The effects of brand image, price, trust and value on purchase intentions

Abstract: Leisure travelers increasingly prefer to book hotel online when considering the convenience and cost/
time saving. This research examines the direct and mediating effects of brand image, perceived price,
trust, perceived value on consumers’ booking intentions and compares the gender differences in online
hotel booking. The outcomes confirm most of the direct and indirect path effects and are consistent with
findings from previous studies. Consumers in Taiwan tend to believe the hotel price is affordable, the
hotel brand is attractive, the hotel is trustworthy, the hotel will offer good value for the price and the
likelihood of their booking intentions is high. Brand image, perceived price, and perceived value are the
three critical determinants directly influencing purchase intentions. However, the impact of trust on
purchase intentions is not significant. The differences between males and females on purchase intentions
are not significant as well. Managerial implications of these results are discussed.

Introduction:

Based on 2010 Philips Index for Health and Well-being , among 23 countries surveyed, Taiwan was ranked as the second highest for people facing life/ working pressure, while India was ranked as the highest. To help release stress, the Taiwan government encourages people to travel either domestically or internationally. A two-day weekend policy
has inspired people living in Taiwan to travel to suburban areas close to the mountain or the ocean (e.g., Kenting).

According to the 2011 Survey of Travel by R.O.C. (Taiwan) Citizens , the proportion of people undertaking domestic tourist travel in 2011 was 95.4%, an increase of 1.5% from 2010 (93.9%). The proportion of people taking domestic
tourist travel is defined as the proportion of people who took at least one domestic trip during the year. The total expenditure on domestic travel in 2011 in Taiwan was NT$ 310.3 billion (US$ 10.527 billion), an increase of 30.3% from 2010 (US$ 8.079 billion). Based on this survey, 36.6% of tourists use the Internet to obtain travel information, an increase of 3.7% from 2010 (32.9%).

Forty-four percent of overnight tourists stayed in hotels. The Internet has become an important distribution channel in the hotel industry (Lehto, Kim, & Morrison, 2006). Unlike traditional hotel booking through travel agents, online hotel booking offers benefits to consumers such as accessing more photos and videos, a full description of the hotel property and location, better pricing, and no additional booking fees (O’Connor & Frew, 2004; Sparks & Browning, 2011). Considering the convenience and cost/ time saving, leisure travelers in Taiwan increasingly prefer to use
the Internet to book hotels and search for information regarding brand, price, and service (2011 Survey of Travel by R.O.C. (Taiwan) Citizens). Many hotels have noted this trend and have provided access to secure online reservation systems.

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