An analysis of the temporal nature of vacation decision-making using Prospect Theory

Submission note: A thesis submitted in total fulfilment of the requirements for the degree of Doctor of Philosophy to the La Trobe Business School, College of Arts, Social Sciences and Commerce, La Trobe University, Bundoora.It is in the interest of tourism providers to encourage travellers to book their holidays, flights, accommodation and so on as early as possible. Research strongly suggests that tourism consumers' decision-making and booking behaviour often involves potential and actual losses and gains. This thesis therefore examines how potential tourists make decisions about when to book, based on the marketing information they are given, while taking into consideration the risks, losses and gains involved in booking in advance or waiting until the last minute. The conceptual basis of the thesis is Prospect Theory, especially its construct framing. Framing in this context refers to the way a message is worded; a single message may be presented in different ways, and produce different responses according to its frame. Following Prospect Theory, four typical framing types have been identified. These have informed the experiments in this thesis, in particular the loss (negative) and gain (positive) aspects of the framing. Five experimental studies were undertaken, using the four frames (two studies use the same frame, but with different messages) to present tourism vignettes requiring participants to choose the loss or gain frame in each case. In all studies the frame was significant in deciding the choices. In some frames, the negative statement (e.g. If you do not book early, you will lose out) and in others, the positive statement (e.g. Book early and win) dominated the results. The findings of these studies demonstrate that the majority of tourism consumers generally have strong preferences according to how the booking information is framed, and therefore, time their travel decisions accordingly. This new research into the timing and presentation of travel booking information could form a useful basis for developing marketing communication strategies to the advantage of the tourism industry as well as to consumers. The studies in this thesis suggest ways that promotional programs can be developed so as to widen the range of possibilities for tourism marketers