & Lau, 2001). Kaynak and Kucukemiroglu (1993), and Pacific Asia Travel Association (1995) indicated that Mainland China has become the most popular travel destination for Hong Kong residents mainly because of the similar cultural background allowing them to find suitable attractions and activities in which to engage. Chinese consumers also tend to pursue top brand goods (Yau, 1998; Mok & DeFranco, 1999). A study by Ap and Mok (1996) found that prestige is an important motive for Hong Kong residents traveling abroad. Patronizing five-star international hotels and visiting Disneyland are viewed as status and prestige boosting activities by Hong Kong people (Mok & DeFranco, 1999). They also tend to have great brand loyalty. A high proportion of them is likely to repeat travel to the same vacation destination (Kaynak & Kucukemiroglu, 1993). In addition, the Chinese rely significantly on word-ofmouth communication, and are easily affected by opinion leaders (Yau, 1988). Family and friends’ recommendations have been viewed as a major consideration for Hong Kong travelers selecting a vacation destination and travel agency, especially for first-time travelers (Kaynak & Kucukemiroglu, 1993; Heung & Chu, 2000). 2.3. Travel product preferences Goodrich (1977) identified scenic beauty, pleasant attitudes of local people, suitable accommodation, rest and relaxation as the top four benefits that tourists seek from their journey. Stevens (1992) pointed out that beautiful scenery, quality of accommodation and different cultures are important at the initial stage of tourists vacation destination selection. A survey conducted by Holiday Which (2001) showed that accommodation, convenience of travel arrangements, value for money, brochure description and services of a representative are the five important considerations for consumers choosing their tour operators. Cai, Boger, and O’Leary (1999) indicated that shopping locations, historical sites, places of worship, museums, theme parks, and river cruises are the most popular places for Chinese outbound travelers. Facilities and safety are the most important factors for Taiwanese in selection of their travel destinations, followed by attractions, practical accessibility, quality and symbolic accessibility (Lai & Graefe, 2000). Mok and Armstrong (1995) concluded that Hong Kong people perceive safety as the most important attribute when choosing their travel destinations, followed by scenic beauty, price of the trip, and the service quality of hotels and restaurants. Recreational and sport facilities, and destination distance are less important considerations
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for them. It is also found that Hong Kong tourists place high values on novelty and authenticity of attractions, visiting historical places, sampling local food, participating in sport activities, and experiencing other environments and cultures during their trips (Hsieh et al., 1992; Wong & Lau, 2001). 2.4. Travel-related behaviors and package tours In addition to travel product preferences, travelrelated behaviors also play an important role in the package tours selection. Quiroga (1990) stated that the necessities and interests of people who travel alone are very different from those who travel with relatives or friends. In fact, most package travelers are accompanied by their spouses, family members or friends. It is suggested that this is probably because package tours permit them to avoid family clashes and compatibility problems (Smith, 1979; Crompton, 1979; Pearce, 1982). Besides, people who are traveling with family members tend to place more emphasis on facilities and safety, and symbolic accessibility factors than those who are traveling alone (Lai & Graefe, 2000). It is also suggested that people are more willing to take a package tour for their first-time international pleasure travel, and normally place a higher value on word-of-mouth communication than more experienced repeat travelers (Sheldon & Mak, 1987; Enoch, 1996; Andereck & Caldwell, 1993; Lai & Graefe, 2000). Compared with multiple-time travelers, Hong Kong first-time travelers display greater aversion to risk. They prefer geographically nearer countries and are usually highly dependent on advice from friends and travel agencies (Kaynak & Kucukemiroglu, 1993).
3. The study 3.1. Development of the instrument A survey questionnaire, which comprised a list of package tours selection criteria, was used as an instrument for data collection of this study. To ensure the selection criteria in the questionnaire were relevant to Hong Kong residents, a qualitative and dichotomous pilot test were separately conducted prior to the construction of the final questionnaire. In the qualitative pilot test, 10 Hong Kong residents were asked two openended questions about the frequency of joining package tours, and their selection criteria for such a tour. There were 42 statements generated in this pilot test. 3.2. Dichotomous pilot test In order to identify the important selection criteria for Hong Kong residents choosing a package tour, a
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dichotomous pilot test was conducted one week after the qualitative pilot test. An English language questionnaire which included the 42 statements was developed for this pilot test. A total of 50 respondents were interviewed outside seven major travel agencies in Shatin (one of the mostly densely populated areas in Hong Kong). In this pilot test, respondents were required to answer either ‘‘Yes’’ or ‘‘No’’ for each of the 42 statements to identify the important criteria for their selections. The results showed that there were 30 statements with 50% or more respondents regarding the item as important criteria in package tour selection. All of these statements were included in the final questionnaire, except two statements: ‘‘Prefer not to join the tour that departs by air from Shenzhen’’ and ‘‘Sun and beach included in the tour’’, because these two statements are relatively destination specific in nature. As this study aims to identify general selection criteria for Hong Kong residents choosing package tours, these two destination specific statements were excluded. Previous studies about room type (Kaynak & Kucukemiroglu, 1993; Heung & Chu, 2000) and visiting theme park/amusement park described in outbound travel brochures (China Travel Service, CTS, 2001; Hong Tai Citizen Travel, HTCT, 2001; Morning Star Travel, MST, 2001; Sunflower Travel, SFT, 2001; Wing On Travel, WOT, 2001) suggested that these items were critical in destination and tour selection. These two statements were therefore also included in the final questionnaire. Thus, there were altogether 30 package tours selection criteria in the final questionnaire.
(very unimportant) to 5 (very important). The third section of the questionnaire focused on the demographic background of the respondents. Items relating to age, gender, marital status, personal income level, education level and occupation were included in this section. A pilot test was applied before the survey was conducted. Ten consumers were chosen outside two out of the seven major travel agencies for checking their understanding of the questionnaire. The questionnaire was rephrased after the testing interview in order to ensure that the questionnaire contained no ambiguous phrases.
3.3. Final questionnaire
4. Results and findings
Since the targeted respondents of the survey are Hong Kong residents who joined outbound tours, a bilingual questionnaire in both English and Chinese was developed as an instrument for data collection. The final questionnaire used in the survey consists of three sections. The first was designed to gather general information relating to travel-related behaviors, such as frequency of joining package tours, travel destination for their next package traveling, the size of the travel party and so on. Data from this part were linked to the second section for studying relationships between these factors and the criteria used for selecting package tours. The second section included the 30 selection criteria for package tours, which were developed from the qualitative pilot test and the dichotomous pilot test. These statements were also supported by previous research on travel product preferences, election criteria for destination and travel agency and information of outbound package tours in Hong Kong. In the survey, interviewees were asked to rate the importance for each of the 30 statements affecting their choice of package tours using a 5-point Likert-type scale, ranging from 1
4.1. Profile of the respondents
3.4. Sampling A total of 280 respondents were chosen outside the seven major travel agencies in Shatin, Mong Kok, and Tsim Sha Tsui. This was mainly because the seven travel agencies are centrally located in these districts, each having high pedestrian flows. Respondents were selected only when they fulfilled the following three conditions: 1. they must be a Hong Kong permanent resident; 2. their ages must not be less than 18; and 3. they indicated that they planned to travel abroad within 3 months from the date of the survey. Convenience sampling was applied. On average, 40 respondents were interviewed outside the selected travel agencies each day within a one-week survey period in January 2002.
Among the 280 subjects in the study, 275 (98.2%) completed the questionnaires. After data ‘‘housekeeping’’, there were finally 220 valid questionnaires used for data analysis. The demographic profile of the respondents is presented in Table 1. It showed that males constituted 53.6% of the participants and 67.7% of the respondents were aged between 25 and 44 years. More than half of the respondents were married (57.3%) and 51.8% respondents had personal monthly incomes of not less than HK$15,000. About 58% of the respondents had secondary education level, while 36.8% had a post-secondary or above education level. In terms of occupation, the majority of the respondents were white collar (40.5%) and managers or professionals (36.4%). 4.2. Travel-related behaviors of the respondents Table 2 summarizes the travel-related behaviors of the respondents. It shows that almost all the respondents (93.2%) had experience of joining an all-inclusive
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Table 2 Travel related behaviors of respondents (N=220)
Characteristics
Respondents (%)
Frequency
Sex Male Female
53.6 46.4
118 102
Age 18–24 25–34 35–44 45–54 >54
11.8 34.1 33.6 15.5 5.0
26 75 74 34 11
Marital status Single Married
42.7 57.3
94 126
Personal monthly income oHK$8,000 HK$8,000–HK$9,999 HK$10,000–HK$14,999 HK$15,000–HK$19,999 >HK$19,999 Missing values
9.5 19.5 18.2 25.0 26.8 0.9
21 43 40 55 59 2
Education level Primary or below Secondary Postsecondary or above
5.9 57.3 36.8
13 126 81
Occupation Business owner Manager/professional White collar Blue collar
10.4 36.4 40.5 12.7
23 80 89 28
package tour. Exactly half of the sample (50%) indicated they would take a tour to Southeast Asia within the next three months at the time the survey was conducted. China was the second most popular destination for package traveling (20.5%). Over 70% of the respondents would take a tour of 4–7 days and would like to travel with others. Only seven respondents would travel alone for the forthcoming package tour. Family and relatives (36.8%) and friends (36.4%) were the two most important groups of traveling companions. Among 220 respondents, 42 (19.1%) would travel with their children and most of them (88.1%) would travel with 1 or 2 children. With regard to the number of traveling companions, the majority of the respondents (62.9%) preferred to be accompanied by 2–4 people.
Characteristics
Respondents (%)
Times of joining package tours 0 6.8 1–3 25.0 4–6 24.5 7–9 15.9 >9 27.7
Frequency 15 55 54 35 61
Destination of the coming package traveling China 20.5 Southeast Asia 50.0 Europe 12.3 United States & Canada 6.8 New Zealand & Australia 4.5 Other 5.9
45 110 27 15 10 13
No. of days of the coming package traveling 2–3 7.7 4–6 40.9 6–7 30.0 >7 21.4
17 90 66 47
Traveling partners Travel alone Spouse Friends Family & relatives Family & relatives & spouse & friends
3.2 11.4 36.4 36.8 12.3
7 25 80 81 27
19.1 80.9
42 178
No. of children travel with (n=42) 1 42.9 2 45.2 >3 11.9
18 19 5
No. of traveling partners (n=213) 1 18.3 2–4 62.9 >4 18.8
39 134 40
Travel with child(ren) Yes No
second, followed by ‘‘service quality of travel agency’’, ‘‘relaxing tour itinerary’’, and ‘‘air-conditioned coach’’. All of these criteria were viewed as important with mean score greater than 4 (Table 3). ‘‘TV advertisements and travel programs’’, ‘‘visiting a theme park and amusement park’’ were viewed as not important for choosing a tour, with mean scores of 2.79 and 2.93, respectively. 4.4. Factor analysis of the package tours selection criteria
4.3. Mean ratings of the selection criteria for package tours Among the 30 selection criteria, ‘‘the safety of the tour’’ was rated as the most important criterion for package tours selection. ‘‘Guaranteed Departure’’ came
In order to ensure the suitability of using factor analysis, several statistical tests were employed. The Kaiser–Meyer–Oklin measure of sampling adequacy was found to be 0.776, and the Bartlett’s test of sphericity was 1635.915, with 0.000 significance level.
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Table 3 Mean ratings of the selection criteria for package tours (N=220) Selection criteria
Meana
Std. Dev.
Safety of the tour Guaranteed departure Service quality of travel agency Relaxing itinerary Air-conditioned coach Reputation of travel agency Hotel’s quality & grading Escorts, tour-guides quality & experiences Sightseeing points included Flight schedule Time for traveling Choice of destination Items included in the tour price Price of the tour Non-repeated routing Airlines used Visiting natural environment Freedom to join or not join self-paid activities Number of days of the tour Visiting cultural characteristics Weather of the destination Number of meals included Traveling partners’ opinions & interests Personal interests Season of traveling Family’s & friends’ word-of-mouth recommendations Hotel’s facilities Allowance of special request for room or bed Visiting a theme park & amusement park TV advertisements & travel programs
4.43 4.30 4.23 4.14 4.13 4.09 4.03 4.03 3.97 3.94 3.86 3.86 3.85 3.84 3.78 3.75 3.69 3.67
0.75 0.73 0.65 0.74 0.77 0.68 0.78 0.80 0.83 0.82 0.96 0.82 0.76 0.82 0.79 0.87 0.93 0.86
3.63 3.59 3.55 3.53 3.50 3.50 3.45 3.41
0.78 0.84 0.91 0.86 0.89 0.84 0.83 0.86
3.19 3.09
1.04 0.94
2.93 2.79
0.81 0.88
a Remark: Five-point Likert scale was used for rating the importance of each criterion, ranging from 1 (very unimportant) to 5 (very important). The lowest mean among the 30 criteria. The highest mean among the 30 criteria.
These figures suggested that the use of factor analysis was appropriate for this study. Principal component analysis with varimax rotation was applied. A factor loading, which is greater than 0.5, was used as a criterion to select a statement into a factor (Hair, Anderson, Tatham, & Black, 1998). From the varimax rotated factor matrix, originally nine factors were extracted from the 30 statements. The selection criterion of an eigenvalue above 1.0 was used (Hair et al., 1998). All nine factors represented 58.7% of the total explained variance. However, the ninth factor was deleted since it had only one statement; ‘‘season of traveling’’ in the factor. The remaining eight factors covered 54.3% of the total variance. Four statements; ‘‘number of meals included’’, ‘‘items included in the tour price’’, ‘‘air-conditioned coach’’, and ‘‘weather of the destination’’ were then excluded because their factor
loadings were lower than 0.5. Except for the two statements: ‘‘relaxing itinerary’’; and ‘‘choice of destination’’, all the remaining statements had a factor loading greater than 0.5. These two statements were kept mainly because their factor loadings were marginally acceptable (0.48, and 0.49, respectively), and the limitation imposed by the small sample size of this study (N=220). Hence the result was eight factors comprising 25 items. Reliability analysis was then conducted to test the internal reliability of items in a factor. Cronbach’s alpha was calculated for each factor. ‘‘Price of the tour’’ with a factor loading 0.58 was deleted from factor 5 since it decreased the reliability coefficient from 0.50 to 0.49. The reliability coefficients of the eight factors were ranged from 0.50 to 0.73, which are considered as being ‘‘acceptable’’. Table 4 summarizes the results of factor analysis of the selection criteria and the reliability analysis of each factor. Factor 1—tour arrangements and service quality. Criteria included in this factor were: ‘‘reputation of travel agency’’, ‘‘service quality of travel agency’’, ‘‘escorts, tour-guides quality and experience’’, ‘‘guaranteed departure’’, ‘‘safety of the tour’’ and ‘‘relaxing itinerary’’. All of these criteria were associated with the tour arrangements and quality of the tour. This factor exhibited a factor mean of 4.20, accounted for 9.1% of the total variance and had an eigenvalue of 2.72. It was therefore the most important package tours discriminatory factor for Hong Kong package travelers. Factor 2—attractions. ‘‘Visiting natural environment’’, ‘‘visiting cultural characteristics’’ and ‘‘sightseeing points included’’ were the three criteria loaded onto this factor. Its factor mean was 3.75, covered 7.3% of the total variance, and possessed an eigenvalue of 2.19. Factor 3—hotels and airlines. This factor recorded an eigenvalue of 2.13 and represented 7.1% of the total variance. It had a factor mean of 3.66, slightly less than factor 2. Items in this factor were ‘‘hotel’s quality and grading’’, ‘‘hotel’s facilities’’ and ‘‘airlines used’’. Factor 4—TV promotions and customer care. ‘‘TV advertisements and travel programs’’, ‘‘allowance of special request for room or bed’’ and ‘‘freedom to join or not join self-paid activities’’ were items included in this factor. Since the last two items are associated with the issue of customer care delivered by travel agencies, the factor was named as ‘‘TV promotions and customer care’’. This was the least important selection factor for Hong Kong residents in choosing their package tours. Its factor mean was 3.12, it explained 7.1% of the variance and possessed an eigenvalue of 2.13. Factor 5—routing. This factor concerned the routing of the tour. It contained two selection criteria: ‘‘nonrepeated routing’’ and ‘‘flight schedule’’. It explained 6.8% of the variance, with an eigenvalue of 2.04 and a factor mean of 3.86. It was the second most important selection factor, when measured by mean score.
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Table 4 Factor analysis with varimax rotation and reliability analysis of the package tour selection criteria used by Hong Kong residents (N=220) Criteria
Factor loading
Factor & overall mean
Eigen-value
% of Variance
Reputation of travel agency Service quality of travel agency Escorts, tour-guides quality & experience Guaranteed Departure Safety of the tour Relaxing tour itinerary
0.70 0.62 0.62 0.60 0.57 0.48
Factor 1: Tour arrangements & service quality 4.20
2.72
9.1
9.1
0.73
Visiting natural environment Visiting cultural characteristics Sightseeing points included
0.78 0.72 0.72
Factor 2: Attractions 3.75
2.19
7.3
16.4
0.67
Hotel’s quality & grading Hotel’s facilities Airlines used
0.78 0.72 0.51
Factor 3: Hotels & airlines 3.66
2.13
7.1
23.5
0.64
TV ads & travel programs Allowance of special request for room/bed Freedom to join/not join self-paid activities
0.74 0.59 0.55
Factor 4: TV promotions & customer care 3.12
2.13
7.1
30.6
0.59
Non-repeated routing Flight schedule
0.66 0.50
Factor 5: Routing 3.6
2.04
6.8
37.4
0.50
Personal interests Visiting a theme park/ amusement park
0.79 0.69
Factor 6: Personal interests 3.22
1.79
5.9
43.3
0.53
Traveling partners’ opinions & interests Family’s & friends’ word-of-mouth recommendations
0.75
Factor 7: Word-of-mouth 3.46
1.64
5.5
48.8
0.53
0.56
Time for traveling No. of days of tour Choice of destination
0.79 0.58 0.49
Factor 8: Time 3.78
1.64
5.5
54.3
0.50
Factor 6—personal interests. ‘‘Personal interests’’ and ‘‘visiting a theme park or amusement park’’ were the two items integrated in this factor. These items were strongly related to personal interests and experiences in traveling. The mean of this factor was 3.22. It covered 6.0% of the total variance, and the eigenvalue was 1.79. Factor 7—word-of-mouth. This factor contained 5.5% of the variance, with an eigenvalue of 1.64, and a factor mean of 3.46. It was composed of two items which incorporate the opinion of other people. They were ‘‘traveling partners’ opinion and interests’’ and ‘‘family and friends word-of-mouth recommendations’’. Factor 8—time. Three criteria associated with time were included in this factor; these being ‘‘time for traveling’’, ‘‘number of days of the tour’’ and ‘‘choice of
Cumulative variance
Cronbach alpha
destination’’. This factor explained 5.5% of the variance and had an eigenvalue of 1.64. Its factor mean was 3.78. It was the third important package tours selection factor for Hong Kong travelers when measured by mean score. 4.5. Mean differences of package tours selection factors by travel-related behaviors Four out of eight travel-related behaviors were found to be significantly different among package tours selection factors. They were: 1. times of joining package tour, 2. traveling partners,
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3. travel with child(ren), and 4. number of traveling partners. Times of joining package tour. Mean ratings of the times of joining package tours were significantly different on factor 1Btour arrangement and service quality (p=0.034). Respondents who have never joined a package tour and joined less than 3 times differed significantly from those who had joined 7 times or more. Respondents with more previous experiences of joining package tour tended to pay more attention to the tour arrangement and service quality. Traveling partners. Respondents traveling with different partners differed greatly on the ratings of package tours selection factors. It revealed that factor 1 (p=0.022), factor 2 (p=0.010), factor 3 (p=0.018), factor 4 (p=0.001) and factor 7 (po0.001) were significantly related to traveling partners. Individuals traveling with family and relatives were more likely to place higher ratings of importance than those traveling alone and with friends on factor 1Btour arrangement and service quality and factor 3Bhotels and airlines. It was also found that people traveling with friends were less concerned with factor 2Battractions than those traveling with spouse, family and relatives. Besides, participants traveling with a spouse paid more attention than those accompanied by family relatives and spouse and friends on the factor 2. Similar to factors 1 and 3, respondents traveling with family and relatives placed higher emphasis than people accompanied with others and traveling alone on factor 4BTV promotions and customer care. Respondents traveling alone viewed factor 7BWord-of-mouth as not important in package tours selection. However, people traveling with others considered factor 7 as fairly important for tours selection. Travel with child(ren). Significant differences were found between those traveling with and without children on factor 1Btour arrangement and service quality (p=0.016) and factor 4BTV promotions and customer care (p=0.027). Respondents traveling with children tended to place higher importance on both factors 1 and 4 than those who planed not to travel with children. Number of traveling partners. Significant differences only appeared in the factor 4BTV promotions and customer care (p=0.030). The results illustrated that factor 4 was more likely to be considered as important package tours selection factor by respondents traveling with more partners than those traveling with only one companion (Table 5).
5. Discussions The results of this study are consistent with findings that all-inclusive package tours are the most popular
traveling mode for Hong Kong people (Mok & Armstrong, 1995). It also found that Southeast Asia and China were the two major travel destinations for Hong Kong residents and that they would mostly travel with 2–4 companions. These results are consistent with those generated by Hong Kong Tourism Board (2000) and Pacific Asia Travel Association (1995). A finding similar to previous research (Lai & Graefe, 2000; Wong & Lau, 2001) was that safety was the most important package tours selection criterion. Due to the 9/11 incident and frequent car crashes of tours in China (Oriental Daily 2001a–c), the demand for safety in package tours is easily understood. ‘‘Guaranteed departure’’ was considered as the second most important selection criterion for Hong Kong people choosing package tours. This is quite specific for Hong Kong package travelers because not all tours are guaranteed departure even though full payment has been made in advance. Most tours will depart only if the number of travelers reaches a certain level. It is quite common in Hong Kong to see that many travel agents ‘‘transfer’’ their customers to another similar package, but depart on a different date, when the number of travelers cannot reach a minimum level. Therefore, it reflects clearly from this study that customers dislike this arrangement although travel agents may argue it is necessary for survival. On the other hand, customers may cancel the tour. However, there is a stringent penalty system practised by the travel agents in Hong Kong for such cancellations. There are five stages for the penalty system commonly used in Hong Kong. For cancellations made within 7 days before departure, no refund is made to customers. For cancellations made from 8 to 21 days before departure, a 25% refund is made. For cancellations made from 22 to 27 days before departure, 50% is refunded. For cancellations made from 28 to 34 days before departure, HKD 3000 will be deducted as administration charge. For cancellation made 35 days before the departure, HKD 300 will be charged as administration fee (P&O Travel, 2003; Jetour, 2003). Although it may be argued that inequity exists between the customers and the product providers, this has become a market’s norm. In addition, Hong Kong residents tend to have a ‘‘tight’’ schedule for holiday time. Therefore, adhering to the original itinerary is important while at the same time the case of canceling the tour is rare from the customer side in Hong Kong. The least important criterion for tours selection was TV advertisements and travel programs. Many respondents reported that TV advertisements and travel programs were viewed as entertainment only which did not affect their choices of package tours. Tour arrangements, service quality and routing were the important factors for Hong Kong residents in selecting their package tours. It could be explained by
Table 5 Results of independent t-test and one-way ANOVA on mean difference of package tour selection factors by the travel-related behaviors of the respondents (N=220) Travel-related behaviors
Factor 1 Tour arrangement & service quality
Factor 2 Attractions
Factor 3 Hotels & airlines
Factor 4 TV promotion & customer care
Factor 5 Routing
Factor 6 Personal interests
Factor 7 Word-ofmouth
Factor 8
Times of joining package tour
F=0.034 0o7–9 (3.96o4.33) 0o>9 (3.96o4.29) 1–3o7–9 (4.12o4.33) 1–3o>9 (4.12o4.29)
F=0.255
F=0.109
F=0.356
F=0.772
F=0.403
F=0.491
F=0.543
No. of days of the coming tour
F=0.506
F=0.109
F=0.165
F=0.758 F=0.579 No significant difference
F=0.633
F=0.380
F=0.744
Traveling partners
F=0.022 TAaoF&Rb TAoF&R (3.90o4.33) FriendsoF&R TAoFRSF
F=0.010
F=0.018
F=0.001
F=0.224
Fo0.001
F=0.996
TAoF&R (3.60o4.04)
(3.10o3.82)
(2.81o3.41)
(4.12o4.33)
(3.58o4.04) FriendsoF&R (3.60o3.86)
(3.10o3.72) FriendsoF&R (3.55o3.82)
(2.95o3.41) FriendsoF&R (3.15o3.41) FRSFoF&R (3.15o3.41)
Travel with child(ren)
t=0.016 NooYes (4.17o4.36)
t=0.337 No significant difference
t=0.077 No significant difference
t=0.027 NooYes (3.14o3.39)
No. of children
F=0.696
F=0.082
F=0.687
No of traveling partners
F=0.072
F=0.200
F=0.967
SpouseoF&R
No significant difference
TAoSpouse
(1.93o3.54)
TAoFriends
No significant difference No significant difference
t=0.627 No significant difference
t=0.306 No significant difference
t=0.446 No significant difference
F=0.265 F=0.386 No significant difference
F=0.773
F=0.168
F=0.692
F=0.030 1o2–4 (2.95o3.25) 1o>4 (2.95o3.28)
F=0.916
F=0.701
F=0.721
F=0.097
No significant difference
589
Remark: aTA is travel alone. bF&R is family & relatives. cFRSF is family & relatives & spouse & friends. Mean ratings are bolded and in italic fonts. po0.05, po0.01.
t=0.152 No significant difference
(1.93o3.50) TAoF&R (1.93o3.56) TAoFRSF (1.93o3.33)
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FRSFcoSpouse
F=0.176
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FriendsoSpouse
No significant difference
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the market being experienced consumers of package tours. The more experience one has, the more requirements and values one demands. Additionally, human want is arguably unlimited, so clients who are satisfied at one time may well desire more the next time. Time was found to be the third most important selection factor. Under the culture of feeling ‘‘rushed’’, Hong Kong residents, especially those in work, normally bear in mind that ‘‘time is money’’. Thus, time has become one of the major considerations for Hong Kong people traveling abroad. People with more package traveling experience were found to pay more attention to tour arrangements and service quality, implying that people become more discerning through experience of past experiences of ill-conceived schedules and poor service quality. The results also indicate that Hong Kong people generally pay higher attention and impose higher requirements on tour selection when they plan to travel with their family, relatives and with children. Since the needs of children were different from adults, some special services and facilities might be needed for children, especially for children less than three years of age. Besides, package tours are priced on a per person basis (Sheldon & Mak, 1987). Although the price of package tours for children is lower than that for adult, children are still required to pay separately. Therefore, it was rational for people traveling with children to be more concerned with tour arrangements and the value of tours. Finally, the number of those traveling together produced relationships that were statistically significant when related to TV promotions and a customer care factor. It was believed that the room arrangements for Hong Kong package tours affected the importance rating on this factor. Almost all the package tours in Hong Kong offer twin rooms for travelers, and a handling charge is imposed for room changing. It may be inconvenient for odd numbered traveling groups to share rooms with other unfamiliar people in the tour. Hence, the travel group with more than two people would pay more attention to TV programs and customer care factors.
6. Recommendations and conclusions Price wars, adding exciting activities and new attractions into tours are the general practice for Hong Kong’s travel agencies operating in the market’s state of keen competition. Whenever a travel agency or operator makes small changes in its package tours, others will follow immediately, with the result that almost all the travel agencies are offering the same products. However, in order to meet tourist demand a number of recommendations might be proposed.
Safety and guaranteed departure. Safety and guarantee of departure are the two most important criteria for Hong Kong package travelers in selecting tours. In order to compete with the others in the market, travel agencies are strongly advised to pay more attention to these two areas and improve the situation. To improve the safety issue of tours, travel agencies could design safer itineraries, provide more first aid training to escorts and tour-guides and employ experienced drivers for the tours. To guarantee departure, they could reduce the variety of tours to the same destination, thereby concentrating numbers and increasing the possibility of departure, sustaining profitability and reducing insurance costs against cancellation. Training for escorts and tour-guides. The quality and experience of escorts and tour-guides is one of the major components for Hong Kong residents choosing a package tour. It is therefore suggested that comprehensive and professional training that covers the knowledge of destinations, interaction skills and skills of handling emergencies should be provided to escorts and tourguides. Additionally, incentives could also be applied as a motivator to encourage them to deliver high quality services and thus, indirectly generate repeat business for the travel agency. Customer welfare services. TV promotions and customer care factor was the least important for package tours selection in this study. Travel agencies might save much money and resources from TV promotions, but improving customer care services could be a way for them to increase their competitiveness. They are highly recommended to pay attention to customer welfare, especially when they deal with odd numbers within traveling groups and those traveling with children. Customer care services could be enhanced by reducing the supplemental charge for room changing and catering for the special needs of children traveling aboard.
7. Conclusions Identifying the important selection criteria for outbound tourists (in this study—Hong Kong residents) choosing package tours is the primary objective of this study. A total of 30 package tours selection criteria were identified in the study. Among the 30 selection criteria, safety of the tour was the most important criterion, followed by adherence to departure dates and the service quality of travel agency. TV advertisements and travel programs were found to be the least important criteria, and were just viewed only as entertainment that might not affect consumption decisions. Eight factors of package tours selection criteria were successfully derived by the use of factor analysis. They were tour arrangements and service quality, attractions, hotels and airlines, TV promotions and customer care,
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routing, personal interests, word-of-mouth and time. Among these factors, tour arrangements and service quality were considered as the most important items. Routing was the second most important factor, while TV promotions and customer care were the least important items for Hong Kong people selecting packages tours. With regard to the relationships between travelrelated behaviors and package tours selection factors, times of joining package tours, destination of the coming tour, traveling partners, traveling with children and number of traveling partners were significantly related to package tours selection factors. It was concluded that travel-related behaviors would affect the choice of package tours for Hong Kong residents. Finally, marketing suggestions were made for Hong Kong’s travel agencies in this study. Safety and guaranteed departures, training for escorts and tourguides, and customer care services were the three areas to which travel agencies should pay attention. By emphasizing these three areas, the attractiveness of package tours and the competitiveness of travel agencies could be improved. However, caveats exist that may limit these recommendations. It can be argued that in a fiercely competitive market structure, those that initiate these policies would well by quickly imitated by competitors. It is common to see this phenomenon in Hong Kong that a 100% copy of the itinerary appears in the next day’s newspaper when another travel agency discovers their competitors’ new initiatives. Nevertheless, this study had successfully identified the selection criteria in a macro sense, that is, to show the overall preference of outbound tourists. All travel agents can benefit by understanding holistically how their customers choose their products. Having said that, any introduction of these policies would need to be carefully considered within a wider schedule of product enhancement and market strategies. Individual travel agents or operators should not just simply copy competitors’ new initiatives. Each travel agent should have its own strengths and weakness. A direct copy without taking self evaluation and product development may, on the contrary, lose market share in the long run. Finally, the conventional limitation should be observed—that is the study is of 220 respondents out of a market of over 3 million, thereby necessitating obvious caution in implementing the recommendations and generalizing the findings; thereby re-iterating a familiar call for yet more research to confirm these findings. By the same token, further research can be extended to investigate other cultures such as residents in USA and Europe and even Chinese people living in Mainland China, Taiwan, Singapore and Malaysia. Such comparisons to see any differences or similarities between different cultures in the selection criteria would possess
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interest while permitting tailor-made marketing strategies appropriate to each market segment.
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