ABSTRACT
This research work evaluated customer’s perceived risk and online bookings of hotels in Umuahia metropolis. It was a descriptive survey research in which 4 specific objectives, 4 research questions and 4 research hypotheses guided the study. The researchers purposively use 18 hotels in Umuahia metropolis as its case study and 384 as its sample size. The research instrument used for data collection was a questionnaire on a 5 point rating scale, which was subjected to a reliability test that produce a reliability coefficient of 0.853, descriptive and inferential statistics on SPSS version 20.0 was used to analyze the data generated. Findings revealed that there is no significant relationship between financial risk and online booing of hotels in Umuahia metropolis and there is a significant relationship between financial risk and online booking of hotels in Umuahia metropolis. Secondly, there is no significant relationship between security risk and online booking of hotels in Umuahia metropolis and there is a significant relationship between security risk and online booking of hotels in Umuahia metropolis. Thirdly, there is no significant relationship between social risk and online booking of hotels in Umuahia metropolis and there is a relationship between social risk and online booking of hotels in Umuahia metropolis. Following the positive and insignificant relationship between online booking as a dimension of customer’s perceived risk, the study recommended that in booking of hotels online, customers should look out for secured and registered sites to avoid loss of money and other financial details and hotel owners introducing online platforms should also make sure that their sites are secured from intruders in other to protect their customers.
TABLE OF CONTENTS
Title
page i
Certification
ii
Approval
page iii
Dedication
iv
Acknowledgments
v
Table
of contents vi
List
of figures ix
List
of Tables x
Abstract xi
CHAPTER ONE: INTRODUCTION
1.1 Background
of the Study 1
1.2. Statement
of the Problem 3
1.3 Objective
of the Study 5
1.4 Research
Questions 5
1.5 Research
Hypotheses 5
1.6 The
Significance of the Study 6
1.7 Scope
of the Study 7
CHAPTER TWO
2.0 Introduction
8
2.1 Conceptual
Framework 8
2.1.1 Concept
of Online Booking 8
2.1.2 Benefits
of an Online Booking System 10
2.1.3 Challenges
of Online Booking 13
2.1.4 Risk 15
2.1.5 The
concept of perceived risk 16
2.1.6
Dimensions of perceived risk
19
2.1.7
Types of perceived risk
19
2.1.8 Factors
that Influence Consumer Risk Perception 21
2.2 Theoretical
Review 24
2.2.1 Theory
of Perceived Risk 24
2.2.2 Technology
Acceptance Model Technology Acceptance Model 26
2.3 Review
of Empirical Studies 31
2.4 Summary
of Literature Review 37
CHAPTER THREE
3.1 Introduction 39
3.2 Research Design 39
3.3 Sources of Data
39
3.4 Area of the Study 39
3.5 The Population of the Study 40
3.6 Sample Size Determination
40
3.7 Data Collection Instrument 41
3.8 Validity
of the Research Instrument 41
3.9 Reliability
of the Instrument 41
3.10 Method of Data Analysis
42
CHAPTER FOUR: RESULTS AND DISCUSSION
4.1 Introduction 43
4.2 Presentation and Interpretation of
Data 43
4.2.1 Analysis of Study’s Survey Response
Rate 43
4.2.2 Bio Data of the Respondents
44
4.2.3 Analysis of Quantitative Data
Relating to Financial Risks 45
4.3 Testing of Hypotheses
48
4.4 Discussions of Findings and
implications
54
CHAPTER FIVE: SUMMARY CONCLUSION AND
RECOMMENDATIONS
5.1 Introduction 55
5.2 Summary of Findings 55
5.3 Conclusion 55
5.4 Recommendation
56
5.5 Contribution to Knowledge
56
5.6 Suggestions for Further Studies
57
REFERENCES
LIST
OF FIGURES
Fig 2.1. A
conceptual framework for perceived risk 17
LIST
OF TABLES
Table
4.1: Questionnaire Distribution/ Return
Response Rate 43
Table
4.2: Descriptive Statistics of the
Respondents 44
Table
4.3: Responses on the Influence of
Financial Risk on Online Booking of Hotels
in
Umuahia Metropolis 46
Table
4.4: Responses on the Influence of
Security Risk on Online Bookings of Hotels
in
Umuahia Metropolis 47
Table
4.5: Responses on Effect of Wasted time
Risk on Online Bookings of Hotels in
Umuahia
Metropolis 48
Table
4.6: Responses on Effect of Social Risk
and Online Booking of Hotels in
Umuahia Metropolis 49
Table
4.7: Correlations Results between
Financial Risk and Online Booking of Hotels
in
Umuahia Metropolis 50
Table
4.8: Correlations Results between
Security Risk and Online Booking of Hotels
in Umuahia
Metropolis 51
Table
4.9: Correlations Results between Wasted
Time Risk and Online Booking of
Hotels
in Umuahia Metropolis
52
Table
4.10: Correlation Results between Social
Risk and Online Booking of Hotels in
Umuahia
Metropolis
53
CHAPTER ONE
INTRODUCTION
1
Online shopping has become an intrin
2
Online
shopping and booking has become an intrinsic part of life in the 21st century.
More and more consumers are discovering the advantages of purchasing goods via
the Internet (Bányai & Novak, 2011). The Internet allows consumers to shop
anytime, anywhere, with the ability to compare products and prices with a few
clicks, and to read the experiences of other buyers with the desired product
and the selected web shop. 63% of the European Union´s population purchased
goods online in the last 12 months in 2019, with the highest proportions seen
in the UK (87%), Denmark (84%), and Sweden (82%). This compares with 22% in
Bulgaria, 23% in Romania and 34% in Serbia (Eurostat, 2020). In Africa, the
e-commerce turnover has been increased since the turn of the millennium (Veres,
2018).
The
technical, legal, and security requirements of the online booking space have
developed steadily over the past two decades. The Internet has become a highly
regulated sales channel in the world. Despite these developments, the
inter-national crime statistics show an increase in the Internet connected
fraud (e.g. credit card fraud, non-payment, non-delivery). Accordingly,
consumers continue to book for goods and services online with perceived risk,
which ´has an impact on their willingness to use online services´ (European
Commission, 2020). At buying online, consumers focus more on avoiding potential
risks than on maximizing benefits (Kiss & Faragó, 2013). Customers are
concerned not only about fraudulent activities, but also the lack of physical
trials and the absence of personal contact with sales personnel (Dai, Forsythe
& Kwon, 2014). Furthermore, uncertainties could result from perceptual bias
as well. Such perceptual bias could arise out of selective attention, selective
distortion, and selective memory of the costumers (Kotler, & Keller, 2012).
Many
hotels in Umuahia have valued online booking of hotel rooms in improving the
profitability and the overall efficiency of their business without looking at
customer’s perception towards perceived risk towards the online booking. Due to
uncertainty of online transaction handling today, customer’s perception towards
risk has been identified as an antecedent that leads to customer’s hesitance
towards adoption of online payments (Yang et al 2015). Customer perceived risk
has been extensively studied has proved to shape all purchasing decision to
various degrees. Specifically, the risk perceptions of the consumers have been
utilized to assess and predict their behavioral intentions during the travel
related decision making processes Rittichainuwat ( 2011), Change Hsiao,(2008),
Tavitiyaman & Qu, (2013); Lu, (2011). Thus, it is constructive to
investigate the effect of OCRs in the context of customer perceived risk
associated with online hotel booking. One of the factors affecting the adoption
of online booking among customers is the concept of the perceived risk.In a
study, made by Beverley et al (2016), which examined customer reviews within
the tourism field, the result showed that shoppers online see reviews as
providing a quick and easy way to compare and evaluate tourism and hospitality
products. They help to reduce the risk which is potentially associated with
purchases online. Thus, customer reviews provide trust to the consumers as they
see them as reliable upon which to make future purchase decisions (Flanagin and
Metzger, 2013).
Online booking is characterized by two words - "Convenience
and availability” which means you can book from the comfort of your home
anytime, anywhere. Despite the prevalence of e-commerce and online booking,
customers may feel uncertain in their online transactions due to the time/space
separation between sellers and buyers, unlike traditional booking which takes
place face to face between the sellers and buyers. Also, sellers let customers
see the actual product before purchasing it. Online booking creates a state of
uncertainty in purchasing decisions for customers. This state of uncertainty
can lead to wrong purchasing decisions. Therefore, the client may not want to
take the risk. These Customers' perceived risks in online purchasing decisions
increase greater than that of normal purchasing decisions. These potential
risks are financial, time and convenience, psychological, security, and privacy
risks that present barriers to online booking. The most crucial duty of every
hotel is to monitor and protect their website to reduce risk faced by customers
who wishes to book online. Risk issues were first introduced into the
consumer behavior research field by Bauer. Bauer’s concept focuses around the
claim that customer behavior
entails risk in
the way that
any action undertaken
evokes consequences impossible to
predict, at least some of which may
appear undesirable. Customers risk is then
the probability of negative consequences resulting from the decision taken and
is important at the level perceived by the customer. The range and type of reaction depends on the risk level
perceived by the customer and his or her own level of tolerance for the taken
risk (Schiffman and Kanuk, 2007).
The hotel industry is really facing high level risks and it has
affected the intentions to book in a hotel. The purpose of this exploratory
study is therefore to investigate the perceived risks associated with intention
to purchase online. With respect to this study, the problem is that many hotels
in Umuahia metropolis who carry out online booking do not think of their
customer perception towards risk at the process of booking and without proper
knowledge of cyber security.
Online booking in the hotel industry is important since people
don’t always have to be at the hotel to make reservation. Hence, there will be
an increase in customer’s perception on possible risks that may occur in online
booking. Criminal activity involving the perpetration of fraud through the use
of computer or internet can take different forms. This may result in the
interception of private information such as passwords, credit card information,
or other type of so called identity theft which is dangerous and poses security
issues especially now that the country is fighting hard to tame cybercrime.
Several studies has been carried out on customer perceived risk
and online booking of hotel, most of them focused on Perceived Risks as an Intermediary Variable between
Online Consumer Reviews and Hotel Booking Intention (Amin et al 2019), The relationship between
perceived risk and online purchase behavior (Crespo et al 2009), A Broader View
of Perceived Risk during Internet Transactions (Lee et al 2016), The effect of
perceived risk dimensions of purchase intention (Bhukya et al 2014), A study of
the effect of risk-reduction strategies on purchase intentions in online
shopping (Chu et al 2008), Web reviews influence on expectations and purchasing
intentions of hotel potential customers (Mauri et al 2013), The impact of
online reviews on hotel booking intentions and perceptions of trust (Sparks et
al 2011), The effects of perceived value, website trust and hotel trust on
online booking intention (Kim et al 2017), Online hotel booking: The effects of
brand image, price, trust and value on purchase intentions (Lien et al 2015), A survey of
the effect of consumers’ perceived risk on purchase Intention in
e-shopping (Samadi et al 2009).
Despite the fact that some
studies have been conducted in the area of customer’s perceived risk and online
booking of hotel, there is no recent work that covers this present study in
Umuahia metropolis. The perceived risk toward online booking has resulted to
fear, distrust, time lost, and some psychological effects and so on. This
therefore prompts the need to investigate the level of perceived risk
associated with customers online booking of hotel which is the gap this current
study attempts to fill and is the purpose for this study.
The main objective of this study is to determine the influence of
customer’s perceived risk on online bookings of hotels in Umuahia metropolis.
The specific objectives of the study are:
i. To determine the influence of financial risk on online bookings of
Hotels in Umuahia metropolis.
ii. To examine the influence of security risk on online bookings of
hotels in Umuahia metropolis.
iii.
To ascertain the effect of wasted time risk on
online bookings of hotels in Umuahia metropolis.
iv. The effect of social risk on online bookings of hotels in Umuahia
metropolis.
The following questions guided the study
i.
What influence does
financial risk have on online booking of hotels in Umuahia metropolis?
ii.
To what extent does
security risk influence online booking of hotels in Umuahia metropolis?
iii.
To what extent does
wasted time risk have on online booking of hotels in Umuahia metropolis?
iv.
What influence does
social risk have on online booking of hotels in Umuahia metropolis?
1.5 RESEARCH HYPOTHESES
The following Null
hypotheses will be tested for the purpose of the study.
H01: There is no significant relationship between
financial risk and online booking of hotel in Umuahia metropolis.
H02: There is no positive relationship between
security risk and online bookings of hotel in Umuahia metropolis.
H03: There is
no significant relationship between wasted time and online bookings of hotel in
Umuahia metropolis.
H04: There is
no positive relationship between social risk and online booking of hotels in
Umuahia metropolis.
The findings of this study will benefit Customers, Hotels, and
Students/Researchers.
v Customers:
Perceived risk directly affects online customer’s behavior and their intention
to purchase. When a customer perceived risk is high, the customer intention to
purchase online is low and when customer perceived risk is low, the customer
intention to purchase online is high. Risk can be real and as long as risk is
real, it will affect online customer behavior. The study is significant to be
studied to know the extent of risk associated with online customer behavior.
v Hotels: Services
within the hotel and are key to contributing to customers patronage of hotels
but the ease with each customers can book hotel services could mean a
substantial increased revenue for hotels that customers perceive less risk in
booking online towards such hotels. An increase in the knowledge base of such
hotels towards reasons why customers perceive risk will go a long way to help
hotels increase their revenue and patronage.
v Students/Researchers: Due
to lack of empirical materials as regards the customers perceived risk on
online bookings in hotels in Umuahia, this work will be of benefit to students
of Hospitality Management and future researchers because it will serve as a
secondary material for those who intend to carryout similar research as it can
serve as a base line literature for further research.
This
study dealt mainly on customer perceived risk and online booking of hotels, but
due to geographic and travel limitations, the researcher’s scope of the study
will be limited to investigations based on Hotels in Umuahia, Abia state,
Nigeria as the subject of data analysis.
Furthermore,
the researcher’s scope will also be limited to the confidential nature of the
kind of reports and information obtained from customers who want to patronize
and has patronized the hotels.
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