SERVICE OPERATIONS

MANAGEMENT

TOURISM INDUSTRY: LOSS

AVERSION AND GAMIFICATION

GROUP 3
 215121037 – KIRTI AGARWAL
 215121041 – PRACHI LONARE
 215121049 – MOKESH KUMAR
V
 215121064 – RAHUL RAJ
 215121083 – SUMIT KUMARI
ENDOWMENT EFFECT

•ALSO KNOWN AS DIVESTITURE AVERSION, IT IS THE TENDENCY OF PEOPLE

TO ASCRIBE MORE VALUE TO THINGS MERELY BECAUSE THEY OWN THEM.
•IN TOURISM INDUSTRY FOR CULTURAL-INTERESTED CONSUMERS THE
NEGATIVE EFFECT OF FINDING AN ACTUAL PRICE HIGHER THAN THEIR
REFERENCE PRICE DIMINISHES WHEN CULTURAL INTEREST SHOWS UP.
•THIS HAS TO DO A LOT WITH VIRTUAL OWNERSHIP AND/OR
PSYCHOLOGICAL OWNERSHIP.
•CULTURAL ATTRIBUTES
 STATUS QUO BIAS

 A status quo bias minimizes the risks associated with

change, but it also causes people to miss out on potential
benefits that might even outweigh the risks.

 You may find yourself booking the same ticket of

train/bus/flight every time you travel.
 Also, you may find yourself booking the same hotel every
time you visit same place or same branch. Some of the
newer hotels on the list may look tempting, but you already
know that you will be satisfied with your old favorite.
 Instead of trying a new hotel/transportation and running the
risk that you will not like it, you'd rather stick to your tried-
and-true favorite.
 IKEA EFFECT

 IKEA’s “do it yourself” (DIY) business model is

rapidly being adopted by airlines much to the
chagrin of the traveling public and hotels heavily
dependent  on airlines - like the Caribbean.
 This is more evident than in baggage handling.
 On a more positive side, airlines are beginning to
let travelers print luggage tags at home and use
their smartphones to keep track of them.
 And permanent bag tags with a bar code that will
allow airlines to re-route your baggage if you get
re-routed are coming as well.
Endowed Progress Effect
The neuro-marketing technique
The idea that if some type of artificial advancement
toward a goal is provided, a person will be more
motivated to complete the goal.
Objective
Remove the Zeigarnik effect in the
offer claiming process

Actual - 8 points reqd.

What people see?

0 completed - 100% left
2 completed - 80% left
 Tourism Industry
Initial 5% discount, further 10% discount
First time offer..... / Trial offer
Initial wallet points > 0
Offer coupons for first time users, then add loyalty points after using
the services
3rd party discount coupons distributed as extras for initial users
Bonuses and offers for consistency
Endowed Progress Effect Cycle
Loss Aversion
Loss Aversion
• Tourists adhere to their original plans to purchase the desired goods and services – they will
exceed their planned budgets.
• On the other hand, not purchasing them can lead to feelings of loss and disappointment from
unmet, pre-travel expectations.
•  Tourists with higher loss aversion and present bias are more likely to experience overspending. 
• The stimuli and situations provided by traveling may trigger impulsive buying tendencies, hence
enhancing the effect of present bias on overspending
Keeping all Options Open
 Because time is a limited
resource, it is impossible
to pursue all the options,
at the same time, with
all your heart.
 When we are paralyzed in
trying to keep our options
open, we miss out on
whole horizons of
possibilities.
 The end result: feeling
burned out, but without
any more clarity on which
option you should take.
SUNK COST FALLACY

 A PERSON IS RELUCTANT TO ABONDEN A

COURSE OF ACTION BECAUSE THEY HAVE
HAEVILY INVESTED IN IT, EVEN WHEN IT
IS CLEAR THAT ABONDONMENT WOULD
BE MORE BENEFICIAL.
 IN TOURISM CONTEXT IT CAN BE A
SITUATION WHERE ONE DECIDED TO VISIT
A MONUMENT BUT REACHED THEIR LATE
AND THE VISITING TIME WAS OVER. SO
RATHER THAN GOING TO SOME OTHER
PLACE YOU DECIDE TO ROAM AROUND IT
JUST TO JUSTIFY YOUR INVESTMENT.
NON INVENTED HERE BIAS

PEOPLE LIKE THEIR IDEA MORE THAN ANY ONE ELSE. IN TOURISM CONTEXT IT CAN BE WHEN PEOPLE REFUSE
TO FOLLOW THE ITERNARY PROVIDED BY THE TRAVEL
AGENGIES AND MAKE THEIR OWN ITERNARY AND STICK
TO IT.
Thank You