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Evaluating Customer Behaviour in Online Room Reservation Dissertation


Executive Summary

The behavior of customers when it comes to online room reservation is an issue that has attracted the attention of many leading multinational hotel groups in the modern market. The global hospitality industry is increasingly becoming competitive, and it forces firms to find ways of dealing with stiff competition. In such a competitive industry, it is critical for a company to understand the changing trends and be able to adjust its operations in line with the market changes.

Traditionally, hotels relied on travel agents and regular customers to ensure that their rooms were fully booked. However, the emergence of online room reservation has completely changed the mode of operations in this industry. The internet has made shopping easy for clients. They no longer have to visit brick-and-mortar stores to purchase what they need. In the hospitality industry, these customers no longer have to visit hotels or make phone calls to agents to book rooms.

New technology has emerged that enables them to view products, which are available in the market, the prices charged, quality promised, and any other detail they may need when planning to travel. They can make their advanced booking online at the comfort of their offices or homes. The popularity of online room reservation has been witnessed not only in developed economies such as the United States and the United Kingdom but also in the emerging economies of Asia and Africa. Time has come when multinational companies have to take seriously the opportunity presented in the online market.

For multinational companies to take full advantage of the opportunities in the online market to boost their sales, they have to understand the online behavior of their customers when they make online room reservations. They should know the factors that influence their decision-making processes. They need to know what makes them choose a given product and not the other. This information is critical because the online market is proving to be very important for multinational hotel groups.

Most of the new clients in the online platform want different products based on their unique demographical factors. Factors such as customers’ age, gender, social status, race, religious, cultural beliefs, among other demographical factors influence their decision-making process. The problem is that a lack of physical interaction between a company and its customers make it almost impossible for the companies to know these needs. There is also the desire for these firms to prove to their clients that they understand and are capable of meeting their desires. As such, these firms are forced to use available means to collect data about the online behavior of their clients to identify what they desire. Some of them will be interested in low-cost products. Others are concerned about reliability than anything else when making their purchases. Some of them place a massive emphasis on quality while others love adventure. The company must understand the uniqueness of these needs so that it can proposition its brand and products in the appropriate way.

This paper is divided into five chapters. The first chapter of the paper is the introduction. It provides detailed background information about customer behavior when it comes to the online room reservation. It describes the emerging trends in this field and the hospitality industry. It also explains how firms can find ways of managing the market forces to remain operational. The first chapter provides a rationale for the study, detailing why it was important to undertake the project and the potential beneficiaries. It outlines the objectives and research questions for the study. The second chapter provides a detailed review of the literature on this topic.

The researcher appreciates that other scholars have done some work in this field of study and as such, it is important to appreciate their work and use it as a basis for this study instead of duplicating already existing information. The chapter discusses various theories and ends with the formulation of the research hypothesis. The third chapter provides a detailed review of the methods used in this research project. It starts by explaining the research philosophy, research approach, and research strategy that were used. It then describes the method used to sample participants and collect data from them. The design of the questionnaire used to gather the data from the respondents is also explained in this chapter. The chapter ends with the explanation of validity, reliability, and ethical issues in this project. Chapter four provides a detailed analysis of the primary data that was collected from the field. The chapter discussed the research questions and hypotheses based on the primary data gathered from the field. The last chapter provides the conclusion and recommendations.

It is clear from the analysis of both primary and secondary data that evaluation of customer behavior concerning online room reservation is a critical activity for the multinational hotel groups. The data from both sources show that these companies must know what their clients need in the market to ensure that they can provide it in the best way possible. One of the best ways of doing that is to monitor their keywords in their online searches.

The study strongly recommends that they should use Google analytic tool to get such data. The tool will help these firms in understanding the most common keywords that customers use in their online searches when they want to purchase hotel products. Words such as cheap, quality, adventure, exclusive, private, family-oriented, and so on will point out what these customers are looking for when planning to make their purchases. The tool will also explain their behavior regarding how they prefer purchasing their products. It will be possible to know whether they prefer making their purchases directly with the service providers or if they prefer using online travel agencies. The information that is collected from them should be used to develop products and promotional messages for the clients.

Introduction

Background of the Study

Technology has transformed the world into a global village, and the business community is keen on taking maximum advantage of the emerging trends in the market. Massive improvements that have been witnessed in the field of transport and communication have been of great benefit to multinational corporations. According to Line and Runyan (2012), e-commerce is now a major business trend that cannot be ignored by the business community. In most of the European countries, the size of the middle class has been on the rise. Most of them spend a lot of their time in their work trying to achieve success and climb the career ladder.

They have limited time to spend shopping around for what they need. E-commerce has been a major relief to most of them because they can now purchase most of the items they want in the comfort of their offices or houses. They no longer have to visit the brick-and-mortar stores to make their purchases. It means that they have more time to spend in their offices or at home with their families. According to Epps and Trebilcock (2013), when the concept of e-commerce first emerged, many doubted its practicality, especially the large multinational corporations. However, it is now clear that the online market is very relevant to small, medium, and large corporations in modern society. Many people are now making their purchases online because of its efficiency and the limited time they have when planning to make their purchases. That is why many companies are now giving e-commerce special attention as they try to take full advantage of the opportunities it presents to them.

The hospitality industry is one of those that have been significantly affected by the emergence of e-commerce. In Europe and North America, many people- especially the middle class and the rich- value regular vacations every time they are off work (Pappas & Bregoli 2016). They prefer visiting places away from their hometown. They visit Africa, parts of Asia, Europe, or North America. It means that they need to book hotels where they can spend time whenever they travel. In the past, these tourists relied on agents. However, the services of the agents were not reliable (Zolait 2013). The agents overcharged their clients and sometimes offered substandard services.

When online room reservations emerged, most of the tourists and business travelers saw a new opportunity. It was a less costly, more convenient, and simpler way of booking hotel rooms. It also eliminated the geographic barrier that existed in the past. Today, more rooms are booked through online platforms than through traditional agents (Matias, Nijkamp & Romão 2016). Online room reservation is currently generating attractive revenues for many major hotels operating in various parts of the world. That explains why many multinational hotel groups are currently giving special attention to online room reservations as they try to ensure that they remain competitive in their operations.

Evaluating customers’ behavior when they are making online room reservation is one of the areas that many major multinational hotel groups currently focus on in their operations. The nature of doing business in this industry has completely changed. These firms know that the era when they had to wait for visitors to come to their hotels is long gone. They now have to take the initiative of reaching out to potential customers wherever they are and guiding them to their facilities. It means that these hotels have to monitor the behavior of their potential clients to determine how to position their products. Some of these customers look for affordable rooms.

Others emphasize more on the quality of the services they require and pay less attention to the price (Peris-Ortiz & Álvarez-García 2015). Some of these clients look for specific meals when visiting these hotels. Some want to book hotels where the needs of all of their family members, including their infant children, will be fully met. Other tourists want adventure whenever they visit a place. Most of these customers currently prefer paying once for all the services they will get when they visit a given place instead of having to deal with so many agents. Multinational hotel groups can learn about the needs and desires of these clients by monitoring their online searches. Every time these customers go online, these companies can know what they are looking for in the market. Monitoring their online behavior is the best way of knowing how to package various products in a way that best meets their desires. In this paper, the focus will be to evaluate the customer behavior of online room reservations.

Research Problem

Multinational hotel groups around the world are currently faced with stiff market competition as new firms emerge in the market. Hilton Worldwide Holdings, InterContinental Hotels Group, and Marriott International / Starwood Hotels & Resorts are some of the top multinational hotel groups in the world today (Katsoni & Stratigea 2016). These multinational hotel groups are finding themselves in very challenging situations, as they have to deal with emerging competitors in this market. In the past, most of these companies relied on advertisements and close relationships with top agents within this industry to have a regular flow of visitors into their hotels. Although the advertisement is still important in promoting their brand, to get regular customers, they have to go beyond it because of the changes that have happened in the global market.

A report by Mittelhammer (2013) shows that many people currently rely on the internet to get the information they need. Whenever one is planning to travel, they often go online to understand the local forces in the countries they will visit. Some of the important information they look for on the internet include security, ease of movement from one place to another, sites to visit, and places to avoid, and weather conditions so that they can know what to wear. Alsos, Eide, and Madsen (2014) say that these tourists or business travelers also use the internet to compare the cost of their travel. They rely on the internet to get information about varying costs of air ticket, cost of hotels, and other services they require before, during, and after their trip.

In the past, marketing researchers had to engage customers through interviews to get to know about their changing needs in the market. However, Louw (2012) says that sometimes clients gave misleading information during such interviews because of their desire to avoid being considered controversial based on society standards. It means that they would say they prefer service A while the truth is that they prefer service B.

A firm would then spend many resources making service A available while in the real sense the market demands for service B. The emergence of search engines has made it possible for marketers to get the truth about what their clients need without engaging them in interviews. Monitoring the online behavior of customers is the best way of knowing what they want in the market. In many cases, these marketers look for key terms in their searches. Terms such as cheap, affordable, high quality, reliable, readily available, flexible, and accessible help in knowing what they want in the market. A client who is interested in first-class services in a hotel will rarely focus on price. Keywords used by such a client would include quality, flexible, exclusive, and reliable. On the other hand, a client who is interested in relatively cheap hotel services would use terms such as affordable, basic, and discount when making online searches.

Multinational hotel groups must recognize these new trends when evaluating customer behavior. It is unfortunate that some of these top global hotels are not giving this issue a proper priority. They still fail to understand how important it is for them to know how to track down specific online customers and position to them products that meet their needs in the best way possible. According to Albarran (2017), even those customers interested in basic hotel services prefer having quality products. They may be thrilled if they are presented with an opportunity to use the services offered by top brands in the hospitality industry.

During off-peak seasons in the tourism industry, these hotels can come up with products for the market segments that often believe they can only afford cheaper services. By monitoring their online activities, the company can determine their number and buying capacity. The firm can then come up with products that they can offer to them in a way that will neither hurt their profitability nor harm their brand in the market (Zeiser 2015). Their goal will be to increase their revenues without tainting their prestigious brand. Monitoring online activities will also help these firms to engage with other companies offering supplementary services in the industry. For instance, when it is established that some of the visitors will be interested in visiting a given park or scenery, the hotel can arrange with the local tour guides so that these services can be made available as soon as they arrive. Through this study, the relevance of evaluating customer behavior when making an online room reservation will be outlined to enable the multinational hotel groups to know why it is important.

Research Aim and Objectives

Marketing is a broad field, and when one is conducting research, it is appropriate to come up with a clear research aim and objectives to guide the process. Having a clear research aim ensures that the study remains focused on a specific issue. On the other hand, setting research objectives enables a researcher to understand the type of data that should be collected from the field. The primary aim of this research project is to evaluate customer behaviors when making an online room reservation with respect to multinational hotel groups. The following are the specific objectives that must be achieved by the end of this project:

  • To determine what visitors look for when planning to make an online room reservation.
  • To identify factors that define what online visitors purchase whenever they want to make an online room reservation.
  • To come up with ways through which multinational hotel groups can monitor customers’ behavior and determine their needs
  • To explain how multinational hotels can use the information they mine in the online platform to define their products.

Research Questions

Online consumer behavior is a very popular topic in the field of marketing today because of the increasing relevance of e-commerce. According to Inversini and Masiero (2014), many researchers have tried to explain how the online behavior of customers can be monitored and the information used by firms to define their operations in the market. In this study, it was important for the researcher to evaluate the buyer behavior of online room reservations. This is a narrow topic within the larger field of online customer behavior. It was important to come up with specific questions that can help in collecting data within that set frame. The following are the questions that guided the process of gathering both primary and secondary data:

  1. What do visitors look for when planning to make an online room reservation?
  2. Which factors define what online visitors purchase whenever they want to make an online room reservation?
  3. What are the ways through which multinational hotel groups can monitor customers’ behavior and determine their needs?
  4. How can multinational hotels use the information they mine in the online platform to define their products?

Significance of the Study

According to Browning, So, and Sparks (2013), research is often a time-consuming process that often requires funding to be completed successfully. As such, it is important to explain its significance to justify the need to conduct it. In modern society, the size of the middle class at the global level is one the rise. The ease with which information is available also makes many people interested in traveling the world.

It means that the demand for the products offered by the hospitality industry is on the rise. The trend is not just common in developed economies such as the United Kingdom and the United States but also in the developing countries of Africa where many tourists visit to see the wildlife. However, as the demand for these products keeps rising, the number of firms offering the same products is also increasing. The level of competition in the market today is far greater than it was two decades ago. Azevedo (2013) says that competition in the hospitality industry is so stiff that only the best and the strongest can survive.

Revel Casino Hotel is a good example of how ruthless the market in the hospitality industry is, especially to firms that fail to understand and properly plan their operations. Failure to master the market may have a devastating impact on the ability of a firm to achieve success. That is why multinational hotel groups are keen on understanding the changing market forces and how to adapt to remain successful.

In modern society, customers often prefer making their purchases online. Most of the young and middle-aged residents of the United Kingdom spend a lot of time on the online platforms (Yang, Zhong & Zhang 2013). Customers find it more convenient to purchase the products they need through the online platform than visiting brick-and-mortar stores. As such, many companies are now shifting their focus to e-marketing. They have realized that the best way of reaching their clients is through various online platforms. Leading hotels are also keen on using online forums to reach out to their customers (Adeline & Wai 2013).

This is specifically so because traditional agents that they relied on to get visitors are no longer relevant. Customers now prefer making direct online bookings. However, many of these hotels still find it challenging when it comes to understanding the needs of the clients in the online platform. Unlike before when they would directly engage their customers and determine their expectations, these firms now have to determine their needs by monitoring their online activities.

This research project will be very important to multinational hotel groups operating in Europe and other parts of the world. It will explain how these companies can monitor the online behavior of customers, especially during room reservations. Through this paper, it will be clear what these firms should look for when customers are online. It will describe factors that determine the final decisions that buyers make when booking hotel rooms. It will also be possible to classify customers into clusters based on social status, cultural needs, age, gender, and other demographical factors that define their purchasing behavior. The recommendations that are provided in this report are very helpful to players in this industry, especially at a time when the competition is getting stiffer. Future scholars in this field will also find the document informative.

Report Structure

It is important to explain the structure of this academic report. The first chapter is the introduction that describes the background of the study, research problem, research aim and objectives, research questions, and significance of the study. The second chapter is a detailed review of the literature and analysis of relevant theories to the study. The third chapter explains the methodology of the report. It outlines the sources of data, sampling method, and sample size, the data collection approach, and the analysis of the primary data. Chapter four is a detailed analysis of the primary data gathered from the respondents and a discussion of the findings. Chapter five provides a summary of the findings and a series of recommendations that should be considered by players in the hospitality industry. The last section of the paper is a list of references used in the research project.

Literature Review

Chapter 1 has provided a detailed background of the study and objectives that should be achieved by the end of this project. In this chapter, the focus will be to review what other scholars have found out in their studies when researching this topic. According to Moran (2015), the primary goal of a piece of research is to add new information to the existing body of knowledge. It is not prudent for a researcher to reproduce information that is already available in the existing literature. That is why it is important to start by evaluating the existing information through a literature review.

According to Baack, Harris, and Baack (2013), evaluation of online customer behavior in the hospitality industry has attracted the attention of many scholars around the world. The hospitality industry is currently one of the most competitive industries in the global market. The fact that this industry relies on holiday seasons to make attractive profits has forced most of the players to find effective ways of surviving during off-peak seasons. That is why they are looking at every possible way of attracting both local and international visitors. It has become evident that many customers now go online when looking for the products they wish to purchase. That is why marketing in the hospitality industry has changed completely.

According to Ballantyne and Packer (2013), marketing in modern society is very different from what it was about five decades ago. The scholar says that before the 19th century, firms did not have to worry about marketing. In fact, it was a foreign concept to many large companies by that time because the competition was limited. The focus of many companies at that time was to manufacture high-quality products and make them available in the market. Their primary concern was production. However, that has been changing over time as firms continue to emerge in the same market offering the same products.

It became apparent that firms had to fight for the market to survive. Knight (2013) says that marketing in modern society has become so important that firms are spending billions of pounds to make their brands visible. When a customer is faced with a situation where he or she has to choose from two or more products, one of the factors that often guide their decision is brand popularity. Brands such as Hilton and InterContinental have gained massive popularity in the hospitality industry, and it is easy for customers to choose them over other existing brands. The visibility of a brand in the market is important when a firm is facing competition from new entrants offering relatively cheaper products (Papathanassis, Breitner & Groot 2014).

It is possible for buyers to ignore the price and opt for a product they trust. It is the reason why marketing as a department and a role within these large multinational hotels has increasingly become important. Given the dynamism of the market that has been witnessed over the years, the time has come when marketing has to take a completely different approach from the one it has traditionally taken. Monitoring the online behavior of customers has become a critical activity that these companies cannot ignore.

E-commerce in the Hospitality Industry

The emerging technologies in the field of communication have transformed business operations in the hospitality industry (Escobar-Rodríguez & Carvajal-Trujillo 2012). In the past, the industry relied on the brick-and-mortar business model to reach out to its customers in the market. However, that is no longer the case in the modern business environment. The international hospitality industry now heavily relies on e-commerce more than it ever did before.

According to Carvalho (2015), the customer base is increasing, but the number of competitors is increasing too. It means that players in the industry must find ways of doing their businesses differently to ensure that they remain relevant. E-commerce offers a unique platform that many multinational hotels cannot afford to ignore. Most of the customers that these companies target are always online. Young travelers and the middle-aged people who want to tour the world or make business trips often spend a lot of time on the internet as they try to understand their destination, what to expect, and how to get the best deals. Even the elderly people who were thought to be less active on the internet currently go online when they plan to travel to help them choose the best deals in the market.

The hotels have also found e-commerce very beneficial, especially in terms of improving their profit margins. In the past, they had to share their profits with the agents that directed visitors to their hotels. These agents acted as intermediaries, benefitting from both the hotels and the customers. Blythe (2013) says that the agents reduced the profitability of the hotels while at the same time making the services so expensive for the visitors that many opted not to travel.

The emergence of e-commerce has helped many hotels to eliminate the need to rely on these agents. Although these agents are still active and cannot entirely be ignored by these hotels, they are no longer as powerful as they used to be in the past. Many hotels are now receiving direct clients who visit their website and book for the products they desire. These hotels get to enjoy the profits because they no longer have to share it with the agents. The customers also enjoy reduced costs because they are not paying the intermediaries anymore. They can also benefit from the discounts that are offered by the hotels.

According to Hung and Law (2011), to achieve success through e-commerce in the hospitality industry, a firm must master its buyers’ needs. Understanding clients’ expectations are not only important in the hospitality industry. It is also very important in any other business sector. Customers currently have numerous choices to make whenever they want to purchase products in the hospitality industry.

They will always look for the product that meets their needs in the best way at the least cost possible. Hsu (2012) also notes that the dynamism in this industry is another issue that these companies cannot ignore. A product that is popular in the market today may not be popular a few years to come. People of different age groups, gender, social status, ethnicity, religion, and educational levels may also have varying demands when looking for hospitality products. It means that any successful hotel must be capable of understanding these varying expectations and be able to meet them. The elderly will place their health, safety, security, and comfort ahead of other needs. On the other hand, the younger generation would place adventure and happiness ahead of factors such as safety and security (Egger, Gula & Walcher 2016).

It does not mean that the younger generation should be offered adventurous products at the expense of their security. Similarly, the elderly should not be offered safe and comfortable products without considering their happiness. The two extremes must be balanced in a way that will ensure that they are happy with what is offered to them. According to Oplatka and Hemsley-Brown (2012), in some cases, customers may opt to use online travel agencies believing that they have a better capacity to meet their varying needs in the most appropriate manner. These multinational hotel groups should, therefore, maintain a close working relationship with these online travel agencies.

Online Consumer Decision-Making Process

According to Lee, Guillet, and Law (2013), it is common for a customer to make decisions when planning to purchase a given product in the market. This is specifically so when these customers are presented with a number of options in the market. They have to evaluate the options presented to them and select the most appropriate ones based on their needs at a specific time. Chong (2013) says that various factors often influence the decisions that customers make every time they plan to purchase a product.

It is important for any business entity to know the decision-making process of their clients. As explained above, monitoring their searches and the websites these potential buyers spend more time on help in understanding their needs. Once a customer makes a purchase, it is important to investigate factors that influenced his or her decisions (Papathanassis, Lukovic & Vogel 2012). Of interest will be to determine if their decision was influenced by pricing, quality of the product, reliability, loyalty to a given brand, impulse buying, knowledge of the product or lack of it thereof, or a combination of these factors. Such pieces of information will help a firm to know how to target such customers.

The relevance of Social Media

Social media is another online platform that has increasingly become relevant in the modern-day business platform. According to French and Gordon (2015), the emergence of the social media platform has had a revolutionary impact when it comes to the field of marketing. At first, many multinational corporations did not consider social media as a major platform through which they could reach out to their audience and monitor their activities related to their pre-purchase and post-purchase decision-making. For instance, when Facebook was started, many companies considered it a platform for youths to interact and share their ideas.

It never occurred to them that the platform had the capacity of becoming a major advertisement platform. However, the changes witnessed over the past one decade have strongly demonstrated to the global community that these social media platforms are very appropriate when it comes to tracking down online activities of customers and reaching out to them with relevant messages that will convince them to purchase products of a given company. Facebook marketing, Twitter marketing, and YouTube marketing have become very popular ways of reaching out to customers.

Major hotel groups have come to appreciate the significance of social media marketing and are now investing heavily in various platforms as they try to promote their brands. According to Cheng and Huang (2013), Facebook currently has over 1.94 billion active users who visit the website at least once a month. The majority of its users are teenagers, young adults, and middle-aged people. In fact, Heesen (2015) says that about one billion people visit this website on a daily basis.

They share their plans, concerns, and issues about their daily life activities on their Facebook pages. It is common to find cases where one shares with friends and the public about his or her intended trip to a given place. Major hotels are now very active in social media, trying to find out what these potential clients want to purchase. Many of these Facebook users often ask their online friends for advice when they are planning to travel. They ask about the best hotels that offer the best services at competitive prices. It is the best opportunity for the hotels or agents to guide these online buyers to their products (Xu, Yao & Lu 2014). The fact that travel agencies and hotels can identify clients who want to purchase their products has made it easy to come up with effective messages that target specific customers based on their needs.

According to Cavagnaro and Curiel (2012), many multinational hotel groups and online travel agencies have developed their Facebook pages that online customers can visit to get the information they require when planning to purchase their products. On their Facebook pages, they offer their clients graphic information about the products they offer. They have a display of the rooms on offer, meals available, the beautiful sceneries visitors can enjoy, and any other additional service that is available for the buyers. The websites also provide customers with a detailed explanation of these products and their prices to help them with decision-making.

Hardina (2012) says that one of the greatest benefits of Facebook, as an online platform for interacting with clients, is that it allows clients to engage agents of the hotels directly. In case these customers cannot get all the information or clarifications they need from the Facebook page and the firm’s website, they can inbox their questions to the firm. Many of these companies have employees in the marketing department whose work is to respond to the concerns and questions of the customers. Once they receive the messages, they have the responsibility of providing the required clarification within the shortest time possible. The Instant response that buyers get in these platforms encourages them to use the services of these companies.

Multinational hotel groups are currently using their Facebook pages and platform to inform their clients about new offers or new products available for them (Lefebvre 2013). These hotels often monitor closely activities of Facebook users. Whenever they realize that one plans to use their services, they quickly mine information about them available on their Facebook pages and other online platforms. They get to know their age, gender, social status, and nature of work, likes, and dislikes, places they want to visit among other facts. After gathering such facts, they determine if they have products that can meet their needs.

They can then develop a message specifically meant for the customer about the products. They can state about the discounts available, the nature of each product, and the advantages their products have over that of the rival companies (Ravens 2014). The clients will explain if they are interested and capable of purchasing the products. The platform also makes it possible for the company to develop a personal relationship with their customers before and after making their purchases. When buyers are thrilled with the services offered, they will share their good experiences with hundreds or even thousands of their online friends. They will become online evangelists to the firm’s brand, making it popular in the market.

Twitter and YouTube work almost in a similar way as Facebook but have different functionalities. YouTube is used to share videos among its users. It means that advertisers who intend to use YouTube must develop commercials in the form of videos. It is possible to know the intention of customers by looking at the videos they look for in the online platform. However, sometimes their searches can be misleading and indirect.

It is not as easy and as direct as with Facebook users. Currently, there are over one billion active users spread across the world. Twitter is another popular social media platform with over 700 million followers. It is often frequented by the working class, mostly the middle-aged members of the society. Multinational hotel groups are also using other online platforms such as Instagram and LinkedIn to reach out to their clients.

Druica (2012) warns that although social media platforms have become major avenues of reaching out to the customer, they also pose serious challenges that should not be ignored. Negative publicity can travel very fast through online platforms and can have a devastating impact on a firm’s brand. It can be as destructive as it can be constructive to a brand. When buyers are not pleased with a product, they can easily share their experiences with their online community. Such negative messages may easily dissuade other customers from purchasing products of the company. Others would deliberately post negative messages about a given company out of malice. Customers may not know the truth about such negative comments, but they are often likely to treat them seriously.

The management must be capable of determining the source of such negative messages within the shortest time possible. They must then provide an appropriate response to the audience in a way that would not be seen as a direct attack on the person posting the message (Weeden 2016). They must explain if it is out of malice, factors that make the information wrong, and provide proper justification. In case it is true that a customer was not provided with the services they required, then a proper answer must be provided as to why the need was not met.

Some firms have suffered damage to their brand because of the irresponsible use of social media. A good case in point was the incident that happened at Domino’s Pizza that became known as ‘Dirty Domino Pizza’. In this case, two employees of this company video-recorded themselves as they prepared pizza under extremely unhygienic conditions. The video then shows the two employees presenting the dirty pizza to an unsuspecting customer.

They uploaded their video on YouTube. Within a short time, the video had been shared by hundreds of thousands of online users not only in the United States but also in many other countries across the world where the brand is popular (Ray 2015). The top management thought that the incident would not have any impact, but that was not the case. Within a short time, customers started avoiding Domino outlets, complaining about the unhygienic manner in which it prepares its meals. Some even contemplated suing the company. What started as a joke by irresponsible employees of this company was degenerating very fast into a devastating situation that was eroding the popularity of this top brand very fast. The management realized that if nothing is done the company could be forced out of the market.

The chief executive officer had to come out through the same platform that was threatening to tear the company apart and clarify the incident. It forced the company to video record how its meals are prepared to dispel the developing notion that the company is unhygienic. Resources had to be spent to repair the damaged image in the market. To this day, some customers do not trust products offered by Domino’s Pizza. The image they saw on that disgusting video is still very clear in their minds.

Theoretical Framework

In this section, the researcher will focus on the theoretical framework to help in clarifying some of the concepts and beliefs that have been presented in the review of the literature. Many scholars have come up with various theories to explain online customer behavior (Roy, Mutum & Nguyen 2017). These theories should be evaluated to determine their relevance in this paper. One of the theories relevant to evaluating customer behavior when making an online room reservation is a technology acceptance model. It can help in explaining the trend that customers have taken to accept the use of online platforms to make their online room reservation instead of using the traditional brick-and-mortar models. According to this theory, the extent to which people believe that using a given system would be effortless determines their ability to accept it.

People tend to embrace technology if they are assured that they will not face numerous challenges when using it. This theory is closely related to Kurt Lewin’s Change Model. The model explains that before introducing a new concept to people, it is important to make them understand it first. It proposes a systematic way of introducing change among people. The figure below shows the steps that should be followed when using the model.

Kurt Lewin’s Change Model.
Figure 1: Kurt Lewin’s Change Model (Crnojevac, Gugic & Karlovcan 2010).

As shown in the figure above, the first step is to unfreeze. It involves identifying and explaining the weaknesses of the old model and proposing new ways of addressing them. The change champions will be expected to make others believe in the need to embrace change. The next step is to introduce the change itself. It is at this stage that new systems and structures are put in place. The last stage involves the refreezing.

At this stage, the proposed model will be emphasized and any issues that stakeholders may have addressed appropriately. These two theories apply to multinational hotel groups trying to understand online customer behaviors. These firms must ensure that their employees have moved from the old system to the new internet-based system of reaching out to the customer. They have to understand the new system to ensure that they can get the meaning of the information that will be gathered from this report. They must be capable of putting into the proper use of the information that will be collected so that they can help their companies achieve success in this highly competitive hospitality industry.

Theory of Reasoned Action is also very relevant in this study. The theory holds that the behavioral intend of a person can be predictable because it is caused by one’s attitude and objective norms (Lu, Marek & Chen 2015). It is possible to know the decision that a person will make based on personal interests, beliefs, and practices. When trying to determine the online room reservation behavior of customers, the guiding principle will always be their beliefs and attitudes. Those who prefer classy products because of their social class will always be guided by the quality offered other than price. On the other hand, those who are keen on running on a strict budget may prioritize price over quality as long as their basic needs are met.

Hypotheses

After a detailed review of the existing literature, it is important to come up with hypotheses, which will be analyzed using the primary data collected from the respondents. The following were the hypotheses that were developed in this research project:

  • Hypothesis 1: Customers are more likely to (1a) be influenced by price, convenience, and quality of products when making an online room reservation and less likely to (1b) be concerned with the brand.
  • Hypothesis 2: First time online customers are more likely to (2a) rely on the information gained from online platforms when making purchasing decisions than (2b) the repeat customers who already have basic knowledge about what they need and where they can access it.

The researcher will use the data gathered from primary sources to accept or reject the above hypothesis.

Methodology

When conducting research, it is important to have a clear plan on how the data from various sources will be collected, analyzed, and presented in a meaningful manner. Chapter 2 above is a detailed analysis of the secondary data collected from books, journal articles, and reliable online sources. The chapter was dedicated to reviewing existing knowledge in this field to ensure that already existing information is not duplicated in this report (Brennen 2013).

The information from secondary sources provided the basis upon which this research was developed. That is why at the end of the chapter the researcher developed hypotheses, which have to be analyzed using the data from primary sources. This chapter focuses on the methodology of the report. It starts by defining the philosophy that the researcher considered appropriate for the study. It then explains the approach to the research that was used in line with the philosophy that was selected.

The chapter then narrows down further to the strategy chosen for the research (Kara 2015). The chapter outlines the method that the researcher used in sampling respondents used in collecting the primary data, the actual method of data gathering, and the strategy used in analyzing the primary data. Also explained in this chapter includes reliability and validity issues, ethical considerations, and resources used to obtain data from the field. The goal of this chapter was to ensure that there was a proper evaluation of online customer behaviors, from aspects of multinational hotel groups.

Research Philosophy

Research philosophy is the first factor that a researcher must determine when planning to conduct a research project. It focuses on issues such as the nature, source, and process of knowledge development. Most research project often uses both primary and secondary data sources. This was the case in this study. The researcher relied on the primary and secondary data sources to come up with a conclusion on this topic and to provide recommendations.

Bernard (2013) says that defining the philosophy of research is also important because it explains the fundamental beliefs and assumptions made in the study. There are four philosophical beliefs that a researcher may embrace in such a study. They include positivism, realism, pragmatism, and interpretivism. Each of them is unique and appropriate in various contexts. To justify the philosophy that was selected for this study, it is appropriate that each of the four is discussed in detail.

One of the common philosophies used by researchers is pragmatism. This philosophy holds the belief that a given piece of knowledge or a concept is considered true and acceptable only if it is capable of supporting action. Any concept that cannot support action is considered untrue and disregarded under this philosophy. However, this philosophy holds that there are many ways of viewing and interpreting the world. The philosophy is considered pragmatic because of its belief that multiple realities often exist. As such, no single view can be considered capable of giving the whole picture (Jasti & Kodali 2014).

That is why it is flexible enough to embrace varying views, as long as it can support action. In a society where people are unique based on their culture, gender, social status, age, and many other demographic factors, realities may vary. What one group of people sees as reality may not be the same thing as what another group holds to be true. Forcing one group to embrace a given pattern of belief is irresponsible and impractical. The philosophy emphasizes the need to be tolerant of the views of others. As we uphold our views based on our justifications, we have to respect the views of other groups. If we have to embrace a given concept, then the guiding principle should always be the ability to put it into practice and for it to yield the desired results. It was considered the most appropriate philosophy in this project.

Another philosophy that has also gained popularity among researchers is positivism. As its name suggests, this philosophy holds that a concept or a piece of knowledge can only be considered trustworthy and factual if it is gained through observation and measurement (Amelina 2012). It highly values knowledge gained through senses. The researcher must remain objective when collecting data based on this philosophy. They must understand that their role in such processes must be limited data compilation, analysis, and interpretation. When finally making conclusions and recommendations, they must be based on the data collected and interpreted objectively (Vasant 2016).

The philosophy requires researchers to be objective and impartial throughout the process of data gathering. They are not allowed to influence the process through personal preferences or beliefs. It also encourages data analysis done through statistical methods. The outcome of such statistical analysis helps in defining the conclusion that is made in the study. This philosophy is popular, but it was not considered appropriate for this project based on the aims and objectives of the study.

Interpretivism, as its name suggests, involves making interpretation of elements of a study from various perspectives. According to Saldanha and O’Brien (2013), this philosophy is based on the primary belief that reality can be accessed through shared meanings, instruments, consciousness, and language (Mahrooqi, Thakur & Roscoe 2015). Many scholars believe that it emphasizes on idealism when one is conducting a piece of research. The philosophy is strongly opposed to the idea that meaning can reside in society independent from consciousness. Meaning and consciousness, according to this philosophy, are closely intertwined and must always be treated as such when collecting data.

Like pragmatism, it holds the belief that people have different beliefs and values in life and as such, they are likely to interpret different concepts in different ways. For instance, what a poor person would consider a proper hotel may not be pleasing to the rich. Interpretation of the world, therefore, should not always be based on the lens of one group of people. It is a good philosophy, but not the most appropriate of the four philosophies available for the researcher.

Realism is another popular research philosophy that bases its assumptions on the realities of the world, just as its name suggests. It is the belief that reality is independent of the human mind and as such, we need to rely on scientific approaches when developing knowledge (Mehl & Conner 2012). People tend to be biased. Personal interests, age, ethnicity, social groups, family interests, and experiences in life all tend to create bias in people’s minds. Once a person is biased, he or she may fail to see reality the way it is. Ross (2012) says that personal preferences and desires often blind people. They see what they want to and block out of their minds what they do not like.

Even in cases when they are presented with realities, they tend to find ways of justifying their beliefs without duly considering what others feel. It is true that people often experience realities in the world. However, personal beliefs may be so deceptive and blinding that one fails to see the truth in its true sense. As such, the philosophy emphasizes scientific approaches to knowledge development. Irrespective of the skewed beliefs of people, when presented with science, they cannot dispute the truth (Tomsky 2012). Gravitational force is a reality irrespective of what some people may want to believe. This philosophy is very appropriate when conducting a scientific research project. It makes it inappropriate for this social science project.

Research Approach

After selecting the appropriate research philosophy, we had to narrow down to the research approach that is in line with the philosophy and appropriate for the study. The approach must be capable of meeting the set research aim and objectives of this project. A researcher can select one of the three fundamental reasoning approaches. The approaches include inductive reasoning, deductive reasoning, and the abductive approach of reasoning (Bailey & Handu 2013). Each of these three approaches is unique in their ways. An inductive research approach, sometimes called inductive reasoning, is an approach that starts with observation and then proceeds to the development of theories based on what is observed (Bryman & Bell 2015).

It is the movement from a more general to a specific belief. When using inductive reasoning, a researcher is offered the freedom to start the research from the desired point, without being restricted to a given theory or belief. The only principles that will be guiding the researcher are the research questions and the objectives. Hair (2012) says that the approach does not forbid a researcher from embracing a theory he or she considers appropriate earlier on in the study.

However, such theories or concepts should not limit their ability to make proper observations. That is so because the conclusion and recommendations that shall be made in the study must be based on the observations made other than the theories that exist. The theories can only be used to support the observations made and not vice versa (Gast & Ledford 2014). When using this reasoning approach, a researcher is highly encouraged to avoid having formed opinions. Their opinions (theories) should purely come from the observations made throughout the study.

Deductive reasoning takes the complete opposite approach from that of inductive reasoning. It emphasizes the need for a researcher to review existing theories (concepts) and then develop hypotheses based on them. It is a movement from a more specific idea to a general one (Nestor & Schutt 2014). In this approach, a researcher will try to prove that a given belief or theory can be applied in a general context. The approach holds the belief that whenever one is conducting research, it is important to appreciate the works of other scholars. It is not prudent to conduct research as though other scholars have not worked in the same field.

Working from what others have found out makes it easy to enrich a given field with new knowledge. It is important to note that when using this approach, it is not mandatory that a researcher must use a specific theory. Sometimes all that a researcher needs are concepts and knowledge that other scholars have put forth. Using that knowledge, a researcher will set two hypotheses. The primary data will then be used to prove if the set hypotheses are true or not (Kuada 2012).

This research embraced deductive reasoning. Customer behavior, especially the online room reservation practices, is a topic that has attracted so many scholars over the recent past. It was important for the researcher to review the information the scholars have found out and the theories or concepts that they have developed. That has been done in chapter two of this paper. After the review of the literature, the researcher then developed the hypotheses based on the information collected. The researcher then proceeds to analyze the collected data to confirm or reject the hypotheses in chapter four.

Critics of both inductive and deductive reasoning were convinced that it was necessary to come up with an alternative approach that can address weaknesses of the other two approaches. They came up with an abductive research approach. The approach seeks to address the weaknesses of the other two reasoning approaches. It starts with the identification of surprising facts or puzzles (Caillaud, Rose & Goepp 2016).

The researcher will then be expected to solve these puzzles with the help of empirical phenomenon that the existing theories cannot explain properly. It is expected that a researcher will find various explanations for the identified surprising facts. He or she is required to select the most appropriate of the existing justifications. As Fowler (2013) observes, the approach allows one to embrace both numerical and cognitive reasoning when explaining the puzzles. Although it is the most recent of the three approaches, it has faced heavy criticism among scholars, and as such, it is not the most appropriate reasoning approach for this study.

Research Strategy

At this stage, it is important to further narrow down to the research strategy after defining the philosophy and approach necessary for the study. The researcher must find the most appropriate strategy for meeting the set goals and objectives (Skott & Ward 2013). In this project, the researcher will use various strategies to gather the information needed to meet the set goals. Surveys will be very important in collecting data.

Survey

The researcher needed firsthand data collected through a survey to evaluate the customer behavior of online room reservations. It is true that scholars have conducted comprehensive research on this topic, but it is necessary for the researcher to conduct primary research (Yanow & Schwartz-Shea 2014). The survey provides the best way of collecting that primary data. By identifying individuals who have the information needed in the study, it was possible to know the status of the issue under investigation. The information gathered from the survey made it possible to analyze the set hypotheses and research questions. Like quantitative research, it was necessary to analyze the collected data statistically. The researcher developed questions in a manner that enabled statistical analysis of data.

Data Collection

Data used were obtained from two main sources: primary and secondary sources. Secondary data came from published sources and have been reviewed in the second chapter of this paper. The primary data was collected from sampled respondents. The information obtained from these respondents formed the basis of analysis used in confirming/rejecting the set research hypotheses.

Sampling method

Primary data collection is a very complex and time-consuming process that requires proper planning. It is always desirable to obtain data from the entire population to get a clear picture of the issue under investigation. However, time and resource constraints may make it impossible to collect data from the entire population. As such, it becomes necessary to select a sample of the entire population that is manageable given the set time and available resources (Reis & Judd 2014).

In this study, it was almost impossible to gather data from the entire population. Data had to come from marketing experts, players in the hospitality industry, and customers who regularly use the services. These individuals are spread across the world. Collecting data from all of them given the limited time and resources in this study was not possible. The researcher, therefore, decided to use a smaller sample of 90 respondents. The researcher used the stratified sampling method to select the participants. In each of the three strata mentioned above, the researcher identified 30 participants.

Data collection instrument

The primary data was gathered with the help of a questionnaire. Before going to the field to collect data, the researcher developed a questionnaire to help in organizing the process of gathering data (McNabb 2013). The developed questionnaire had three sections. The first part of the questionnaire focused on demographical information of the respondents and their background. This section was essential because the customer decision-making process is often influenced by these demographical factors.

Section two of the questionnaire focused on the academic background of the respondents. As Choy (2014) notes, the level of education of a person often defines how they view specific issues. Some of these respondents have expert authority regarding their knowledge on this topic, and it was necessary to capture that in this paper. The third section of the paper delved into specific issues about customer behavior of online room reservations. Time and resource constraints forced the researcher to administer the questionnaire through an online platform. After contacting the participants, the researcher emailed the questionnaire to them. They were requested to fill the questionnaires and send their responses back using the same platform.

Justification of the instrument

The instrument was selected because of the need to have structured data. It made it possible to provide similar questions to the respondents and a similar pattern of response. The instrument guided the respondents in answering the questions in this project. The uniformity in data collection was particularly important given that the researcher was interested in conducting a statistical analysis of the primary data.

Reliability and Validity

In the modern competitive business environment, firms are keen on understanding how they can become dynamic in their operations to ensure that they remain operational in the market (Theron 2012). As such, they rely on studies to understand the emerging forces and know what they need to do to remain relevant in the market. That is why it is very important to ensure that issues of reliability and validity of data are observed in such research.

The information provided in the recommendations should not be misleading. The researcher used triangulation to enhance the validity of the data. Collecting information from various sources made it possible to identify possible causes of bias. The method enabled the researcher to identify any inconsistencies and to address them appropriately. The researcher also ensured that personal opinion and bias did not influence the process of collecting or analyzing data.

Ethical Considerations

Ethics should be observed when conducting any piece of research (Vaioleti 2015). As an academic researcher, various ethical considerations were observed to ensure that the project was completed as per the set rules and regulations. The researcher started the project after getting approval from the professor assigned. After identifying a few multinational hotels locally within the United Kingdom, the researcher made a formal request to their management to allow their employees to be part of the study. The participants were sampled from institutions that gave their approval. Before starting the process of data collection, the researcher explained the relevance of this project and the role that the sampled participants had to play in it. All their questions and concerns were addressed.

They were informed that they were at liberty to withdraw from this research project at any time without having to justify their decisions. They would not be subjected to any consequences if they decided to withdraw from the study.

Timeline

An academic researcher is often bound by the set rules to complete a dissertation within a specific period. It was important for the researcher to ensure that this project is completed within the set time to avoid consequences set by the school. The table below provides an outline of activities that were conducted in this project and the time within which they were completed.

Timeline of project activities.
Table 1: Timeline of project activities.

Findings and Discussion

The previous chapter has provided a detailed review of the methodology of this report. In this section, the focus will be on conducting a comprehensive analysis of the primary data collected and coming up with a discussion of the findings backed by the information obtained from the secondary sources. The information collected from this chapter will be used to make a conclusion and inform the recommendations at the end of this project. As explained in the methodology section, the primary data was majorly analyzed using quantitative methods.

Primary Data Analysis

In the introductory chapter of this paper, the researcher provided a series of questions that were to be answered using the primary data. The questions were set in line with the primary aim and objectives of the study. The researcher used the questionnaires to collect data from the respondents. The questions set in chapter 1 were integrated into the questionnaire. It is important to analyze each question based on the data obtained from the respondents.

What do visitors look for when planning to make online room reservations?

The first question focused on determining what customers often look for when planning to make online room reservations. Each of the respondents was requested to mention just one thing they believe customers often give priority when planning to make online room reservations. It was important to identify factors that would be prioritized by each of the respondents. The figure below shows factors that appeared most common in the list of the answers they provided.

What customers prioritize when making online room reservations.
Figure 2: What customers prioritize when making online room reservations (Developed by author).

As shown in the figure above, price is still one of the leading factors that customers prioritize when planning to make online room reservations. Most of the online searches entail price factors. This may be explained by the fact that the majority of these travelers are the middle class, traveling for business trips or for vacation and have a specific budget for a specified period. As such, they are keen on the cost of such trips. Another major issue when making an online room reservation is the location of the facilities. The respondents noted that travelers often prefer hotels located strategically based on why they are visiting a given place. Quality of the services offered came third in the list. The respondents emphasized the need to get quality products from the hotels. The reliability of the services and privacy were other important factors mentioned by the respondents.

What are the ways through which multinational hotel groups can monitor customers’ behavior and determine their needs?

The next question focused on determining how multinational hotel groups can monitor buyers’ behavior and determine their needs. The knowledge is critical because it can help them to define how to develop relevant products in the market. Using that information, these firms will also be capable of developing promotional messages that will be in line with the needs and expectations of these online clients. The respondents were requested to state the ways through which these hotels can collect that information. The figure below shows possible tools that can be used by these firms to monitor online customers’ behavior as identified by the respondents.

Tools to monitor the online behavior of customers.
Figure 3: Tools to monitor the online behavior of customers (Developed by author).

As shown in the figure above, most of the respondents feel that Google Analytics is the most appropriate tool for monitoring online buyers’ behavior. This is so because most of them often use Google as their search engine when they are online. It is, therefore, an appropriate tool for this form of data collection. Another group of respondents stated that GFK MRI was an appropriate tool to collect information about the behavior of customers in the online platform. Cision, Sizmek, and comScore are the other tools that these multinational hotel groups can use.

How can multinational hotels use the information they mine in the online platform to define their products?

When collecting data, it is important to determine how it will be used by the relevant agency. It takes time and significant resources for these firms to use various tools to collect information about the online behavior of customers when making a room reservation. As such, the question wanted to determine how these multinational hotel groups could use the information to define the products in the market. The researcher first asked these respondents if they believe hotels can use the data they mine to define their products. The answers provided by the customers were analyzed statistically and the figure below shows their response.

Using the information mined to define products.
Figure 4: Using the information mined to define products (Developed by author).

As shown in the figure above, it is clear that an overwhelming majority of the respondents (85 out of 90) strongly believe that these companies can use the information they mine using various tools to define the nature of their products. When asked how this can be done, the industry experts stated that these companies should use the information to determine the needs of their targeted customers and purchasing capacities.

They should then develop products, which meet these needs in an affordable manner. Some of these respondents argued that the top brands such as Hiltons and Sheratons should develop products, which are affordable to the middle class, especially during off-peak seasons. Such products can help them increase room occupancy hence increase their revenues. At this point, it is important to analyze the hypotheses that were set in chapter 2.

  • Hypothesis 1: Customers are more likely to (1a) be influenced by price, convenience, and quality of products when making an online room reservation and less likely to (1b) be concerned with the brand.

The first hypothesis focused on determining the major factors that influence the customer’s decision to purchase a given product offered by firms in the hospitality industry. The hypothesis held that price, convenience, and quality of products are more important concerns for buyers than the brand of the service provider. The outcome of the primary data analysis shown in figure 2 above confirms this hypothesis. Price, location (convenience), and quality are some of the top concerns identified by the respondents. It clearly shows that although customers may value the brand of a product, there are more important factors that they consider when planning to purchase hospitality products.

  • Hypothesis 2: First time online buyers are more likely to (2a) rely on the information gained from online platforms when making purchasing decisions than (2b) the repeat clients who already have basic knowledge about what they need and where they can access it.

The second hypothesis was interested in determining if indeed it is true that first time online buyers are more likely to rely on the information they get from the online platform than the repeat customers are. The figure below shows their views:

Customer reliance on internet information.
Figure 5: Customer reliance on internet information (Developed by author).

As shown in the figure above, the majority of the respondents feel that first-time customers often rely on the information they collect from the internet. Unlike their more experienced counterparts, these first-timers are often keen to get the information from any relevant source they can find. It is at this stage that online travel agencies become critical players in this industry (Tanford, Baloglu & Erdem 2012). When evaluating customer behavior of online room reservations, these agencies are also important players because leading multinational hotels still rely on them to get regular clients.

Discussion

It is important to explain the relevance and role of online travel agencies in the hospitality industry. According to Morpeth and Hongliang (2015), although e-commerce has made it possible for hotels to reduce their reliance on travel agencies, these agents have not been eliminated. Some of them understood the dynamism in the market and were able to change their mode of operations in line with the changes within the industry.

The emergence of online travel agencies has had a major impact on the hospitality industry (Szutowski 2016). These agencies offer a wide range of products to the customers whenever they want to purchase products in the hospitality industry. Unlike the websites of individual hotels, which limit buyers to their products, these agencies offer their clients a wide range of products available at different hotels based on clients’ unique needs (Safko 2013).

In fact, a number of customers often prefer using these agencies because they believe they are impartial compared with specific hotel websites. The agents have business deals with many hotels and their loyalty is always to their customers to ensure that they remain in operation. Currently, there are numerous online travel agencies operating in various parts of the world. Hotel.com, Orbitz.com, Travelocity.com, Priceline.com, and Expedia.com are some of the leading online travel agencies that customers often use in the market today. These agencies often use three different business models based on the market forces they are dealing with at a particular time. They can operate as merchants, use the commissionable model or the opaque selling model (Chong, Chan & Boi 2012). Each of these models is unique.

When an online travel agency is operating under the merchant model, it purchases travel products from companies, which offer them at a discounted price (Gbadamosi, Bathgate & Nwankwo 2013). They then sell these products to their online customers at a higher price so that they can get their profit. This strategy is very common during off-peak seasons when hotels are under-booked.

Instead of having unoccupied rooms for a long period, these hotels enter into a business deal with these online agencies and offer a significant discount on their products. It is the responsibility of these agents to find customers who can purchase these products. They are expected to use their websites to convince clients to purchase the products (Müller, Lundmark & Lemelin 2013). Although the hotel will offer all the services, which the visitors need once they check-in, these visitors will be considered clients of the agencies. Any complaints that they may have will be directed to the agents. If it is something that should be addressed, it will be the responsibility of the agent to follow up with the service provider. This model was also used among traditional travel agencies. The model is popular among agents operating within a specific location and with the capacity to engage closely their customers.

The commissionable model of business has also been in place among travel agencies for some time (Neirotti, Raguseo & Paolucci 2016). In this model, the online travel agencies get a commission on every visitor that they direct and successfully book the products of a specific hotel. Unlike the above model where the agent has to take care of their visitors from the time they check in to the time they check out, under this model, the visitors become clients of the hotel as soon as they check into the hotels (Tate 2015).

Any responsibility to the client for the agent ends as soon as he or she makes a payment for the product. In return, these agents are paid a percentage of the price that these visitors pay in the form of commission. The model is popular among agencies that operate in a wide market but have a limited number of employees who can take care of the interest of the customers beyond finding them the hotels they need (Gbadamosi 2016). It is also beneficial to the hotels because they can easily develop a personal relationship with these clients so that they can directly contact the hotels next time they need to make another purchase.

The opaque selling model, as the name suggests, is an approach where customers are offered huge discounts by the agencies, but denied critical information about the products they are purchasing (Crane & Matten 2016). In this case, a traveler is instructed to state-specific expectations when planning to travel. Once they state their needs, the agent will provide them with a list of alternatives in the market and their current prices. The customers will be informed that if they consider the offered options too expensive, then they can be offered alternative products at better prices without compromising on quality (Sheldon & Daniele 2017).

The problem is that even the agents are not always aware of the location or specification of the product because they have to go and search for the product based on the stated client’s needs. The client has to pay a given percentage as a commitment that they really do want to purchase the product. At the time of making the purchase, the client knows very little about the product. The agent is expected to get the product within the agreed time and inform the client to complete the payment. Products offered under this model are often cheaper, but very unpredictable (Sharma & Shilpa 2013).

Agents who do not have a well-defied working relationship with specific hotels popularly use this model. They roam around looking for the best deals for their customers. It works well during off-peak seasons when hotels are keen on discounting their products to increase room occupancy (Theodosiou & Katsikea 2012). However, it is not a popular model with many tourists, especially given that they are often unaware of the specifications of the products they are purchasing. Irrespective of the chosen model, it is important for these top hotels to ensure that they maintain close working relationships with these agencies.

Conclusion and Recommendation

The hospitality industry is increasingly getting competitive, and it is necessary for multinational hotel groups to find ways through which they can overcome such stiff market competition. A number of changes have been witnessed in this industry over the recent past. Business travelers and tourists are now using online platforms whenever they want to make online room reservations. They believe that through online platforms they can easily compare services offered by various firms and select the best deals. Traditional travel agencies that operated offices in various cities have been faced out of the market. In their places have emerged online travel agencies.

It is a clear indication of how the industry is shifting to the online platform due to the emerging technological changes. Top multinational hotel groups such as InterContinental Group, Hilton Group, and Sheraton Group are now redefining their operations to ensure that their activities are in line with the changing market forces. They have established social media platforms to help them reach out and interact with their customers. They have also developed websites to help them make online sales for their products. However, these firms still have to monitor and master buyer behavior when making an online room reservation.

Understanding online customer behavior when they are making room reservations is critical to the success of these firms. The information will enable them to understand the average price that online clients are willing and able to pay, quality of the products they want, their preferred locations, the model with which they want their products delivered among other important factors. Getting such information will empower these firms in terms of defining products based on the demand in the market. They will also have a better capacity to reach out to their customers with promotional messages, which are in line with their needs. People often pay attention to the message they find relevant to them. Understanding online buyer behavior makes it possible to develop relevant messages that customers will find informing when planning to make purchases. The following are the recommendations that multinational hotel agencies should put to practice based on the findings of this study:

  • Multinational hotel groups should consider using Google Analytics, GFK MRI, Cision, ComScore, and Sizmek to monitor customer behavior when it comes to online room reservations. These tools, and others that continue to emerge, will help in providing important information these firms need in their operations.
  • The information gathered from the above tools should be used to define products that these firms offer and promotional messages that they pass to their customers.
  • Multinational hotel groups should keenly monitor the emerging trends brought about by the emerging technologies in the hospitality industry and adjust their products and production approaches accordingly. Their products and production methods should always remain dynamic, keeping in line with emerging customer needs.
  • Multinational hotel groups should continue maintaining a close working relationship with online travel agencies. They still play a critical role in finding customers for these hotels.

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IvyPanda. (2020, July 26). Evaluating Customer Behaviour in Online Room Reservation. Retrieved from https://ivypanda.com/essays/evaluating-customer-behaviour-in-online-room-reservation/

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"Evaluating Customer Behaviour in Online Room Reservation." IvyPanda, 26 July 2020, ivypanda.com/essays/evaluating-customer-behaviour-in-online-room-reservation/.

1. IvyPanda. "Evaluating Customer Behaviour in Online Room Reservation." July 26, 2020. https://ivypanda.com/essays/evaluating-customer-behaviour-in-online-room-reservation/.


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IvyPanda. 2020. "Evaluating Customer Behaviour in Online Room Reservation." July 26, 2020. https://ivypanda.com/essays/evaluating-customer-behaviour-in-online-room-reservation/.

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IvyPanda. (2020) 'Evaluating Customer Behaviour in Online Room Reservation'. 26 July.

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