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Investigating Consumer Purchase Decision Based On Switching Barriers and Decision Postponement: Moderating Role of Time Pressure
Investigating Consumer Purchase Decision Based On Switching Barriers and Decision Postponement: Moderating Role of Time Pressure
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Abstract
Purpose – Although various booking platforms have been contributing to the dramatic growth of hotel
industry, little research has been conducted to understand consumer psychological processes and behaviors in
online hotel booking. To fill this gap, the current study examines the effect of switching barriers (switching cost
and alternative attractiveness) on consumers’ decision postponement and repurchase intention. Additionally,
the moderating effect of time pressure in different phases of booking decision is investigated.
Design/methodology/approach – A total of 352 samples was collected through an online platform. Data
analysis was conducted via Amos 23 (structural equation modeling) and SPSS 24 (descriptive analysis and
PROCESS macro).
Findings – Results show that switching cost and alternative attractiveness are two significant drivers of
decision postponement and repurchase intention. Meanwhile, time pressure only has a significant moderating
effect on the relationship between switching cost and decision postponement.
Practical implications – The findings of this research reveal that hotel operations need to implement
strategies to prevent customers’ delayed booking decisions and overcome the influence of time pressure on
customer decision-making.
Originality/value – These findings stress the importance of consumer perceptions of switching barriers and
time span when making hotel reservations online. Hotel practitioners are encouraged to provide multiple
human–computer interaction applications to attract novice consumers and increase their familiarity with
booking process.
Keywords Online hotel booking, Switching cost, Alternative attractiveness, Decision postponement,
Repurchase intention, Time pressure
Paper type Research paper
Introduction
The rising popularity of online travel agencies (OTAs) brings intensifying competition and
conflicts in hotel market. Hotels encourage consumers to make direct booking from their own
websites to avoid commission fees paid to OTAs, which can be as high as 30% of the room
rate (Koo et al., 2020). To increase competitiveness against the third-party distribution
channels, hotels have tried to retain their loyal members by offering lower rates, reward
points, complementary services and other member-only benefits (Shin et al., 2020). However,
OTAs have also competed with their own similar loyalty programs. Most important, as a
hotel room distribution platform, these OTA channels could provide a broader selection than
individual hotel websites (Talwar et al., 2020). Although this system brings direct benefits to
consumers, hesitation and indecisions could be by-products because of the greater time and
effort needed in evaluating and comparing all options. Journal of Hospitality and Tourism
Insights
The advanced applications from consumers’ mobile phones and other electronic devices © Emerald Publishing Limited
2514-9792
provide the convenience and flexibility for quick searching and receiving the latest DOI 10.1108/JHTI-12-2022-0628
JHTI information to make reservations. Yet these advantages might create some obstacles for
consumers as overwhelming information may cause confusion or hesitation (Xue et al., 2020).
Both the consideration of costs to switch to another booking channel and evaluations of
attractive benefits from other channels could result in decision complexity. Consumers may
delay their decisions because the best option cannot be identified easily. Consumer decision
postponement is generally associated with the available time to make their decisions (Sharma
et al., 2023). When time is perceived as insufficient, time pressure appears during the decision-
making process and affects final decisions. Individual consumers might adopt different
strategies to respond to the time urgency. For example, some consumers might wait until the
last minute in hope of getting a better deal in the future. If no better deal appears, they may
completely abandon all options and cancel their trips. Other consumers might shorten the
decision-making process and choose the current best option, which might not be better than
future options.
Related to the available consumer choice and decision literature, switching barriers and
repeat purchasing have been discussed most often in various contexts, such as the
restaurant (Han et al., 2019) and online knowledge service industries (Du et al., 2022).
Considering the increasing technology-enabled choices, little in-depth understanding of
the consumer psychological process and behaviors in online hotel booking to-date is
available. Furthermore, consumer decision postponement has been treated as a
consequence of consumer confusion (Xue et al., 2020), but the subsequent purchasing
behaviors of decision postponement have hardly been examined. When consumers
postpone their decisions, they might change their minds at any time. Some possible
subsequent behaviors include staying with same brand or product, switching to another
brand or product, abandoning the purchase or even doing nothing (Mitchell et al., 2005).
Therefore, decision postponement should be considered an important psychological stage
in the decision-making process instead of a behavioral outcome. As mentioned, time
constraints are a major cause of decision postponement, and time pressure has an ongoing
effect. Thus, having an in-depth understanding of the influence of time pressure in
different phases of booking decision from the time span perspective is relevant and
important. The current study aims (a) to investigate the roles of two switching barriers,
switching cost (SWC) and alternative attractiveness (AA), on repurchase intention (RI) in
online hotel booking; (b) to examine decision postponement (DP) as a mediator between
two switching barriers and RI and (c) to test moderating effect of time pressure (TP) on the
relationships among the study constructs.
Literature review
Switching barriers: Switching cost and alternative attractiveness
A switching barrier is defined as “the consumer’s assessment of the resources and
opportunities needed to perform the switching act, or alternatively, the constraints that
prevent the switching act” (Ranaweera and Prabhu, 2003, p. 379). Researchers have
identified it as a multi-dimensional concept, including switching cost (SWC), alternative
attractiveness (AA) and relational investment (Koo et al., 2020). The social exchange theory
posits that relationships between different entities are determined by the trade-off analysis
between their subjective cost and reward appraisals (Fu et al., 2023). SWC, as a cost factor,
relates to the psychological or financial burden when leaving a current service provider.
AA, as a reward factor, relates to the change to another service provider if consumers
perceive attractive or competitive benefits by doing so (Chi et al., 2021). Incorporating the
theory with switching barriers can offer researchers a more profound comprehension of
how customers alter their online hotel booking behaviors. Relational investment focuses on
personal bonds developed between consumers and service providers (Lee and Kim, 2022).
Because the interaction between consumers and service providers in online hotel booking is Consumer
minimal, relational investment is excluded in this study. purchase
SWC refers to “the perception of the magnitude of the additional cost required to
terminate a relationship and secure an alternative one” (Patterson and Smith, 2003, p. 108).
decision
It is associated with penalties or obstacles for consumers discontinuing the current
service or products. Consumers need to replace resources in which they have invested or
spent extra time and effort in finding a new service provider and learning to use it
effectively (Han et al., 2019). High SWC forces consumers to lock into the existing
relationship against their will. For example, consumers might stay with a higher-priced
channel because of external factors, such as service quality standards (Chun et al., 2019).
In this case, consumers are locked in the relationship with channels that offer higher rates
than others.
AA is described as “the degree to which individuals are attracted to, prefer, and support
relationships with a company given its enduring attributes” (Marın and Ruiz de Maya, 2013,
p. 659). Consumers would retain the same relationship if satisfied with the current
relationship or if no better alternatives become available (Mahmud et al., 2021). The perceived
difference between acquired and scarified benefits determines whether consumers prefer to
stay with the same service provider or switch to another one (Yuen et al., 2023). AA is strongly
linked to consumer loyalty in hospitality literature because hotel practitioners use attractive
attributes as a dedication-based mechanism to build loyalty through lowering the possibility
of switching intentions (Kim and Kim, 2020).
Decision postponement
Decision postponement (DP) is conceptualized as a decision deferment to better understand
the confusing circumstances related to a purchase (Sharma et al., 2023). A few models based
on different theories are available to describe the concept. The decision field theory “assumes
that attribute values are sampled sequentially and stochastically” (Bhatia and Mullett, 2016,
p. 118) and preferences for actions accumulate through time (Jessup et al., 2022). The main
idea behind this theory is that each attribute’s value based on consumer preference is updated
over time; thus, consumers are required to refresh their evaluation after each update. Mitchell
et al. (2005) adopted DP as one of seven confusion reduction strategies and developed a
conceptual model for confusion. DP serves as an important psychological stage during
information processing, resulting significant influences on actual purchasing behaviors. By
connecting switching barriers to DP, consumers’ assessments of various costs or attractive
benefits from other available options can be better understood.
Switching barriers and decision postponement. Some empirical studies have identified a
negative relationship between SWC and switching intention in hotel booking choices
(Quoquab et al., 2018). Based on the cost-and-benefit approach (Debrah et al., 2022), SWC
arises when consumers perceive that costs outweigh benefits. Thus, high SWC creates
barriers to terminate the current service provider or product. DP is identified as a strategy
for confused consumers to seek a better purchase decision (Sharma et al., 2023). Beyond the
traditional approach above, consumers need to take more factors into consideration to make
their decision. In a hotel reservation decision, more elements might be involved other than
price alone. Then the trade-off analysis becomes complex in deciding to switch or not. Extra
time and effort might be required of the consumer to process the additional information from
a new booking website and to make comparisons with their familiar regular channels. As an
example, the method of payment is another important external factor for booking decision
(Shukla and Rodrigues, 2022). Many OTA websites offer different currencies and various
methods of payment for international travelers. When consumers have credit cards in
partnerships with certain branded hotels or OTAs, extra benefits associated with these
JHTI credit cards cause more calculations in evaluating each available option. Consumers need
more time to assess which method is the most convenient and valuable for them.
AA is proposed to have a significant influence on DP because negative emotions
resulting from reviewing too many attractive options could lead to unfavorable
decision behaviors, such as delaying decision and decreasing purchase behaviors
(Akhtar et al., 2020b). Consumers with negative emotions are more likely to defer
choices when they have different alternatives due to required searching for additional
information for option comparison (Gambetti and Giusberti, 2019). Regret, as a negative
emotion, plays an important role in decision-making (McCormack et al., 2020). Taking
an action (i.e. deciding on a choice) and inaction (i.e. not deciding) can generate certain
level of regret (Shin, 2022). Inman and Zeelenberg (2002) demonstrated that switching to
a different option is associated with greater regret than habitual repeat purchase.
Consumers also experience more regret with a deferral choice if the future option is
expected to be less attractive than the current one (Mourali et al., 2018). Expected utility
theory suggests that consumers will select the option that maximizes their expected
utility (Masiero et al., 2020), so consumers might delay their decisions to wait for a better
choice to avoid regret. As a searching intermedium, OTAs provide convenience for
consumers to search and compare each individual hotel option. Meanwhile, the speedy
information update from OTA websites requires more searching activity because as
consumers do not want to miss any good deals. Thus, the following hypotheses are
proposed:
H1. SWC has a positive relationship with DP.
H2. AA has a positive relationship with DP.
Methods
Study population and data collection
The target population of this study is comprised of Canadian and U.S. residents over 18 years
old who had booked hotel reservations online in the past six months. An online convenience
sampling was adopted to collect panel data via Qualtrics (Quatrics.com). A total of 521
respondents completed the online survey. After removing 169 unqualified cases for missing
data or suspicious response patterns, 352 useable surveys were retained for analysis.
Harman’s single factor test was conducted to test common method bias. The test result shows
that the combined variance for a single factor was 20.7%, which is below the 50% threshold.
Therefore, no obvious common method bias existed (Podsakoff et al., 2003).
Measurements
All measurement items were modified as needed to fit within the context of this study. SWC
and RI were measured by four items and three items respectively (Kim et al., 2014). AA was
measured by four items adopted from Liao et al. (2017). Four DP measurement items were
adopted from Walsh et al. (2007). A single item for TP was measured (Saqib and Chan, 2015).
The full list of measurement items is shown in appendix. A 7-point Likert scale (1 5 “Strongly
disagree” to 7 5 “Strongly agree”) was used for all measurement items. A pretest was
conducted among 10 graduate students and faculty members, and some potential wording
and ambiguity issues were addressed to better fit the study context.
Data analysis
The two-step process was followed to conduct confirmative factor analysis (CFA) and the
structural equation modelling (SEM) via AMOS 23 (Anderson and Gerbing, 1988). First, the
consistency between measured variables and latent variables and the reliability and validity
of all four constructs with 15 measurement items and overall measured model fit were tested
via CFA. With the established measurement model, hypothesized paths among four
constructs were then examined in SEM. The mediating effect of DP was tested using the SPSS
PROCESS macro by inspecting the direct and indirect effects with 95% of the confidence
interval (Hayes, 2013). Lastly, the moderating effect of TP was examined by dividing the
sample into two groups by the mean value (4.92) of TP. The p value of structural weights was
compared between the models.
Results
Respondent demographic profiles
The respondents were almost equally divided between Canadian (50.6%) and American
respondents (49.4%). A majority was relatively young between 19 and 49 (68%) female
(67.3% versus male 32.7%) Caucasians (69.3%). There were slightly more singles (43.5%)
than married (40.6%), holding high school diplomas (32.4%) or 4-year degrees and more
(45.4%), and reporting between $20,000 and 79,999 (55.4%) for their annual household
income. About 67% of the respondents had booked hotel rooms online one or two times in the Consumer
past six months for leisure travel (75.3%). purchase
Confirmatory factor analysis. Table 1 provides the standardized factor loadings and
construct reliability from convergent validity. One SWC (0.55) and one AA ( 0.14) items were
decision
removed due to low standardized factor loadings. One SWC item with factor loading of 0.53
was retained despite being less than 0.60. A cut-off point of 0.50 factor loading has been
accepted in the tourism literature (Chen &Tsai, 2007). The factor loadings t-values for all
retained items were significant (p < 0.001). The key goodness-of-fit indices for the
measurement model were examined. The chi-square χ2 5 147.66 (d.f. 5 58, χ2/d.f. 5 2.55) and
other indexes, such as the goodness of fit index (GFI) 5 0.94, adjusted goodness of fit index
(AGFI) 5 0.90, normed fit index (NFI) 5 0.92, Tucker–Lewis index (TLI) 5 0.93, comparative
fit index (CFI) 5 0.95 and root mean square error of approximation (RMSEA) 5 0.07, show an
adequate fit (Hair et al., 2010).
The correlation, average variance extracted (AVE), mean value and standard deviation
among the seven constructs are shown in Table 2. Convergent validity was gauged by
composite reliability and AVE. The AVEs ranged from 0.53 to 0.79, above the threshold value
of 0.50, and the composite reliability of seven latent constructs ranged from 0.77 to 0.85, all
Factor
Loading Cronbach’s α
TP
Significant R2 = 0.19
n.s.
0.48 (t = 6.59) ***
–0.36 (t = –5.17) **
n.s.
n.s.
AA 0.21 (t = 3.05) ** RI
R2 = 0.22
Note(s): AA = Alternative attractiveness; DP = Decision postponement; RI = Repurchase
intention; SWC = Switching cost; R2 = Multiple coefficient of determination;
Figure 1. n.s = non-significant; ** p < 0.01; *** p < 0.001
Structure model results
Source(s): Figure by authors
Mediation effect
Hypothesis Direct effect Indirect effect Total effect Result
SWC →DP 0.20 0.10 1.81 0.41*** 0.08 5.62 χ2 (116) 5 242.73 χ2 (117) 5 247.02a
SWC → RI 0.60*** 0.12 4.00 0.45*** 0.06 5.54 χ2 (116) 5 242.73 χ2 (117) 5 245.12b
AA → DP 0.65*** 0.14 4.88 0.14 0.17 1.91 χ2 (116) 5 242.73 χ2 (117) 5 243.89c
AA → RI 0.35** 0.15 2.14 0.05 0.12 0.63 χ2 (116) 5 242.73 χ2 (117) 5 244.59d
DP → RI 0.18 0.13 1.19 0.40*** 0.05 4.94 χ2 (116) 5 242.73 χ2 (117) 5 243.26e
Note(s): AA 5 Alternative attractiveness; DP 5 Decision postponement; RI 5 Repurchase intention
SWC 5 Switching cost; TP 5 Time pressure; ***p < 0.001; **p < 0.01
Chi-square difference test: a Δχ2 (1) 5 4.29, p < 0.05 (significant); b Δχ2 (1) 5 2.39, p > 0.05;
Table 5.
c
Δχ2 (1) 5 1.16, p > 0.05; d Δχ2 (1) 5 1.86, p > 0.05; e Δχ2 (1) 5 0.53, p > 0.05
Moderating test results Source(s): Table by authors
Practical implications
This study also has some important practical implications. With an in-depth understanding
of predictors and outcome of DP, hotels should encourage consumers to book at the time
of searching and not delay their booking decisions. Providing a creative simulation could help
reduce consumers’ propensity to delay booking decisions. For example, a pop-up graphic that
shows the steps of hotel online reservation process on hotel websites can be adopted for
novice users (Kim et al., 2020b). Once they are attracted by this interesting simulation, they
could improve their familiarity with the reservation process. Eventually, both familiarity Consumer
with and the usability of the website can make it difficult for experienced consumers to switch purchase
to other new websites. In addition, to minimize the negative effect of DP on RI and encourage
repeat purchases, hotels must assist individual consumers in obtaining the necessary
decision
booking information as efficiently as possible to avoid wasting time searching for
information. Promoting the mobile hotel reservation application could be an effective way
to save consumer time on browsing information. In fact, both hotel booking sites and OTAs
develop their own applications on mobiles or tablets (Sun et al., 2020). These applications help
consumers save time on locating the needed booking information and make reservations
online quickly.
The positive influence of switching barriers on RI means hotels should increase
consumer perception of SWC and AA simultaneously. This emphasizes the importance of
hotel websites or booking apps to be convenient for making reservations, preventing
guests switching to other sites or apps. Bundling can be one of the ways for hotels to
distinguish themselves from other channels where very similar booking options are
offered. As a popular marketing strategy, bundling has shown that integrating price-
related information influences buyers’ perceived savings (Kwon and Jang, 2011). Hotel
rooms can be bundled with other services and amenities such as unlimited access to
business centers, faster internet connection or the head chef’s special breakfast. These are
all controlled within the hotel, which OTAs do not control. Bundling pricing can be seen as
a valuable cost-saving option for potential guests and can be a significant factor for
preventing switching behaviors. Not only the actual saving on the products but also time
saving and less efforts on searching and calculating for each added service separately
might help consumers to make a quick decision.
Lastly, TP is an important concern for hotel patrons. To overcome the influence of time
pressure, hotels might optimize a live chat function to help their consumers to resolve
confusion in a timely manner. Many live chat functions currently used in hotel websites
require consumers to type their questions in the chat box. It can be time consuming and
difficult for them to clearly describe their concerns in a text. To save time and avoid potential
ambiguity, a filtering technique could be a useful tool; it could categorize possible questions
(e.g. frequently asked questions) (Guillet et al., 2020). Consumers can then select a category for
their concerns before typing in their questions. In some cases, they might not even have to
type their questions as the category offers it. The service agents can have a brief
understanding of the questions raised before finding the solution, thus providing faster
service.
Switching cost
1. If I switch to another hotel booking website, I would miss some of the services and benefits from the site I
usually use (e.g. mileage points)
2. In general, it would be problematic to switch from the hotel booking website I usually use to another one
3. Switching the hotel booking website would involve major effort for me
Alternative attractiveness
1. There is a variety of hotel booking websites that I can choose from
2. I would be happy to use a different booking website than the one I used last time
3. Other booking websites are probably just as good or better than the last website I used
Decision postponement
1. Sometimes, it is difficult to make the final decision when making a hotel reservation
2. Sometimes, I delay the decision when making a hotel reservation
3. Sometimes, I postpone a planned hotel reservation
4. Sometimes, the choice is so large that making a hotel reservation takes longer than expected
Repurchase intention
1. I intend to continue making future hotel reservations from the booking website I usually use
2. I would recommend the booking website I usually use to other people
3. I plan to keep the booking website I usually use for the future trips
Time pressure
1. How much time do you typically have when completing your online hotel reservation?
Table A1. Note(s): For time pressure, 1 5 Not enough time, 7 5 Enough time
Measurement items Source(s): Table by authors
Corresponding author
Pengsongze Xue can be contacted at: pxue@uoguelph.ca
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