An empirical study on customer engagement practices in tourism industry

International Journal of Marketing and Human Resource Management (IJMHRM),
ISSN 0976 – 6421 (Print), ISSN 0976 – 643X (Online), Volume 4, Issue 2, May - August (2013)
26
AN EMPIRICAL STUDY ON CUSTOMER ENGAGEMENT PRACTICES IN
TOURISM INDUSTRY
Dr. A P Hosamani, Vadiraj J S
ABSTRACT
Online travel intermediary services have simplified travelers’ vacation panning process by
providing comprehensive travel services related information at travelers’ fingertips. Global online
travel industry is witnessing rapid growth and Indian online travel industry is one of the fastest
growing industries in the world. Customer engagement generated through User Generated content
(UGC) and Online Travel Review (OTR) could be one of the most important factors which is
contributing to the travel industry’s rapid growth.Through this study researcher attempts to describe
critical parameters considered by a travel enthusiast while deciding about a vacation and to
determine themost engaging activity on Social media/ Travel portal from a travel enthusiast’ point of
view. The study finds that, most important parameter considered by travelers while making a
decision about vacation is Hotel Reviews and ratings on the internet and mode of travel and cost.
And viewing photographs on travel portals or social media is the most engaging travel related
engagement activity for the travel enthusiasts.
Key words:User Generated Content (UGC), Travel marketing, Customer engagement, Digital
marketing.
1. INTRODUCTION
There is an increasing preference of travelers to design their personalized tour itineraries
online (Sigala M 2010a). Today’s technology savvy, global, demanding customers’ travel plans are
thoroughly researched and personalized. Consumer preferences for travel destinations have always
been influenced by media, word of mouth and recommendations from travelers and booking agents.
But broadcast media’s influence is shrinking as channels diverge to serve ever smaller segments of
the market. Internet has become the foremost influencing media on the consumer’s purchase process
and decision making related to travel and it continues to grow every year.
INTERNATIONAL JOURNAL OF MARKETING AND HUMAN
RESOURCE MANAGEMENT (IJMHRM)
ISSN 0976 – 6421 (Print)
ISSN 0976 – 643X (Online)
Volume 4, Issue 2, May - August (2013), pp. 26-39
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Impact of Internet on Travel Business
Internet in India has evolved as a utilitarian medium where consumers research about brands,
learn about brands, share peer reviews, advocate brands and propagate against brands that are not
transparent. Co-creation has come to the fore in a manner, unimaginable in the past. As a result, it’s
become more difficult to carefully craft a marketing strategy for the marketer. This change has
important implications for business, especially for the travel sector, which has embraced the web as a
marketing and selling mechanism. The implications of user generated content has a stronger meaning
for travel business as hotel reviews, destination reviews and general perception created on the web
is redefining travel intermediary’s brand image every moment. The Web is shifting from a business-
to-consumer marketing to a peer-to-peer model for the sharing of information. All tourism businesses
are thus facing the need to implement strategies and tools based on user generated contents and to
incorporate these new technologies to generate positive business impact.
Travel Planning Process
Travel planning is a complex process involving multiple collaborators (at different times
and/or places) and consisting of six stages (Moutinho L, 1987). Problem identification (i.e.
generating ideas for trip itineraries and activities), information search, information evaluation
(negotiation and assessment),choice (choosing and designing), book (execute) and post choice
(review and reflection). However global travel intermediary services have simplified this complex
process by providing comprehensive information at travelers’ fingertips with the help of online travel
portals. As a result online travel industryis experiencing strong growth and also boosting travel
industry business overall.
1.1 Online travel Industry
Global online travel industry is showing a rapid growth, Table 1. Explainsglobal online travel
industry’s revenue growth from 2010 to 2016.
Table1: Global online sales growth
Year Year on year % growth Sales Volume
2010 10% $309 billion
2011 10% $340 billion
2012(Projected) 10% $374 billion
2013 (Projected) 9% $408 billion
Source:European Travel commission new media trend watch, 2012.
India's travel intermediaries industry is estimated to reach Rs1.21tn ($24.76bn) in 2016 from
Rs 679.9bn ($13.82bn) in 2012, at a compound annual growth rate (CAGR) of 15.7%, according to a
new BRIC data report. The travel and tourism business in India currently contributes 6.23% to the
country's national gross domestic product (GDP) and represents 8.78% of the its total employment .
According to the report, tourist volumes in the country increased from 466.8 million in 2006 to 710.6
million in 2010, growing at a CAGR of 11.03%.
Online travel sales Compound Annual Growth Rate (CAGR) in selected countries for the
period 2011-2016 indicates the following figures: India: 30.6%, - South Korea: 19.8%, - Brazil:
18.2%, - China: 14.1%, - Russia: 9.8%, Australia: 7.4%, - US: 7.2%. It indicates India’s online
Travel industry is one of fastest growing industries(http://www.newmediatrendwatch.com).

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Indian online travel industry has undergone a transformation in the last decade by becoming
one stop solutions for all types of travel needs, merging online and offline travel booking, creating
online ecosystem and by global expansion of operations. Increasing Internet and credit card
penetration, increased foreign travelers to India and growth in civil aviation market helped these
travel portals to maximize their revenues.
1.2 Key Challenges Today
The business projections of Indian online travel portal industry looks very green on the other
hand industry players would have to deal with some important challenges like low operating
margins, fierce competition, limited reach in Tier-II and Tier-III cities and many marketing
challenges.
With the advent of new media, today the marketing emphasis is on effective marketing
communications rather than focusing on efficiency. Media consumption is extremely fragmented and
traditional media is diminishing. Today there is a huge variety of content available for fewer people
and it costs very less to distribute the content, this is referred as ‘narrowcasting. Instead of dedicating
a large chunk of marketing budgeton mass media channels such as network television and large
circulation print media vehicles;marketer isinvesting in creating brand experience and focusing on
tactical executions through a variety of new media.
Website, blog, Facebook page, Twitter feed, and YouTube channel are all owned media for
marketer today, that allow him to engage the consumer in suitable and desirable way , he can
distribute marketing information when and where the customerlooks for information. This
relationship building approach can deliver a richer brand experiences and nurtures consumer
advocacy and word-of-mouth recommendations that carry great weight and credibility. Today mass
media is playing a role of growing and maintaining momentum created by engaging customerson
internet rather than playing the lead media role.
1.3 New marketing philosophy
The goal is to really connect with consumers and leverage on their attentiveness, receptivity
to ideas, conversations and buzzes potential – and help deliver on an authentic brand experience.
This is a significant change in communications philosophy – one that diverts media resources to
deeper, richer exchanges with smaller audiences and engages them positively.
There are very limited research studies available to understand how internet and user
generated content are impacting travel enthusiasts’ decision making related to travel purchases.
Through this work researcher attempts to describe critical parameters considered by a travel
enthusiast while deciding about a vacation and to determine themost engaging activity on Social
media/ Travel portal from a travel enthusiast’ point of view. This research work would be helpful for
online travel industry stake holders to understand the usability of customer engagement and User
Generated Content.
2. LITERATURE REVIEW
To understand the relationship between the proposed research and prior research work, a
detailed literature review was carried out. Research papers published in the area of user generated
content (UGC), Online Travel Review (OTR), customer engagement, Geo-portals/Geo-collaborative
portals and Digital media’s impact on consumer behavior theories have been studied. Literature
review studied is divided into 4 parts and reviewed as follows.

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2.1 User Generated content (UGC) and Online Travel Review(OTR)
Internet in the tourism, travel and hospitality industries is not only part of the main stream
industry management and marketing but also has changed market structures, practices,
communication and distribution channels (Koumelis T, 2008). Online travel review (OTR) is one of
the most prominent forms of travel-related consumer-generated content. OTR includes product
ratings and short reviews about travel destination, accommodation and services described by
travelers. Posting pictures and videos of the tourism destination, sharing social profile of the
destination/travel portal are some other forms of travel-related consumer-generated content.
User generated content (UGC) constitutes the data, information or media produced by the
general public (rather than by professionals) on the internet (Arriga M &Levina N 2008). In all UGC
activities, the user is the central point being not only the consumer but also such content contributor,
simultaneously playing the roles of producer as well as consumer of the content on the internet
(Arriga M &Levina N 2008). UGC such as online travel reviews written by tourists and posted to
virtual communities are being used more frequently to communicate and share travel related
information (Gretzel U &Yoo K.H. 2008). UGC is changing the dynamics of the travel industry
profoundly through its global word-of-mouth forces (Laboy, F. &Torchio, P 2007). Today
consumers are using e-word of mouth (e-WOM) websites more and more to share opinions and
experiences about product and service (Rezabaksh, B.Bornemann, D.Hansen& U Schrader 2006).
Travelers are getting in touch directly with other travelers who have similar destination
interest through social networking content such as online travel reviews,consumer-generated content
such as online travel reviews written by tourists on virtual communities are more available and used
frequently to transmit travel-related decision (Gretzel U &Yoo K.H. 2008).
2.2 Digital media is also changing consumer behavior theories
Traditionally, marketers modeled consumers’ buying decision as they progressed from
awareness through, consideration, preference, action and loyalty; this is called as marketing funnel.
David Rogers, 2011, proposed the following rethinking the marketing funnel in a world of social-
media (David Rogers, 2011).
Fig 1: Marketing funnels
Source: Rethinking the Marketing Funnel in a World of Social Media: David Rogers, 2011.

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Marketers’ job was to move prospects from larger end to smaller end of the funnel, but the
funnel has outlived its usefulness. Today marketers don’t dictate the path people take and they don’t
lead the dialogue of marketing communication (www.goldmine.corp.adobe). Though the primary act
of awareness is still created by the marketer to communicate to the buyer that a particular brand
exists and what are the key features of his specific brand. But factors like recommendations from
friends and family, experts’ product reviews, word of mouth (WOM) on social media, competitive
claims, first hand experiences expressed by consumer and many more factors are not controlled by a
marketer. Specially the online media, where the whole world of avenues are at a customer’s finger
tips it is very difficult for a marketer to understand what kind of communication is being spread
about his brand.
Customer engagement (CE) is the solution that marketers have devised in order to come to
terms with the social, technological and dynamic young consumer who consumes media differently.
In a nutshell, it is an attempt to create an engaging dialogue with target consumers and stimulate their
engagement with the brand.
2.3 Customer engagement Definition
Customer engagement: Hollebeek (2010) (9): The level of expression of an individual customer’s
motivational, brand-related & context-dependent state of mind characterized by a degree of
activation, Identification & absorption in brand interactions.
Bowden (2009a) Customer engagement (2): A psychological process that models the underlying
mechanisms by which Customer loyalty forms for new customers of a service brand, as well as the
mechanisms by which loyalty may be maintained for repeat purchase customers of a service brand.
Van Doorn et al. (2010) (2): Customer engagement behavior: Customers’ behavioral
manifestation towards a brand or firm, beyond purchase, resulting from motivational drivers,
including word-of-mouth, activity, recommendations, helping other customers, blogging & writing
reviews.
2.4 Geo-portals/Geo-collaborative portals
There has been a comprehensive research work done on how geo-portals have an influence
on travelers’ trip related decision making process. Maguire and Logeley(Maguire DJ and Longley
PA 2005)have defined geoportals as the gateways that organize geographic content and services-
capabilities such as directories, search tools, community information, support resources, data
applications. Being WWW gateways portals, geoportals provide web environments for an
organization or a community of information providers and users to; aggregate and share content and
information flow; and build consensus (Magurie DJ and Longley PA 2005) .
Geo-portals facilitate the storage, sharing, discovery of and access to geospatial resources
(that are either offline or online Geospatial content) that are desired and searched by metadata. By
using GCP (Geo-collaborative portals)travelers can more quickly , precisely and accurately find and
evaluate geo-information for organizing travel itineraries and activities(Ilies G and Ilies M 2006).
GCP can transform the trip planning from a frustrating to a more enjoyable and efficient experience
(Pan B and Fesenmailer D 2006) as well as a solitarian to a social collaborative process (Pan B,
Crotts JC and Muller B 2007). Visual representations depicted on Geo-portals increases cognitive
resources, reduce search complexities, ease the pattern determination and fasten the perceptual
inferences (Thomas JJ and Cook KA 2005: Zhang J and Norman DA 1994).

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3 SCOPE AND OBJECTIVE OF THE RESEARCH
User generated content in the travel business in India has witnessed a gradual growth;
however the customer engagement on online travel portals pertaining to the traveler’s experience has
a lot of scope for betterment. Corporate travel and tour companies in India haven’t substantially
exploited and integrated the whole concept of user generated content for their customer, in order to
retain strong customer engagement through user generated content. The travel industry has a varied
response to the emergence of user-generated content. While travelers appear to be embracing the
concept, travel industry members are still somewhat unsure of how to respond to itclearly; however
there are very limited research studies to understand this subject clearly. Researcher through this
work attempts to understand what is the consumption pattern of user generated content and what is
the impact of user generated content on consumers’ travel related purchase decisions. This research
work would be helpful for online travel industry stake holders to understand the usability of
customer engagement and User Generated Content.
Objectives of the study
1) To determine themost engaging activity on Social media/ Travel portal from a travel
enthusiast’s point of view.
2) To understand how travel enthusiasts prefer to share their travel experience.
3) To describecritical parameters considered by a travel enthusiast while deciding about
Vacation.
4 RESEARCH METHODOLOGY
RESEARCH DESIGN
Research Design: With the help of survey based technique this descriptive research tries to explore
and provide clarity to understand how different travel portals are engaging customers, consumption
pattern of user generated content and impact of user generated content on consumers’ travel related
purchase decisions.
Sampling Plan:127 travel enthusiasts from age group of 18-45, who have used travel portals and
travel social networking sites from Pan India were selected as the sample for the desired study.
Data collection: Questionnaire technique was used to collect responses, the medium opted to receive
responses was online medium.
Instrument design:The questionnaireconsisting of14 questions, with 15 Likert scale statementsand
1 ranking scale question was framed to achieve the desired results.
Pilot testing: A pilot survey was conducted on 14 respondents and necessary changes were
incorporated in the final survey.
Data Analysis: Researcher has used IBM SPSS Data Editor, version 20 to analyze the data. Relevant
statistical tests like Weighted Average,Factor analysis, t-test are applied to analyze the data
comprehensively.

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5. DATA ANALYSIS
5.1) Most engaging activity on Social media/ Travel portal
To understand which engagement activity on social media/travel portals is the most engaging
activity, respondents were asked to rank the following 10 engagement activities, with the help of
weighted average method most preferred engagement activity is derived.
Table 2: Weighted Average on Most preferred online travel activity
Viewin
g
Photog
raph
Reading
reviews
on
destinati
on
Searchi
ng for
famous
tourist
spots
Flighttic
ket
Booking
Hotel
Booki
ng
Ratings
on
Hotels/
Restaur
ants/
tourist
Destinat
ion
Writin
gRevie
-ws on
restaur
ants
Post
reviews on
travel
forums and
Blogs
contribute
my travel
experienc
e
Choose to
become a
destinatio
n expert
1 39 27 8 17 7 4 6 10 5 5
2 18 28 16 12 19 9 9 6 8 3
3 19 20 23 6 23 12 7 5 5 8
4 17 12 29 12 18 14 13 4 7 2
5 9 11 17 19 16 10 18 11 11 6
6 6 6 13 18 20 21 18 8 11 7
7 5 12 4 14 7 26 16 18 13 13
8 2 2 7 8 8 13 11 41 25 11
9 2 5 8 15 5 14 16 16 30 17
10 11 5 3 7 5 5 14 9 13 56
Weighted
Avg.
Score
3.62 3.76 4.52 4.77 4.82 5.62 6.13 6.65 6.9 7.93
Rank 1 2 3 4 5 6 7 8 9 10
Source: Author’s Research
With the help of weighted average test, we can conclude that viewing photographs on travel
portals or social media is the most engaging travel related engagement activity for the travel
enthusiasts, followed by “reading reviews on destination” and “Searching for famous tourist spots”.
A tourism marketer can engage travel enthusiasts positively by providing exciting photographs and
by generating positive reviews. With the help of focused SEO (Search Engine Optimization) a
tourism marketer can increase visibility.
5.2 ) Parameters considered while deciding about Vacation
To understand the important parameters that a travel enthusiast considers while deciding
about his vacation researcher frames 6, five point Likert scale questions and with the help of t-test
following table explains the important parameters that a travel enthusiast considers while deciding
about his vacation.

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Table No. 3: t -Test
With the help of t-test we can conclude that most important parameters considered by
travelers while making a decision about vacation are Hotel Reviews and ratings on the internet and
Mode of travel and cost.A hotel marketer can focus his marketing efforts to generate positive
reviews and ratings and if he can design cost effective packages and communicate the same to the
target audience it would be a meaningful marketing activity. However which are the critical
parameters that generate positive reviews and ratings could be understood with the help of a separate
study.
Null Hypothesis H0 T DF Sig. (2-
Tailed)
Hypothesis Testing
Hotel Reviews and ratings is not an
important parameter while deciding
on vacation
-5.731 127
.000 Reject H0
Mode of travel and cost is not an
important parameter while deciding
on vacation
-4.673 127 .000
Reject H0
Information on the city/town/hill
station is not an important parameter
while deciding on vacation
-1.310 127 .192
Don’t reject H0
Pictures of a particular tourist
location is not an important
parameter while deciding on
vacation
1.284 127 .201
Don’t reject H0
Tourist attractions and famous
places to visit are not important
parameters while deciding on
vacation
.625 127 .533
Don’t reject H0
Package deals offered by tour and
travel companies/ travel agents are
not an important parameters while
deciding on vacation
1.192 127 .236
Don’t reject H0

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5.3 Sharing Travel experience
To understand how the travel enthusiast prefers to share his travel experience, researches
frames 5, five point Likert scale questions and with the help of t-test following table explains the
enthusiasts’ most preferred way of sharing his travel experience.
Table No. 4 t -Test
With the help of t-test we can conclude that travel enthusiasts would like to share their travel
experience by word of mouth, writing reviews on travel portals, Uploading pictures in an order of
preference. A travel marketer should emphasize his marketing efforts to engage and facilitate
provisions for writing reviews on travel portals, Uploading pictures and generate a positive image on
the portals.
Null Hypothesis H0 T DF Sig. (2-
Tailed)
Hypothesis
Testing
Travel enthusiasts don’t share their
travel experience by word of mouth
-11.353 127 .000
Reject H0
travel experience by Writing review on
travel portals
3.157 127 .002
Reject H0
travel experience by Uploading pictures
-2.947 127 .004
Reject H0
travel experience on social networking
sites
-.517 127 .606
Don’t reject H0
travel experience by giving most
number of likes/stars to their favorite
destination
1,541 127 .126
Don’t reject H0

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5.4) Factor Analysis
Table No.5 : KMO and Bartlett's Test
Kaiser-Meyer-Olkin Measure of Sampling
Adequacy.
.671
Bartlett's Test of
Sphericity
Approx. Chi-Square 341.354
Df 105
Sig. .000
Table No.6: Total Variance Explained
Component Initial Eigenvalues Extraction Sums of Squared
Loadings
Rotation Sums of Squared
Loadings
Total % of Variance Cumulat
ive %
Total % of
Varian
ce
Cumulativ
e %
Total % of
Variance
Cumulati
ve %
1 3.147 20.982 20.982 3.147
20.98
2
20.982 1.909 12.727 12.727
2 1.871 12.471 33.453 1.871
12.47
1
33.453 1.841 12.273 25.000
3 1.454 9.694 43.147 1.454 9.694 43.147 1.735 11.564 36.564
4 1.181 7.875 51.021 1.181 7.875 51.021 1.724 11.493 48.057
5 1.150 7.665 58.686 1.150 7.665 58.686 1.594 10.629 58.686
6 .932 6.215 64.902
7 .886 5.909 70.811
8 .755 5.032 75.842
9 .724 4.824 80.666
10 .633 4.222 84.888
11 .568 3.789 88.677
12 .503 3.353 92.030
13 .427 2.845 94.875
14 .401 2.674 97.549
15 .368 2.451 100.000
Source: Author’s Research- Extraction Method: Principal Component Analysis.

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Table No.7: Rotated Component Matrix
Components
1 2 3 4 5
I consider Hotel Rates/Reviews to plan my
vacation
.297 .132 -.228 .034 .722
Mode of travel and cost of travel are very
important parameters to plan a trip
.249 .520 .090 -.120 .212
I consider information about the city/town/hill
station as an important parameter to decide about
a vacation
-.182 .083 .232 .016 .770
I refer to Pictures of a particular place while
deciding about a vacation
.066 .329 .490 .048 .399
I consider tourist attractions & famous places to
visit while deciding about a vacation
-.120 .594 .284 .210 .270
I evaluate Package deals offered by tour and
travel companies/ travel agents while deciding
about a vacation
.124 .647 -.206 .326 .238
I would like to share my travel experience
through Word of mouth
-.037 .650 .063 -.180 -.123
I would like to share my travel experience by
Writing review on travel portals
.717 -.314 .129 .058 .215
Uploading pictures .220 -.022 .794 -.089 .077
through Social networking sites .053 .093 .701 .360 -.111
I would Give most number of likes/stars to your
favorite destination
.399 .142 .174 .355 .165
During a conversation about travel, I am likely to
mention my experience on a travel social
networking website .727 .326 -.014 .049 -.191
The authenticity of the review provided by the
traveler on the online social travel networking
site is credible. .280 .013 -.096 .745 .055
More honest and reliable reviews will encourage
me to visit the online travel portal again to help
me plan my vacation. .023 -.087 .198 .768 -.027
I am convinced by the information offered by the
travel portal it encourages me to will purchase
my vacation through the website. .599 .054 .189 .331 -.011

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Table No. 8: Factors
Factor Components
Factor
loadings
Factor 1
Expert Adviser
Writing review on travel portals
.717
During a conversation about travel, I am likely to
mention my experience on a travel social
networking website
.727
I am convinced by the information offered by the
travel portal; it encourages me to purchase my
vacation through the website.
.599
Factor
Value Seeker
I consider tourist attractions & famous places to
visit while deciding about a vacation
.594
I evaluate Package deals offered by tour and
travel companies/ travel agents while deciding
about a vacation
.647
through Word of mouth
.650
Factor 3
Propagator
Uploading pictures
.794
through Social networking sites
.701
Factor 4
Credibility Seeker
The authenticity of the review provided by the
traveler on the online social travel networking site
is credible.
.745
More honest and reliable reviews will encourage
me to visit the online travel portal again to help
me plan my vacation.
.768
Factor 5
Digital reviewer
I consider Hotel Rates/Reviews to plan my
vacation
.722
I consider information about the city/town/hill
station as an important parameter to decide about
a vacation
.770
Interpretation: The factor loadings for various components are shown in the tables above. And we
can interpret these factors as follows, customers who are travel enthusiasts and use social media and
other forms of digital media to learn about various travel related information can be divided into
following 5 factors.
Factor 1: Expert Adviser- Who believes firmly about the information shared on travel portals, he
writes reviews on travel portals,shares experience on a travel social networking website.
Factor 2: Value Seeker - Who evaluates Package deals offered by tour and travel companies/ travel
agents, considers tourist attractions & famous places to visit. Through various means he evaluates all
aspects related to vacation and finds most valuable deal.
Factor 3: Propagator- One who would like to share his travel experience by Uploading pictures and
through Social networking sites. His level of expertise is not at an expert adviser level.

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Factor 4:Credibility Seeker- He believes in honest and reliable reviews which will encourage him
to visit the online travel portal to plan his vacation. And he has a conviction that authenticity of the
review provided by the traveler on the online social travel networking site is credible.
Factor 5: Digital reviewer- He considers information about the city/town/hill station and hotel
Rates/Reviews as an important parameter to decide about a vacation.
With the help of Table No. 7 we can infer that Expert Advisers(Factor 1, 21%) , Value Seekers
(Factor 2, 12%) and propagators (Factor 2, 10%)constitutearound 43%of the travel enthusiasts.
Travel marketer should design travel services and communication according to these psychographic
attributes and engage them positively.
6. CONCLUSION
With the help of the empirical research findings we can conclude that User generated content
(UGC) and online travel reviews (OTR) have a significant impact on the travel planning process of
consumers, the current empirical study proves thatmost important parameters considered by travelers
while making a decision about vacation are Hotel Reviews and ratingson the internet(Gretzel U
&Yoo K.H., 2008) and Mode of travel and cost.The empirical research also proves that consumers
are using e-word of mouth (e-WOM) websites to share opinions and experiences about tourism
product and service( Rezabaksh, B.Bornemann, D.Hansen& U Schrader 2006). Another important
finding from research is, viewing photographs on travel portals or on social media is the most
engaging travel related engagement activity for the travel enthusiasts.By redesigning customer
engagement tools and generating positive reviews and ratings on the portals and on social media a
travel marketing company can generate positive results in its favor.
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22. https://www.adobe.com/engagement/pdfs/measuring_engagement.pdf

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