Understanding how user-generated content empowers the online consumer in the travel industry

User-generated content (UGC) is having a significant impact on the travel industry whereby travelers have direct access to the information they need to make their travel decisions and by doing so are empowered to create and distribute their own content. However, little is known about the role that UGC plays in the users’ travel behavior and decision-making processes, and there is limited insight into how UGC empowers travelers to make their own decisions. This study aims to provide a mechanism for understanding how UGC empowers online consumers when making their travel plans. A research model is developed to identify and evaluate the factors that empower travelers when making their travel decisions. This study investigates, in the context of travelers’ use of UGC, (1) the role of informational social influence and normative social influence and their impact on perceived empowerment when using UGC to help make their travel plan decisions; (2) the extent to which perceived empowerment impacts attitude towards using UGC when making travel plans; and (3) the impact of attitude, subjective norms, and perceived behavioral control on intention to use UGC when making travel plans. Dual-process-theory (DPT), psychological empowerment (PE), and the theory of planned behavior (TPB) are the theories used to develop the theoretical foundations underlying the research model. The research model is tested using partial least squares (PLS). Specifically, PLS-Graph Version 3.0 Build 1130 is employed to examine the proposed hypotheses. An extensive survey is adopted to gather field information from international backpackers staying at hostels in Auckland, New Zealand. The survey asks backpackers about their views on UGC (specifically online travel review) they had read from websites (e.g., HostelWorld.com, HostelBookers.com, TripAdvisor.com, Booking.com, etc) when making their travel plans. Altogether 268 usable responses were received. This study confirms that travelers feel empowered by using UGC when making their travel plans, and the empirical results of the survey lead to several significant findings. The findings show that attitude towards using UGC and subjective norm explain a significant amount of variance in the dependent variable, that is, intention to use UGC when making travel plans. In addition, travelers’ perception of psychological empowerment significantly influences their attitude toward using UGC when making travel plans. The results also show that psychological empowerment is impacted by informational social influence and normative social influence. Given the fairly high explanatory power of the model findings, this thesis has significant theoretical and practical implications. From a theoretical viewpoint, this study provides a framework that explains how UGC empowers online consumers when making travel plans. The theoretical contribution is grounded in the use of three theories (i.e., DPT, PE and TPB) to model and reason about the impact of online travel reviews on consumer behavior. In addition to the contributions to academic research, this study has provided a more in-depth understanding of how UGC empowers online consumers, and makes suggestions on how travel service providers can respond to these trends and utilize UGC to their benefit. From a practical viewpoint, these findings can also help enhance the competitiveness of the accommodation sector, which is a cornerstone of broader tourism development