Empirical Research
IT Governance and Digital Application of Online Customers Expectations
By Ezendu Ariwa & Sarah Olaya
Oct 17, 2007 - 7:57:20 AM

IT Governance and Digital Application of Online Customers Expectations

(with respect to UK customers’ perceptions towards Hotel Websites

Ezendu Ariwa & Sarah Olaya

London Metropolitan University , UK

1. Introduction

According to Chung and law (2003); Jeong et al (2003); Jeong and Lambert (2001) and Kim et al, (2003) all found that the information satisfaction was the most important requirement of online customers’ purchases decision making, which remain largely unmet despite the growing importance of e-commerce within the hospitality industry. According to Kim et al, (2005), the changing trend in the business activities is largely attributable to the fast and improved developments in information and telecommunications. As a result, Chung and Law, (2003) noted that the Internet is also helping to drive down overhead costs for the hospitality industry and cost of information for the customers, as the traditional method of communication is slowly being phased out. Similarly Kim et al (2005) argued that the Internet gives the customers more advantages by allowing them to obtain valuable information such as prices and hotel facilities without the need of getting into contact with any sales agents. In addition, the Internet provides the customers with numerous supplies allowing customers to access a pool of products and services information from which they can make choices and compare prices.

In response to these demands, the hotel industry is fast adopting e-commerce so as to benefit from the global opportunities, distinguish themselves from their competitors and lower the costs of reservation processes. Kim et al, (2003) pointed out that the Internet offers optimum flexibility to enable hotels operators to react more swiftly to the changes in the business environment. However, before the hotels can reap these benefits, Jeong and Lambert (2001), pointed out that these benefits will not come on a silver platter. They emphasized that it is no longer adequate simply to market products and services online, but it is vital for hoteliers to fully understand the factors that determine online customers’ courses of actions (i.e. to buy or not to buy). This is of the main concerns on the effectiveness of hotel web sites, which include the values of the information content for online customers’ purchase decisions.

2. The Purpose of the Research:

The main purpose of this study is to:

• Investigate and identify UK online customers’ perceived key elements of hotel websites information contents for purchases decision.
• Use the key elements identified as ‘measurement indicators’.
• Evaluate the performance of UK two and three –star hotel websites.

3. The Research Questions:

According to a survey conducted by American Express in 2004 (cited by British Hospitality Association, current topics), e-commerce presents the UK hotel managers with one of the five biggest challenges facing the industry today. When Jeong and Lambert, (2001) tested a framework for evaluating information quality of hotel web sites, they found that the ‘usefulness’ of web site ‘information’ about hotel products and services has important implications on the customers’ purchase decision behaviours. Although more research has been done since Jeong and Lambert, (2001), latter studies suggest not much has changed in terms meeting customers’ information needs through the websites. This prompts the main question of interests: What information do online customers expect to find on the hotel web sites?

4. The relevance of the study:

There are a growing number of research on e-commerce for the hospitality industry, however many of these studies are being carried outside the UK and/or in general terms of hotel website overall performance. For example, Kim et al (2005) investigated the factors that influence the Chinese online reservation intentions and their satisfactions with online reservation in Beijing, China. Jeong et al, (2003) conducted a similar study in New York, USA. And Chung and Law’ (2003) who moved a step further to address specific aspects of the hotel web site quality- (i.e. information content), conceptualised their framework and tested the model in Hong Kong, on Hong Kong hotel web sites.

These examples demonstrate that, although some work has been done to address the information needs of online customers, it is equally important that the perceptions of UK online customers and hotel operators are incorporated in such evaluation framework if such frameworks are to be universally acceptable. The findings of this study should therefore be of interests to other researchers as well as hotel practitioners and web site developers.

5. The Literature Review:

Although initial response to calls for investigating the issues that affect online customers were slow, more researchers are now entering the hotel web sites and attempts to improve and add literature on e-commerce within hotel industry, in particularly customers’ information needs are gradually forthcoming. For instance, in an empirical study to investigate the relationship between information quality and the customers’ decision –making behaviour, Jeong and Lambert (2001), adapted a framework that consisted of four major dimensions of hotel web sites. These are: “perceived usefulness”, “perceived ease of use”, “perceived accessibility” and “customers’ attitude”. The study involved evaluation of eight web sites built on the basis of the framework.

Jeong and Lambert (2001), believed that these factors have strong impacts on customers’ intention to use information to make room reservations and information use for decision-making. The researchers argued that the intent to use the web site information involved two stages (i.e. ‘after examining the web content and before using the information to make a decision’). While the aspect of “information use” formed two significant behavioural results (i.e. ‘obtaining the information and making online reservation’). Thus in the event that the information obtained from the web site was used and purchases were made, Jeong and Lambert assumed that this would lead to recommendation of the web site to other prospective guests. They used these three factors: ‘use information’, ‘intention to use web site information’ and ‘recommendation of the web site’ as dependent variables to measure the information quality of the purported hotel web sites and to weigh customers’ behavioural decision.

Their findings suggested that “security of personal information” followed by “immediate reservation number”, “room rate” and ease of reading information” were the most important information among the 38 questions asked. In the end, they concluded that “perceived usefulness”, “ease of use”, “attitude”, and “intention to use web site information” have very strong impacts on the customer’s purchase decision behaviour.

However, Jeong and Lambert’s (2001) study though very comprehensive, to some extent there are reasons for it to be treated with reservation. For instance, the study was based on hypothetically built web sites. If the same study was conducted using real hotel web sites, the results would perhaps be different. Secondly, the time lapse between the period of study (1998) and now reduces the validity of the findings. For example, Internet application software, technology and telecommunication infrastructures have become more advanced. Furthermore, customers’ attitudes toward technology acceptance have also greatly changed. Therefore the validity of the results, which are based on their expertise at the time in web design and, users’ attitude and experience of using the Internet, can be distorted by time frame.

In a similar study, Jeong et al (2003) proposed that information satisfaction and purchase–related behavioural intentions are direct results of web site quality. They defined web site quality as “overall excellence or effectiveness of a web site in delivering intended messages to its audience and views”. Extending the work of Jeong and Lambert (2001), the researchers investigated the likely effects of web site quality. Unlike the predecessors of the concept Jeong and Lambert, Jeong et al (2003) made distinctions between the classes of the hotels (equivalent of five-star, four-star, three-star and two-star) in their research. In addition, the travel situations of either business or leisure were considered. Using of random sampling, 16 hotel web sites were examined through online questionnaire by prospective hotel guests. To measure the quality of the web sites, six variables were used. These were: “information accuracy, completeness, ease of use, navigation quality and colour combinations”.

The results of Jeong et al’s (2003) shared some similarities with the result of a study conducted by chung and Law (2003) who also found that the web site quality of budget hotel (e.g. two-star), were inferior to the rest of the upper classes (i.e. five-star, and four-star hotels). However, it has been argued that the degree of information technology application and sophistication are relative to the classes of hotels, (Jeong and Lambert, 2001).

Jeong et al’s (2003) findings also suggested that information accuracy, sufficiency and colour combinations were relative to the classes of the hotel. While the value of information, sufficiency and ease of navigation had strong influence on customers’ behavioural intention, a finding which is consistent with that of Jeong and Lambert (2001).

Furthermore, Jeong et al (2003) found that sufficient information and ease of navigation were significant to information satisfaction, which in turn determined customers’ behavioural intentions.

While the study of Jeong et al (2003) remain interesting, like Jeong and Lambert (2001), they make assumptions that no novice Internet users would want to use the hotel web sites since their samples consisted only of experienced hotel web site users. In my view, an easy to use web site should provide the novice with a first positive and lasting impression. In addition, the random sampling method reduces the reliability of the results. For instance, 70% of the respondents were female. Such a composition cannot give a true and fair gender representation and has great influence on the generalised concept.

The theory of information quality has been used in various circumstances. Chung and Law, (2003), adapted information quality as a model to measure the performance of hotel web sites with due regards to information value. The concept measured five dimensions of luxury, mid-priced and budget (equivalent of five-star, four and three-star and two-star) hotel web sites. Theses dimensions included; “facility information, customer contact information, reservation information, surrounding area information and management of the web sites”. In addition, the dimension and their attributes were modified by hotel professionals and the study was conducted on 80 Hong Kong hotel web sites. The results of the study revealed that the web sites of the luxury hotel had a better performance that of the mid-priced and which in turn did better than the budged hotel. The most significant part of the result was its suggestion that reservation information was the highest rated item, which is consistent to the findings of Jeong and Lambert (2001).

However, the generalised study leaves a lot to be desired. Firstly, there was no clear sampling method for comparison of results with other studies. For example, it is not clear whether the respondents have ever used the Internet at all or visited hotel web sites and/or made online reservations.

Apart from the above, other concepts have produced information requirements as a crucial factor in determining hotel web sites’ performance and customers’ intentions to make online room reservation. For instance, in a study conducted in Chine to investigate the factors that manipulate the Chinese’s online reservation intentions, Kim et al (2005) concluded that the Chinese were far more concerned about information requirements than any other factor. Followed by security, ease of use and being keen to use technology as determinants of electronic fulfilment.

These findings are very closely related to the findings of Jeong and Lambert (2001) conducted in the USA and Jeong et al (2003) carried out in the USA. On the other hand, the result revealed that, being keen to use technology was vital in determining purchase intentions. This was followed by gains from ‘price, level of service and reputation, security and ease of use’. They considered six factors: “information needs, service performance and reputation; convenience, price benefits, technology inclination and safety”. The dependent variables considered were “e-satisfaction and purchase intentions”.

In light of this literature review, it is unquestionable that information requirements have significant implications on e-commerce within hotel industry. Moreover, the need to improve information quality within the lower classes of the hotel categories is indeed urgent. However, the significance of these studies to remain relatively low in term of the performance of UK hotel web sites, which remains largely unknown. Equally, the perceptions of the British people and other nationals on the performance of UK hotel web sites also remain in the dark. Together with the limitations highlighted in the review, it would therefore be inappropriate to believed in the above generalised frameworks can be sued for evaluating UK hotel web sites without empirical studies.

6. The Research Methodology:

6.1 The study design:

The literature review attached formed the first stage of the study. This has been undertaken to gain deeper knowledge in the current issues in e-commerce for hospitality industry and the work that has been done in the field of e-commerce. It is proposed that the study will adapt the conceptual framework developed by Kim et al (2005) and Chung and Law (2003) for evaluating the information quality of hotel web sites. This will also form the second stage of the study and will involve consultations with at least five hotel managers from 2 and 3- star UK hotels as classified by the tourism trade organisation. The consultation will be necessary to ensure what the hotel mangers consider as the most important web site information contents are included in the scope of the study.

The third stage of the study will be to prepare the first set of questionnaires to carry out the initial survey. The forth stage will be to conduct the initial survey with the UK publics in London to investigate what customers perceive as the most important elements of hotel web sites information contents. The fifth stage will be to prepare the second set of questionnaires based on the result of the initial survey. The final stage of the study is to make a comparative evaluation of 3 two-star hotel and 3-three star hotel web sites’ information content.

6.2 Data sample and collection:

A stratified data sampling method will be used. The target group will be prospective hotel customers of two and three-star classes of hotels. The stratification will be done by asking respondents if in the past twelve months they stayed in any 2 or 3-star hotel in the UK or if they intend to stay in any 2 or 3-star hotel in the UK in the near future. If their answer is ‘Yes’, then they will be ask if they have used the Internet to make the choice of hotel they stayed in or will consider using to Internet to look for information about the hotels at their destinations. If there is ‘Yes’ then they will be asked if they can participate in the survey.

The data sample will be collected from both UK nationals and foreign visitors London.

London has been select as the geographical area for data collection for two main reasons. One is to reduce cost of movement and the second being constraints that will be imposed be time.

50 copies of questionnaires will be prepared for data collection for the initial study and 24 copies of questionnaires for evaluating the UK hotel web sites.

6.3 Data analysis:

The main tool of data analysis will be Microsoft. Excel because the software provides all the functions necessary for non-complex quantitative analysis.

7. Expected methodological problems and limitations of the study:

A study of this scale can better achieved over a longer period of time and involves greater understanding of demographic composition and lifestyle. Given the short space of time available for the study, the researcher is bound to overlook the implications of some of those issues. Secondly, stratification of the data sample may prove to be more difficult than first thought, such problems may have impact on the validity of the data collected for analysis.

Secondly, problems may be encountered in statistical analysis, but the researcher is fully aware that any in accuracy in the statistical analysis which will be unresolved will limit the reliability of the study findings. Subsequently, the researcher is prepared to devote time to learn more skills in statistical analysis even with the given the short period of time. It has also been said that experience counts when it comes to academic research; since this is the first time the researcher is undertaking such a study, limited experience will may have impacts on the findings of the chosen methods and as such, the findings of the study will have be treated with cautions and follow up studies will be desirable.

References:

Chung. T and Law. R, (2003), “Developing a performance indicator for hotel websites” , International Journal of Hospitality Management, Vol. 22, No 1 ,Pp 119-125

Jeong. M and Lambert C.U (2001 ), “ Adaptation of an information quality framework to measure customers’ behavioural intentions to use lodging Web sites ”, International Journal of Hospitality Management, Vol. 20, No 2 , pp 129-146.

Jeong. M, Oh. H and Gregoire. M, (2003), “ Conceptualizing Web site quality and its consequences in the lodging industry”, International Journal of Hospitality Management,
Vol. 22, No.2 , Pp 161-175

Kim. W. G, Ma. X and Kim. D. J, (2005), “ Determinants of Chinese hotel customers’ e-satisfaction and purchase intentions” Journal of Tourism Management, Article in Press, Corrected Proof,

Web sites:

British Hospitality Association, “ Key Challenges facing Hotel General Managers”, current issues; www.bha.org.uk/pdfs/keychallengesforhotelmanagers.pdf

Trade Industry, “ Hotel star ratings Summary” http://www.touristmtrade.org.uk/

Appendices:

Journal articles:

1. Chung. T and Law. R, (2003), “ Developing a performance indicator for hotel websites”
2. Jeong. M and Lambert C.U (2001 ), “ Adaptation of an information quality framework to measure customers’ behavioural intentions to use lodging Web sites ”,
3. Jeong. M, Oh. H and Gregoire. M, (2003), “ Conceptualizing Web site quality and its consequences in the lodging industry”
4. Kim. W. G, Ma. X and Kim. D. J, (2005), “ Determinants of Chinese hotel customers’ e-satisfaction and purchase intentions”
5. Trade Industry, “ Hotel: Star Ratings Summary”