An Examination of Context Effects of Online Reviews on Travellers’ Hotel Choices: The Moderating Roles of Consumption Situations, Psychological Distance and Review Levels
Bai, Blake Hui
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Making decisions in choosing an accommodation option is often difficult for travellers because of the uncertainty involved in their decisions and in how their choices will affect their future experience. This PhD research aims to find out how travellers make hotel choice decisions on online travel agency (OTA) websites, and particularly how their hotel choices are affected by the context effects (i.e., decoy and compromise effects) of hotel review attributes across different consumption situations and psychological distances. Given the increasing importance of electronic word-of-mouth (eWOM) on consumers’ decision-making processes, this study investigates travellers’ hotel choice construction by examining the context effects of online review information. Preference construction theory suggests that individuals’ preferences are determined at the time of choice and are subject to changes in context. Preferences are sensitive to various decision conditions, including decision time, task characteristics (e.g., to choose or to reject), and description of options. The context effect examined in this research refers to a systematic change in consumers' preferences amongst alternatives when a new option is introduced to the choice set; the systematic change arises because the context-related changes will alter consumers' perceptions of a stimulus resulting in inconsistent choice outcomes. This research also incorporates tourism-relevant moderators to examine their confounding effects on the magnitude of context effects on travellers’ decision-making. The influences of consumption situations in travel (in terms of business and leisure travel) and the psychological distance (in terms of departure time and destination distance) on travellers’ hotel preferences are examined. This study suggests that there are significant moderating effects of consumption situations (i.e., business vs. leisure travel) and psychological distance (i.e., near/close vs distant/far future/destination) on the context effects of online reviews, ultimately influencing travellers’ hotel decision-making processes. In addition, the study postulates that context effects will be moderated by different online review levels, namely overall-level review attributes (e.g., overall rating, review volume) and individual-level review attributes (e.g., review recency, review comprehensiveness, and reviewer expertise). The study adopted an experimental design; a series of scenario-based experiments were conducted with random assignment of participants to different treatments of online review information with other hotel-related factors being controlled (e.g., hotel brand, price, and location). Data was collected from the United States through Amazon Mechanical Turk, one of the most reliable panel data companies. The decoy effect on hotel choice based on overall-level review attributes (i.e., rating and review volume) was found significant. Consumption situations successfully moderated the context effects on hotel choice, where it was found that the compromise effect is stronger for business travel and the decoy effect is stronger for leisure travel. Psychological distance derived from construal level theory operationalised in temporal and spatial distances also showed significant moderation effects; high-construal (distant future /destination) promotes the decoy effect on hotel choice and low-construal (near future / destination) promotes the compromise effect on hotel choice. In contrast, reverse context effects (i.e., significant but negative decoy and compromise effect) were found based on individual-level review attributes, which indicates the moderation role of levels of online reviews. The study offers insights into the context effects of online reviews on travellers’ decision-making processes for industry practitioners and provides a meaningful contribution to the body of knowledge in the areas of preference construction theory, psychological distance, and consumption situations in the context of eWOM. This study extends the body of knowledge of preference construction by examining the decoy and compromise effects in a tourism-specific field. Particularly, the study contributes to the emerging research stream of irrational decision-making in the tourism literature by adding empirical evidence of how context effects influence travellers’ hotel choices online. The study also provides new directions for future research that involves online review information by the approach of quantifying online review dimensions of different types and representation modes. Practically, the study helps hotel managers have better understanding of travellers’ decision-making processes based on online reviews as well as offers managerial implications on online marketing and segmentation in the context of OTA websites. Particularly, the study provides the general audience with an interesting perspective in understanding travellers’ hotel decision-making process from a preference construction standpoint. The study can help raise the awareness of irrational decision-making factors such as the context effects on travel decision-making for both hotel providers and consumers. Hotel brands that work with various OTAs would benefit from this study such as being better informed of its positioning to the competitors in these platforms. Moreover, hotels marketers can develop different strategies in managing their online presentation of hotel and online review features to facilitate the decision-making for consumers with different travel needs.