CHAPTER ONE
INTRODUCTION
- Background to the study
Even though the number of internet users is high in Nigeria however according to the Nielsen Mobile Insights Nigeria, those who go online in Nigeria are mainly for social networking and instant messaging. Many of Nigerian internet users spend time online to socialize rather than to purchase. Researches also indicate 81% of those who browse websites do not actually make purchases. Hence online purchasing in Nigeria can still be developed further so strategies need to be in place to encourage this growth. This exploratory research can assist in understanding online consumers’ attitudes and behaviours when making online hotel room reservation. Consumers who are interested in making a hotel room reservation online can use two different methods to make their reservations. They can either reserve the hotel room via hotel official websites or a third party hotel websites. Hotel official websites is a form of distribution channel where hotels used to market and sell to their consumers. Many hotels especially major international hotel chains choose to use this form of distribution channels such as Hilton.com and Starwoodhotel.com. The other method is that consumers can use to reserve hotel rooms online is via a third party which is also known as Online Travel Agents (OTA). These OTA are considered intermediaries that assist the hotels in selling their rooms. Among the frequently used OTA are wakanow.com, Booking.com, jumia.com and Asiarooms.com. Consumers that are searching and making reservations online are on the rise. According to e-marketer, it is estimated that in the Unites States, 114 million internet users will explore travel online and 93.9 million will make reservations online in 2012. This is said to catch on in the Asia Pacific region. PhoCusWright report revealed that they are anticipating sales across the Asia Pacific region to boost from USD79 billion in 2012 to USD91 billion in 2013. The same report also revealed that this region showed the most rapid travel market growth globally in 2010. Countries in the Asia Pacific region especially China, India, Indonesia, Singapore, Malaysia and Thailand also showed remarkable development in the online travel sales. It is reported that the rapid growth in the online travel sector is due to the fact that there is an increase in the wealth of the middle-class consumers. With this segment increasing, the consumers who want to travel and the adoption of credit cards have pushed the online travel sector to grow in order to capture the demands of the consumers. The growth in this region is also due to the fact that there are many new hotels in this region and in order to reach its competitors more effectively, hotels are using its online distribution channels. Most consumers that book hotel rooms online are inclined to book via OTA rather than the hotel official websites. PhoCusWright report showed that OTA which make of 62% is the main source that is used by most United States travellers when booking their hotel room online. In addition to that, Moroson and Jeong found that only 27% of consumers reserve their hotel rooms via hotel official websites as compared to 73% of them who book via OTA. In their study, they found that most consumers prefer OTA as it is easier and convenient for them to use compared to hotel official websites. Past researches exposed that hotel official websites were ineffective in reacting to consumers’ wants and needs for online transactions. Schmidt, et al. found that hoteliers’ were not keen in creating more effective websites as OTA were doing a good job in selling their rooms online and hotel revenues continue to generate from these OTA. On top of that, hotels had to compensate commissions to OTA for selling their rooms and this might disturb the existing sales and lower their revenues from the OTA. Even though the online travel reservation market in this region is estimated to reach US$51.6 billion in 2011 and will grow by 40% a year, research on online travel trends and buying behaviour in this region is still very limited. According to PhoCusWright overall OTA expect between 10 to 20% of their reservation profits to come from Asia Pacific in 2012 and 2013. Expedia presently has an annual gross travel reservation of US$24.3 billion. With the rapid growth in this online area and in this region, it is vital to conduct a research to have better understanding of online attitudes and behaviours. The travel industry is a very competitive industry. This industry consists of well-established agents, and also frequent new players. Online portals, online search companies, online travel agencies, shopping websites, traditional travel agencies, travel suppliers, and OTA are amongst the key players in this industry. In order to get loyalty from online consumers, online business must constantly provide better service than competitors. This is because in the online environment, consumers can easily go to any websites to search information, check out offers and compare prices. Even though online consumers are pleased with the service provided, they will still search for substitutes and authenticity or availability of the room advertised
- STATEMENT OF THE PROBLEM
The hotel products are intangible products. I.e. you cannot see before purchase. Therefore, it requires proper marketing to bring guest to visit the hotel in other to receive the service, There are also several factors why consumers are reluctant to use online booking. Research showed that when a consumer post an enquiry on the agency’s website, the consumer will only get a reply from an agent, either shortest by 2 to 3 days or never at all; consumer has lack of trust, vendors that consumers are not familiar; and consumers feel lack of confidence towards online transactions and providing private personal details. It is in view of this that the researcher intend to investigate the efficacy of online advertising of hotel rooms and their actual availability.
- OBJECTIVE OF THE STUDY
The main objective of this study is to ascertain the efficacy of online advertisement of hotel rooms and the actual rooms available, but to aid the completion of the study, the researcher intends to achieve the following sub-objectives;
- To ascertain the availability of the actual room advertised on the hotel website if it correlate with the once actually available
- To investigate the relationship between the price offered by OTA and the one charge on the counter
- To investigate the effect of false advertisement on customers patronage
- To ascertain the effect of online advertisement on the sales volume of the hotel rooms.
- RESEARCH HYPOTHESES
For the successful completion of the study, the following research hypotheses was formulated by the researcher;
H0: the rooms advertised online on website does not correlate with the once actually available
H1: the rooms advertised online on the website does correlate with the once actually available
H0: there is no significant relationship between the price offered online and the price charge on the counter
H2: there is a significant relationship between the price offered online and the price charge on the counter.
- SIGNIFICANCE OF THE STUDY
The result of this research would be valuable to customers of hotel product. It will make them to be alert and conscious; it will also make them to have a clear mind when purchasing hotel product not to expect too much from the hotel. This study will also be valuable to hotel employers. It will help them to review their marketing means, and also they will know that their guest are aware of unethical isues and want to be able to trust them. The study will also be of importance to researchers who intend to embark on study in similar topic as the study will serve as a reference point to the researcher.
- SCOPE AND LIMITATION OF THE STUDY
The scope of the study covers comparative analysis of online advertisement of hotel rooms and the actual rooms available for sale. In the cause of the study, there are some factors which limited the scope of the study;
(a) Availability of research material: The research material available to the researcher is insufficient, thereby limiting the study.
(b) Time: The time frame allocated to the study does not enhance wider coverage as the researcher has to combine other academic activities and examinations with the study.
(c) Finance: The finance available for the research work does not allow for wider coverage as resources are very limited as the researcher has other academic bills to cover
1.7 DEFINITION OF TERMS
Marketing:
Marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society.
Ethics:
The branch of knowledge that deals with moral principles.
Customer perception:
Customer perception refers to the process by which a customer selects, organizes, and interprets information/stimuli inputs to create a meaningful picture of the brand or the product.
Customer expectation
Customer expectations refers to the perceived value or benefits that the customers seek when purchasing a good or availing a service.
Attraction:
A quality or feature that evokes interest, liking, or desire
Customer attraction: things that evokes interest, liking, or desires of a customer to a particular brand.
Consumer Behaviour:
Consumer behaviour is the study of individuals, groups, or organizations and the processes they use to select, secure, use, and dispose of products, services, experiences, or ideas to satisfy their needs and wants.
Customer satisfaction
Customer satisfaction is a marketing term that measures how products or services supplied by a company meet or surpass a customer's expectation.
1.8 ORGANIZATION OF THE STUDY
This research work is organized in five chapters, for easy understanding, as follows Chapter one is concern with the introduction, which consist of the (overview, of the study), statement of problem, objectives of the study, research question, significance or the study, research methodology, definition of terms and historical background of the study. Chapter two highlight the theoretical framework on which the study its based, thus the review of related literature. Chapter three deals on the research design and methodology adopted in the study. Chapter four concentrate on the data collection and analysis and presentation of finding. Chapter five gives summary, conclusion, and recommendations made of the study
