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Customers' preferences for new technology-based self-services versus human interaction services in hotels Hanan Saad Kattara and Osman Ahmed El-Said Tourism and Hospitality Research 2013 13: 67 originally published online 8 January 2014 DOI: 10.1177/1467358413519261 The online version of this article can be found at: http://thr.sagepub.com/content/13/2/67

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Article

Customers’ preferences for new technology-based self-services versus human interaction services in hotels

Tourism and Hospitality Research 2014, Vol. 13(2) 67–82 ! The Author(s) 2014 Reprints and permissions: sagepub.co.uk/journalsPermissions.nav DOI: 10.1177/1467358413519261 thr.sagepub.com

Hanan Saad Kattara and Osman Ahmed El-Said Alexandria University, Egypt

Abstract This study explores differences in customer preferences for using new technology-based self-services versus human interaction in different service encounters at five-star hotels in Sharm El-Sheikh, Egypt. Data were collected using a scenario approach in a questionnaire where customers can either use a technology-based self-service or human interaction service. Findings showed that customers prefer to contact an employee rather than depending on a technology-based self-service in the majority of service encounters; customers’ preferences for using technology-based self-service versus human interactions vary during different stages of their occupancy cycle; customers’ preference for receiving a direct person contact is the most important reason for preferring human interaction encounters; customers’ preference for speed and easy service is the main reason for preferring technology-based self-service. Finally, the study ends up by offering useful suggestions and practical implications for hotel managers and practitioners.

Keywords Technology-based self-service, human interaction, guest cycle, Egypt

Introduction In Egypt and in many parts of the world, technologyfacilitating transactions have become increasingly popular. High labor costs are causing service organizations to examine delivery options that allow customers to perform services themselves. There are now a growing number of customers interacting with technology to create service experiences, and outcomes, which were traditionally performed by service employees (Ong, 2010). On the other hand, technology-based self-service (TBSS) is a term used to describe technological interfaces that allow customers to produce a service which is independent of direct service employee involvement (Meuter et al., 2000). Despite the fact that nowadays, using TBSS is an influential competitive advantage in the hospitality industry. Egypt was chosen to conduct this research because the hospitality industry in Egypt has been reluctant to introduce TBSSs to their customers. Yet, little is known about how customers would evaluate such options (Dabholkar, 1996).

Human interaction services (HISs) are the kind of service that most people are familiar with, which is the service that are provided by the frontline employees to customers (Bitner et al., 1990). Frontline employees interact with customers to learn about customers’ requests, problems, and other information and then deliver the requested service to them (Chen, 2011). According to Ganesh et al. (2000) employees’ interactions can be the most crucial factor that affects overall customers’ satisfaction and the repeat visit intention. In this context, customer experiences are the result of all the different moments of contact with the hotel using different channels (Shaw and Ivens, 2002 and, as such, the different customer interfaces become intertwined (Birgelen et al., 2006.

Corresponding author: Osman Ahmed El-Said, Faculty of Tourism and Hotels, Alexandria University, Dean’s office, Dr. Mostafa Mosharafa Street, Azareeta, PO Box 386, Ibrahimia, Alexandria, Egypt. Email: [email protected]


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At present, hotels’ customers believe that TBSSs are the trend for the future, and still some others consider that traditional HISs will remain the main service channel in the hospitality industry. Nowadays, in the hotel industry, one can find the online reservation systems that are taking over the reservation clerks’ duties; self check-in service by mobile device and self checkout or automatic check-out service by the hotel television that are taking place of the front desk services, in addition to the automatic mini bar service that is replacing guests’ room service (Chen, 2011). Therefore, this paper is concerned with comparing customers’ preferences for using TBSSs versus HISs during different service encounters. The comparison takes place during different stages of the guest cycle in five-star hotels. Moreover, the study attempts to trace the motives of customer preferences for TBSSs versus HISs, in addition to exploring recommendations and implications for the improvement of hotel services and the enhancement of customers’ satisfaction.

Theoretical background TBSSs These days, customers are literally surrounded by technologies that promise to redefine the way that they interact with manufacturers and retailers (Burke, 2002). By reviewing the literature, a considerable body of research has focused on the adoption of TBSSs (Curran and Meuter, 2005). Researchers recognized the critical importance of technology in the delivery of services, and empirical studies have investigated customer differences in the use of recent innovations in hotels which can result in significant cost savings for organizations (Meuter et al., 2005). TBSS is known as a form of service that is delivered by customers to themselves through an interaction with technological systems or devices (Beatson et al., 2006). TBSSs are also defined as those technologies that enable customers to receive and consume the service in the absence of service employees (Meuter et al., 2000; Salomann et al., 2006). TBSSs have become a changing force in the hospitality industry (Lema, 2009). Advances in technology and expensive labor cost have made the service providers to develop and investigate the TBSS option (Shamdasani et al., 2008). Services traditionally delivered by service staff, such as reservation, check-in, and check-out, are now available through the internet, mobile devices, stand-alone kiosks, or other forms of TBSSs (Kit, 2011). According to Kit (2011) although sometimes customers might still consult employees for the use of the self-service systems or devices, TBSS has helped

to reduce the amount of employees used in the hospitality industry. Moreover, TBSSs enable organizations to delight their customers instantly by allowing them to solve their problems using technology (Bitner et al., 2002). Reasons for implementing TBSSs appear to be numerous, not only because customers appear to have strong preference but also because there is cost savings involved for operators (Connolly, 2005). Some hospitality organizations could up-sell by providing more products or services available on the screen of a kiosk or in-room TV without increasing labor costs (Kim et al., 2012). Moreover, according to a study by Beatson et al. (2006) customers who have a successful interaction with TBSSs are more likely to stay loyal to the organization. They are also likely to have positive word of mouth and repeat visit intentions (Bitner et al., 2000). Additionally, organizations can correspond more quickly to customer enquiries and problems and can provide faster services that are precise and personalized (Berry, 1999). Beatson et al. (2007) have also confirmed this view by suggesting organizations to adopt TBSSs to build technological reputations for differentiation. TBSSs create a more consistent service experience, and the customer will be able to know precisely what to expect with every service encounter (Ong, 2010). Lastly, as technologies continue to integrate with our daily life, more and more customer will expect and welcome a more high-tech approach to the traditional service pattern, TBSSs would be an appealing feature for this new market (Kit, 2011). Despite all the benefits of TBSSs, there are also several weaknesses in this kind of service (Chen, 2011). First, it requires higher cost to purchase the equipment or the systems and ongoing maintenance fees. Second, a self-service technology system or device may be able to help the customers to perform various services; however, if the service list is too long, then people may not easily find what they need (Shaw, 2004). In addition, if there is a malfunction in the technology, it may create inconvenience to the guests and lead to customer dissatisfaction. According to Meuter et al. (2000) some of the most common dissatisfying incidents related to the TBSSs are possible technology failure, poor design, and process/customerdriven failures. Likewise, Bruce (2003) indicated that only 10% of self-service banking customers will use an ATM to deposit money due to fear of a banking error or unforeseen problem; in other words, these individuals feel comfortable taking money out of ATMs but are hesitant to deposit money because of the potential for service failure mistakes. Among other deficiencies is the lack of humanto-human interaction that can result in the possibility


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of a service failure with inadequate or slow service recovery methods, and service failures which are not evident at the moment of the service delivery (Girman et al., 2009). As much as possible hotel managers want to impress their guest in every service encounter, but they are afraid that the coldness of TBSSs will turn their guests away (Kit, 2011). This is valid since many studies have confirmed the lack of ‘‘social bonding’’ in TBSSs that leads to low customer satisfaction and negative impact on customer loyalty (Parks, 2010; Selnes and Hansen, 2001). Additionally, Castro et al. (2010) argued that every time technology advances and tries to get rid of the redundant manpower, there were always voices complaining about the loss of human contact. Lastly, Reinders et al. (2008) pointed out that forcing into using TBSSs has a negative impact on the experience and may eventually drive customers away from the service provider. There are many reasons leading to the popularity of TBSSs among today’s customers. Customers now are highly sensitive to the speed of service delivery (Bateson, 1985; Silpakit and Fisk, 1985; The Wall Street Journal, 1990), and studies have shown that they usually overestimate the time taken to deliver a service (Hornik, 1984). In deciding between alternative service delivery options, customers considered speed of delivery and ease of using the service delivery technology to be somewhat important (Dabholkar, 1996). Meuter et al. (2000) investigated customers’ reactions to a variety of technologies and applications, including internet shopping services, pay-at-the-pump terminals, telephone-based and interactive voice response systems, automated hotel checkout, and package tracking. They found that the technologies were most satisfactory in cases where they saved time, worked reliably, were easy to use, addressed a salient need, and offered greater control and accessibility. It is noteworthy to mention that few studies were conducted to examine the range of TBSSs available to customers in the hotel industry (Ong, 2010). Meuter et al. (2000) presented a conceptualization of TBSSs options available in the hotel industry. The authors classified TBSSs into four different technology interfaces, namely (1) telephone-based technologies and interactive voice response systems, (2) internet-based interfaces, (3) interactive kiosks, and (4) video technologies. These technologies were implemented mainly for customers carrying out transactions and to allow the customers to perform self-help. Additionally, Chen (2011) indicated that there are a lot of TBSSs in the hotel industry, such as self-reservation systems, self check-in kiosks, self check-out system on hotel television, self-serving in room mini bar, room service ordering system, electronic menus

for making choices in restaurants, boarding pass printing, and flight check-in kiosks, etc.

HISs The literature provided a large number of studies investigating the interaction between service employees and customers in the service sector. HIS is a service that takes place in a form of direct contact between the customer and an employee in a service encounter. Surprenant and Solomon (1987) defined the term service encounter as the dyadic interaction between a customer and a service provider. Service encounters also have been defined as that period of time during which the customer and service organization interact in person, over the telephone, or through other media (Maloney and Asce, 2002). The literature indicated that customers prefer HISs because they need to interact with a service employee. Need for interaction is defined as a customer’s desire to have a personalized service (Dabholkar, 1992). In service encounters, human interaction is extremely important in evaluating the service (Bitner et al., 1990; Gronroos, 1982; Solomon et al., 1985; Surprenant and Solomon, 1987). In the TBSSs contexts, Dabholkar (1992) examined the determinants of customers’ attitudes toward TBSSs options and found that the need for interaction with service employees has a negative impact on attitude toward TBSSs. Recently, Kim et al. (2012) indicated that customers who indicated a high level of needs for interaction with hospitality employees had a lower likelihood of using TBSSs. There are many benefits in HISs for organizations. First, people build trust and interpersonal relationship through the interactions (Chen, 2011). According to Chao et al. (2007) the closeness of interpersonal relationship, in terms of trusting, liking, and knowing each other, may serve as a shield against other competitors, via holding up no less than a short-term continuity business relationship. Similarly, another research had found that the interpersonal relationships between customer and frontline employees are a very significant factor that can positively affect customer satisfaction and loyalty (Guenzi and Pelloni, 2004). Second, customer satisfaction is often dependent on a specific relationship with a contact employee, thus, the cost of losing such an employee includes the weakening if not loss of key customers (Duboff and Heaton, 1999). For example, Reynolds and Beatty (1999) found a positive association between the customers’ satisfaction with a salesperson and customers’ satisfaction with the organization. Third, the interactions between customers and frontline employees are key aspects affecting customers’ commitment and loyalty


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(Beatson et al., 2006). For example, Bove and Johnson (2006) found a positive association between the service customer’s attitudinal loyalty toward one specific service worker and the customer’s attitudinal loyalty toward the service person’s organization. Nowadays, customers want the employees to know their value (Stuart, 2010): a smile, a good eye contact, a friendly greeting, and a positive comment can bring positive emotion to the customer, which can indirectly affect customers’ service experience and loyalty (Chen, 2011). Despite the previously mentioned benefits, there are problems in HISs for organizations. First, since the quality of the interpersonal interaction in HIS can affect customer satisfaction (Bitner et al., 1994) it can have not only positive effect but also negative effect. For example, if the employees do not use proper language or attitude to serve the customers, there might be customer dissatisfaction (Chen, 2011). Second, HIS is a service that is provided by human, and all the humans are different, the service quality they provide would be varying too. Third, other problems with HISs are personal mistakes, such as mistype guests’ name or card number, or give away the wrong type of the room or wrong room key (Chen, 2011). Some of these mistakes can create serious inconvenience to the customers and other serious mistakes can even lead to litigations and cost the organizations’ fame and business (Barth, 2002).

TBSSs versus HISs Over the last two decades, services have migrated from human interaction to the substitution of technology for service employees or, where possible, to electronic services that can be deployed anywhere at any time (Ong, 2010). By reviewing the literature there were many points of view regarding customers’ preferences for HISs versus TBSSs. On one hand, several studies suggested that customers prefer to receive the service from a machine rather than to contact an employee. For example, Meuter et al. (2000) argued that avoiding service personnel may be a source of satisfaction and lead to a positive evaluation of TBSSs by some customers. In addition, Dabholkar (1996) showed that speed of delivery by technology interface compared to personnel in contact has a direct effect on intentions to use the service for people waiting longer. Additionally, results of a study conducted by OrfilaSintes and Mattsson (2009) supported the positive effect of the average customer directly booking her or his stay on the service scope innovation. On the other hand, other studies affirmed that although TBSSs are an unavoidable trend and have been widely adapted by various hotels, there are

many customers who prefer to receive the service from a contact employee rather than a machine. According to Beatson et al. (2006), personal service remains a very important part of customers’ satisfaction and it also affects customers’ intention to develop and maintain a stable long-term relationship and a long-term commitment in the hotel industry. Moreover, Pfeffer (1994) indicated that competitive advantage through employees is becoming more important because other sources of competitive advantage are easier to access and, therefore, easier to copy. The expertise and enthusiasm of frontline staff is a particularly crucial aspect because it has a direct effect on customers’ perceptions of service quality (Hartline et al., 2000). Additionally, since it is hard for TBSSs to express empathy in today’s technology, customers would still prefer to complain to an employee rather than a machine (Chen, 2011; Yilmaz, 2009). Complaining customers are looking for justice, well-being, and security, and they want the employees’ authenticity, competence, and active listening skills (Gruber, 2011). Lastly, Pursell (2011) pointed out that some people would prefer to go to a cashier rather than a self check-out kiosk when they are checking out a lot of products. A third point of view asserted that competitive advantage of corporations will depend on arranging the right combination of human and automated interfaces to go beyond any existing levels of performance and service (Rayport and Jaworski, 2005). For example, customers would book the travel online if they want a lower price, and when they prefer more service, such as travel arrangement, they would normally go to offline agent (Lee and Cheng, 2009). According to this view, the traditional personalized service through employees may no longer be the only best service delivery method because of the increase in availability of high-tech alternatives and its importance (Kim et al., 2012). Kim et al. (2012) affirmed that in order for hospitality operators to successfully implement and use TBSSs, they should understand whether and why customers are willing to use TBSSs. For instance, customers may value shorter wait times, the feeling of control, or the privacy that TBSSs can provide. In contrast, some people may not prefer TBSSs because they feel that they lack proficiency in technology and for that they are afraid of making mistakes (Kim et al., 2012). The sum of related research leads to the following hypotheses and the research framework (Figure 1): H1. Customers prefer to use HISs rather than TBSSs during different service encounters. H2. Customers’ preferences for HIS versus using TBSSs vary during different stages of their hotel stay cycle.


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Customers’ preferences (Use) (H1)

Technology-based self services (TBSSs)

Customers’ preferences for HIS versus using TBSSs vary during different service encounters (H2)

Speed of service and ease of use (H4)

Human Interaction Services (HISs)

Need for human interaction (H3)

Intention to use TBSSs

Intention to use HISs

Figure 1. Research hypotheses and framework.

H3. Customers’ need for human interaction is the main reason for choosing human interaction situations. H4. Customers’ need for a speedy service and ease of use are the main reasons for preferring TBSSs.

Methodology Study approach Research hypotheses for this study were tested (using a scenario approach in a questionnaire) for a context where customers can either use a TBSS or HIS. Dabholkar (1996) stated that the scenario approach could be used for several reasons. For example, in testing a new and as of yet widely unavailable TBSS option, a study of potential customers and their expectations was thought to be appropriate. In addition, using the scenario approach allowed manipulation of waiting time, something not easily replicated in field experiments (Jackson et al., 1984). Sharm El-Sheikh city five-star hotel customers were selected as a highly relevant population for this study because its hotels are more innovative than any other hotels in Egyptian cities.

Questionnaire development and piloting During September 2011, researchers collected and reviewed preliminary qualitative data. The purpose of collecting this data was to discus the different

scenarios that customers can choose from when dealing with the hotel during different service encounters. These data were collected through face-to-face interviews with 10 customers. During the interview, customers were asked to indicate the different options for using hotel services during different stages of their stay in the hotel. These data were used to guide in the development of the TBSS versus HIS questionnaire (TBSS/HIS-Q), in addition to the review of literature therein (Appendix 1). The TBSS/HIS-Q was composed of three sections. The first section was related to the demographic data of respondents, namely: nationality, age, social status, purpose of visit, education, number of visits, and length of stay. The second section of the questionnaire consisted of seven statements, measuring customers’ preferences for using TBSSs versus HISs. Customers’ preferences were measured using a five-point Likert scale, where (5) meaning ‘‘strongly agree’’ and (1) meaning ‘‘strongly disagree.’’ The last main section of the questionnaire consisted of nine interaction scenarios covering the customers’ hotel cycle. Respondents were asked to determine their preference between two scenarios: one indicating a HIS and the other expressing TBSS usage. They were also asked to identify the reason behind choosing a particular scenario. Face validity of the questionnaire was applied on the first draft of TBSS/HIS-Q to ensure that the questionnaire measures precisely what it was designed to measure. To do that the questionnaire was reviewed by a panel of five professionals and academics. Important comments were considered and several changes have been


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made, regarding the rephrasing and rewording of some statements. The second draft was piloted to 15 customers in order to identify questionnaire deficiencies and problems with layout and design, to get suggestions, to test the time proposed for answering the questionnaire, and to investigate the level of comprehension of the constructed questionnaire. After a review of the pilot test results, several changes were made. Additionally, the reliability of the scale was measured with Cronbach alpha coefficients and coefficients were all greater than 0.80. This test method was employed to ensure that the responses to the questionnaire from the same person produce the same results on repeated trials.

Sample frame and questionnaire distribution The sample frame for this study comprised all customers staying in five-star hotels in Sharm El-Sheikh city in Egypt. Using the 30th edition of the Egyptian Hotel Guide (EHA, 2011) the researchers were able to prepare a list of 40 five-star hotels in Sharm El-Sheikh. Random sampling technique was employed in the current study in order to choose five customers from each hotel. The cause of this low number of distributed questionnaires in each hotel is that the researchers received low level of cooperation from hotel managers, as most of them refused to distribute copies of questionnaire forms in hotels they manage. Researchers have overcome this obstacle by asking the help of some hotel employees who helped them in achieving this mission. Therefore, 200 TBSS/HIS-Q were distributed. This sampling technique has the advantage of that every customer in the hotel has a known, independent, and equal chance of being selected as a subject, and selection of one element does not affect the

selection of another element. Out of the 200 distributed questionnaires, 122 were collected. Only 106 questionnaires were valid, counting for 53% of the total sample which represented a satisfying response rate. Researchers distributed questionnaires to guests directly what resulted in this high rate of response.

Results presentation and discussion The data for the entire study were inputted into the Statistical Package for Social Sciences 17.0 program for Windows to interpret results. Descriptive statistics were generated for the variables of interest, and a second reliability analysis on the instruments was conducted to ensure that questions properly represent the study hypotheses. The four research hypotheses were examined through various data analysis procedures and were individually discussed in further detail as outlined later. The following section presents a detailed analysis of the field research data, results obtained through the use of the predetermined statistical tools, as well as the rational discussion and interpretation of the findings as they relate to the hypotheses. The demographic profile of respondents and the characteristics of their visit are presented in Table 1.

Presentation of results Results of customers’ preferences for HIS versus TBSS during guest cycle stages are presented in Table 2. Nine scenario alternatives, representing different guest cycle stages, were presented to customers. HIS scenarios were preferred by customers in seven scenarios, representing preregistration, registration, occupancy, and departure stages. In after departure stage the inclination was for the TBSS interaction.

Table 1. Respondents’ profiles and characteristics of the visit. Nationality

%

Profile of respondents British 50.9 Italian 4.7 Others 44.3

Purpose of visit

%

Characteristics of the visit Leisure 92.6 Business 5.2 Other 2.2

Age group

%

Educational level

%

Social status

%