Do online travel agencies deceive customers?

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It is estimated that 5% of paid Adwords are bought by Priceline. Group & Expedia (O'Neill 2015). • Success due to comfort, accessibility and a great user.
Do online travel agencies deceive customers? Insights from customers & industry experts Research by Sandra Metz, Emina Velic, Yen Nguyen, Christian Furthner

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The OTA market •

Online hotel sales accounted for 26% of total hotel sales in 2013 (Euromonitor International 2014)



Booking & Expedia account for almost 80% of bookings via OTAs (Hotrec 2016)



OTA-Commissions are in general 20-25%



It is estimated that 5% of paid Adwords are bought by Priceline Group & Expedia (O‘Neill 2015)



Success due to comfort, accessibility and a great user experience (Buhalis, 1998). ISCONTOUR 2017

OTA market share in Austria 2015 European hotel distribution study

Schegg 2016, ÖHV ISCONTOUR 2017

The OTA market

6.6b USD revenue in 2015

6.3b USD revenue in 2015 ISCONTOUR 2017

Research Design • Research Question:

Which factors (like time, urgency, location, distribution channel, used device or consumer profile) influence search rankings in terms of online prices?

• Hypotheses:

H1: H2:

Customers feel deceived by OTAs. Prices ranked first in search history are tailored to customer characteristics.

ISCONTOUR 2017

Research Design Hypotheses: H1:

Customers feel deceived by OTAs.

H2:

Prices ranked first in search history are tailored to customer characteristics.

ISCONTOUR 2017

2. Methodology

1. 2.

• • • •

Qualitative Research Expert Interviews function list Awareness and influence

• Quantitative Research • Customer survey • Ethical or not?

ISCONTOUR 2017

US-customers feel deceived! Online panel study in July 2015, GFK custom research & American Hotel & Lodging Association Perception of decisive OTA-Practises, in % representative for US population, multiple selections (n=1017)

Got a room that was different than expected Were charged unexpected or hidden fees

100

75

Did not get their reward points Were charged an extra booking fee

50

Could not get a refund for a cancellation Had reservation lost or cancelled

32 25

Had their identity or private info stolen 0

ISCONTOUR 2017

17

15

14

14

9

3

Our convenience sample also feels deceived! CAWI Interviews in December 2016

Perception of decisive OTA-Practises, in % Convencience sample, multiple selections (n=144) 100

Got a room different than booked Had been charged an unexpected or hidden fee

75

Had problems getting reward points Had problems getting a refund for a cancellation Had reservation lost or cancelled

50

25

Had personal data stolen

21

26 5

0

ISCONTOUR 2017

6

7

4

Unexpected or hidden fees To what did these extra fees relate? (n=74, multiple selection)

ISCONTOUR 2017

Decisive Practises 50

32 17

25

15

14

14

Room different expected/booked

9

3

Unexpected Fees Reward points problems

0

Extra booking fee Problems Refund for a cancellation 50

Reservation lost or canceled 25

21

26

Identity or private data stolen 5

6

7

4

0

ISCONTOUR 2017

Research Design Hypotheses: H1:

Customers feel deceived by OTAs.

H2:

Prices ranked first in search history are tailored to customer characteristics.

ISCONTOUR 2017

Expert interviews Company

Interviewee

1. Channel Manager, Berlin

Representative Sales

2. OTA: booking.com

Account Manager Austria

3. Hotelsoftware Provider, Tirol

Regional Sales Manager

4. Hotelsoftware Provider, Tirol

Representative Sales & Support

5. Channel Manager, Vienna Representative Sales Team 6. Hotel Consultancy & Distributor Channel Consultant Manager, Burgenland 7. Channel Manager, Tirol Key Account & Quality Management 8. Hotel Consultancy, Revenue Management, Salzburg

Head of Business development

ISCONTOUR 2017

Evaluation of the Expert interviews Function list 1.

Customer Profile

2.

Cookies – Online Behaviour

3.

Content provided by the hotel

4.

Use of a channel manager

5.

Use of a Yield-/Revenue Management

6.

Availability

7.

Commission level

8.

Customer Reviews

ISCONTOUR 2017

Research Design Hypotheses: H1:

Customers feel deceived by OTAs.

H2:

Prices ranked first in search history are tailored to customer characteristics.

ISCONTOUR 2017

Thank you very much for your attention!

Any questions?

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