Final Research Project

Analyzing the Effect of Electronic

Word-of-Mouth on Travel Decisions

Mentor: Submitted By:

Dr. Gaurav Joshi Shivani Anand
20/2018
PGDM General
Flow of Presentation
Introduction

Literature Review

Objectives

Methodology

Data Analysis

Findings

Conclusion
Introduction EWOM: All informal communications directed at consumers through
internet-based technology related to the usage or characteristics of
particular goods and services, or their sellers.
This refers to favorable and unfavorable comments made by social
media participants, especially Generation Y towards a brand, product,
or organization online.
The existence of eWOM help consumers make online purchase
decisions. Consumers usually read information about a product from
online reviews, which are used as a basis to assess whether the
consumer will make a purchase or not.
In the tourism industry, the effect of eWOM is especially strong.
Intangibles such as tourism services cannot be evaluated in advance of
use. Hence, purchasing intangible products and services involves higher
risk. Then, customers are more dependent on the online interpersonal
influence and eWOM.
Source: Report by wearesocial and Hootsuite
Tourism and Hospitality Sector
India generated a revenue of US $247 Billion in 2018.

Foreign Travel arrivals stood at 10.55 million in 2018, achieving growth rate
of 5.2% year-on-year

It is 3rd largest foreign exchange earner for the country

India was ranked 34th in the Travel & Tourism Competitiveness Report 2019
published by the World Economic Forum.

India was ranked third in tourism sector by World travel and tourism Council
Report, 2018
Source: Tourism and Hospitality Report by IBEF
India ranked 7th in the world in 2018 contributing
US$ 247 billion in terms of absolute direct
contribution of travel & tourism sectors to its GDP.
Domestic consumers to lead Growth: Domestic
travel revenues are estimated at Rs US$ 215.38
billion in 2018 and are anticipated to further
increase to US$ 405.8 billion by 2028E
Source: Tourism and Hospitality Report by IBEF
Leading States in terms of Tourists
Major Players

Source: Tourism and Hospitality Report by IBEF

 Literature Review
Electronic word-of-mouth and online reviews in tourism services: the use of twitter by tourists
Marios D. Sotiriadis and Cinà van Zyl (2013)
This research paper talks about conceptual framework for understanding the foundations of digital communication and empirically investigate its validity
by examining the factors influencing the tourism consumer behavior. This study adopts a conceptual model of e-WOM and explores the use of Twitter by
the tourists. The study’s findings indicate that three factors are very influential regarding the use of information regarding tourism services retrieved from
Twitter, which are Reliability of Twitter followers/users, Degree of involvement—Posting and Expertise and know-how of Twitter users/followers.

Brand Love and Brand Jealousy mediating electronic word of mouth on online hotel reservation intention
Nadiyah Hirfiyana Rosita and Yuvita Ratnandika (2019)
This research aims to determine and analyze the direct and indirect influence of electronic word of mouth on hotel reservation intention mediated by
brand love and brand jealousy as the intervening variable. This explanatory research explains causal relationship between variables through hypothesis
testing. Marketers should be able to create brand jealousy in the potential customer’s mind. Individuals would be strongly motivated to buy a brand if
they were jealous. The most important outcome of brand jealousy, in addition to purchase intention, is increased active engagement, as a jealous
partner’s mind would largely be occupied by the thought of the other partner.

A Meta-Analysis of Electronic Word-of-mouth Elasticity

Ya You, Gautham G. Vadakkepatt, & Amit M. Joshi (2015)
This research paper focused on meta-analysis on the effect of electronic word of mouth on sales by examining 51 studies and primary data collected on
product characteristics (durability, trialability, and usage condition), industry characteristics (industry growth and competition), and platform
characteristics (expertise and trustworthiness) , it can be expected that high involvement, experience product categories, for which consumers typically
engage in extensive prepurchase information searches, may exhibit greater effectiveness of both eWOM volume and valence.
 Literature Review
Analysing the Effect of Electronic Word of Mouth on Tourists’ attitude toward Destination and Travel Intention
Zarrad H.1 and Debabi M.2 (2015)
This research identified the theoretical arguments and hypotheses about the interrelationships between electronic word of mouth (eWOM) and tourists’
attitudes towards specific destinations and actual travel intentions using a structural equation model (SEM). The results illustrate that eWOM
communication has a credible influence on both attitude and intention to visit. WOM can play a key role for service providers, as intangibility makes the
pre purchase trial of services impossible.

The role of electronic word-of-mouth in the tourism market

Dina Lončarić, Ivana Ribarić and Vlatka Farkaš (2016)
The aim of this study was to investigate the habits of Croatian citizens in e-WOM communication in the context of the decision making process while
planning tourist vacations. The usefulness of the information published on the Internet was also tested, together with the popularity of specific
information sources. The research has also provided an answer to the question regarding the tourists’ tendency of sharing information of their tourist
experience. From a tourism perspective, e-WOM communication provides numerous possibilities for tourism companies by making it possible to
objectively present tourism products and services with minimum expenses, and often with greater impact on sales and competitiveness when compared
to other forms of advertising.

e-WOM Scale: Word-of-Mouth Measurement Scale for e-Services Context

Isabelle Goyette, Line Ricard, Jasmin Bergeron and François Marticotte (2010)
The primary objective of the study was to create a multidimensional measurement scale for WOM in the context of electronic services—the e-WOM
Scale. A review of prior research highlighted the paucity of studies focusing on this set of problems, especially in the domain of e-services. The nine
items of the e-Scale measure four dimensions of word-of-mouth: (1) intensity (activity); (2) positive valence/praise; (3) negative valence; (4) content.
Statistical tests applied to two different samples helped confirmed the validity and the reliability of this measurement tool
 Literature Review
Analysis of the effect of quality components of web 2.0 enabled ecommerce websites on electronic word-of-mouth marketing (ewom) and on
customer loyalty
Harun Gümüş, Vedat Bal (2016)
The fundamental aim of this study is to reveal the relationship among website quality dimensions, loyalty and eWOM concepts in the e-commerce
websites. As a result of the statistical measurements, it is revealed that loyalty factor affect eWOM directly; besides, design quality, service quality and
system quality affect eWOM indirectly through loyalty; and, information quality does not have any effect on eWOM indirectly.

Examining the influence of customer-to-customer Ewom on purchase intention in social networking sites
Duong Hanh Tien a , Adriana A. Amaya Rivas b and Ying-Kai Liao(2018)
The results show that perceived persuasiveness, perceived informativeness, and source expertise are adequate predictors of the usefulness of eWOM.
Additionally, perceived persuasiveness, source expertise, and source trustworthiness significantly predict the believability of eWOM with regard to SNSs.
It was found that perceived usefulness and credibility together increase the likelihood of the adoption of an eWOM message, and eWOM adoption has a
strong mediating role in the influence of eWOM credibility and usefulness on consumer purchase intention toward products recommended on SNSs.

A Unified Model for the Adoption of Electronic Word of Mouth on Social Network Sites: Facebook as the Exemplar
Navid Aghakhani, Jahangir Karimi, and Mohammad Salehan(2018)
This study highlights the differences between SNSs and conventional platforms for eWOM communication.The affect-as-information theory to
understand the drivers of cognitive and affective attitudes, thus contributing to prior eWOM adoption studies by providing empirical evidence of the
benefits of integrating these two theories to explore the eWOM adoption process in the presence of both explicit and implicit eWOM. It shows that
product-related information in a review positively affects the cognitive attitude. In addition, that source credibility also has a positive effect on the
cognitive attitude.
 Objectives
1. To study the Usage and Credibility of different eWOM Mediums (blogs, social media, online travel
company site, travel review sites, online discussion forums)
2. To analyze the impact of demographic variables i.e. - Age, Gender and Income on Consumer Travel
Behavior like Frequency of Review Posting, Type of travel, tourism sector and trust in influencer’s posts
3. To examine information types provided in eWOM Communication (advice, tips, warnings, and
Recommendations)
4. To identify the various factors that influence the eWOM Effect
 Research Design
 Management Problem
How to make eWOM Communication (Online Reviews) more authentic and complete as to increase the trust of
travellers
 Data Collection
Data is collected using two methods:
Primary data
• The questionnaire was prepared to collect the data that is useful to conduct this study. The questionnaire was
filled by the respondents (previous and potential travellers). In this study, the questionnaire was based on the
objectives of the study and responses are collected from the residents of Delhi.
Secondary data
• The research would collect the required secondary data from the research papers from various sites like Emerald,
EBSCOhost and Research Gate.
 Research Design
 Sample Size
With 95% confidence interval and 5% tolerable error.
Where n is the sample size
Sigma is population standard deviation of the variable we are trying to find, E is the Tolerable Error and Z is the
value from the standard normal distribution table for the given confidence level
Taking confidence level of 95%, so Z comes out to be 1.96 from the standard normal distribution table.
As all the responses are measured on scale of 1-5
For Sigma we have range of 1 to 5 for a Likert scale, so we have Sigma as (5-1/6) = 0.67
Putting all the values in the above formula, we get sample size as 384 (Rounded off to 390)

 Measurement and Scaling

Scale: A 5-point Likert scale is being used for measuring the influence of factors affecting eWOM, credibility of
different sources and information types
 Research Design
 Sample Method
Convenience and judgemental sampling method would be used to contact the respondents.
 Tools for Data Collection
The data analysis tools which would be used are SPSS and MS-Excel.
 Limitations of Study
• The study would be restricted to Delhi only so the findings would be applicable only to Delhi.
• Findings of the survey would be based on the assumption that the respondents would provide correct
information. The respondents may be subjected to bias.
• The time limitation is one of the factors which influence the study.
• The Study does not involve any Structural model to test Ewom Adoption
• Majority of the sample size consist of student population
 Data Analysis
Sample Description:

Respondents who have Frequency of Review posting

No. of trips in a year read online reviews earlier
Gender
while making travel
decisions
 Data Analysis
Cronbach Alpha: It is a measure of internal
consistency, that is, how closely related a set
of items are as a group.
It is considered to be a measure of scale
reliability.
As the Cronbach’s alpha>0.7, the scale is
reliable.

Reliability Statistics

Cronbach's
Alpha Based on
Cronbach's Standardized
eWOM Medium Usage for Online reviews
Alpha Items N of Items
.756 .759 20
 Data Analysis
Credibility
Model Summary
-2 Log Cox & Snell Nagelkerke
Step likelihood R Square R Square
1 345.614a .376 .604
The Regression coefficient for personal travel
Variables in the Equation blogs is the highest indicating it is the most
B S.E. Wald df Sig. Exp(B) credible source. The sources can be ranked in
Step 1a Social Media .337 .186 1.624 1 .003 .789 order of credibility as:
Personal Travel 1.184 .220 28.859 1 .000 3.266
Blogs
Online Travel -.137 .188 .530 1 .007 .872
Personal Travel Blogs> Travel review Sites>
Company Site Social Media > Online discussion forums >
Travel Review Sites .574 .194 3.725 1 .024 .688
Online Travel Company Sites
Online discussion .221 .190 7.509 1 .006 1.684
forums
Constant 2.820 2.396 1.386 1 .239 .060
Data Analysis
Demographics Behaviour

Travel Decision  Domestic


Gender Type
International

 Never
Frequency of  Sometimes
Age review posting  Always

Tourism  Adventure  Heritage

 Eco  Medical
Income Group Segment  Pilgrimage  Luxury

 Trust and Urge to

Influencer’s post Travel – Yes/No
 Data Analysis
Hypothesis 1: Hypothesis 6:
H0: There is no significant relationship between Gender and type of travel H0: There is no significant relationship between Income and frequency of online review posting
decisions made using eWOM H1: There is significant relationship between Income and frequency of online review posting
H1: There is significant relationship between Gender and type of travel decisions Hypothesis 7:
made using eWOM H0: There is no significant relationship between age and tourism segment
Hypothesis 2:
H0: There is no significant relationship between Age and type of travel decisions H1: There is significant relationship between age and tourism segment
made using eWOM Hypothesis 8:
H1: There is significant relationship between Age and type of travel decisions made H0: There is no significant relationship between Gender and tourism segment
using eWOM H1: There is significant relationship between Gender and tourism segment
Hypothesis 3: Hypothesis 9:
H0: There is no significant relationship between Income and type of travel H0: There is no significant relationship between Income and tourism segment
decisions made using eWOM H1: There is significant relationship between Income and tourism segment
H1: There is significant relationship between Income and type of travel decisions Hypothesis 10:
made using eWOM H0: There is no significant relationship between age and urge to travel due to Influencer’s post
Hypothesis 4:
H0: There is no significant relationship between Gender and frequency of online H1: There is significant relationship between age and urge to travel due to Influencer’s post
review posting Hypothesis 11:
H1: There is significant relationship between Gender and frequency of online H0: There is no significant relationship between gender and urge to travel due to Influencer’s
review posting post
Hypothesis 5: H1: There is significant relationship between Gender and urge to travel due to Influencer’s post
H0: There is no significant relationship between Age and frequency of online Hypothesis 12:
review posting H0: There is no significant relationship between Income and urge to travel due to Influencer’s
H1: There is significant relationship between Age and frequency of online review post
posting H1: There is significant relationship between Income and urge to travel due to Influencer’s post
 Data Analysis
Chi-Square Tests
Asymptoti
As p>0.05, we accept the null hypothesis. There is no
c significant relationship between gender and travel destination
Significanc Exact Sig. Exact Sig. (Domestic/International)
Value df e (2-sided) (2-sided) (1-sided)
Pearson Chi- 1.312 a 1 .252
Square Similarly, Hypothesis 4 and 11 are accepted as p>0.05
Continuity 1.080 1 .299  There is no significant relationship between Gender and
Correctionb
Likelihood Ratio 1.311 1 .252
frequency of online review posting
Fisher's Exact .288 .149
Test  There is no significant relationship between Gender and
N of Valid Cases 392
a. 0 cells (0.0%) have expected count less than 5. The minimum
urge to travel due to Influencer’s post
expected count is 63.61.
 Data Analysis
Age * Travel Decision Crosstabulation Chi-Square Tests
Travel Decision Asymptotic Significance (2-
Internatio Value df sided)
Domestic nal Total Pearson Chi-Square 52.283a 2 .000
Age 16-25 years Count 87 138 225 Likelihood Ratio 54.440 2 .000
Expected Count 120.5 104.5 225.0 N of Valid Cases 392
a. 0 cells (0.0%) have expected count less than 5. The minimum expected count is 9.29.
% within Travel 41.4% 75.8% 57.4%
Decision Symmetric Measures
26-35 years Count 113 34 147 Value Approximate Significance

Expected Count 78.8 68.3 147.0 Nominal by Nominal Phi .365 .000
Cramer's V .365 .000
% within Travel 53.8% 18.7% 37.5%
N of Valid Cases 392
Decision
36-45 years Count 10 10 20
Expected Count 10.7 9.3 20.0 Travelers in 16-25 years Age Group believe Online reviews
% within Travel 4.8% 5.5% 5.1% are more important for International travel while Travelers
Decision in 26-35 years Age Group believe Online reviews are more
Total Count 210 182 392
Expected Count 210.0 182.0 392.0
important for domestic
% within Travel 100.0% 100.0% 100.0%
Decision
Data Analysis
Chi-Square Tests
Asymptotic Significance (2-
Value df sided)
Pearson Chi-Square 202.789a 8 .000
Likelihood Ratio 244.092 8 .000
N of Valid Cases 392
a. 0 cells (0.0%) have expected count less than 5. The minimum expected count is 3.88.

Symmetric Measures
Value Approximate Significance
Nominal by Nominal Phi .719 .000
Cramer's V .509 .000
N of Valid Cases 392

Majority of the travelers in 10-15 LPA Income Group post

reviews regularly while Travelers above 20 LPA Post review
sometimes.
Data Analysis
Chi-Square Tests
Asymptotic Significance
Value df (2-sided)
Pearson Chi-Square 86.035a 3 .000
Likelihood Ratio 113.014 3 .000
N of Valid Cases 392

Symmetric Measures
Approximate
Value Significance
Nominal by Nominal Phi .468 .000
Cramer's V .468 .000
N of Valid Cases 392

Majority of the female travelers (53.5%) prefer Online reviews for

Adventure while male travelers mostly prefer online reviews for eco,
heritage and luxury tourism.
Data Analysis
Chi-Square Tests
Asymptotic
Value df Significance (2-sided)
Pearson Chi-Square 20.420a 2 .000
Likelihood Ratio 27.937 2 .000
N of Valid Cases 392
a. 0 cells (0.0%) have expected count less than 5. The minimum expected count is 8.98.

Symmetric Measures
Approximate
Value Significance
Nominal by Nominal Phi .228 .000
Cramer's V .228 .000
N of Valid Cases 392

There is significant relationship between Age Group and Influencer’s

posts. Majority of the travelers in 16-25 years Age Group have mixed
response towards sponsored posts of famous bloggers while travelers
in age group 25-35 years highly trust social media influencers.
 Data Analysis
Demographics/ Travel Behaviour Gender
Travel Destination Type (Domestic/ No significant Relationship
International)
Frequency of Review Posting No significant Relationship
Tourism Segment Female travelers - Adventure
Tourism
Male travelers - eco, heritage and
luxury tourism.
Influencer’s Post No significant Relationship
Age
16-25 Age Group - International travel
26-35 years Age Group Domestic
Destinations
16-25 Age Group don’t post online
reviews
26-35 years (51.3%) Age Group post
Online reviews after the trip
16-25 Age Group - adventure Tourism
while 26-35 years Age Group- eco-
tourism and adventure tourism
36-45 years Age -luxury Tourism.
16-25 years Age Group- not influenced
25-35 years highly trust social media
influencers
Income
10-15 LPA Income Group –
Domestic
Above 20 Lakhs –
International
10-15 LPA Income Group
post reviews regularly while
Travelers above 20 LPA Post
review sometimes
10-15 LPA Income Group-
Adventure Tourism
15-20 Lakhs - luxury and
heritage tourism.
10-15 LPA Income Group trust
social media influencer’s post
15-20 Lakhs -not influenced
by influencer’s posts.
 Data Analysis
Review Content
Variables in the Equation
B S.E. Wald df Sig. Exp(B)
Step 1 a Transportation .346 .141 6.021 1 .000 .708
Model Summary accommodation .513 .182 .504 1 .003 .879
Food/Beverages .108 .136 .636 1 .000 1.114
Step -2 Log likelihood Cox & Snell R Square Nagelkerke R Square Safety Concerns -.059 .141 .172 1 .012 .943
1 425.842a .332 .487 Money Issues -.088 .122 2.370 1 .002 1.207
a. Estimation terminated at iteration number 4 because parameter estimates (ATMs/ Modes of
changed by less than .001. payment available)
Itinerary .247 .110 5.101 1 .002 .781
Constant 3.023 1.004 9.073 1 .003 20.557
a. Variable(s) entered on step 1: Transportation, accommodation, Food/Beverages,
Safety Concerns, Money Issues (ATMs/ Modes of payment available), Itinerary.

The most important content in online review is Accommodation, as it

has the highest regression coefficient.
Accommodation> Transportation > Itinerary> Food/Beverages >
Money Issues (ATMs/ Modes of payment available) Safety Concerns
 Data Analysis
Information Type Variables in the Equation
B S.E. Wald df Sig. Exp(B)
Step 1a Warnings (postings that warn .543 .183 5.644 1 .002 .648
others about safety & health
Model Summary
issues)
Cox & Snell R Nagelkerke R
Recommendations (postings that .643 .177 5.881 1 .002 .650
Step -2 Log likelihood Square Square
a include specific names of places
1 430.645 .420 .630
such as hotels/museums)
a. Estimation terminated at iteration number 4 because parameter
Advice/Tips (postings that include .454 .211 3.490 1 .000 .675
estimates changed by less than .001.
travel advice and tips)
Clarifications (postings intended to .344 .171 6.714 1 .096 .642
clarify information provided by
other members)
Constant 5.437 1.580 11.837 1 .001 229.817
a).

The most significant factor that makes the review complete is

Recommendations as the regression coefficient is highest. The order of
importance is:
Recommendations> Warnings > Advice/Tips > Clarifications
 Data Analysis
Factor Analysis

KMO and Bartlett's Test

Kaiser-Meyer-Olkin Measure of Sampling Adequacy. .705
Bartlett's Test of Sphericity Approx. Chi-Square 266.982
Df 110
Sig. .000
Data Analysis
Data Analysis
 More is the number of online reviews, more likely I believe in these reviews
Frequency  Online travel reviews were current and up-to-date
 I preferred destinations having more number of online reviews

 The more contrasting online reviews are, the more likely I believe ,
Valence  When I read online reviews, it is important for me to read both positive and negative reviews
 Travel destinations having more number of positive reviews were considered favourably

I trust those reviews that have a known source identity more (visible name and surname, country of origin, profile picture etc.
Source Online travel reviews saved me from having a disappointing experience at the destination
Credibility Electronic medium provides real-time customer support and quickly resolves the query

People who posted the reviews are knowledgeable and experts

Source Online reviews helped me know that the destination has the quality infrastructure (roads, airport) accommodation and safety
Expertise issues
The online travel reviews included most of the necessary information I was searching for
 The information shared through online reviews contributed to my knowledge of the travel experience
Group  Online Community improved my Social image
Involvement  I am likely to post the review after my review as it gives me social recognition

 I like the overall design of the Electronic medium (Eg: Facebook/ Instagram/ Travel Websites)
User Interface  Navigation through App is easier as compared to website
 Online reviews are time saving as you can view all the reviews quickly
 Findings
Social Media is the most widely used source for reading online reviews followed by Personal travel blogs. Online Discussion Forums are
least used.

The most credible source is personal travel blog followed by travel review sites like tripadvisor, followed by social Media. The least credible
source is Travel website.
Personal Travel Blogs> Travel review Sites> Social Media > Online discussion forums > Online Travel Company Sites

Online reviews for domestic destinations are mostly preferred by travellers of age group 26-35 years and Income group 10-15 Lakhs while
Ewom for international tourism is preferred by travellers in age group 16-25 years and above 20 LPA income

Female travellers prefer online reviews for adventure tourism while males usually prefer ewom for eco, heritage and luxury Tourism

The most significant factor that makes the review complete is Recommendation. The order of importance is: Recommendations> Warnings
> Advice/Tips > Clarifications. They look for accommodation mostly. accommodation> Transportation > Itinerary> Food/Beverages > Money
Issues (ATMs/ Modes of payment available) Safety Concerns
Six factors have been identified that influence eWOM – Frequency, Valence, Source Credibility, Source Expertise, User Interface and Group
Involvement.
 Conclusion
The purpose of this study was to explore eWOM in online travel communities and its influence on travel
decisions. Getting information from online communities reduce the information search time and gives the
option to customize questions in accordance with traveler’s needs. By reading online reviews, individuals get
both sides of the travel experiences - good and bad.

Monitoring eWOM in online travel communities can be a strategy that can be used by travel vendors for
enhancing tourism destinations and products.

Managers can focus to improve the credibility of the reviews by making at least 1 picture/video mandatory
as well as focus on group involvement along with focus on different information types.
THANK YOU!