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The popularity of completing higher education courses online has increased rapidly over recent years (Lee & Choi, 2011), with around 20 percent of all Australian tertiary students enrolled in online programs (Australian Bureau of Statistics, 2015). Students decide to study online for various reasons, including flexibility, the opportunity to integrate study with family and work commitments and the advantage of being unrestricted regarding location and time (Lee & Choi, 2011; Parker, 1999; Liu, Gomez, & Yen, 2009). However, one major disadvantage has been consistent over recent years. High attrition rates of about 45 percent compared to 18 percent for on-campus students have not improved in recent years (Australian Government – Department of Education and Training, 2015).
This study considers whether the design of Australian distance education courses can be improved thus increasing student retention. Referring to the above mentioned longitudinal data of the Australian Government – Department of Education and Training (2015), student retention includes students who are still enrolled in a course or who graduated from university. To add to previously identified crucial program factors for distance student retention, we consider the potential implications and application of a tourism and business model, Pine and Gilmore’s Experience Economy (1998). The model explains how authentic experiences can be created. Authentic learning experiences comprise activities that reflect the reality, are enriching and mesmerising, and allow the student to engage (Herrington & Herrington, 2006). Furthermore, the research objectives of this study, the identification of how the student experience, the student satisfaction and retention in online courses are related, are outlined. This article utilises simple mediation models to describe the procedure of determining the relationship between more than two variables with a sample size of n = 75.