Essay: Decisional Factors of Malaysian Tourist from Kuala Lumpur in Choosing Airbnb over Budget Hotels in Bangkok

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Background of Topic

a) Budget Hotels

The difference between the budget hotel and hotel is focused on the rooms and meals which is reserved at the economic cost. Hotel is a building that provides a room to sleep with a certain management standard in term of serving their customer. Their facilities, services, and amenities determined their level in certain categories that classified their reputation among customer.

Even though budget hotels are considered as the lowest category of a hotel but they are still required to fulfill basic requirements as a hotel. Those requirements such as broadband connection, room service, air conditioning, telephone, beverages, etc. The budget hotels infrastructure and amenities may not as large or complete as common hotels but some of them also provide a minibar for the guest. The employees may not as much and highly educated as a bigger hotel but if you don’t stay for a commercial purpose then they should be good enough to serve you well. (Palace, 2012)

b) Kuala Lumpur

As a federation of 13 states in Southeast Asia, Malaysia consists three federal territories that located along Southern South China Sea and Strait of Malacca. Malaysian government system allows a private freedom for each state centralized with government economic regulation. (globalEdge, 2016)

Kuala Lumpur as their capital city is well known as a city that filled with an abundance of gastronomic delights with a total population more than 1.5 million in 2010. It divided into several districts and famous known for their few landmarks such as Petronas Twin Towers as known as the world’s tallest twin skyscrapers, a natural preserve which is Batu Caves that influence by Hinduism culture for over 400 million years old, and Petaling Street flea market. (Wong, 2018)

c) Total Quality Management

According to (Crosby, 1979) identified, the style of management determined how successful the quality improvement. The main things are to reduce mistakes and increase the standards in their jobs. First things to do are to educate and train in terms to get rid of the first cause and pay attention to the detail along with committed to zero defects which can cure the second cause. By using the quality management maturity grid, you can evaluate your own quality management maturity. The most important things are to understand, to commit, and to communicate.

Significance

As it founded in 2008, Airbnb has been developing significantly more and more every year. This type of accommodation may become an alternative choice when you visit Europe or America, but unfortunately even though it quite popular amongst Asian, in term of market growth it didn’t as successful as it’s in Europe or America. (McCarthy, 2016)

This research project aims to find out more about customers demands and needs factors in choosing their accommodation. The result of this research will be straightly submitted to Mr. Brian Chesky as Airbnb’s Chief Executive Officer. Therefore, Airbnb can identify which sectors and factors they should improve for a better hospitality experience for the customer in terms of competing with another competitor. Without knowing the Malaysian decisional factors, Airbnb can’t develop a better strategies to compete with budget hotels.

First impressions are important especially for those who usually choose hotels as their ideal accommodation when they are traveling. Airbnb may not give much hospitality direct to the customer but in a certain part, they should give more benefits to balance their weakness among other accommodation types who give a lot.

Scope

Different country means different culture, especially in Asia, a lot of things are different when it comes to their mindset. Since I born and grew up in Asia, it’s easier and more convenient to get further deeper information that needed for this research. The reason why I choose Bangkok as my country’s target cause based on the data that I collected, Bangkok is one of the cities that have the highest Airbnb demand in the world. (Shatford, 2015)

It also ranked as the second cities that fastest-growing destination neighborhoods for Airbnb in a scale of worldwide in 2015. (Statista, 2016) When it comes to the tourist from ASEAN that comes to Thailand especially Bangkok, Malaysian tourist popped up on the charts as the second nation in top 10 nationalities to visit Thailand during 2017. They spend around 86 billion baht in that country which made them as the third country for top 10 tourist expenditures in 2017. (Barrow, 2017)

The research will be done during peak season in Bangkok which is from November to March. The subject matter of this research is identify decisional factors in term choosing Airbnb over budget hotels.

Type and Purpose of Research

This study is a comparative research that used to identify the difference between Airbnb’s hospitality with budget hotels. The purpose is to strengthen the strong points of Airbnb’s and modify their weakness to become their superiority. In some case, Airbnb may not possible to give direct service like what others accommodation can do but based on the data there are other things that make Airbnb as a death threat. Even though there’s a lot of good reviews about their experience with Airbnb, but in a term to develop a better service and compete with budget hotels, it’s important to keep evolving in this modern era.

Problem Statement & Objectives

a) Problem Statement

To prioritize decisional factors of Malaysian tourist especially from Kuala Lumpur in term of housing Airbnb over budget hotels in Bangkok

b) Objectives

1. To draw focus on the needs and demands of Malaysian tourist especially from Kuala Lumpur in their accommodation

2. To identify the decisional factors of Malaysian tourist in choosing their accommodation in term to improve Airbnb’s hospitality quality

3. To investigate and compare both weakness and strong points from budget hotels and Airbnb when it comes to hospitality

4. To recommend Airbnb’s in improving on some parts that play an important role in term of customers satisfaction

Literature Review

Reasons for Internationalization of Domestic Hotel Chains in Thailand

This academic journal focuses on the main point of the reason why it is important to internationalization in accordance with the current globalization (Young, 1990). Internationalization can be clarified as a continual process that gives huge changes in terms of state and implies dynamic change, as (Buckley & Ghauri, 1993) also shared the whole notion of a developmental process. In fact, they declare that main reason to internationalization is because of the growth of the firm. In contrast, other researchers said that other things, as well as client following (Erramilli & Rao, 1990), strategic-asset seeking (Dunning, 1980), merger acquisition (Gilbert & Zok, 1992), or risk avoidance (Robock & Simmonds, 1989), contribute to shaping the internationalization of firms.

Because of the revolution of global environment these days, internationalization considered as a thing that couldn’t be avoided if the targets of the company are meant to be achieved. However, (Beamish, 1990) stated that internationalization is a way that constructs their awareness of international transactions either by directly or indirectly effect on their future and collaborate with different countries. This explanation about internationalization declares that as the unidirectional process of increasing investment, involvement, and commitment which exsiccate international contribution of a firm. In conclusion, internationalization intends to adapt their entanglement and responsibility to international competition and markets.

Thailand’s government realized their tourism and hotel industry provides the largest source of income in Thailand which delivered to encourage Thai enterprises to go international since the beginning of the 1990s through various institutional and measures support facilities. In addition, their government made a 39 bilateral investment agreement and 56 double taxation deal with various regional arrangements and economies collaboration and bilateral FTA treaty. Therefore, with all the things that have been done by the government, Thailand’s enterprises, especially in hospitality and tourism industry, be expected to expand more across the countries.

International Tourist Satisfaction and Destination Loyalty: Bangkok, Thailand

Tourism trends consider Asia and the Pacific region as the second of the most visited area in the world according to World Tourist Organization in 2007 and in term of tourism segmentation, cultural tourism has become the fastest part that has been growing in 2001 by World Tourist Organization. With their famous culture and strategic location, both factors enable Thailand to compete with other countries and stimulate Thailand as a favorite tourist destination. A continual increase in the number of international tourists depicts further that Thailand one of the world’s leading tourist destination.

The difficulty for Thai government since the 1990s in term of international tourism growth without a right planning has been a challenge for all these years. Such as AIDS (Chon & Singh, 1994), safety (Li & Zhang, 1997), degradation of the environment (Jansen-Verberke & Ko, 1995) and sex tourism (Esichaikul & Baum, 1998). Since then, a few studies and research have been conducted to get a further information about Thailand’s images and motivation factors of foreign tourist with the chance to revisit Thailand (Rittichainuwat, et al., 2008). These studies aim to measure the international tourist satisfaction with their experience when they explore Bangkok.

The satisfaction of international tourist has expanded to resettle the various nature of the tourist market which from all over the world. This expanded concept give a lot of benefits for the different industry especially for the tourism industry in a term to satisfy and fulfill customers needs and wants. Therefore, divide the market and repeat visitors assists marketers in providing products and services made Thailand reputation is getting better, or in fact has been successful to get more attention from international tourist. However, with the fluctuation of gasoline cost over the world and political situation in Thailand not in a good situation, cause a decreasing number of flights to Thailand. Thus, it made Thailand’s challenge to compete with others has become more difficult than before.

What Really Matters to Hotel Guests: A Study of Guest Reviews of 3 Star Hotels in Bangkok

Marketing and consumer behavior has extremely changed because of the evolution of technology these days especially electronic word-of-mouth (eWOM). It proposes a ‘third party, impartial opinions on these varieties of products and services that available for customers which incredibly fast to reach on a wide scale that involves a large community. Inform of customer ‘user-generated content’ (UGC), eWOM consists of a variety of forms such as forums, website, customer review sites, blogs. Not only that, it also takes a crucial part in travel consumption.

In this era of globalization, when customer’s planning their travel list, eWOM has encouraged them to aware and make an extensive search of consumer-generated product and service reviews that available on social media before they finally decide to make the final decision to get which one is the most suitable for them (Chung & Buhalis, 2008) (Dellarocas, 2003) (Stringam & Gerdes Jr, 2010). Thus, word-of-mouth considered as a pivotal part that influences decisional factors of tourist in term of travel consumption. (Cox, et al., 2009) (Gretzel & Yoo, 2008) (McCarthy, et al., 2010).

In travel consumption, online travel websites that serve a particular review and information about their travel destination became extremely popular among customers. (Litvin, et al., 2008) (Ong, 2012) (Xiang & Gretzel, 2010). To get further information about travel products and services, ‘third party referrals’ is considered as a trusted advisor that sought by potential customers/tourist before they established them final purchase decision. The most commonly considered factors of hotel properties in according rankings are their amenities/facilities, geographical and services that offered in that hotel. Regardless of the ratings that given on various websites, prospective customers more likely to get through guest reviews in order to find out what a ‘real’ customers experienced and feedback with their stay. In the importance of customer-generated feedback point of view, indicated the importance of the prominent feature for guests and hotel managers.

Economic Determinants of Long-Term Equilibrium in Malaysian Tourist Arrivals to Thailand: Implications for Tourism Policy

Marketing and consumer behavior has extremely changed because of the evolution of technology these days especially electronic word-of-mouth (eWOM). It proposes a ‘third party, impartial opinions on these varieties of products and services that available for customers which incredibly fast to reach on a wide scale that involves a large community. Inform of customer ‘user-generated content’ (UGC), eWOM consists of a variety of forms such as forums, website, customer review sites, blogs. Not only that, it also takes a crucial part in travel consumption.

In this era of globalization, when customer’s planning their travel list, eWOM has encouraged them to aware and make an extensive search of consumer-generated product and service reviews that available on social media before they finally decide to make the final decision to get which one is the most suitable for them (Chung & Buhalis, 2008) (Dellarocas, 2003) (Stringam & Gerdes Jr, 2010). Thus, word-of-mouth considered as a pivotal part that influences decisional factors of tourist in term of travel consumption. (Cox, et al., 2009) (Gretzel & Yoo, 2008) (McCarthy, et al., 2010).

In travel consumption, online travel websites that serve a particular review and information about their travel destination became extremely popular among customers. (Litvin, et al., 2008) (Ong, 2012) (Xiang & Gretzel, 2010). To get further information about travel products and services, ‘third party referrals’ is considered as a trusted advisor that sought by potential customers/tourist before they established them final purchase decision. The most commonly considered factors of hotel properties in according rankings are their amenities/facilities, geographical and services that offered in that hotel. Regardless of the ratings that given on various websites, prospective customers more likely to get through guest reviews in order to find out what a ‘real’ customers experienced and feedback with their stay. In the importance of customer-generated feedback point of view, indicated the importance of the prominent feature for guests and hotel managers.

The Rise of the Sharing Economy: Estimating the Impact of Airbnb on the Hotel Industry

This research aims to explore more about the economic impact of the sharing economy for instance, in this case, is Airbnb, a protruding choice for short-term accommodations. Peer-to-peer markets, well known as the sharing economy, have appeared as another option suppliers of products and services which provided by a well known developed and experienced industries. They analyze Airbnb’s entry effects and quantify the impact on the hotel industry in some period of time. For example, in Austin, the city which Airbnb supply is highest, the effect on hotel revenue is around 8%-10% range, therefore the impact of it’s nonuniform, the one who gets the impact of Airbnb is budget hotels and hotels that do not cater to business travelers.

The effect manifests itself through less aggressive in hotel room pricing, give benefit to all consumers, not just for particular party. The price itself give it best responds during peak season or at the certain time such as during cultural event and is due to the various demands and needs that required instantaneous supply to satisfy customers.

Literature Summary

NO. REASONS FOR INTERNATIONALIZATION OF DOMESTIC HOTEL CHAINS IN THAILAND

1 Author Pimonpat Rodtook & Levent Altinay

2 Year November 2012

3 Country of Origin Thailand

4 Name of Journal Routledge Taylor & Francis Group, LLC

5 Type of Publication Literature review

6 Type of Research Applied

7 Purpose of Research Applied research

8 Research Method Qualitative – explorative

9 Theory

10 Key Words Thai hotel chains, Reasons for Internationalization

11 Major Theme Identify the reason why it is important to internationalization in accordance with the current globalization

12 Sub-Themes

13 Comment

NO. INTERNATIONAL TOURIST SATISFACTION AND DESTINATION LOYALTY: BANGKOK, THAILAND

1 Author Siriporn McDowall

2 Year March 2010

3 Country of Origin USA

4 Name of Journal Routledge Taylor & Francis Group, LLC

5 Type of Publication Literature review

6 Type of Research Applied

7 Purpose of Research Applied research

8 Research Method Qualitative – explorative

9 Theory

10 Key Words First-time, repeat, international, tourist satisfaction, destination loyalty

11 Major Theme Investigate international tourist satisfaction and destination loyalty in Bangkok, Thailand

12 Sub-Themes

13 Comment

NO. WHAT REALLY MATTERS TO HOTEL GUEST: A STUDY OF GUEST REVIEWS OF 3 STAR HOTELS IN BANGKOK

1 Author Sonia Khan

2 Year 2017

3 Country of Origin India

4 Name of Journal International Journal of Hospitality & Tourism Systems

5 Type of Publication Literature review

6 Type of Research Applied

7 Purpose of Research Applied research

8 Research Method Qualitative – explorative

9 Theory

10 Key Words Hotel reviews, TripAdvisor, User generated content

11 Major Theme Investigate guest needs and demands based on their review of 3 star hotels in Bangkok

12 Sub-Themes

13 Comment

NO. ECONOMIC DETERMINANTS OF LONG-TERM EQUILIBRIUM IN MALAYSIAN TOURIST ARRIVALS TO THAILAND: IMPLICATIONS FOR TOURISM POLICY

1 Author Jittaporn Sriboonjit, Yaovarate Chaovanapoonphol, Aree Wiboonpongse, Peter Calkins, Songsak Sriboonchitta

2 Year 2010

3 Country of Origin Thailand

4 Name of Journal International Journal of Intelligent Technologies and Applied Statistics

5 Type of Publication Literature review

6 Type of Research Applied

7 Purpose of Research Applied research

8 Research Method Qualitative – explorative

9 Theory

10 Key Words Long-term equilibrium, tourist

11 Major Theme Analyzes the nature and determinants of long-term equilibrium in number of tourist from Malaysia to Thailand

12 Sub-Themes

13 Comment

NO. THE RISE OF THE SHARING ECONOMY: ESTIMATING THE IMPACT OF AIRBNB ON THE HOTEL INDUSTRY

1 Author Georgios Zervas, Davide Proserpio, John W. Byers

2 Year October 1,2017

3 Country of Origin United States

4 Name of Journal Journal of Marketing Research

5 Type of Publication Literature review

6 Type of Research Applied

7 Purpose of Research Applied research

8 Research Method Qualitative – explorative

9 Theory

10 Key Words Sharing economy, Airbnb, hotel industry, competition, peer-to-peer markets

11 Major Theme Analyze Airbnb’s entry into U.S especially Texas and the impact in the hotel industry

12 Sub-Themes

13 Comment

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Chung, J. Y. & Buhalis, D., 2008. Information and Communication Technologies in Tourism.

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