Research Thesis Solved - An evaluation of consumer behavior for Direct booking and OTAs in hotels

Introduction

Background of the Research

The use of social media and other platforms that were adapted by information technology or the Internet has increased since their inception. Because using specific platforms of this kind is crucial for any organisation if it wants to boost the volume of sales in the hospitality sector. It is about providing a welcoming environment for guests who are there to travel to the location and have a positive experience to share with their families or other people (Muresherwa et al., 2022, p. 3). Direct ticket purchases from customers are now more popular than using an online travel agency like an OTA.

The use of online travel agencies to obtain information and other data regarding a destination and a hotel is declining (Chang et al., 2019, p. 2). Instead, users have access to the internet, where there are numerous websites and advertisements through social media applications, where they can obtain extensive knowledge without incurring any costs.

As a result, the research focuses on comprehending how direct booking is used by customers or guests of the online travel agency. An online travel agency is able to provide information that is also online. On the other hand, since online travel agencies work to satisfy their clients, they go out of their way to charge them a high price for the data they need from their clients (Toedt 2011). However, if the customer's user is somewhat educated enough to use the website and comprehend the reading of the various below for information available there, the customer may choose to make a direct reservation.

Research Questions

• 1.      What influence a person to book directly a ticket instead of going towards OTA?
• 2.      Which method is best suited for the direct booking experience for customers?
• 3.      What method should be adopted to increase direct hotel reservations through the online platform of the internet?

Research Objectives

• To determine factors of influence people to book directly rather than through an OTA.
• To find methods for enhancing customers' direct booking experiences.
• To determine methods for enhancing direct hotel reservations made online.

Significance of the Research

Because of the growing trend of customers buying various products and services directly from businesses online, research is crucial. The research is solely focused on comprehending the direct booking of the guest and the use of various methods to enhance this strategy because it is necessary to have an understanding of the major steps that are necessary to have a particular method to adopt and increase the involvement of the guest to go for direct bolting instead of using OTA.

Outline of the Report

Introduction

·         Research questions

·         Research objectives

·         Reason behind the research

Literature review

·         Direct booking via OTA – advantages and disadvantages

·         Impact of IT on hotel distribution and channel’s evaluation

·         Approach for hotels and OTA

Methodology

·         Methodology approach

·         Population

·         Data collection

·         Limitation

Discussion and analysis

·         Recommendations

References

Literature Review

Direct booking via OTAs – Advantages and Drawbacks

To reach and interact with potential customers, marketing through multiple channels involves blending different distribution channels. Since the development of information technology, consumers are more likely to use both offline and online platforms to support their purchasing decisions for the goods and services they require (Lv et al., 2020, p. 3). However, numerous researchers have assessed how consumers view the market's integration of multiple channels in the context of e-commerce. However, whether moving from offline to online, a channel's success depends on how well it is used and how well customers are coordinated to use the platform.

As a result, the transition from an offline to an online platform for customers is now simpler, allowing them to find specific hotel information and other necessary information according to their needs and those of their visitors. OTA thus becomes a key benefit for businesses to use and attract customers from around the world (Kisliakova 2022, p.  5). Because of this, hoteliers are always attempting to adopt OTA, either to improve their products or at the expense of potential profits.

Impact of IT on the hotel distribution channel's evolution

According to Lee (2022), in contrast to the retail sector, which places a lot of emphasis on creating a seamless multichannel customer experience, the hospitality sector offers a multi-channel environment that is built around complex features that give customers access to a variety of destinations and options (Jedin et al., 2022, p. 3). The hotel and hospitality sector has not yet fully adapted to the fast pace of technological development.

The direct booking has been impacted by the market's increasing competition (Luo et al., 2021, p. 6). As a result of entrepreneurs' new ideas to promote various websites and blogs to share information about the features that are more appealing to customers given the variety direct booking available to gain an advantage over the competition. When it comes to making information available to users, the internet is crucial.

Today, direct booking is being used more and more to cut costs and conduct in-depth, fascinating research using the internet platform through the available websites (Huang & Lan, 2021, p. 5). It gives users or customers the chance to travel to their preferred locations without being limited by the options offered by online travel agencies, although they can offer better options when the customer is aware of what they want.

Because everyone is treated like a provider most of the time on social media (Ampountolas et al., 2019). Hence, the platform can offer various advertisement campaigns with direct booking options for guests, allowing them to pursue the information they require before making a decision through the OTA (TUDORICĂ 2022, p. 3). OTAs may not offer direct booking options, but they can provide information about these facilities via websites or blogs that travel planners can access before choosing the OTA to use.

The Internet has fundamentally changed the hospitality sector, especially in terms of distribution channels (Vu Thi et al., 2022, p.  4). The online platform is based on helping businesses expand their reach and draw in more customers. It offers users simple access so they can review hotel services and goods without being constrained by geography, time, or anything else. Chen (2022), Third-party booking sites, or OTAs, rely on playing a dominant role in luring customers to online hotels. Since OTAs often offer discounts to consumers who use a third-party credit card for payment, this means that the same cardholder may purchase airfare and hotels from different sites.

Approaches for hotels and OTAs

Phocuswright estimates that Expedia Group and Booking Holdings, which formerly did business as Priceline, have taken nearly two-thirds of all global gross OTA bookings and 90% of the US online travel market, respectively (Chivandi et al., 2020, p. 5). OTAs have seized 70% of the overall online hotel booking market in the Asia Pacific region (Tanford et al., 2019, p. 5).

Since 1990, hotels have begun to allow guests to book directly through social media platforms or the internet (Pidada 2020, p. 4). They also mention the various options that are available so that visitors can review the website at the lowest cost and avoid visiting any agents or other agencies in order to get detailed information about a destination.

Since 1990, the number of travelers has gone up by more than 50%, while the OTAs' share has gone up by more than 400% (Muresherwa et al., 2022, p. 3). These statistics point to a growing trend: OTAs have significantly reduced the market share of traditional intermediaries like tour operators and physical travel agencies. It is obvious that the traditional travel agencies have experienced a sharp decline as a result of the OTAs' unprecedented growth.

Methodology

Research methodology approach

The primary approach served as the foundation for the paper's methodology approach. As a result, there is quantitative research to collect responses from participants who have travelled for at least the previous 12 months through a questionnaire. The primary approach is based on the use of the internet platform for the users to use direct booking or OTA.

The study will recruit participants from friends and coworkers who have travelled within the last year and booked a hotel directly or through an OTA. Convenience sampling and snowball sampling are employed. Depending on how much information is gathered through the survey, the sample size will range from 50 to 60. However, a minimum of 30 participants will be required to collect data. It will take longer than 10 minutes to complete the survey. The survey will be voluntary, and the collected data will be secure and private.

The methodology for conducting the research was based on the questionnaire that was chosen. The reason for this is that the research method is the most well-known for being effective, quick, and affordable when used with a sizable volume of data for a sample of the population.

Since this research is based on understanding the use of a direct booking for the users who go on a tour in different countries and stay at hotels, it is important to emphasise that it is the most authentic form of research methodology to get the questionnaires from any platform is such as our online platform, for the physical visit of the participant. The manner of data collection in the survey consisted of simple form with some pre-designed questions.

It is crucial to use online platforms where people who can use them and comprehend the value of the information they can obtain from websites can do so. There was a decision made regarding the online platform to use for the understanding of those with prior knowledge, access to the internet, and knowledge of how to use it with the information from various websites for their tour. Any planned mode of the researcher's direct booking experience in the survey had to be done using on-line platform

Population

The online questionnaire, which consists of 19 mixed-type (open and closed-ended) questions, is how the data is gathered. It is made so that the respondent can complete it in 10 minutes. We sent the questionnaire to 50–60 participants, and we received 30 fully filled out questionnaires. We'll get in touch with the participants by phone, email, or WhatsApp.

It is voluntary to participate in this project's survey, which will be conducted by Google. Since friends and coworkers are the survey's target audience, there won't be any pressure to take the survey. All participants will receive an email with a link to the online Google survey form or a direct message to their mobile numbers.

The population for the study consisted of between 50 and 60 participants who were contacted to get their opinions. All of the participants were chosen while expressing a preference for one gender over another. As a result, the participants held some of the blame when M approached 60 participants, but only 30 of them responded to the research.

In this regard, 18 participants voted in favour of using direct booking for their hotel stays and against using online travel agencies, while the remaining 12 participants voted in favour of booking their tickets through an online travel agency for a variety of reasons. It appears that 60% of the participants preferred making their hotel reservations directly, while 40% preferred using online travel agencies for various reasons.

Data collection

Social media was used to collect the responses on a website where they could also be found on other reputable platforms. The data was gathered from Instagram and LinkedIn, where emails were readily available for users who frequently repeated their profiles and visited multiple locations within the previous 12 months. Since the data was gathered so that participants could receive emails. However, 30 of the participants who responded did so in light of their own travels, whether they booked directly or through an online travel agency.

Participants were asked to respond without disclosing their identities or other personal information to other users during the data collection, so the research was fairly based on the data collection that was only used for the research and was not influenced by the use of social media to obtain specific accounts or to exercise any individual on the basis of their responses.

Data analysis

Data analysis is a crucial component of the participants' responses to a questionnaire served as the foundation for the research and methodology. Since it was crucial for the research to have the responses of the individuals who have visited any place in the previous 12 months, the responses were based on the experience and decision-making of the participants who actually went for the hour to work in that time. This study of data was then tested, and by using the technique of looking at this setting in more detail it was evident that there was a significant difference between each area and it also showed where improvement needed to be made.

However, the analysis of the research was based on comprehending the participant responses because it was believed that today's users of social media platforms on the internet were more likely to base their responses on a reliable approach. As a result, it is a great idea for social media users to understand information and other platforms of websites where they can get the real and trustworthy information whenever they are planning a trip. However, because it was thought that users of social media platforms on the internet today were more likely to base their responses on a reliable approach, the analysis of the research was based on understanding the participant responses.

Limitations

The study is restricted to using social media platforms and does not move towards practical responses from the other participants through any kind of survey or interview. The research is limited to having responses from the internet or social media platforms. However, it is also unnecessary for the research because the focus of the study was only on understanding whether users' customers preferred using direct booking or an online travel agency (OTA). Following a brief description of the geographical background to the study, the first section contains a specific overview of the nature and main findings of the research.

Users are moving toward having the experience of the online booking and what is their experience after having the tour through their direct booking using the website of the specific destination hotel. This comparison was made between using the direct booking through the online travel agency and using the internet. Therefore, the scope of the paper was restricted to an analysis of comments made by people who use social media or the internet and have recently visited the location.

Findings and Discussions

18 of the 30 participants in the study supported the idea of using direct booking for users or visitors, according to the research. The majority of travellers get a room when they consider staying in a different region during tour. Hence, there are many factors that influence people's decisions, but the price is by far the most crucial one (Ye et al., 2019). For many years now, online travel agencies have been working to offer these services to customers who are looking for information about visiting a specific location.

Since it's crucial to realise that most users are shifting toward using social media platforms to make direct bookings for themselves and their friends or family, it's important to note this. It is because the platform is trustworthy enough for registered websites of renowned hotels to enter and provide services to customers.

The majority of users concur that they are ready to learn how to use the internet to choose their destination and schedule their visit. Since the majority of users have access to the mobile application for the Hotel, where the modifications are conveniently available for download and use. Since the downloading of the application server based on the hotel or other significant features are also here, today everyone and their smartphone and use is almost everywhere. To prove its authenticity, many hotels offer discounts for booking through their websites (Buhalis and Cheng, 2020).

It is crucial to realise that the method most of the users have chosen is for a user to use a mobile application and make a direct booking for their stay at a specific hotel in a specific location or in any country (Par et al., 2019). As a result, the research has gone for the multiple responses from both male and female respondents. The majority of the respondents were encouraged to make a direct booking because they have emphasised so many reasons why they should. Earlier, it was discussed that through interview with users (mostly male respondents) it was found that majority of the users had used a mobile application and made a direct booking.

Time saving

The main justification given by participants for choosing direct booking over using an online travel agency is that it saves them time. They no longer need to have access to the online travel agency's website or wait even an hour to receive responses and information about any hotel or restaurant they want to visit while travelling to a specific location.

Since the website is accessible via the social media platform and the internet. It offers the largest platform where various blogs are accessible with information about the various packages available to stay at the specific Hotel (Azer and Alexander, 2020). The reason, which is given for skipping the use of a travel agent and booking directly on the internet has no real or logical merit.

Therefore, for the majority of users, it is time-saving to make a direct booking while examining the amenities and offered packages from the hotels that can be found on their websites. This will allow for the selection of the unique and suitable packages and immediate direct booking, which will save time.

Cost saving

According to the participants, direct booking not only saves time, but also money. Since the cost of the services provided by the online travel agency to book the ticket on the client's behalf includes both information and services. To compare the various package options for staying at the hotel in the specific location, visit the website when the other user is aware of the use of the online platform. As a result, using an online travel agency is a more convenient option than making a reservation directly through a website. Offering online travel agencies through online booking portals has become a popular choice to take advantage of the customer's satisfaction while saving time and money.

As a result, this strategy has emerged as the most flexible one for the users of your direct online platform. However, there are two arguments for the participants who have actively participated in suggesting that they use an online travel agency. They lack of time as their justification for not visiting each package individually to evaluate it and other factors. They are unable to manage their time because they are working nonstop, running their own business, or working from home. Rather, they favour using online travel agencies to reserve tickets for their stay at the specific hotel with the specified dates.

Without a doubt, direct booking can reduce costs, but on the other hand, those who do not know how to properly use websites or read to understand the various packages on offer may not be able to do so (Masiero et al., 2020). There are people who are older in age and who come from areas where they lack the education or awareness to go for the direct booking options, so it is impossible for them to choose the safe option for them to stay.

Hence, there are respondents whose main reason for responding is that they don't have access to the application because they don't know how to use it or even have internet access. Since it is crucial to have an online travel agency that allows customers to place orders while conducting independent research.

The main point that needs to be understood for the discussion is that the percentage differences between the responses are not very great. because the direct booking through the online platform using the internet and moving toward the information from the websites has been supported by 60% of the participants.

The availability of the platform, which is free and takes little time to use to hire someone and work with an agency, is a major factor in this decision. Instead, reading the necessary information on websites and other social media platforms makes it simple to comprehend the various packages that hotels offer to visitors who want to take a tour of a particular location.

Additionally, a number of hotel chains have actually launched their applications (Shin and Back, 2020). Therefore, downloading the application, installing it, and then manually searching through the various hotel packages is a much simpler task for any user or individual. The application offers more accurate and concise data that isn't so brief as to bore the reader. As a result, users are using the application more frequently than the social media platform. Therefore, 60% of users support making a direct reservation after obtaining the necessary information online.

It follows that the internet is the medium that has in fact encouraged users or people to conduct searches for various locations and have access to websites. Similar to this, having a website and app where they can easily access the various packages offered and review them for days or even instantly to book an air ticket for a reservation in a specific hotel is their main driving force.

For the time being, it's critical that the action be advantageous because it saves time and money (Morales 2017). When a user chooses to use an online travel agency, a service fee is added on top of the cost of the hotel and destination searches. There is no fee, and even the average internet user is fully capable of using the website and platform to obtain the desired information and put it to use for the intended purposes.

Similar to this, the platform gives the user the freedom to use it whenever they have free time, whether they are working at an office or doing their homework. Then that person can actually access the website, and it's also advantageous because even that person can take a 10-minute break and look at the various hotel packages. A special visit over a social media platform is not necessary in order to use an online travel agency.

For those users who are familiar with using websites and applications to make hotel reservations, the platform is suitable for direct booking.

40% of the participants, however, supported using an online travel agency. Online travel agencies are also practical for people for a variety of reasons, including the fact that some people do not have enough time to make a day-direct booking through a variety of websites and applications. They consider it to be a waste of time because they are engaged in other household duties, business transactions, or other professional activities. Finally, some people consider this information a headache because they do not like to visit various websites and applications in order to make an online booking.

Since they can choose from a variety of online travel agencies that can provide them with options after doing extensive research, relying on these companies has become a significant part of their lives as they travel to these states and destinations. Because, a lot of people's professional lives include a tour. As a result, it is essential to understand the hotel when using the application or visiting the website (Han and Anderson, 2022). However, there is a requirement for an online travel agency that can provide or make recommendations for a specific better hotel based on requirements. Nowadays, hotel reservation can be done in just a few minutes by dialing a specific number or by going to their website.

Similar to this, there are people who are not as knowledgeable about how to use websites and social media platforms where they can obtain educated training, and older people and others who are not interested in using websites and applications are not as knowledgeable about how to use them and obtain the necessary information. Even for them, using online travel agencies is the best way to quickly find the options that have been carefully considered in light of their requirements and needs. An online travel agency also applies to any website of a hotel, airline, car rental company, tour guide agency and so on.

Recommendation

Using Direct Booking can encourage users to reduce cost and time

There's no denying that users like direct booking because it saves them time and money. Therefore, it is advised that companies adopt a strategy of having user-friendly websites and applications that are accessible and downloadable so that users can use them and choose the hotel in accordance with their requirements.

People appreciate using Applications

Since they have installed applications on their mobile phones so they can use the application immediately, people today value using software applications. Businesses should choose applications that are easy for users to install and use. Because of the application's user-friendly features and increased loyalty, people should recommend it whenever they need any information, not just for themselves but for friends or other people as well.

Areas for future research

The effect of direct booking on businesses needs to be further assessed in the future. However, it is estimated that 40% of respondents supported the existence of online travel agencies. But, the direct booking users can potentially have a more significant impact on the business, and it is anticipated that they will grow over time, necessitating additional ongoing research on this topic.

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