Abstract
Generation Y has been considered to be a sizeable new market. This study, based on a sample of 1131 Italian travellers from Gen Y, investigates their views for and against disintermediation, and analyses how their choices are influenced by user generated content (UGC), rather than by information provided by high street travel agencies. The factor analysis uncovers three dimensions: “Benefits of Travel Agency”, “Benefits of Online Reservation”, and “Online Trust & Search Behaviour”. Further, a series of statistical tests indicate that demographics such as age and education have a significant influence on the respondents' perceptions. Our findings suggest that hotel managers and travel agencies should monitor Gen Y perceptions of the benefits and constraints of using the Internet, UGC and travel agencies for hotel booking. Further, accommodation providers should use online channels to create affective commitment in their young customers. Limitations of the study are discussed and suggestions for further research are given.
TopIntroduction
In the last decades, the Internet has been experiencing significant growth worldwide. According to Internet World Stats (2016), more than 3.6 billion people in the world are active Internet users, with an increase of 10% since 2015. More specifically, Internet penetration varies considerably among countries, but an average of 46% has been observed worldwide. The United States (88%) and Europe (83%), respectively, show the highest Internet penetration ratios, whereas South Asia (27%) and Africa (29%) record the most negative peaks (We are Social, 2016). The development of the Internet has influenced the daily lives of individuals (Wan, 2002). More than 70% of the global population searches online for products or services to buy, 53% actually purchases on the web (We are Social, 2016), and 58% uses the Internet and peer-to-peer applications to seek advice about brands and products (Communify, 2015). Specifically, 92% of consumers perceive User Generated Content to have a higher degree of trustworthiness and credibility than traditional advertising (Communify, 2015).
Tourism has become the foremost industry in terms of online market share, and travel planning and booking are two of the most popular online activities (e.g., Guo, Ling, Dong, & Liang, 2013). The Internet and User Generated Content have completely reshaped the way in which people plan, buy and consume tourism services (Buhalis & Law, 2008) and select tourism destinations (ITB, 2016). The Internet and User Generated Content have resulted in a gain of hotel efficiency: hospitality companies are now able to reach their customers directly and offer them marketing promotions and sales (Berne, Garcia-Gonzalez, & Mugica, 2012), thus challenging and changing the traditional role of tourism intermediaries (Del Chiappa, 2013).
In the last two decades, there has been a growing academic interest in studies aimed at analyzing the impact of the Internet, Information and Communication Technologies and peer-to-peer applications on consumers, firms and the marketplace (Manjit & Pavlou, 2014). In recent years, the Internet has become one of the most popular and influential information sources in tourism, especially due to the recent and greater use of wireless devices (MacKay & Vogt, 2012), with tourists using it to gather information, comparing alternatives and making purchases and reservations (Money & Crotts, 2003).
The most active group of individuals involved in online behaviours is Gen Y (e.g., Bolton et al., 2013). Gen Y can be considered to be a sizeable new market. In the US alone, this group consists of 82 million people, spending nearly 200 billion dollars annually (e.g., Djamasbi, Siegel, & Tullis, 2010). In 2012, as reported by the UNWTO, youth travel generated US$182 billion, and the total number of international trips by Gen Y is estimated to increase to 300 million trips a year by 2020 (IPK International, 2013). Based on these figures, it is easy to explain why Gen Y is widely recognised as the future market of the travel and tourism industry (Benckendorff, Moscardo, & Pendergast, 2010).
Key Terms in this Chapter
Factor Analysis: A statistical method used to describe the variability among observed variables in terms of a potentially lower number of unobserved variables called factors.
Electronic Word Of Mouth (E-WOM): All of the informal communications directed at consumers through Internet-based technology with regard to the consumption experience of products and services and their providers.
Gen Y: The cohort of people born between 1980 and 1999 (the so-called Millennials).
Tripographic Characteristics: Travel-related behavioural characteristics, such as travel party, the duration of the stay, means of transport and types of accommodation.
Disintermediation: The disintermediation hypothesis describes the idea that the role of tourism intermediaries can be eliminated.
User Generated Content (UGC): All types of comments, reviews, photos and videos that consumers can upload on peer-to-peer applications as regards to products, services and their providers.