The influence of eWOM on intentions for booking luxury hotels by Generation Y

Abstract

Electronic word-of-mouth on social networking sites is one of the most effective marketing resources in the lodging industry. Furthermore, Generation Y is becoming an important customer base for the luxury hotel industry and relies heavily on eWOM on social networking sties. By adopting and using four selected constructs (perceived usefulness, enjoyment, subjective norm, and perceived behavioral control) from the extended Technology Acceptance Model and the Theory of Planned Behavior, this study reveals how eWOM on social networking sites influences Generation Y’s purchase intentions when booking luxury hotels. The current study suggests that the usage of eWOM on social networking sites not only helps potential Generation Y customers select suitable luxury hotels but also allows luxury hoteliers to better cater to this growing market segment.

Keywords

Consumer behavior electronic word-of-mouth (eWOM)Generation Y luxury hotel marketing social networking sites marketing

Introduction

With the advancement and growing popularity of social networking sites, consumers nowadays can make ‘effortless’ interaction and communication online (Deighton and Kornfeld, 2009: 6). Through social networking sites, consumers actively search for and exchange information on services and products, and social networking sites have become one of the primary avenues for consumers when making lodging purchase decisions (Varkaris and Neuhofer, 2017). As a result, many hospitality companies have utilized social networking sites as one of the most important marketing mediums for improving brand–consumer relationships (Su et al., 2015). One of the crucial functions of social networking sites is electronic word-of-mouth communication (eWOM), defined as ‘any positive or negative statement made by potential, actual, or former customers about a product or company, which is made available to a multitude of people and institutions via the Internet’ (Hennig-Thurau et al., 2004: 39). eWOM is considered one of the most influential informal media among consumers, businesses, and the population at large (Huete-Alcocer, 2017) According to Jovanović et al. (2018), the growing importance of eWOM is closely related to young generations’ increased purchasing power in the industry. Young generations, such as Generation Y, share photos, videos, and opinions on social networking sites as a way of self-expression and self-image construction and the shared contents greatly influence their peers.

Generation Y refers to people who were born between the years of 1981 and 1998 and is expected to be the largest segment of the U.S. population by 2030 (Brosdahl and Carpenter, 2011; Nusair et al., 2011). Generation Y actively adopt and utilize eWOM to search and acquire travel-related information, share personal feelings and comments with peers, and purchase tourism products (Xu and Pratt, 2018). In addition, they are becoming the demand drivers for the luxury hotel segment as they tend to seek premium and luxury products and are prone to impulse buying (Nusair et al., 2013). In a study that examined individuals’ travel intention, 61% of Generation Y showed preference in luxury travel, which was the highest among all generations (McKone et al., 2017). Their purchasing power in the hospitality and tourism sector is estimated to be the largest among generations at $200 billion in 2018 (Schroeder, 2017). Luxury hotel brands, such as Four Seasons, are experimenting with offerings that cater to Generation Y travelers and creating positions to manage eWOM on social networking sites. However, relatively few studies have analyzed generation Y’s purchase intentions, especially using consumer-generated reviews on social networking sites in the luxury market segment (Kim and Moon, 2017). Research has noted that relatively fewer number of luxury hotel customers share their voices on social networking sites, thus any eWOM could have significant impact on their purchase intentions (Netbase, 2018).

A considerable number of studies have utilized the technology acceptance model (TAM) to examine the acceptance of established technology (e.g. Kim and Moon, 2017). TAM is widely used to investigate people’s adoption and usage of a new technology and measure cognitive orientation of constructs, such as perceived usefulness and ease of use (Kim and Moon, 2017). However, researchers have extended and modified the original TAM model by proposing external dimensions, which could affect consumers’ acceptance of latest technology. Additionally, to determine how individual purchase intention is formed, the adoption of the theory of planned behavior (TPB) would be appropriate as TAM is not intended for the investigation of consumers’ perceived technology acceptance (Kim and Moon, 2017). Therefore, the current study proposes to integrate the extended model of TAM and TPB to investigate individual beliefs and behaviors that are affected by eWOM on social networking sites.

With respect to Generation Y’s growth and influence over the luxury hotel market, the purpose of this study is to (1) examine how the booking intentions of Generation Y customers are affected by eWOM on social networking sites when booking a luxury hotel, (2) develop an integrated model that integrates the extended TAM and TPB to understand their luxury hotel booking intentions influenced by eWOM and (3) examine the moderating effect of TAM and TPB constructs, such as perceived usefulness, enjoyment, subjective norm, and perceived behavior control, on the relationship between eWOM and luxury hotel purchase intentions.

Literature review

eWOM on social networking sites

Social networking sites enable users to create unique and personal profiles, virtually meet, connect, communicate, and develop relationships with other users whom they may or may not know in the real world (Han et al., 2015). While people utilize social networking sites for social interaction and communication, commercial organizations and businesses exploit the mediums for marketing, recruitment, and information sharing (Eid and Al-Jabri, 2016). Consumers post and share product reviews, experience and reflections on SNSs. Fan pages on social networking sites created by many companies offer various opportunities for consumers to learn about products and services (Nusair et al., 2013).

In general, eWOM occurs on various types of online communication platforms including discussion forums, blogs, review sites, chat boards and social networking sites (Lerrthaitrakul and Panjakajornsak, 2014). However, a previous study specifies that social networking sties clearly differ from other types of online platforms in the visible presentation of (a) connections among social networking site users and (b) profiles posted by users on their individual account (Chatterjee, 2011). In that regard, eWOM on social networking sites can be initiated based on a desire to establish and maintain social relationships within the consumers’ personal connections. Especially, shared reflections, suggestions or experiences of a product or service to those social connections can be helpful when customers seek out the opinions of others. According to Hafeez et al. (2017), the recommendation of a certain product on social networking sites can positively influence prospective consumers’ purchase intentions. Since the hospitality industry offers intangible or service-related products, eWOM, including reviews, feedback, and comments provided on social networking sites by previous guests is a significant key factor for consumer purchase intentions and decision-making processes (Farzin and Fattahi, 2018). More and more consumers utilize eWOM to make purchase decisions for the products and services (Cheung et al., 2012; Ruiz-Equihua et al., 2019) and social networking sites are one of the most important mediums of eWOM diffusion (Kim and Moon, 2017).

Generation Y and luxury hotels

Brosdahl and Carpenter’s (2011) categorization of generations makes use of the following birth years: the Silent Generation (1925–1945), the Baby Boomers (1946–1960), Generation X (1961–1980), and Generation Y (1981–1998). Generation Y is also referred to as the Millennial Generation, Nexters, Echo Boomers, Generation Tech, Generation Next, Generation 2000, or Generation Dot Com (Behrens, 2009). The worldwide population of Generation Y is about 1.8 billion, and nearly 75 million members of Generation Y are in the U.S. This particular group has surpassed the Baby Boomer generation as the nation’s largest living generation (Fry, 2020). Furthermore, Generation Y has caught the attention of researchers in the field due to their spending power and growing demand (Kruger and Saayman, 2015). One defining characteristic of Generation Y is early and frequent exposure to technology (Luenendonk, 2019) Likewise,). Compared to other generations, Generation Y is more likely to find reviews or comments on social networking sites and adopt eWOM to make purchase decision (Xu and Pratt, 2018).

Nearly 68% of Generation Y travelers are either spending or have intentions to spend on luxury travel products and services (McKone et al., 2017). Generation Y tends to seek prestige moments and capture the moments to share with social network. This is related to a desire to build a personal brand within their network(s) (McKone et al., 2017). The major target market of luxury hotels has been baby boomers as they are more financially affluent and have higher social status than other generations (Kim and Lee, 2015). However, as baby boomers age, the market is expected to shrink over the next few years (Fry, 2020). Many luxury hotel operators have noted that Generation Y would become the next major target market for the luxury hotel segment (Heyes and Aluri, 2018).

In general, Generation Y consumers tend to read user-generated product reviews when shopping for luxury products and are likely to recommend luxury brand purchases through social networking sites (Xu and Pratt, 2018). Moreover, Generation Y consumers accounted for 32% of sales in the global personal luxury goods market in 2017 and this figure was expected to be increased by 45% in 2025 (O’Connell, 2020). Therefore, it is critical for the luxury hotel operators to embrace generation Y’s propensity in providing products and services and attracting this particular generation (McKone et al., 2017). Therefore, understanding Generation Y consumers’ behavioral intentions, especially their purchase intentions using eWOM on social networking sites, may be imperative for the growth of luxury hotel market.

Theoretical framework and research hypotheses

The theoretical framework and research hypotheses are based on extended models of technology acceptance model (TAM) (Davis, 1989) and theory of planned behavior (TPB) (Ajzen, 1991). TAM is widely used to measure people’s adoption and usage of a new technology and extensive empirical support is available in the field of hospitality (Kim, 2016; Kim and Moon, 2017; Morosan and Jeong, 2008). The original TAM constructs include perceived usefulness and perceived ease of use. However, Venkatesh (2000) proposed the extended version of the original theory to capture consumers’ acceptance of latest technology and introduced additional construct, such as enjoyment. On the other hand, TPB is useful to determine how individual purchase intention is formed as TAM is not intended for the investigation of consumers’ perceived technology acceptance (Kim and Moon, 2017). TPB include constructs, such as perceived behavioral control and subjective norm. The integration of two theories are expected to provide the most prominent framework to understand the technological, emotional, and behavioral influence of eWOM on Generation Y customers’ luxury hotel purchase intentions (see Figure 1).

Figure 1.

Proposed conceptual model with hypotheses.

Perceived usefulness

TAM indicates that two main beliefs, perceived usefulness and perceived ease of use, are related to attitudes and behavior intentions toward using a technology (Davis, 1989). Perceived usefulness is defined as the prospective user’s subjective evaluation that using a specific application or technology will increase an individual’s job performance (Davis et al., 1989). Previous research indicates that eWOM is significantly associated with users’ perceived usefulness (Erkan and Evans, 2016). eWOM is found to increase social networking sites’ user intentions to adopt the information (Erkan and Evans, 2016). Additionally, perceived usefulness is a major predictor of online users’ purchase intentions (Sahli and Legohérel, 2015) because consumers tend to engage in information when it is found useful (Lee and Koo, 2015). Therefore, the following hypotheses are created:

H1. eWOM on social networking sites influences perceived usefulness.

H2. Perceived usefulness influences customers purchase intentions toward booking a luxury hotel.

Enjoyment

The current study uses the extended version of original TAM by adding a construct that is related to eWOM and consumers’ behavioral intentions: enjoyment. Venkatesh (2000) stated that enjoyment could be used to measure the degree to which online users perceive a technology as pleasant. Previous studies have utilized perceived enjoyment and found its association with peoples’ behavioral intentions (i.e., Al-Maghrabi et al., 2011; Di Pietro et al., 2012; Hsu and Lin, 2008; Kim and Moon, 2017). Indeed, social networking users who perceive eWOM on social networking sites as enjoyable are more likely to have favorable feelings toward selecting a certain product or service (Di Pietro et al., 2012; Kim and Moon, 2017). Previous studies used perceived enjoyment to predict behavioral intentions and found that enjoyment was positively related to increasing customer booking intention (Sahli and Legohérel, 2015) and repurchase intentions (Kim and Moon, 2017). Thus, the following hypotheses were proposed:

H3. eWOM on social networking sites influences enjoyment.

H4. Enjoyment influences customers’ purchase intentions toward booking a luxury hotel.

Purchase intention

Behavioral intention is an expectation that an individual will do something in action (Bagozzi and Dholakia, 2002). Likewise, purchase intention is defined as the likelihood that a customer will purchase a specific product or service (Dodds et al., 1991). Previous research has shown that a consumer’ purchase intention is significantly influenced by eWOM information (See-To and Ho, 2014; Wang et al., 2012). Especially social media users’ purchase intentions are greatly influenced by eWOM as they are exposed to a vast amount of information on daily basis (Kim and Moon, 2017). The influential effect varies depending on types of eWOM (i.e., commercial or private) or the quality, but eWOM is more likely to impact the user’s attitude or purchase intentions (Erkan and Evans, 2016). Thus, the following hypothesis is posited:

H5. eWOM on social networking sites influences purchase intentions toward booking luxury hotel.

Subjective norm

Ajzen (1991) defined subjective norm as ‘the perceived social pressure to perform or not to perform the behavior’. Subjective norm is used to predict an individual’s perception based on their significant others’ opinion about the behavior (Jalilvand and Samiei, 2012). eWOM was found to have a significant impact on subject norms (Guoqing et al., 2010). On the other hand, subjective norm is a factor that is often used to determine how it influences users’ intentions to make an online purchase (Kim, 2016; Pavlou and Fygenson, 2006). Additionally, Sahli and Legohérel (2015) suggested that subjective norm was a significant determining factor of booking online on tourism websites. Based on the findings, the current study proposes the following hypotheses:

H6. eWOM on social networking sites influences subjective norms.

H7. Subjective norms influence customers’ purchase intentions toward booking a luxury hotel.

Perceived behavioral control

Perceived behavioral control refers to ‘the perceived ease or difficulty of performing the behavior’ based on past experience and anticipated behavior results (Ajzen, 1991: 188). According to Palka et al. (2009), eWOM is positively associated with perceived behavioral control. Additionally, studies have demonstrated the relationship between perceived behavioral control and intention. One study revealed that perceived behavioral control directly influenced online booking intentions (Sahli and Legohérel, 2015). Han et al. (2010) indicated that perceived behavioral control had a positive influence on potential customers’ intentions to visit a green hotel.

H8. eWOM on social networking sites influences perceived behavioral control.

H9. Perceived behavioral control influences customers’ purchase intentions toward booking a luxury hotel.

Methodology

Measurements

The measurement items were developed after reviewing the literature on consumers’ purchase intentions, the extended TAM, and the TPB. The hypothesized model involves six constructs: eWOM on social networking sites, perceived usefulness, enjoyment, subjective norm, perceived behavior control, and purchase intention. Table 1 presents all constructs, item codes, scale descriptions, and reference sources. In total, there were 26 scale items that appeared in the survey. All instruments were adapted from previous studies with validated scales and slightly modified to meet the research objectives. For example, eWOM on social networking sites was measured using a six-item scale index developed from Jalilvand et al. (2011) instruments. Generation Y’s purchase intention was assessed using a four-item scale index adopted from Yang and Zhou (2011) and Chen (2014)’s studies (See Table 1). A seven-point Likert scale (1 = strongly disagree to 7 = strongly agree) was used for the assessment of all constructs.

Table 1.

Measurement items of constructs.

Variable	Measures (Scale) Items	Reference
eWOM on SNSs	I read eWOM to know a good impression of the luxury hotel.	Jalilvand and Samiei (2012)
	I read other eWOM to make a good decision when booking a luxury hotel.	Jalilvand and Samiei (2012)
	I gathered information from eWOM before I book a luxury hotel.
	I gathered information from eWOM before I book a luxury hotel.
	I am hesitant to book a luxury hotel if I do not read eWOM.
	eWOM makes me confident in booking in the luxury hotel.
Perceived Usefulness	eWOM is a convenient way to book a luxury hotel.	Rauniar et al. (2014)
	eWOM is a useful way to book a luxury hotel.
	eWOM improves my effectiveness to book a luxury hotel.
	eWOM makes my decision easily to book a luxury hotel.
Enjoyment	I enjoy reading eWOM before I book a luxury hotel.	Childers et al. (2002); Choi et al. (2015)
	I enjoy reading eWOM before I book a luxury hotel.
	I experience pleasure while reading eWOM before I book a luxury hotel.
	Reading eWOM is enjoyable before I book a luxury hotel.
Subjective Norm	My peers confirm me to read eWOM before making a reservation.	Jalilvand and Samiei (2012); Yang and Zhou (2011)
	My peers confirm me to pass along eWOM to friends or relatives.
	My peers confirm me to prefer that I book a luxury hotel after I read eWOM.
	My peers confirm me to think it is valuable to read eWOM before I book a luxury hotel.
Perceived Behavioral Control	Feel confident that I can read eWOM before I book a luxury hotel.	Jalilvand and Samiei (2012); Yang and Zhou (2011)
	Whether or not I read eWOM is completely up to me before I book a luxury hotel.
	Reading eWOM is entirely within my control before I book a luxury hotel.
	If I wanted to, I could easily read eWOM before I book a luxury hotel.
Purchase Intention	In the future, I will read other luxury hotel guests’ reviews/comments on SNSs before booking a luxury hotel room.	Chen (2014); Yang and Zhou (2011)
	In the future, I will use other luxury hotel guests’ reviews/comments on SNSs to help me decide which hotel to book.
	In the future, I will search for other luxury hotel guests’ reviews/comments on SNSs before I book a hotel.
	In the future, I will consider reading other luxury hotel guests’ reviews/comments on SNSs before I book a hotel.

Sample and data collection

To achieve the research goal, participants must have met two criteria: (a) the individual must be a member of Generation Y, born between 1981 and 1998 (Bolton et al., 2013), and (b) the individual must have stayed in a luxury (five-star) hotel within the past 12 months. Generally, luxury hotel is classified with a five-star rating and has the highest annual average daily rate among all hotels (Israeli et al., 2011; Kim and Moon, 2017). The survey was performed toward Generation Y in the U.S. and the survey was distributed online via Qualtrics. This online survey company facilitated the access of participants from their online panels. Since the study established the criteria of participants to be of Generation Y and having booked a luxury hotel with the past 12 months, the study had two screening questions to assure that participants met the requirements. A total of 340 participants completed the survey. It was confirmed that all participants satisfied the inclusion criteria.

Data analysis

The main objectives of the study were to evaluate the proposed model and to examine the relationships among study variables regarding the Generation Y customers’ luxury hotel booking intentions. To achieve research objectives, Structural Equation Modeling (SEM) was used in the study. SEM is deemed to analyze relationships between multiple variables simultaneously (Rosseel, 2012). Several statistical analyses were conducted using R 3.5.0 and SPSS 24.0 software. SPSS 24.0 was used to produce demographic information and descriptive statistics of all study variables. Univariate and bivariate tests implemented in the psych R package were performed to check scale reliability and distributional properties (i.e., normality) of data. The lavaan R package (Rosseel, 2012), an increasingly popular tool for latent variable modeling, was utilized for SEM in order to not only examine the reliability and validity of each scale (i.e., confirmatory factor analysis, a special case of SEM) but also test the proposed research hypotheses.

Results

Demographics

Table 2 shows the demographic profile of respondents. Among the 340 participants, female amounted for 67.4 percent and male respondents accounted for 32.6 percent. Respondents’ birth years range from 1981 to 1998, the largest birth year group was 1981 to 1986 (43.5%). 37.6 percent of respondents had a college level degree or equivalent, followed by bachelor’s degree (29.7%). The majority of the sample was White (73.5%) and about half of the respondents (50.9%) reported an annual household income between $20,000 and $59,999. About the participants’ social networking sites usages and patterns, 40.9 percent visited social networking sites 10 times or more on a daily basis, followed by those who visited social networking sites 4–6 times (25.0%), 7–9 times (18.8%), and 1–3 times (15.3%). On a daily basis, Facebook (80.6%) was the most frequently used type of social networking sites by respondents, followed by Instagram (8.5%), Twitter (7.6%), Pinterest (8.0%), Foursquare (0.3%) and other (0.6%). 44.7 percent claimed they read their friends’ postings and 9.1 percent answered they read other people’s comments.

Table 2.

Demographic profile of respondents.

Characteristics	Category	Frequency	%
Gender	Male	111	32.6
	Female	229	67.4
Birth Year	1981–1986	148	43.5
	1987–1992	137	40.3
	1993–1998	55	16.2
Education	Less than high school	2	0.6
	High school or equivalent	76	22.4
	College or equivalent	128	37.6
	Bachelor’s degree	101	29.7
	Graduate degree	33	9.7
Race	White	250	73.5
	Black or African American	47	13.8
	American Indian or Alaska Native	6	1.8
	Asian	30	8.8
	Native Hawaiian or Pacific Islander	1	0.3
	Other	13	3.8
Annual Household Income	Less than $20,000	18	5.3
	$20,000–$39,999	87	25.6
	$40,000–$59,999	86	25.3
	$60,000–$79,999	70	20.6
	$80,000–$99,999	38	11.2
	$100,000 and above	41	12.1
SNSs used per day	1–3 times	52	15.3
	4–6 times	85	25.0
	7–9 times	64	18.8
	+10 times	139	40.9
	Native Hawaiian or Pacific Islander	1	0.3
Type of SNSs used per day	Facebook	274	80.6
	Twitter	26	7.6
	Instagram	29	8.5
	Pinterest	8	2.4
	Foursquare	1	0.3
	Flickr	0	0
	Other	2	0.6
	Searching for products/services	35	10.3

Reliability test

Table 3 presents the reliability of each scale developed in this study. Cronbach’s alpha was computed to analyze the internal consistency of the construct. An alpha value of .70 or higher is considered to be acceptable (Nunnally, 1978). The calculated alpha values ranged from .87 to .91, suggesting sufficient reliability of the constructs. Additionally, the composite reliability (CR) values of all constructs were above the required level (.70 or higher), ranging from .87 to .91.

Table 3.

Results of factor loadings, Average Variance Extracted (AVE), Cronbach’s Alpha (α) and Composite Reliability (CR).

Construct	Factor Loadings	α	CR	AVE
eWOM on SNSs (eWOM)		.91	.90	.59
eWOM 1	.79
eWOM 2	.78
eWOM 3	.76
eWOM 4	.75
eWOM 5	.69
eWOM 6	.82
Perceived Usefulness (PU)		.87	.86	.61
PU1	.79
PU2	.75
PU3	.76
PU4	.82
Enjoyment (ENJ)		.93	.91	.73
ENJ1	.81
ENJ2	.84
ENJ3	.87
ENJ4	.89
Subjective Norm (SN)		.88	.87	.62
SN1	.77
SN2	.69
SN3	.82
SN4	.86
Perceived Behavior Control (PBC)		.88	.88	.64
PBC1	.77
PBC2	.77
PBC3	.81
PBC4	.84
Purchase Intention (PI)		.92	.89	.67
PI1	.84
PI2	.79
PI3	.84
PI4	.80

The measurement model

A confirmatory factor analysis (CFA) was performed to examine psychometric properties of the constructs and their items. Specifically, factor loading of each item and overall model fit were estimated to check for violations of the multivariate normality assumption (Khattree and Naik, 1995). The assumption was not violated and the overall model fit indices indicated that the model had a satisfactory fit to the data, χ2 (284) = 796.227, p < .001, χ2/df = 2.80, CFI = .921, TLI = .909, RMSEA = .073 (90% CI = .067–.079), SRMR = .05. Table 3 also shows the estimates of standardized factor loadings. All standardized factor loadings were considerably high, ranging from .69 to .89. Average variance extracted (AVE) was performed to check convergent validity (Fornell and Larcker, 1981) and showed the required level (above .50). In addition, Table 4 presents the correlations among the six constructs. All correlations were significant, with a range of .51 to .94, supporting for discriminant validity (Fornell and Larcker, 1981).

Table 4.

Correlation matrix among constructs.

Constructs	eWOM	PU	ENJ	SN	PBC	PI
eWOM	1.00
PU	.92***	1.00
ENJ	.73***	.73***	1.00
SN	.75***	.74***	.70***	1.00
PBC	.54***	.65***	.51***	.53***	1.00
PI	.78***	.84***	.72***	.74***	.69***	1.00

Note. ***p < .001.

Structural equation modeling (SEM)

Structural equation modeling was used to analyze the proposed research model. The overall model fit indices indicated that the model had a satisfactory fit to the data, with χ2 (290) = 844.788, p < .001, χ2/df = 2.91, CFI = .914, TLI = .904, RMSEA = .075 (90% CI .069–.081), SRMR = .059. All the figures suggested an acceptable structural model fit. Table 5 shows the results with standardized path coefficients.

Table 5.

Results of hypothesis testing.

Hypothesized path	Standardized parameter estimates	t-value	Result
H1: eWOM → PU	0.94	5.443***	Supported
H2: PU → PI	0.47	1.897	Not Supported
H3: eWOM → ENJ	0.76	9.003***	Supported
H4: ENJ → PI	0.16	2.086*	Supported
H5: eWOM → PI	−0.07	−0.225	Not Supported
H6: eWOM → SN	0.79	8.587***	Supported
H7: SN → PI	0.19	2.109*	Supported
H8: eWOM → PBC	0.60	6.711***	Supported
H9: PBC → PI	0.27	4.013***	Supported

Note. *p < .05, **p < .01, ***p < .001.

Discussion and implications

This study attempted to provide the valuable understandings into the impact of eWOM on social networking sites on Generation Y’s purchase intentions by utilizing four factors (perceived usefulness, enjoyment, subjective norm, and perceived behavior control) from extended TAM and TPB models. Findings from this study revealed that seven out of nine hypotheses were supported, and the results are presented in Table 5.

Hypothesis 1 (β = .94, p < .001) was supported, implying that perceived usefulness is significantly influenced by eWOM on social networking sites. The result supports study findings by Erkan and Evans (2016), indicating that eWOM would increase social networking users’ willingness to adopt the information and find them useful. Related to hypothesis 2, which states that perceived usefulness is positively associated with purchase intentions, the finding was not significant (β = .47, p > .05), thus the hypothesis was not supported. This result is inconsistent with previous study finding by Morosan and Jeong (2008), which indicated that perceived usefulness would be significantly associated with online users’ purchase intentions. Generation Y customers may find eWOM regarding luxury hotel products and services useful on social networking site, but it does not necessarily result in increased purchase intentions toward booking. One explanation could be that these customers are exposed to a vast amount of eWOM information on daily basis as the study indicates that about 84.7 percent Generation Y customers use social networking sites more than 3 times a day. This provides important insights into luxury hotel operators that perceived usefulness is not a determinant of purchase intention for Generation Y customers. The finding for hypotheses 3 indicated that hypotheses 3 (β = .76, p < .001) was supported, implying that enjoyment is significantly influenced by eWOM on social networking sites. Additionally, hypothesis 4, which states that enjoyment is positively associated with Generation Y customers’ purchase intentions when booking a luxury hotel, was supported (β = .16, p < .05). These findings are consistent with the earlier study findings (i.e., Al-maghrabi et al., 2011; Di Pietro et al., 2012; Hsu and Lin, 2008; Kim and Moon, 2017), stating that users that perceive eWOM on social networking sites as enjoyable are more likely to have favorable feelings toward certain products or services. The study confirms that perceived enjoyment is a significant predictor of purchase intention and is positively related to customers’ repeated purchase intentions (Al-maghrabi et al., 2011; Sahli and Legohérel, 2015). It can be concluded that Generation Y customers who find eWOM regarding luxury hotels enjoyable are more likely to have the increased booking intention. On the other hand, the proposed association between eWOM on social networking sites and purchase intentions was not significant (β = −.07, p > .05), thus hypothesis 5 was not supported. The result of the study is inconsistent with previous study findings (Erkan and Evans, 2016; See-To and Ho, 2014; Wang et al., 2012; Yang, 2012), stating that a consumers’ purchase intention is significantly influenced by eWOM information. The inconsistent finding could be because this study was performed only toward Generation Y customers. eWOM on social networking sites by Generation Y is often initiated based on a desire to establish and maintain social relationships within their personal connections. Therefore, eWOM on social networking sites does not affect Generation Y users’ purchase intentions directly, but rather positively affect other social, emotional and behavioral factors that could result in increased purchase intentions. Furthermore, hypothesis 6 (β = .79, p < .001) was supported, stating that subjective norms are significantly influenced by eWOM on social networking sites. Regarding hypothesis 7, the results indicated that subjective norms have significant positive impact on purchase intentions (β = .19, p < .05). The result is consistent with the findings by Guoqing et al. (2010), which stated that eWOM positively affect subject norms. Furthermore, the results are in the same vein with the findings by Pavlou and Fygenson (2006) and Kim (2016) that found subjective norms positively influence online purchase intentions. One explanation for the results lie on the nature of social networking sites, which provide platforms to communicate and build relationships with personal social connections (Han et al., 2015). Especially, eWOM on social networking sites can be initiated based on a desire to maintain social relationships and build a personal brand within given networks. Therefore, shared reflections, suggestions or experiences of a product or service on social networking sites would have great impact on creating positive perceptions to other users in the network. Additionally, the perceived behavior control was found to be influenced by eWOM on social networking sites (β = .60, p < .001) and had a significant positive impact (β = .27, p < .001) on Generation Y’s luxury hotel booking intentions. Therefore, hypotheses 8 and 9 were supported. The findings are consistent with the study by Palka et al. (2009), which found that eWOM is positively associated with perceived behavioral control and the studies by Jalilvand and Samiei (2012) and Sahli and Legohérel (2015), indicating that perceived behavioral control positively affects customers intentions to purchase a product or to visit a green hotel. The results indicated that Generation Y customers are affected by perceived behavioral control the most in terms of luxury hotel booking intentions. One reason for the findings lie on a characteristic of hospitality products. Since the hospitality industry offers intangible or service-related products, eWOM may serve as a significant role for users gain indirect experience form shared comments and reviews and increased perceived ease of purchasing hospitality products. eWOM is helpful for users who have not experienced a particular hospitality product or service to anticipate results and create a product image. Overall, enjoyment, subjective norm, and perceived behavioral control were found to be substantial determinants of the Generation Y’s booking intention toward luxury hotels as a result of eWOM. Perceived behavior control, in particular, showed the strongest effect among all variables tested in the model.

Theoretical and practical implications

The results of this study provide the theoretical contribution for academia in the hospitality sector. This study is among the first attempts to utilize an integrated framework of the extended TAM and TPB to measure Generation Y’s purchase intentions toward booking a luxury hotel through the impact of eWOM on social networking sites. The study validates the two theories by examining the important demographic, psychographic and behavioral characteristics that influence Generation Y customers’ purchase intentions through four mediating constructs. According to the findings achieved by this study, the extended TAM and TPB could be integrated to predict Generation Y customers’ purchase intentions toward booking a luxury hotel. There have been studies that investigate the impact of eWOM on consumer purchase intentions (i.e., Erkan and Evans, 2016; See-To and Ho, 2014; Wang et al., 2012; Yang, 2012). However, relatively few studies have analyzed Generation Y’s purchase intentions, especially using consumer-generated reviews on social networking sites in the luxury market segment. This study explores emerging trends of Generation Y’s eWOM acceptance on social networking sites regarding luxury hotel products and its influence on their booking intentions. The study has revealed important insights about the impact of eWOM on social networking sites on Generation Y customers’ booking intention toward luxury hotels, which is of benefit to this hotel sector that can utilize eWOM on social networking sites as a marketing tool. The study suggests that eWOM on social networking sites can help luxury hotel operators to improve Generation Y’s purchase intention by enhancing enjoyment, subjective norm and perceived behavioral control. One way the industry practitioners can help enhance the constructs is maintaining their signature social networking webpage and providing fun and sharable contents. The findings support to current hospitality marketers that have the signature webpage and manage reviews on social networking sites. With respect to Generation Y’s heavy involvement with social networking sites and intention to purchase premium goods, this can ensure Generation Y customers’ needs of seeking information, identifying products, involving in discussions and reviews as well as entertaining (Krbova, 2016) Setting up social networking sites and having appealing contents could provide opportunities for their guests share experiences on social networking sites and interact with their social connections, creating eWOM platform for new and existing customers. For example, 3D virtual tours, polls, pictures or videos of hotels and services on social networking sites can provide users to indirectly experience the property or recall memories, which can also be shared to their social network. This will also increase the exposure of the brand on social networking sites and help to capture new and existing customers engage in shared contents. Operators also can encourage customers to participate in discussion on social networking sites by sending post-stay emails with direct links or responding to social networking sites’ reviews and comments. With this, luxury hotel operators could maintain continuous relationships with Generation Y customers and help them build emotional bonding with the brands.

Luxury products may be more appealing to Generation Y customers with respect to their known characteristics of seeking premium products and valuing prestige moments (Nusair et al., 2013). These experiences are likely to be shared in forms of images, videos, comments, opinions, reviews, recommendations, and reflections on multiple social networking sites such as Facebook, Twitter, Instagram, etc. These eWOM can also be spread across countries and influence numerous consumers to book luxury hotels. As noted earlier, one reason for the popularity of social networking sites among Generation Y users lies on a desire to establish and maintain social relationships within the consumers’ personal connections (McKone et al., 2017). In that regard, operators should understand that eWOM is one of the most effective ways to create sharing culture among their social connections. In the same vein with the study finding, the sharing culture or subjective norm will positively affect their purchase intentions. Generation Y customers tend to rely on previous hotel guests’ reviews or comments before making purchase decisions (Lee, 2013). Due to the intangibility of hospitality products and services, the level of service or experience cannot be predicted until they are consumed. Therefore, eWOM has become a very powerful source of getting information from others’ experiences, selecting a property, and making booking decisions (Litvin et al., 2008). social networking sites have become a popular virtual space for interactions and information exchange among Generation Y customers, eWOM on social networking sites should serve as an important marketing and promotional tool in the luxury hotel segment, particularly to target Generation Y customers.

Generation Y will be the major customer base for the luxury hotel segment as the industry has noticed their growing purchasing power in this segment (Schroeder, 2017). Based on study findings, the importance of eWOM on social networking sites presents substantial opportunities to attract and cultivate relationships with Generation Y customers for luxury hotel operators. While hoteliers reach for a competitive advantage, an emphasis on eWOM marketing can uncover insights that illustrate trends, norms and needs around brands (Netbase, 2018). eWOM marketing may not only play a critical role in increasing purchasing intention for Generation Y customers, but also provide better opportunity to attract other consumers that are exposed to eWOM. For this reason, eWOM must become an essential component of the luxury hotel industry’s marketing strategy.

With the importance of eWOM on social networking sites, the study discusses the following practical implications. First, eWOM on social networking sites can create direct connections between luxury hotels and their Generation Y customers. Due to the significance of direct connections, the luxury hoteliers should listen to Generation Y guest’s voices on social networking sites and identify the initial stage of their booking intention at luxury hotels. Second, the importance of eWOM on social networking sites presents substantial opportunities to cultivate Generation Y as potential customers for luxury hotels because of this generation’s strong engagement with virtual communications. Thus, the engagement of eWOM on social networking sites may translate to potential hotel revenues and become a very important, credible, and influential marketing agent for the luxury hotel segment. Third, industry practitioners in the luxury hotel segment can encourage Generation Y members to participate in discussions on social networking sites. When the volume of Generation Y’s reviews or comments on social networking sites is high, more information about a certain luxury hotel will disseminate among potential Generation Y customers, and luxury hoteliers may have better opportunities to capture more potential Generation Y customers. Lastly, luxury hotel practitioners should understand that Generation Y members are technologically savvy and tend to adopt and use eWOM on social networking sites substantially (Luenendonk, 2019). eWOM on social networking sites is shaping the purchasing behaviors of Generation Y members as they give and take positive and negative eWOM from millions of people in terms of luxury hotels they visit, how the ambiance was, how they were treated, how the hotel rooms or facilities were, and whether they would return.

Limitations, and future research

This research contains several limitations, indicating the possibility for future research. The first limitation is that the type of eWOM is not specified in the study. While eWOM can be generally expressed as either positive or negative (Doh and Hwang, 2009), this research did not separately investigate the impacts of positive and negative eWOM on Generation Y’s purchase intentions. Depending on the Generation Y’s exposure to the type of eWOM, they may have shown different purchase behaviors when booking luxury hotels. Particularly,, future research is suggested to address how Generation Y customers are influenced by negative eWOM. In addition, the type of socila networking sites used by Generation Y customers when booking luxury hotels is not identified. Generation Y customers’ booking intentions may vary significantly depending on the type of social networking sites they utilize. Future studies may investigate the different impacts of Facebook, Twitter, and Instagram on Generation Y’s purchase intentions. The final limitation is that this study does not consider the effects of the eWOM credibility, quality and quantity on Generation Y’s luxury hotel purchase intentions. These three dimensions may have influence on Generation Y’s purchase intentions; therefore, future studies can address these dimensions to test the eWOM impacts on their intentions.

Footnotes

Declaration of conflicting interests

The author(s) declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.

Funding

The author(s) received no financial support for the research, authorship, and/or publication of this article.

ORCID iD

Jihye Min

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