1.1 Research Background
Evolution of internet had influenced consumer to go for online shopping rather than going to the physical stores (Lim, Osman, Salahuddin, Romle & Abdullah, 2016). Consequently, consumers that are browsing and making online hotel reservations are on the rise as well (Saw, Goh & Isa, 2015). In general, budget hotel is a service provider which consists of limited service, low cost and simple rooms as compared to other types of hotels (Peng, Zhao & Mattila, 2015). Furthermore, budget hotels are commonly labelled as 1 star hotel with rates from RM50-RM100 per night (Albattat, Ibrahim, Abd Raof & Nasruddin, 2016). Budget hotels do not have a standardized theme for the hotel design unlike boutique hotels which consists of a theme such as Ipoh Boutique Hotel. In addition, budget hotels are situated in urban cities whereas motels are found alongside highways because motels are designed for travellers to take a short break after a long drive and they usually rest for one night (Albattat et.al, 2016). On top of that, Kaur (2014) explains that budget hotels in Ipoh with room rates between RM70 and RM218 are highly attractive to the tourists in Ipoh. Moreover, the growth of internet offers a platform for consumers to interact with each other. The rise of Web 2.0 has extended the use of UGC platforms such as social media (Facebook, Instagram, Twitter and LinkedIn), transformed the word-of-mouth ?
(WOM) communication into virtual networks and online forums (Ye, Law, Gu & Chen, 2011). EWOM communication also defined as statement that written by past users exchanges their experience in virtual environment (Hennig-Thurau, Gwinner, Walsh & Gremler, 2004).
1.2 Problem Statements
Since eWOM is still consider in the infant phase, several researchers have tried hard to obtain more information in order to have better understanding about WOM and eventually adopt it for marketing purpose. Researches were done mostly on the impact of eWOM towards tourism (Albarq, 2013; Zarrad & Debabi 2015; Ishida, Slevitch & Siamionava, 2016).Nevertheless; there are limited researches conducts about the characteristic of eWOM in the budget hotel industry.
In addition, such service industry studies are more concentrated on those first world countries (Zhang, Ye, Law & Li, 2010; Pai, Chu, Wang & Chen, 2013) instead of those developing nations such as Malaysia. Specifically, the research of tourism is less in Ipoh, more in other states of Malaysia, for instance, Sarawak (Sivadasan, 2015) and Klang Valley (Kasimu, Zaiton & Hassan ,2012). Ipoh is underrated by researchers as it has high degree of revisiting intention, destination loyalty, strong word of mouth recommendation (Ahmad Puad, Ibrahim & Sayaka, 2016).
Since the hotel is the service provider, consumers are unable to physically judge the service before they reserve. Thus they rely heavily on the eWOM or consumers’ reviews to make their online budget hotel reservation (Tsao, Hsieh, Shih ; Lin, 2015). Thus, this research aims to solve this problem by analyzing the characteristics and attributes in IAM such as IQ, IC, IU and IA in the context of online budget hotel reservation.
1.3 Research Objectives
The objective is set as a direction to achieve the goals of this study (Business, 2018). It is considered as comprising into two parts:
1.3.1 General Objective
Primary intention of this paper is aim to discover about the influence of eWOM towards budget hotel reservation in Ipoh.
1.3.2 Specific Objectives
Four exact intentions for this paper are discusses below:
1. To examine is there a positive influence of IQ towards consumer’s intention to reserve budget hotels at Ipoh.
2. To examine is there a positive influence of IC towards consumer’s intention to reserve budget hotels at Ipoh.
3. To examine is there a positive influence of IU towards consumer’s intention to reserve budget hotels at Ipoh.
4. To examine is there a positive influence of IA towards consumer’s intention to reserve budget hotels at Ipoh.
1.4 Research Questions
Numbers of questions are stated to determine the influence of Independent Variables (IV) towards Dependent Variable (DV).
a. Does IQ influence CI to reserve budget hotels at Ipoh?
b. Does IC influence CI to reserve budget hotels at Ipoh?
c. Does IU influence CI to reserve budget hotels at Ipoh?
d. Does IA influence CI to reserve budget hotels at Ipoh?
1.5 Hypotheses of the Study
Assumptions are illustrated as a guideline for this research. The hypotheses are set to determine what are yet to be tested in this study. It is a way for the researchers to pre-determine the result of the variable that going to test.
H1: There is a positive influence of IQ towards CI to reserve budget hotels at Ipoh.
H2: There is a positive influence of IC towards CI to reserve budget hotels at Ipoh.
H3: There is a positive influence of IU towards CI to reserve budget hotels at Ipoh.
H4: There is a positive influence of IA towards CI to reserve budget hotels at Ipoh.
1.6 Significance of Study
This research contributes primarily for budget hotel operators in identifying consumers’ behaviour towards information. Due to the fact that the competition of hotel industry is getting stiff as more and more budget hotels are developed around Ipoh area for instance, Highway Times Inn Hotel in Ipoh Garden East (Kaur, 2014),thus, role and characteristics of e-WOM is essential to be studied by budget hoteliers to know consumers’ behaviour towards information. There are abundant of online reviews of budget hotel in the virtual platform (Tripadvisor and Yelp) (Filieri, 2015), consumers who like to make a reservation may refer to the reviews but little is known on what they think of the value and reliability of the information that is available on those websites and how those information can really contribute to consumers’ intention to reserve a budget hotel.
The purpose of this research is to fill up the disparity via examining the various aspects of information influences such as IQ, IC and IU and how these attributes bring values to consumers in adoption of e-WOM that further drives them towards buying intention using IAM model. The message receivers will evaluate the relevancy of information regarding the various aspect stated as above (Filieri, 2015). Furthermore, this research also can contribute in literature studies. In the original IAM model, IA has not been used as an independent variable to influence consumers’ buying intention; instead it was widely used as a dependent variable (Erkan ; Evans, 2016). Thus, this research by modifying the original model can provide new empirical result on how IA can have an influence towards consumers’ buying intention.
1.7 Chapters Layout
Chapter 1 primarily discusses about the following basic elements of this research: background, objectives, questions, and hypotheses. When we proceed to chapter 2, the related theory of the study will be discussed by referring past studies, and then the hypotheses will be developed. Chapter 3 gives the details of research methodology that will determine the sampling size and explain the definition of the methodology methods. Chapter 4 describes the results attained from the actual survey besides the pilot tests. Lastly, in chapter 5 will discuss the result regarding the findings and the conclusion of the overall study.
This part are introductory to talk about eWOM and the concerning issues in this study is leading the formation of the objectives, questions, and hypotheses. There will have total four independent variables that determined the CI to reserve budget hotels at Ipoh.?
CHAPTER 2: LITERATURE REVIEW
Following section argues on philosophical model as well as past research studies to further explore this topic. The conceptual framework consists of four important determinants of influence the consumer’s intention to reserves a budget hotel is presented. The proposed conceptual framework and the hypotheses use to investigate the influence of the elements comprise in the eWOM on consumer’s intention to reserve a budget hotel will be explain detailed in this chapter.
2.1 Hotel Reservation Environment in Malaysia
Evolution of internet technology brings the new terrace for the hotel industry. Crnojevac, Gugi? and Karlov?an (2010) reported that internet becomes the tool for consumer to search information when they have the intention to reserve a hotel online.
Malaysian consumers not only rely on one kind of information source to support their purchase decision but also looking for the others opinion and experience. Lim, Yap and Lau (2010) found that Malaysia consumers like to study the eWOM before they purchase air ticket and reserve a hotel.
Besides, Google Malaysia and TNG Research had confirmed that 90% of Malaysia travellers will carefully evaluate the hotel before they proceed to the booking task. Similarly, TripAdvisor found that more than 77% of Malaysia consumers will review the information and looking the characteristic of information to book a hotel. Furthermore, such consumers search behaviour was made the consumers have high tendency to explore him/her toward eWOM information (MarketingMagazine.com.my, 2014). Karabulut and Bulut (2016) reported that eWOM are the most preferable source for consumers in evaluating and purchase the tourisms products. In addition, eWOM also refer to person to person contact such as weblog comments, experience customer opinions, communication between the purchaser and experience on internet to allow the consumers to gain extra knowledge to book a hotel (Pourabedin & Migin, 2015). At the end, individual will close the sale by online reservation.
As hotel is offering the services for the consumers, then the experiences and quality of staying in that particular hotel is the consumers cannot prior know before they really experienced it (Pourabedin &Migin, 2015), thus, major travellers are depending the e-WOM information that written by the past experiences to affect their reservation decision.