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Factors influencing hotel selection: Decision making process.

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 A dissertation topic

Factors influencing hotel selection: Decision making process.

A dissertation submitted on

14th December 2017

by

Vladan Pantelic # 2369

Submitted to:

Ms. Bincy Baburaj

In partial fulfillment for the requirement of the Degree of

Bachelor of Business Administration (Hons.) in International Hospitality Management

 DECLARATION

I, Vladan Pantelic, declare that this is an original piece of work, produced entirely by me, and
that all source material has been appropriately referenced. In addition, I attest that no portion of
the work referred to in this dissertation has been submitted in support of any other course,
degree, or qualification at this or any other university or institute of learning.

__________________________ Student’s signature

ii
 ACKNOWLEDGMENT

I would like to take this opportunity to thank my parents for everything that they did for me and
that gave me lesson and groomed me to be who I am today. I would like to also dedicate this to
my late mum, that passed away during writing of this dissertation as I know she would be
extremely proud of me and me studies.

Secondly, would like to say huge thank you to my supervisor Ms. Bincy Baburaj that helped me
every step of writing this dissertation and enabled me to see things from different perspective
and as a big picture in order to exceed in the desired goal.

Lastly, massive thank you to all faculty of EAHM that was there always when needed and that
gave me excellent tools and experiences in order to grow my knowledge. This further cant be
said without two core tutors and librarians Ms. Schola and Mr. Zafar that are always they to
extend their great amount of knowledge and assist at all times. Both of them represent true
example of values that academy stands for.

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ABSTRACT
Due to strong growth of hospitality industry and hotel sector specifically in recent years there is
an increased need from management and industry professionals in order to understand how guest
select hotels to stay in and what are decision making factors that prevail. Furthermore, goal of
this paper is to research in depth and compare literature that is discussing selection process of
hotel booking as well as what decision making process guest follow. Moreover, even after many
years of study we still seem to know very little about how guest select their hotel to stay at as this
area could possibly be subjective and tough to research. Additionally, this is also contributed to
the fact that most of previous studies focused on choice attributes rather than decision-making
process itself so therefore this paper will try to investigate wide spectrum of literature in order to
possibly establish best practices in researching this topic and provide recommendation for future
research. Most of the article analysis was investigated trough content analysis which is most
objective and organized method of collected documentation that focuses on key theme around
the topic investigated.

Furthermore, this paper examines literature surrounding hotel selection processes well as
customer decision-making process that is extremely needed in fast growing hospitality industry.
The hospitality industry is very dynamic with lot of different categories and sectors under its
umbrella such as hotel sector, aviation, food and beverage, travel and tourism to name a few. It is
important to know that customer service arise as extremely important and common to all of the
hospitality categories. Success of the business in hospitality industry mainly depends on how
good and efficient are employees in providing service and ensuring that guest satisfaction is at its
highest at all times. Additionally, for that same reason hospitality industry is often referred to as
service industry.

As introduction to topic goals this paper further examines means to an end theory. This theory
discusses individuals who are goal driven and use product as a mean to an end, which further
mean that an advantage of a service for the tourist is copied from the product or service that
supports tourist in order to meet their need. Additionally, this theory has three main types: price,
quality and value. After the introduction of the above-mentioned theory, development of the
paper continues with the process of hotel selection. In this part of the report discussion is made
on what hotel attributes influence selection, what motivates tourist in order to decide to travel as

iv
well as push and pull factors that are influencing tourist hotel selection. Further, hotel selection
process framework is discussed and offers oversight of all stages of selection process such as
evaluation, selection, booking and stay. Each stage is special and it has its important in entire
process. Furthermore, this paper discuses decision-making process and focuses on four main
attributes that literature established as most important in consolidated research. As mentioned
earlier these attributes may be subjective and not necessary applicable to wide range of markets
and cultures.

Lastly, on the end this paper provides insight in developed literature map that explains attributes
that influence hotel selection and have impact on decision-making process. Also it provides
suggestions and recommendation need for future research as well as on what hospitality industry
professional s could focus in order to understand hotel selection and decision making process
from their guest in order to capitalize on it as well as satisfy needs by tourist visiting their
properties.

Key words: hotel selection, hospitality industry, factors, decision-making process, framework,
selection attributes, hotel selection criteria, choice attributes, leisure travel, selection attributes.

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 Table of Contents

ABSTRACT iv

CHAPTER 1: Introduction 1
1.1 Statement of the problem 3
1.2 Research Question 4
1.3 Research Objectives 4

CHAPTER 2: Methodology 5
2.1 Secondary Research 5
2.2 Data Collection and Analysis 5
2.3 Research Structure 6
2.4 Limitations of the Research 6

CHAPTER 3: Literature Review 7

3.1 The Hospitality Industry 7
3.1.1 Growth and Trends 7
3.1.2 Hospitality Industry Characteristics 8
3.1.3 Changing needs of Hospitality 9
3.1.4 Hotel Sector Overview 9
3.2 Theoretical Framework 10
3.2.1 Means – End Theory 10
3.2.2 Perceived Price 11
3.2.2 Perceived Quality 12
3.2.2 Perceived Value 12
3.3 Hotel Selection 12
3.3.1 Hotel Selection Attributes 15
3.3.2 Tourist Motivation 17
3.3.3 Push and Pull Factors 18
3.3.4 Hotel Selection Process Framework 21
3.4 Consumer Decision Making Process 26
3.4.1 Special Map - Location 28

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 3.4.2 Special Map - Price 29
3.4.3 Special Map - Facilities 30
3.4.4 Special Map – Cleanliness 31
3.4.5 Decision Making Style 32

CHAPTER 4: Discussion 34
4.1. Literature Map 34

CHAPTER 5: Conclusion and Recommendation 40

5.1. Recommendation for future research 42
5.2. Recommendation for Hospitality Industry 42

REFERENCES 43

APPENDICES 52

Appendix 1: Search String Table 52

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CHAPTER 1: Introduction
There has been a remarkable growth witnessed in the numbers of travelers around the world for
the past few decades that grew from 525 million back in 1995 to 1.2 billion in 2016 within
hospitality industry (World Bank, 2017). Due to this significant increase of travellers a new push
and pull factor have been noticed that require attention of hotel sector management in order to
maximize on the profits and capture desired markets accordingly. Consumers purchase power
has been changing in positive way due to the growth of economies, better income and also the
continuous and constant economical expansion across the globe at same time have increased
tourist visits as well as higher revenues across hospitality industry. In the high competitive
environment that hospitality industry is, it is crucial that companies comprehend consumer’s
behavior and their decision- making in order to gain a competitive advantage. The selection of
accommodation is one of the main challenges for the tourist in their decision making process.
Selecting most appropriate accommodation to stay can sometimes be very complicated task. A
complete hotel selection model could help to empower hotel owners, general managers and
tourism industry overall to make decision on more effective indicators of high service quality for
a greater rate of satisfaction (Sohrabi et al., 2012). Moreover, companies need to have an in-
depth view of the wide-range characteristics of their guests, which allows them to comprehend
the driving factors, mindset and values that form consumer opinions in making purchase decision
(Niininen et al., 2006). Furthermore, the discovery of the consumer preferences and interests that
drive them to choose particular hotel are based on the psychology, socio-demographic and
consumer-behavior theories (Han and Kim, 2010).

This paper will review significant literature with regards to hotel selection and customer
decision-making process. Furthermore, despite numerous years of research, we still seem to
know very little about how travellers select hotels to stay in. This can be attributed to the fact
that most of the previous studies focused on the choice attributes rather than decision-making
process itself (Jones and Mei Chan, 2010). For the purpose of this study researcher choose the
conceptual map of the key constructs that were developed by Jones and Mei (2010) due its
simplicity and objectivity as compared to other approaches (Lockyer, 2002; Lockyer 2005;
Sagestaad, 2013).

1
 Figure 1: Conceptual map of key constructs (Jones and Mei Chan, 2010).

Moreover, the most studies disregard the variance between pre-purchase and post- purchase
decision-making (Noone and McGuire, 2013; Shohrabi et al, 2012). Prior to selection and
purchase there are many attributes that the consumer could not know about, such as comfort of
bed, which could have significant impact on choice and selection of the hotel. There is also
influence on non-price information that is provided on hotel choice (Noone and McGuire, 2013).
Therefore, key of research is to investigate in depth literature review on decision-making process
and factors influencing hotel selection. Additionally, this will be reflected trough the most
updated literature as trends and travelers are changing constantly and compared to historical.

Many factors can influence hotel selection such as prices of the hotel are often seen as crucial
factor when selecting hotel. It is important to note that rate limits, also known as rate barriers,
rate policies are designed to allow customers to segment themselves into appropriate rate
categories based on their needs, behavior, or willingness to pay in order to select on hotel to stay
in. Many hotel industry experts are presently under burden to develop hotel rate restraints that
are acceptable to and preferred by their consumers, while at the same time protecting their own
business interests. As seen in revenue management practices, in which most of time demand-
based pricing is the norm, it is normal for hotels to segment guests and charge distinctive prices
to different sectors and based on different demand (Guillet et al., 2014).

In the new age of technology boom it is extremely important for hotels to have good social
media presence as with technologies advancing and rise of social media platforms in past decade
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such as Facebook, Twitter and LinkedIn to name few, it is crucial to have great online presence
and presentation as more and more social media is seen as key factor when selecting hotel to
stay. Previous to the “age of online media”, consumers usually had very narrow resources where
they could collect information on services and products with hotel room purchases and they were
predominantly informed by brochures and travel agents on the hotels an destinations available.
Furthermore in recent years, old-style sources of information as we named earlier have been
replaced by social and online media as tourists started to refer to a user-generated content (UGC)
on social media to plan and make decisions on their hotel stay. In the tourism context, travellers
use social media for a extensive range of reasons, for example, sharing their travel-related
experiences, engaging with other consumers, linking with people from diverse destinations as
well as buying travel-related products and service (Varkaris and Neuhofer, 2017). It is important
to note that social media boom effects hotels and hospitality industry positively and negatively as
there is wider audience covered by all social media platforms as well as review sites such as a
Trip Advisor and Yelp being one of the most popular. It is also established that some of review
websites can be misused and provide fake information that could be seen as key factor in
decision making process therefore hotels have to take serious approach in order to react and
provide comprehensive feedback in order to not have social media as push away factor for their
business.

1.1 Statement of the problem

Despite numerous years of trying to understand and assume how consumers select hotel when
travelling, we still don’t know much about how guests select hotels to stay in. This could
possible be because of the emphasis has been placed on determining ‘choice attributes’, which
are the issues that influence choice, and disregarding studies on real factors influencing selection
method itself. Furthermore, some of the studies on this topic that discuses variety of
characteristic is deeply inconsistent, as the literature review will demonstrate. This study
discovers possible decision-making process and crucial factors affecting choice for a particular
market segments, specifically leisure and business travellers (Jones and Mei Chan, 2010).
Research for this paper will be conducted on in depth analysis of theoretical framework as well
as extended literature analysis with consolidation of previous and newest literature on this topic.
The research has been conducted trough searching both manual and electronic articles. The
search of papers was conducted by looking through previous and latest literature that had a
3
connection with consumer decision-making process for a selection of the hotel to stay in when
travelling.

1.2 Research Question

The goal of this study is to examine key features of the hotel selection process not previously
identified. In the line with purpose and goals of the study, the research questions will be:

1. What are the main factors influencing consumers when selecting a hotel?
2. What decision-making process consumer follows when selecting the hotel to stay in?

1.3 Research Objectives

The research objectives of this study are to:

1. Identify the consumer behavior in decision-making when choosing a hotel.

2. Identify factors that are influencing consumers when making decision for a hotel stay.
3. To examine the characteristic of consumers and the decision process in hotel selection style.

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CHAPTER 2: Methodology
2.1 Secondary Research
The secondary research is created on an experimental study and consists of the finding, reading
and analyzing of existing literature related to the decision process and factors influencing hotel
selection. This extended literature review has a conventional and theoretical approach.
Furthermore, this means that it offers the reader with background knowledge and info about the
topic. It is aimed to analytically assess the results and findings of earlier conducted studies and
compose this knowledge together in order to deliver a general and comprehensible mixture of the
issue (Jesson et al., 2011). Extended literature method has the benefit of being time and cost
effective and it is not facing any ethical issues that may be opposed in qualitative approach.
Additionally, a secondary research for the selected topic was appropriate since a enormous
amount of information with primary research findings needed to be analyzed, compared,
distinguished and recapitulated in order to get a precise and most recent updated understanding
of the topic chosen.

2.2 Data Collection and Analysis

In order to have most recent study relevant to the topic, most recent journals, peer reviewed
articles and reports have been examined and collected from the online Databases on the platform
Athens that is made available to all of the students of the Emirates Academy of Hospitality
Management, and the search engine Google Scholar. Additionally, the following databases have
been used on the Athens platform: ProQuest, Emerald Insight and Taylor & Francis. After
articulating the research question, keywords such as “hotel”, “selection”, “factors”, “decision”,
“customers” “travellers” “attributes”, “choice’, “hospitality”, have been acknowledged and used
in mixture with Boolean operators, such as AND/OR/NOT for the search in earlier named
database. In addition, new and more specific keywords were generated for the purpose of
collecting more topic related articles after having read the first and initially discovered articles.
Some of the search limitations have been used in the databases such as “peer-reviewed”, “full
text”, “years” and “journal” in order to categorized and select most relevant reading material.
The online database ProQuest and Emerald Insights were found to be the most prosperous
sources, since majority of the articles have been retrieved through this platform, which might be
related to the fact that it is the one generic focused for variety fields including hospitality. Some

5
of the articles which were relevant but did not appear as full text due to restriction, had to be
accessed with the help of the librarians from the Emirates Academy of Hospitality Management,
Zafar Khan and Schola Kazi. Furthermore, this was needed since some fundamental articles
could not be accessed for free with a student account. Moreover, the “snowball technique”
described by Ridley, was very useful. This method comprises the searching and usage of models
and authors’ references that have been cited in earlier read articles. This was a very effective and
suitable method of finding relevant information about the hotel selection topic (Ridley, 2008).
Most analysis of the articles were conducted through content analysis, which is most objective,
organized and analytical method of composed documentation and description of repeating and
consistent emerging key themes from the gathered articles that are concerning selected topic. In
other terms, it is the process of forming and reducing data by illustrating on logical relationships
between related topics in order to draw meaning and assumption.

2.3 Research Structure

Research structure for this study was established after having recognized the main topics and
what related problems need to be answered after finding of research problem, an outline and
structure of the paper have been created adequately in order to explain key words, present
background information and models used in the literature in order to answer study objectives.
Additionally analysis of the previous primary studies was conducted in Chapter 3. This chapter
further analyzes critical literature and answers what decision-making process, consumer models
and process are used when selecting hotel to stay.

2.4 Limitations of the Research

This paper is a secondary research in the form of an extended literature review so therefore only
the present literature from previous studies was explored and examined. Furthermore as a
outcome, this study have not produce any new findings related to the research topic. Moreover, if
primary research was conducted in form of surveys or interviews that would have helped to
identify the latest consumer feedback in the regard of selection of hotel to stay. This was the
leading limitation of this paper. Furthermore, other important limitation of the study to consider
would be geographical and cultural factors as selection process may vary due to it. Most of the
findings from the extended literature reviewed relate to the some geographical regions but main
focus was based on general concept of hotel selection practices.

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CHAPTER 3: Literature Review
3.1 The Hospitality Industry
The hospitality industry is a very active industry with countless categories and sectors with in,
but service delivery is the main merging factor shared by all subdivisions of the industry. The
success of the business in hospitality sector mainly relays on how good and efficient teams are in
providing service as well as ensuring tourist expectations are exceeded with its innovation in
hotels. Hospitality industry could therefore be segmented into five main sectors (Global
Hospitality Portal, 2017):

1. Lodging Accommodation
2. Food & Beverage
3. Travel & Tourism
4. Timeshares
5. Entertainment Industry

3.1.1 Growth and Trends

The travel and tourism industry account for 266 million jobs worldwide and represents 9.5% of
total world gross domestic product (GDP). Moreover, even in the slow growing European
market, the hospitality and tourism industry have positive outlook. On the other hand fast
developing regions, such as the Middle East and Africa, make use of their economical boom in
order to invest additional in the lodging and tourism industry. Therefore, key hotel brands such
as Marriot International, Hyatt, Four Seasons and InterContinental Hotel Group (IHG) have
recognized these new attractive regions as their major area of further development and
investment. Additionally, the international tourism numbers are expected to increase by 70%
globally in between 2013 and 2030, which would then signify a tourism income of 10 % to the
global GDP by 2024 (Ernest & Young, 2015).

It is important to note one of the biggest game changers in hospitality industry and hotel sector
itself is rise of Airbnb. Airbnb links people to exceptional travel experiences, at variety of price
point, in more than 65,000 cities and 191 countries as shown in Picture 1. Additionally, its
world-class customer service and a rising community of users, Airbnb is becoming easiest way
for people to monetize their extra space and showcase it to a wide range of travellers. Basically it

7
allows homeowners to list their real estate property as rental space for travelers on long and short
period of time at affordable price (Airbnb, 2017).

Picture 1 (Airbnb, 2017)

3.1.2 Hospitality Industry Characteristics

The hospitality industry is well recognized as a people industry, since it is extremely reliant on
the service delivery and performance of its employees. Moreover, nature of the service requires
an instantaneously creation and provision of the services and products for the customer. The
hospitality industry, besides selling an actual tangible product, such as lodging and transport, has
a main focus on providing a intangible service, whereby service delivery for example impacts
perception and understanding which are rather subjective and highly reliant on the patron
expectations (Angelo and Vladimir, 2011). It is important to note that tourism products cannot be
kept so, unless disbursed when planned, they are becoming waste. Additionally, hotel industry is
affected in such a way that we must select among selling at the market speed and selling in
advance trough travel agents as well as online travel agents (OTA’s). Furthermore, this leads to a
overbooking as a consequence of this short life span of the product, an characteristic of tourism

8
service industries that we must attempt to correct (Jaume, 2013). One of the key characteristics
in hospitality industry is its high turnover rate due to long working hours and different shift
patterns.

3.1.3 Changing needs of Hospitality

The hospitality industry is continuously changing in order to remain competitive in the global
business environment (Swanger and Gursoy, 2010). It is important to note that industry experts
often are criticized from hospitality educators for not having a current understanding about the
industry and therefore poorly preparing the students for the current market with an outdated
curriculum (Mao and Moreo, 2008). It is worth to mention that are important trends that are
impacting and changing hospitality industry such as changing of guest behavior and increase in
expectation, technology that is shaping guest journey and personalization of service trough
understanding correct needs by having data (Schaap, 2017). Furthermore, there are behavioral
competencies that are crucial for the leaders to plan, guide and constantly redesign their
organizations in order to keep it competitive to a changing trends. These competencies include
self-management, strategic positioning, implementation skills and intercultural capabilities
Moreover, it is interesting to mention that these competencies are very alike to the competencies
necessary outside the lodging and hospitality industry (Seymour and Constanti, 2002).

3.1.4 Hotel Sector Overview

The hotels sector is one of the fastest developing sectors of the international economy. It is also
between the highest job producing sectors because its labor demanding nature and the important
multiplier effect on employment in other associated sectors. Hotel sector is a part of service
industry. Hotels are very important for travelers in the whole world. Selecting a hotel
occasionally is complicated for travelers because they have to consider many aspects in their
mind and it can cause problem for them to decide and select hotel to stay at (Chen et al., 2012).

Furthermore, the hotel sector has a status of poor working conditions due to a number of factors
such as low union concentration, and work categorized by low wages and low levels of skill
requirements, shift and night work and seasonality (ILO, 2017). Hotels, B&Bs and others in the
travel-lodging sector have seen considerable financial progress since the 2008 financial
downturn, where they end up on the bottom in terms of profits and sales as shown in Picture 2
(Sageworks, 2017).

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 Picture 2 (Sageworks, 2017).

As with any other sectors during economical downturn, employers in hotel sector will face hard
and unpopular decisions. The clear responses to the wage rise are to reduce or stop incentives,
cut back on other employee settlements or in the worst-case scenario, make redundancies.
Furthermore, this is way more challenging in an industry where service standards are crucial
factor in order to exceed guest expectation that contribute to more revenues. Customer
experience and expectation in 2017 are expected to drive more loyalty then a points or a miles
system currently used in hospitality industry (Deloitte, 2017).

3.2 Theoretical Framework

3.2.1 Means – End Theory

Means – End theory refers to individuals that are who are goal driven and use product qualities
as a means to an end, which further indicates that the advantage of a service for the tourist is
copied from the product or service that helps tourist meet his/her need. For example, guest at the
hotel will feel safe as result of having security department in place. Furthermore, this indicates
that security can be seen as desired end and the evaluation would be positive for hotel itself
(Kashyap and Bojanic, 2000). Means – End theory is based on three main features; price, quality
and value.

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3.2.2 Perceived Price
Price is something that is being given away by the consumer in order to obtain desired product or
service. In the hospitality industry, perceived price is difficult to analyze due to service factor
that often can not be measured as well to large number of products and service that tourist can
come across during their travel to a certain destination (Zeinthaml, 1988). Some destination, such
as island resorts would be more simplified due to its lack to provide a lot of different products.
The most common product in hotel sector is the price of the room as in most cases and it is the
largest number on the guest bill (Kashyap and Bojanic, 2000). Furthermore, customers intend to
forget on prices that they spend for product and this is the time when hotels have to make sure
that they find out perfect balance in between realistic price offered that will benefit customers
and hotel revenues. For example, there is significant relationship in the price that business
traveller look for when selecting hotel to stay in as mentioned earlier there are many studies that
indicates that business travelers are selecting hotel based on their need to complete work needed.
Additionally, during hotel selection process if the perceived total price is higher then the will to
pay then business travellers will not make a booking but rather look for more affordable price
and discounts. Moreover, business travellers will only consider the price they had paid for a hotel
if the actual price is lesser then their anticipated price (Lie and Zhang, 2014).

Revenue management professionals in hotel sectors are under constant pressure in order to
develop hotel rate that are acceptable to consumers, while at same time is benefiting business. In
revenue management practices demand based pricing is standard and it is up to hotel to segment
their guest and establish different rate based on those segments. Once two or more rates are
given to customer at same time, hotel makes rate fences in order to protect certain rate from
certain customers using it. Normally, discounted rates are less prone to rate fences, where
medium and high rates are more related with preventive rate fences. Generally, in hotel sector
there are no specific rules on establishing these rates, therefore balancing consumer and hotel
desires can be challenging. Guests should perceive the rate restrictions given to them as
acceptable in order to make their bookings, while hotels need to protect their own interests by
controlling the consumers and segmenting them accordingly to maximize on room revenues
(Guillet, Liu and Law, 2014).

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3.2.2 Perceived Quality
Having judgment about a product or service can be defined as perceived quality. In hospitality
industry that refers to the human element, which is inclusive of employees possessing core
attributes of industry itself such as courteous, politeness and friendliness. Furthermore, as
discussed earlier providing efficient and personalized service by employees of the hotel
contributes to guest returning back as well as affecting guest perception during hotel selection
process. There is very close relationship in between quality of service and tourist reason to
choose that hotel again (Lockyer, 2002).

3.2.2 Perceived Value

According to Zeithaml (1988) perceived value refers to a form of a trade off between what
customer gives up and what customer receives. Furthermore, perceived value is providing more
broad variety of features that contribute to certain value to a customer. For example, during
selection of hotel by business traveller there are attributes that are affecting perceived value.
Hotel star rating is one of those attributes that have big role in selecting business hotel as you
would want to conduct business in more comfortable setting and convenient for your partners
too. On the other hand, cleanliness is also one of major attributes that play big role in hotel
selection. Furthermore more, attributes such as location, security and safety, business center and
pick up and drop off also affect perceived value in order to justify price for the hotel that is being
paid (Wharton, 2012).

3.3 Hotel Selection

According to study conducted by Barsky (2012) which was based on survey responses from
40,000 American, European and Asian consumers that traveled during 2012 discovered that
“Location” regained number one position as factor that influence selection criteria. Results
revealed that guest priorities vary extensively by region, country and culture. Furthermore,
“Price” and “Past Experience were recognized as the next most important factor in hotel
selection with factor “Past Experience” (shown in Picture 3) climbing up in compare to previous
research conducted. This further indicates that customer experience throughout the hotel stay is
extremely important factor and that hoteliers are mandated to delivery exceptional service in
order to stay competitive. Additionally, this could indicate as well that guest has become more
demanding due to increase in hotels choices available on the hotel market (Barsky, 2012).

12
 Picture 3 – Global Market Results (MMHI, 2012)

In The Americas, past experience, loyalty programs and price play a superior role in customers
purchase decision and hotel selection process than compared to other world regions.
Furthermore, as seen in Picture 4 “Past Experience” had 15% of the guest involved in study as
their primary motivation for selection of brand, which is way more than in any other region
globally.

Picture 4 – America vs Global Average (MMHI, 2012)

13
Main focus of the hotel companies in the Americas is attention on the guest experience that have
to constantly be innovative in order to engage customers as part of service offering. The “wow”
factor is playing crucial role in order to exceed guest’s expectation and ensure that they come
back to a hotel or become part of the loyalty program. Consumers are repeatedly searching for
the various variables to enrich their experience such as service offered, appearance, leisure
activates, location attraction and value for the money to name few that are constantly evaluated
by customers when selecting hotel to stay at (Williams, 2014).

Picture 5 - Europe vs Global Average (MMHI, 2012)

On the other hand, as seen is Picture 5 European market is having bigger challenge due to the
guest satisfaction scores that remained flat and at same time rooms prices are climbing up and
currently account for more than 20% in compare to US market. It is important to note that results
of some European hotel customer differ, whereby for example guests from Belgium and France
are the most worried with the price while Germans are less likely to highlight price when
selecting a hotel (Barsky, 2012).

Lastly, in Asia personal recommendation play a huge role in hotel selection, which could be
contributed to cultural differences in compare to Europe and Americas as shown in Picture 6.

14
 Picture 6 - Asia vs Global Average (MMHI, 2012)

An enormous 12.2% of hotel reservations in Asia come from a personal referral, which in this
study was categorized under "recommendation by a friend or colleague". Personal
recommendations play a smaller role in Europe (7.5%) and are relied on even in the Americas
(4.1%). Furthermore, this indicated that in Asia recommendations are very powerful in
comparison to online reviews where they are four times more important factor when selecting
hotel. Online reviews in Asia have very limited influence and are the initial reason for hotel
booking in only 3% of reservations made (Barsky, 2012).

3.3.1 Hotel Selection Attributes

As described by Dolnicar (2002) hotel attributes studies have been present for a long time in the
hospitality research. This study examines the issue for business tourists by asking the
respondents to state their expectations and dissatisfactions in an open question setup instead of
evaluating the importance of attributes directly. A lot of focus has been placed on studies made
in the last decades that establish which hotel attributes guest most care about. Moreover, hotels
require high investment and a lot of cost is associated with those investments so there is very
strong need to conduct profound studies in order to establish if investments are feasible
(Dolnicar, 2003). It is important to note that in a competitive marketplace, appropriate market
segmentation is the key to success of a business. The idea of market segmentation can be
executed best, when there is a sound foundation of knowledge about the targeted group.
Furthermore, a large number of researches were conducted in the past exploring how the ideal

15
hotel offer looks like (Dolnicar, 2002). As seen in the Picture 7 there are different hotel benefits
that are segmented by Dube and Renghan (1999) into leisure, transient business and meeting and
convention guest.

Picture 7 – The hotel benefits that guest wants by segment (Dube and Renghan, 1999).

As discussed, segmenting guest in hotel sector is extremely important in order to ensure maximal
satisfaction of the all customers and create more attractive offering for each targeted market.
Therefore, when hotel is welcoming diverse customer segments at same time management of the
hotel must ensure that hotel is offering different bundles to each of the segments. They also need
to ensure that all of those packages offered are different but not completely distinctive for each
segmented group (Dube and Renghan, 1999).

It is important to note that various researches found different hotel attributes that included
distinctive mixture of the guest. These studies have indicated differences in between luxury
leisure attributes and business. Dube and Renaghan (2000) discovered the top five hotel
selection attributes for a business travellers to be a “location”, “brand name and reputation”,
“”physical property”, “value for money” and “guest- room design”, while the top five attributes
that created highest value during the stay were identified to be “guest-room design”, physical
property”, “service (interpersonal)”, “service (functional)” and “F&B related services”. Lewis
(1984) found the top choice-determining factors of business travelers: “location”, “price”, “Level
of service”, food quality” and “cleanliness”. Bowen and Shoemaker (1998) studied loyalty
factors that influenced luxury hotel business traveler’s selection process. “Providing upgrades
when available” ranked first, followed by “Check in and check out anytime” and “The hotel uses

16
information from your prior stays to customize services for you.”

Yang, et al. (2017) in his study identified hotel price as one of the most important attributes in
hotel selection process. Price is sort of measurement for the consumers on standard of hotel
service quality and facilities offered. Location is another very important attributed that cant be
changed once selected. Hotel management can change amenities, room rates, interior decoration
and service standard but location can’t be changed so therefore it is crucial factor in pre
construction phase that will establish future success of the hotel. Moreover, geographical
location is critical factor in feasibility process for the new hotel project. Price and location are
normally considered as the intangible characteristics which effect guest choice. Furthermore,
tangible hotel attributes such as facilities and amenities can also influence guest consumption
choice and further develop their in house spending (Yang, Huang and Shan, 2017).

In similar study Kuckusta (2017) assessed the attitudes of guests towards different hotel
amenities. Study find out that Wi-Fi is regarded as the one of most useful hotel amenity for
Chinese consumer and telephones as the least valuable hotel amenity. Moreover, it was
established that guest willingness to spend is affected by the delivery of luxury-brand room
amenities. Furthermore once luxury amenities are placed in the room, guest perception of room
rate and immediately sets higher bar for their willingness to pay.

3.3.2 Tourist Motivation

Travel and tourist motivation have been researched for many years. Maslow (1970) hierarchical
theory of motivation is one of the pioneers and mostly used in the tourism literature.
Furthermore, theory was displayed as a pyramid whose base consists of the physical needs,
followed by greater levels of psychological wants and the need for self-actualization
(Mohammad and Som, 2010).

Moreover, all of the tourist motivation studies include questions about why people travel.
However, recognizing clearly the relationships among an individual's motivations and selection
of a destination and hotel to stay in is a very challenging task (UK Essay, 2016). Krippendorf
(1987), acknowledged a numerous of tourist motivations, including:

• Recuperation and regeneration;

17
 • Compensation and social integration;
• Escape;
• Communication;
• Broadening the mind;
• Freedom and self-determination;
• Self-realization;
• Happiness;

Krippendorf (1987) considers that the main motive for the tourist to travel is escape from
something that they may feel is wrong in a daily lives. Additionally, this departure or escape is
characterized and made by specific effects, motivations, and expectations.

A review of the previous literature on tourist motivation specifies that the examination of
motivations is based on the two dimensions of push and pull factors that have been usually
accepted. Moreover, the idea following push and pull factors is that people travel because they
are “pushed by their own internal forces and pulled by the external forces of destination
attributes”. Majority of the push factors, which are related to country of destination, are
intangible or intrinsic needs of the individual tourist. On the other hand, pull factors, are those
that appear as a result of the attractiveness of a destination and the way it is perceived by the
tourists (Mohammad and Som, 2010).

3.3.3 Push and Pull Factors

As discussed previously, push factors are described as inner reasons that cause travelers to seek
activities in order to reduce their needs, whilst pull factors are destination-produced forces, the
knowledge and experience that tourist holds about a destination that they traveled (Gnoth, 1997).
Mainly, push factors are inherent motivators, such as the wish for escape, rest and relaxation,
prestige, health and fitness, adventure and social communication. Pull factors develop due to the
attractiveness of a destination traveller is experiencing, including: beaches, recreation facilities
and cultural attractions. Additionally, push factors are very important in getting travel desire in
first place towards certain destination, while pull factors are considered more vital in describing
destination choice and selection of hotel to stay in (Mohammad and Som, 2010).

Previous studies conducted on pull and push factors were mostly in context of tourist destination

18
selection but not necessary hotel selection itself. Kim and Klenosky (2003) studied influence of
push and pull factors on visitors to the Korean national park. They have analyzed 12 push factors
that were key to bringing visitors to national park and have highlighted four key factors that
include: “appreciating natural resources and health’, ‘adventure and building friendships’,
‘family gathering and study’ and ‘escape from daily routine’.

Ryan and Prayag (2010) conducted qualitative research trough out interviews that were done in
Mauritius as very popular tourist destination. Furthermore, this study-investigated role of
nationality and relationship in between push and pull factors. They established that nationality
and diverse cultural background have significant relationship in the way tourist are interpreting
destination with respect to a cognitive and affective components. Furthermore, the results also
offered different insights that visitors experience from destination. The perceptive responses
identified that tourists are not only passive contributora in the travel experience but also can be
very active in seeking to gain knowledge and understanding of destination and cultural history
and compare to its own. Ryan and Cave (2005) established similar result were importance of
different nationality established as significant influence on selection of destination due to the
cultural backgrounds.

Another study conducted by Mohammad and Som (2010) that was mentioned earlier examined
travel motivations of international travelers to Jordan and determined that the four key push
factors in making travelers to go there were: ‘to visit a place that have never visited before’,
‘prestige fulfillment’, ‘seeking relaxation’ and ‘escaping from daily routine’. Furthermore, same
study also found that adding more leisure activities and events that will drive tourist interest can
lead to better satisfaction for the customers travelling because of the influence of these four push
factors. On the same note Uysal and McDonald (1994) conducted study on Australian tourists to
USA and found that ‘novelty’ and ‘relaxation/hobby participation’ were two major motivational
factors that influenced decision on their travel.

Pull factors develop due to the attractiveness of a destination traveller is experiencing, including:
beaches, recreation facilities and cultural attractions. Additionally, push factors are very
important in getting travel desire in first place towards certain destination, while pull factors are
considered more vital in describing destination choice and selection (UK Essay, 2016). In terms

19
of hotel selection Chu and Choi (2000) examined six pull factors in between leisure and business
travelers, perceived status and performance of Hong Kong hotel section. Highest rated in hotel
selection were room appearance, security and service quality. On the other hand Mun Lim and
Endean (2009) noted that personalized service and hotel location have massive importance and
could form part of a criteria in overall hotel selection for the tourists. Additionally, similar
findings were discovered and confirmed by Olga (2009) in the study of luxury hotels in United
States. This study to highlighted that warm, genuine and exceeding service from hotel staff
would motivate guest on next hotel selection and therefore drive return of guest to same
property.

For example in the case of Macao, the casinos and the opportunity to legally gamble has played
key role in attractiveness of Macao and driving tourists to destination and high hotel occupancy
numbers (Sou and McCartney, 2015). As shown in Picture 8 McCartney and Ge (2016)
concluded that proactive service, experience of hotel theme and personalized service were also
very important push factors in hotel selection for the Macao destination. On the other hand pull
factors such as safe and secure environment and a comfortable room had major influenced on
choice of hotel and were ranked highest in the results. Various other hotel facilities such as
shuttle bus transport, traditional cuisine and entertainment offered were ranked as very important
too by the responders of the survey as presented in below table of top 10 pull and push factors
influencing on Macao hotel selection.

Picture 8 (McCartney and Ge (2016).

20
Furthermore, it is established that once tourist made decision to travel pull factors play a key role
in driving individual to certain destination. A variety of different attractions such as theme parks,
national parks and cultural heritage and different types of activities offered at destination will
definitely enhance greater spend and longer stay at that destination.

3.3.4 Hotel Selection Process Framework

Further to push and pull factors that influence hotel selection this paper present and discus below
selected hotel selection process framework as shown on picture 8.

Picture 8 - Hotel Selection Process Framework (Saugestad, 2012)

According to study conducted by HawkPartnersLLC (2012) regarding what hotel channel guest
use the most, which was conducted in between 1203 leisure and business travellers of age group
21-75. This research provided breakdown of resources used by these customers while
researching for hotel to stay in:

- Hotel Websites (74%)

- OTA’s (52%)
- Loyalty Programs Websites (47%)
- Online Review Sites (40%)
- Friends and family recommendation (34%)
- Called hotel directly (27%)

Another very important statistic was that hotel website was main source of providing information
to a travelers which happen in over 25% in above mentioned sample which is more than any
other source of information. Furthermore, when impact of these resources is measured against

21
travel and review sites have more impact in hotel selection process. Therefore, hoteliers need to
focus on providing exceptional service if they intended to drive their business forward as seen in
case of Hotel 1000 and Wickanninish Inn, where general word of mouth and Trip Advisor in this
case were main drivers of all hotel bookings (Saugestad, 2012).

Another study conducted by Mattila (1999) on how business travellers evaluate luxury hotel
services established that business travelers want hotel to provide them environment where they
have to complete their work accordingly and efficiently and that included having reliable staff
that will deliver exceptional service more than having fancy and luxury surroundings and access
to tangible things. According to same study luxury travellers are seeking value for people,
process and physical environment or what has been seen as servicescape. On the other hand
customer evaluation of service is made out two basic dimensions: service delivery and service
outcome. Moreover, the way delivery of service is conducted seems to be more important than
services process, which included technical quality outcome of service itself. People in general
assess others by judging their intent in various situations. Furthermore, it is then evident that
efforts made by employees leave long and lasting impression on consumers in hotel selection
process (Mattila, 1999).

It is important to note that social media have tremendous impact in hotel selection process.
Traditional way of collecting information about destinations and products that were promoted in
brochures and travel agent newsletter were suddenly replace by internet were people could easily
research on their needs as well as provide feedback in more efficient manner that is more
consolidated. Prior to social media boom travelers shared feedback mostly by word of mouth. In
the hotel sector consumers use social media for wide spectrum of reasons such as sharing their
experiences, engaging with travel agent and other customers in order to get more feedback as
well as executing booking that is one of stages mentioned in above hotel selection process
framework (Vakaris and Neuhofer, 2017).

In less than a two decades, the ways travel bookings are made have been changed completely.
Prior 1996 tourist had only two choices: book direct or speak to travel agent and that have all
been changed by growth of Expedia and Priceline as initial OTA’s that merged in beginning of
2000 (Howe, 2017). Similar to social media boom traditional bookings conducted trough hotel

22
reservation agents via phone and travel agent were suddenly replaced by self online bookings by
consumers or often called as well as trough online travel agents (OTA’s) and as mentioned
earlier trough direct website bookings that were one of major ways travelers booked their hotels.
Furthermore, there is a huge amount of attention in hotel sector about direct bookings and how to
loosen the hold of OTA’s have on the industry. As often called in hotel management circles
OTA’s are the “necessary evil”, therefore hotel owners and management would love if online
travel agent (OTA’s) could vanish. Due to power of Internet that seems unrealistic scenario as
hotels are taking huge amount of exposure trough out this sites as guest use them to research
their holiday trips (Rowe, 2017).

That ideal scenario for the hotels could perhaps become reality if hotels owners and management
find ways to offer better value for the direct booking such as early check out / check in,
complimentary breakfast or parking are offered as part of direct booking. Importance of
attracting consumers to do more direct bookings can be seen in example of Marriott International
as in 2017 they have doubled they advertising spending because of Expedia and bookin.com in
compare to previous year. Therefore, as example in the United States we are seeing shift in
balance in between direct bookings and online travel agents (OTA’s). As shown in picture 9
illustrated below it is evident that direct bookings are increasing year on year in US hotel chains
meaning that hotels are really focusing in improving and increasing their direct bookings
(Schaal, 2017).

Picture 9 - Hotel Website Share of US Hotel Website Bookings (Schaal, 2017).

23
Wyndham had growth in direct bookings for 9.61 percent, which could be contributed to their
loyalty program that was revamped recently. They are offering 20 percent discount when guest
book directly, and that has impact of $100 million market over next year as their attempt to
reduce bookings trough out online travel agents (OTA’s). Although Wynsham US market share
and guest visits are way smaller than competition such as Marriott, Starwood and Hilton it
proves that focus on direct bookings can be useful in order to reduce impact of OTA’s.
Furthermore as seen in above picture Inter Continental Hotels Group (IHG), Best Western,
Sheraton and St. Regis hotel direct bookings have all seen downturn in United States.

In comparison online travel agents versus online travel agents Booking.com made largest gains
from period including May 2016 – May 2017. Out of all online travel agents (OTA’s) only three
of them have shown increase in 2017 for their bookings in compare to same period in 2016
Booking.com, Expedia and Priceline, while five other have lost amount of bookings done trough
them in year on year comparison as seen on Picture 10 (Schaal, 2017).

Picture 10 – Online Travel Agent (OTA’s) gains / losses (Schaal, 2017).

24
To conclude booking part of hotel process framework, it is important to outline that OTA play
crucial factor as hotel booking channel but too high obsession on providing too low prices for
consumers and too high interest opposed on hotel chains could see negative impact on OTA’s
that could harm them as hotels might divers they investments into technologies in order to avoid
consumers booking trough OTA’s but rather choose to do it directly with a hotel. As noticed by
Rowe (2017) where she identified strategies that hotels can apply in order to divert guest towards
direct bookings and reducing online travel agents (OTA’s) bookings. Rowe (2017) identified 10
possibly strategies that could be implemented to reduce impact of OTA’s such as:

- Analyze individual performance by channel;

- Ensure the best rate is trough direct booking;
- Highlight to customers why they should book online;
- Have your prices as total stay;
- Protect your high demand dates;
- Ensure your site has best inventory level;
- Consider mobile booker;
- Talk to booking provider about booking abandonment;
- Look at your paid advertising;
- Update content regularly;

Strategies as such if implemented will for sure drive difference for the hotel bottom line as this
will change habit of your consumers and provide them perceived and better value for the hotel
stay if booked directly (Rowe, 2017).

Stay stage of hotel selection process framework exhibited earlier is extremely important part of
hotel selection process cycle as that is only opportunity in entire process that mostly contributes
to a positive or negative impression on guest. Therefore, it is outmost importance to each hotel to
ensure they deliver on what they promised in initial stage of process such as evaluation, selection
and booking. Whether tourist traveling for business, customer service they receive on their
journey will help to establish if they will come back to that hotel or moreover advise their friends
to avoid your hotel in the future. Guest, after all have a lot of memories that they carry with them

25
to their home so therefore leaving positive memory will make huge difference in capturing new
guest too. Personalized and differentiated service is major contributor of guest choosing between
hotels and competitor of the same. According to McCann (2013) in between other aspects he
classified as two most important, customer expectation and delivering on your promise.

Customer Expectation refers to happy customers that are looking for a memorable experience
and therefore some of main reasons to select certain hotel during evaluation and booking process
will definitely have with measuring reviews for that hotel. Therefore, receiving negative review
would take away potential customers from your hotel. In order to have your guest return there is
a need to deliver on what was promised during initial stages of process. For example, if hotel
promised personalized service make sure that you deliver on it and going extra mile in exceeding
expectation will benefit hotel and the guest as well it will ensure that guest returns (McCann,
2013).

To conclude on hotel selection process framework that has cycles of evaluation, selection,
booking and stays that goes over and over again every time guest is in search of destination and
hotel to stay. It is important to rectify that for hotel in order to be successful all stages are
important with first impression counting stay and evaluation would have most impact on
decision to select and book hotel. Furthermore, that highlights value on providing great customer
service and focusing on getting better feedback and reviews in order to enable easier selection
against competitors.

3.4 Consumer Decision Making Process

Numerous different aspects influence the way consumers choose hotel to stay in. Furthermore,
the consumer decision-making process in the hotel choice selection is in influenced by hotel
product, established information, and personal preferences. Regrettably, marketing research in
hotels is still working with inadequate information and analysis of guest related data, based on
demographic and geographic data gathered while the guest is making the reservation or upon
registration. Further, this cannot be sufficient in an attempt to better know the travellers decision-
making behavior. In order to understand customers in their decision-making processes there is
need for predicting their potential intentions. This is vital to a business success in the hotel sector
(Baruca and Civre, 2012). Decision making process shouldn’t be a worry only to hoteliers but
26
also to a travel agencies as well as OTA’s as they may want to understand tourists decision-
making process and accommodation selection too in order to find what are the main factors that
have impact on the selection of various hotels types in as that will play huge role in order to
target their customers and market themselves accordingly (Chen, Tsai and Chiu, 2015).

One of the main researchers in aspect of decision process and selection criteria Lockyer (2002)
that was mentioned and discussed earlier in selection process was one of the main drivers to
establish decision making process that is used widely in other research that include hotel decision
making process. Dolnicar and Otter (2003) were able to present and conclude 173 attributes were
13 of them were related to image of the hotel, 16 related to value and price of rooms and 20
attributes were connected to service provided by hotel employees. On the other hand Callan
(1998) identified 166 attributes related to hotel selection process including location, price, image,
security and staff competence. As mentioned, Lockyer (2002) conducted research in regards to
hotel selection and was able to raise question about methodology used as it asked guest to rank
attributes offered on the list already prepared but it did not considered many other factors that
influence hotel decision making process so therefore it had certain degree of variation as
potential guest could have select attributes that perhaps was not offered in this study.
Furthermore, such methodological approach is rather focused on evaluation of alternatives that
researcher saw but not necessary applicable to guest as it did not summarize past experiences of
the guest as well as presence of other attributes that impact decision making process. Therefore,
researcher became interested in expanding his research with goal to establish better
understanding of what guest really think and what really is important in their selection of hotel to
stay in.

Moreover, as indicated in Picture 11 decision-making process was developed based on different

triggers that motivate guest to travel and from there was able to establish basic decision-making
model where cleanliness in all research was stated as mandatory factor (Lockyer, 2005).

27
 Picture 11 – Decision Making Process Model (Lockyer, 2005)

As seen from illustrated model basic model outlines four major factors that lead to purchase
decision of the hotel accommodation. After guest are triggered by attributes that lead to a desire
to travel major attributes identify in process were price, location, facilities and cleanliness as
mandatory factor. Further from this model Lockyer (2005) established four different maps trough
focus group study conducted that corresponded to attributes in decision-making process.

3.4.1 Special Map - Location

Special Map – Location (Lockyer, 2005).

Factors such as “location”, “price”, “distance”, “attraction”, “depends”, “car” were found to be

28
very important for a guest in order to establish how much they were willing to pay for the certain
hotel. Focus group that developed map was busy discussing the issues of hotel being close to
attraction and that hotels located further away may be less expensive but would involve
transportation and car cost that would displace saving on room if guest were to decide to select
hotel further away from all attractions. Words depend and transport as well as car and cost were
found to be more related to each other even they were not in the same category. Words
“business” and “stay” are closely related to category “price” which indicates that business
travelers were less sensitive to a price if the location of hotel was in approximate distance to all
attractions. Furthermore, as seen on map category “need” has key interest drawn from focus
group as it has relationship with many categories such as “price”, ”town”, ”city” and in some
aspect to “business” too. On the other hand, category “city” emphases importance of location in
the guest expectation and what they would prefer to do. Categories, “family and “area” clearly
highlight possible interest for the families and if they would have enough to entertain them self if
they select hotel for that matter. Lastly, category “transport” has very strong relationship with the
“price” but also indicates availability of public transportation (Lockyer, 2005).

3.4.2 Special Map - Price

Special Map – Price (Lockyer, 2005).

During the focus group there was strong relationship established that categories “availability”

29
and “first” are primary in order to continue looking for hotel as if there was no availability there
was no point in looking into price nor any other attribute. Furthermore, emphasis was placed on
strong relationship in between categories “reason”, “price” and “pay”. As example it served that
if guest family member was hospitalized there was strong need to stay at the hotel so price did
not seem important in case of such need. Words “afford” and “budget” very closely selected, as
there was expectation for the amount to pay even initial budget has been decided for hotel stay
when enquiring about hotel to stay at budget played big role. “Location” was placed in between
“price” and “first” which proved strong relationship in between price and importance of
accommodation location. As discussed previously in this paper service level offered in
hospitality industry play crucial role. Moreover, this study revealed strong relationship between
categories “amount” and “service” and that referred that guest is willing to pay more if high level
of service is offered at accommodation that could be decided in selection process trough out
various reviews as discussed previously. It is important to mention that “ expect” and “spend”
are two factors that are split but they indicated certain degree of expectation in purchase
decision. Even though guest want to spend sometimes what was budgeted certain situation will
command otherwise and will not necessary follow expected spend.

3.4.3 Special Map - Facilities

Special Map – Facilities (Lockyer, 2005).

30
As a one of most important factors that led to purchase decision beside price and location,
facilities offered at hotel have very strong influence on hotel decision-making process and
selection of accommodation to stay in. As seen in facilities special map facilities were identify
as very important but they are also influenced by different type of hotel. For example some of
categories as “fridge”, “email”, “parking”, “cooking”, “playground” and “hairdryer” were not
consider to be any sort of luxury but an essential need instead. “Quite” is seen as one of the most
important factors, in particular disturbance by other people deemed to be important. As seen on
the map “family”, “pool” and “games” have indication of being very important for the family
guest as a need for the activates. On the same note, “sports”, “garden” and “outside” also
indicated need for family entertainment but also could depend on purpose of stay (Lockyer,
2005).

3.4.4 Special Map – Cleanliness

Special Map – Cleanliness (Lockyer, 2005).

As mentioned previously cleanliness as factor had mandatory influence on hotel decision making
process as majority of guest would not proceed further with their decision for purchase of
cleanliness were about to be an issues. Furthermore, cleanliness factors as “bed”, “covers”,
“stains”, “bathroom”, “smell”,”towels”, ”looks” all play major role in ensuring that this

31
categories are satisfying before purchase is made. Therefore, it is essential for the hotels to
ensure that cleanliness is at the top level at all times as well as ensuring they are promoted trough
pictures presented to a guest during their decision making process in order to enable them to get
attracted to this crucial factor (Lockyer, 2005).

3.4.5 Decision Making Style

Since the 1950’s, various focus of studies were conducted in investigating the consumer behavior
and their decision-making style (Mishra, 2010). Furthermore, the consumer decision-making
style can be defined as “mental orientation characterizing a consumer's approach to making a
choices" (Sproles and Kendall, 1986). Based on that, they were able to create the Consumer
Style Inventory (CSI). Consumer Style Inventory (CSI approach was developed in order to
determine the characteristic of young consumers in their decision-making style, which can be
categorized as follow:

1. Perfectionist and High-Quality-Conscious Consumers: type of consumers that seek only

best quality product.
2. Brand-Conscious and Price-equals-Quality Consumers: type of consumers that believe in
product with higher price will have better quality.
3. Novelty and Fashion-Conscious Consumers: type of consumers that seek and follow the
latest trends.
4. Recreational and Hedonistic Consumers: type of consumers that look for leisure and
luxurious shopping, just for pleasure.
5. Price-Conscious and Value-for-Money Consumers: type of consumers that always
compare and look for the cheapest products to get the best value for their money.
6. Impulsive and Careless Consumers: type of consumers that do not plan on their purchase
and do not concern on how much they spend.
7. Confused-by-Over Choice Consumers: type of consumers that struggle in making
decision on which one to choose when they perceive many brands and stores, due to the
overloaded of information.
8. Habitual and Brand-Loyal Consumers: type of consumers that loyal to particular brand
regardless the price, location, etc.

32
Many researchers have been using this approach in order to conduct surveys for their research as
well as to categorize their consumer behavior in making the decision especially in hospitality
industry and hotel selection and decision making process.

To conclude literature review chapter it is important to note that in fast growing hospitality
industry predicting customer desire and need are key in order to drive business, especially in the
hotel sector. Therefore, for the hoteliers it is important to understand hotel selection factors and
decision-making process that guest follow when selecting hotel to stay in. Additionally, lot of
previous literature has been focusing on choice attributes that could be very subjective rather
than decision-making process that could offer more objective approach to the way guests select
hotel to stay in. Further in this report literature map has been created in regards to crucial factors
surrounding hotel selection and decision making process. Additionally, this paper will provide
recommendation for the future research and the hospitality industry overall.

33
 CHAPTER 4: Discussion

4.1. Literature Map

In order to provide structured discussion this paper further consolidated all of the literature that
was examined previously in order to provide factors that influence hotel selection and decision
making process. Due its very close relationship hotel selection factors play huge part in decision-
making process and bellow four attributes/factors have been selected for the literature map of
this paper as the crucial and most important in the process.

Location
(Gary and Ligouri, 1998)

(Lockyer, 2005)

(Chou and Hsu and Chen, 2008)

Social Media
(McCarthy and Stock, 2010)
(Leung et al, 2013)
Service Delivery
Hotel Selection Factors
(Barsky and Nash, 2010)
that influence decision
process and purchase. (Ramanathan, 2011)

(Tounta, 2014)
(Heaton, 2014)
(Lee, 2016)
(Vakaris and Neuhofer, 2017)
(Kidwai, 2017)

Price
(Chan and Wong, 2005)

(Baruca and Civre, 2012)

(Barksy, 2013)

(Noone and McGuire, 2015)

34
Further to content analysis of the existing literature, literature map is created and explained to
provide clear picture and the findings related to hotel selection factors and decision-making
process. Additionally, social media, location, price, facilities and service delivery have been
selected as most influential and important factors for the purpose of the study.

Beside regular importance that social media brought to peoples every day life, at the same time it
became extremely valuable for the tourism. For the guest it became valuable for the purpose of
reviews, easier bookings as well as making decision process easier, while on the other hand for
tourism it brought positives in terms of engagement and reaching wider audience and possibly
negative in terms of spread of negative feedbacks that could harm the business (Varkaris and
Neuhofer, 2017). Social media has changed the way travellers determine which hotel they will
stay, specifically leisure travellers. It became mandatory for the hoteliers to understand guest
attitude towards social media and find new ways in order to interacts and capture their attention.
Furthermore, this will help them to promote they business in effective and less costly manner
then traditional way of marketing (McCharty and Stock and Verma, 2010). Hospitality industry
is in the second place for mobile engagement, only Retail has more. According to Heaton (2014)
42% of consumers use mobile application for hotel bookings. Additionally, overall growth of
social media went up by 356% in last 5 years. According to same study 63% of the companies
who are using effectively social media has said that it has increased their marketing effectiveness
as well as reduced cost. Furthermore, 75% of SEO (Search Engine Optimization) users have
never scroll past the first page of a search result so therefore investing in positioning your hotels
online automatically provides wider audience. Direct bookings trough mobiles has grew from
$160 million in 2010 to astonishing $8 billion in 2015 which is an perfect example on why is
mandatory to have online and social media presence. The importance of social media on a guest
hotel selection and decision making process is huge as social media users are growing every day.
Review websites such as Trip Advisor and Yelp have great impact in hotel selection and decision
making process, therefore social media cant be skipped as crucial factor in this process.

Second factor that was rectified trough out literature as extremely important in the hotel selection
process is service delivery. As mentioned earlier hospitality industry itself is service industry and
entire process depends on the way business deliver customer’s expectation in order to have them
return. Customer care service is delivery of service before and after purchase decision has been

35
made (Kimanuka, 2014). Furthermore, service delivery has been selected as crucial factor in the
literature map. In hospitality industry the ability for retaining guest is crucial in success of
business. The customer loyalty requires before anything provision of great service to a guest and
leaving memorable experiences that will bring them back to the hotel and earn their value.
Ramanathan (2011) recognize importance of good customer service throughout analysis of
online data on customer service for the UK hotels. Research involved 664 hotels in UK and they
were able to establish out of five factors that three were significant where two were not.
Furthermore, out of three-customer service end it up on top as primary reason that kept guest
loyalty and retained them as hotel customers. Therefore, development of CRM (Customer
Relationship Management) is extremely important for hotel operation. Throughout proper
analysis hotel are able to establish their customer’s negative feedback and ensure that feedbacks
are being followed up for service failure. Impact of service could possibly be felt on bottom line
revenues too due to raise of complaints. In terms of marketing cost for the hotel-retaining
customer is far less than getting new customers, 1/8th is total cost of retention versus getting new
customer (Lee, 2016). For hoteliers therefore in order to provide exceptional customer service
there is a need to provide a lot of training as vast majority of hotel front line staff are consider as
unskilled or semi skilled. Irrelevant of what position you posses in hotel crucial factor in
maintaining good customer relationship is quick and effective feedback to a customer (Kidwai,
2017). Preferences and expectation vary from customer to customer so therefore hoteliers should
recognize customer need and deliver personalized service in order to exceed expectation and
have guest return to hotel and spread positive feedback about their experience (Tounta, 2014).

Importance of Guest Experience in Hotel Selection (Barsky and Nash, 2010)

36
According to Barsky and Nash (2010) guest experience has most influence on decision to choose
hotel and those numbers have strong impact especially in luxury and upscale hotels. On average
50% is impact of customer service for different hotel rankings.

Furthermore, one of most important out of four selected would be location. Determining good
location not only increases profitability and return on investment to hotel owners but at same
time it creates convenience for a customer (Chou et al, 2008). For business travelers selecting
good location is crucial in order to get closest proximity to venues and convenience in attending
meetings. On the other hand for leisure tourist selecting good location enables convinces for
shopping, site visits, transportation, attractions and amenities to name a few. At the same time
selecting good location mean less hassle and more fun time for leisure tourists. Traveling to
metropolitan cities will offer also better views on skylines (Swinton Hotel, 2017). Lockyer
(2005) identified other important attributes that are closely related to a location such as price,
attractions, amenities, transportation, cost, car and distances, which further indicates on how
important is location and what other aspects are considered during selection of hotel location. He
found that location is one of the crucial attributes in hotel selection and decision making process.
According to Martin (2013) JD Power and Associates conducted study on over 200,000 hotels
guest around eight different countries. The goal of the study was to assist hotels around the world
establishing most important attributes in hotel selection process and study showed that price and
location were the top two attributes overall. This of course varied by country where for example
Italian travelers were more considered on reputation of hotel and Spanish on previous guest
experiences that are all selected on literature map as crucial attributes too. Furthermore, many
researchers outlined location as crucial factor hotel decision-making process (Coltman, 1989;
Gray and Liguori, 1998; Pan, 2002;). While selecting hotel location it is very important to
consider traffic and transportation. Gary and Ligouri (1998) in feasibility study considered few
factors such as local economics, law and regulations, accessibility, amenities, public facilities
and geographic factors on where hotel should be placed. This further indicates that hotel owners
have to pay great value in feasibility study when choosing location to build hotel, as this will
determine hotel profitability as well as satisfaction of guest. Additionally, Pan (2002) also
considered tourist hotel location selection factors according to traffic convenience, fine visual
observation and public amenities available in close distance to a hotel. Therefore, it is very
important for a hotel management to highlight their location during their marketing campaigns

37
and advertise important factors that will add benefits to tourists choosing their hotel (Chou et al,
2008). Further to literature map developed it is important to note that location is key factor of
successful and profitable hotel business.

Lastly, selected factor as one of the most important on literature map is price. Price, being one of
the 4 Ps, it a very important marketer tool in order to attract consumers to purchase certain
product or service. There are varieties of different pricing techniques such as skimming pricing,
market penetration, luxury pricing, demand based pricing (Noone and McGuire, 2015). All of the
techniques have common goal and that is to attract consumers in purchasing product, which at
the times can be very difficult task due to many factors such as economical situation (Chan and
Wong, 2005). For example, during economical downturn customers are extremely sensitive to
high prices and rather turn to more affordable options, whereby in the hotel sector Airbnb could
be seen as more affordable option then a hotel. As discussed in literature review and according to
Barksy (2013) and market matrix study conducted on over 40,000 international tourists price as a
factor in hotel selection was selected on second place with 15.7%, just behind location as most
important factor when selecting hotel.

Global results on hotel selection factors – Market Matrix (Barsky, 2013)

Another hotel selection study conducted by Baruca and Civre (2012) also highlighted how
important is price during selection and decision making process. As mentioned, many guest are
price sensitive and therefore understanding factors as price are extremely important for hotel

38
management in order to provide best value for the consumers and at same time ensure
profitability of hotel. Same study find out that price was chosen as third most important factor by
hotel guest at 25.3% of overall guest surveyed. Total 1,520 guest were involved in the study on
how guest choose hotel and what factors influence their decision that was done predominantly in
Slovenia, Italy, Germany and UK.

(Baruca and Civre, 2012)

As mentioned, rise of technology and development of online platforms such as airbnb will make
pricing for hotels even more difficult and challenging therefore researching importance of this
factor and having better understanding of consumer limits will have to be conducted by hotel
chains as well as individual properties in order to stay competitive and keep occupancies and
ADR levels high for their business.

To conclude discussion part of this paper and literature map, it is worth to mention that all
attributes have certain impact on decision making process and therefore understanding them is
very crucial for success of business in hospitality industry. It is important to understand how
customers perceive product or service attributes and how they are remaining competitive in
compare to other competitors in the business. Moreover, choosing a hotel to stay in is very
important decision for a guest that are also linked closely to guest expectation and certain risk
that they might be exposed during their travel.

39
CHAPTER 5: Conclusion and Recommendation
To conclude this extended literature paper it important to note that large number of reputable
researchers in hospitality industry have investigated factors that influence hotel selection as well
as decision making process. With hospitality industry being very dynamic and fast growing it is
important that studies are conducted in important direction. Many of the researchers focused on
consumer choice in the selection process rather than on decision-making process therefore
making this topic more subjective and difficult to evaluate due to its complexity. Furthermore,
this could depend on variety of different regional analysis that could bring different results due to
cultural, religious and economical factors that influence different hotel selection attributes. On
the other hand many studies conducted on the topic have prove that there are lot of similarities in
attributes as discussed in literature map. Most of the article analyses in the literature review were
investigated trough content analysis. Such analyses are most objective and organized method of
collected documentation that emphases on key theme about the topic investigated, which in this
case is factors influencing hotel selection and decision making process.

Secondly, this paper presented literature explanations and citations that provided insights into
variety of different studies on selected topic. Literature part of this paper included short overview
of hospitality industry, discussion of theoretical framework that included Mean to an end theory,
review of hotel selection process and consumer decision making process. In the theoretical
framework part of literature review, we discussed mean to an end theory that discussed guest as
individuals who have are driven by specific goal and use product and service as mean to an end.
Furthermore, this means that advantage of a service for the guest is copied from similar product
or services that upkeeps tourist in order to meet their need. This theory is made out of three main
features: perceived price, perceived quality and perceived value. In the hospitality industry,
perceived price is tough to examine due to its service factor that often cant be measured as well
to big amount of products and service that tourist can come thru during their travel. Furthermore,
perceived quality can be defined as consumer having certain judgment on product or service
offered. Perceived value is seen as sort of trade off in between what customer gives up and what
they received. Further, hotel selection process is examined. This part of paper offers oversight of
hotel attributes, push and pull factors, tourist motivation and hotel selection process framework.
Tourist motivation are one of first stages in entire process as in that stage it is discovered what is
motivation behind decision to travel. Hotel selection framework discuses variety of stages during

40
hotel selection process such as evaluation, selection, booking and stays. Each stage has it own
process that is followed with different attributes within. Also varieties of attributes discussed that
are also connected to pull and push factors in the process. Furthermore, this paper-examined
decision-making process that focuses on four main attributes that were established trough
literature review as most important in consolidated research. As mentioned earlier these
attributes may be personal choices and not necessary applicable to all consumers.

Lastly, literature map was dawn by author of paper that highlights main factors that have
influence on hotel selection and decision making process. These factors were established trough
out range peer reviewed literature and repeated findings in coexisting literature that was
examined. Location, price, social media and service delivery were selected as most important
attributes extracted from literature and consolidated in literature map. Location found its place as
main attribute for the guest and business owners. For guest location plays big role due to its main
features such as proximity to destination attractions, amenities, public transport and shopping to
name few, while for the business having goof hotel location meant greater profitability and faster
return on investment for the owners. Furthermore, price also plays big role as consumers are
more and more being selective based on prices especially in mid scale hotel segment. Therefore,
it is important for the hotel to set up competitive and correct pricing that will benefit both sides.
Being core of the industry service delivery is one of the key factors that influence hotel selection
and play big role in purchase decision. In past decade development of social media has very big
impact on selection process and this is one of the attributes that is not very well recognized in
literature but it has huge role in the process. Due to its tremendous growth of 356% in last 5
years it is vital for hotel business to understand role of social media and how it impacts guest
during their decision to purchase product or service.

Choosing hotel to stay in is very complex task for many consumers as traditional way of
selection trough sales agent and travel leafs has moved to online world that offers variety of
different influential factors to a consumers such as online experience reviews, search
optimization engines (SEO), Online Travel Agent (OTA’s) to name few. All of them offer very
comparative factors that influence on final decision to purchase hotel stay to stay at.

41
5.1. Recommendation for future research
Future research should have stronger focus on decision making process rather then choice
attributes. Also it should involve more segmented studies that could be based on geographical
evaluation rather than a global study as current literature established that there are many
differences on how Europeans, Americans or Asian select hotels. At same note, factors that
influence hotel selection are also different and may impact final purchase decision. Future
studies most involve social and online media more as ways consumer make decision and select
hotel has shifted from traditional to online and future predicts that this trend will continue
therefore it is mandatory more research on online world and impacts on social media have as
factor that influence hotel selection and leads to purchase decision.

5.2. Recommendation for Hospitality Industry

Recommendation for hospitality industry and hotel sector definitely involves more investment
from management and owners side into educational institution in order to provide more data in
regards to selection and decision making process. This will lead industry professionals into
making more data driven decision rather than assumption based. Furthermore, more education is
needed in hospitality industry to employees as well as management on important factors that
bring business to their establishment. Training to be provided to hoteliers in order to establish
correlation between back of house data driven decision and front of house execution on those
important factors that drive business forward.

42
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 APPENDICES

Appendix 1: Search String Table

Filters
(Peer Relevant
Database Search reviewed) Total Used
Results
Results
Selection OR “decision
EBSCO making” AND hotel OR 689 15 3
hospitality OR lodging
“Hotel selection” OR “Hotel
PROQUEST choice*” 338 40 7
AND decision OR motivate*
“Hotel selection” OR “Hotel
EMERALD choice*” 2428 25 3
AND decision OR motivate*
“Hotel selection” OR “Hotel
TAYLOR & choice*” 768 11 6
FRANCIS
AND decision OR motivate*
Selection OR “decision
TAYLOR &
making” AND hotel OR 6757 8 4
FRANCIS
hospitality OR lodging
Selection OR “decision
EMERALD making” AND hotel OR 3458 11 4
hospitality OR lodging
Selection OR “decision
PROQUEST making” AND hotel OR 5698 35 8
hospitality OR lodging
“Hotel selection” OR “Hotel
Google Scholar choice*” 3660 45 14
AND decision OR motivate*

52

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