Chapter 1

THE PROBLEM AND ITS BACKGROUND

Introduction

Tourism is one of the fastest-growing industries in the world,with

continued growth over decades and export volumes surpassing those of food products
and automobiles (UNWTO.org, 2016). It is a service intensive, experience-
centric sector where customer satisfaction, service design, and innovation are
of central focus (Oh et al., 2007; Otto and Ritchie, 1996Stamboulis and
Skayannis, 2003). A multitude of different businesses from a variety of industries,
usually referred to as service providers, constitute the supply side of tourism. These
actors (airlines, hotels, restaurants, museums, etc.) collectively contribute to and
influence the experience of the individual tourist.

The demand side of tourism is comprised of any individual who is capable of

traveling, and is quite heterogeneous. Between supply and demand are the
intermediaries, such as the two companies investigated in this study, who bundle
resources provided by various suppliers at host destinations and offer packages to end
customers. These intermediaries act as gatekeepers, determining which elements of a
destination are offered to any given client and how those elements are presented. In the
recent years, package tours have become less fashionable. The disadvantages of
package tours are becoming more and more obvious as the society is developing.
Frankly, more travel alternatives such as road trips and online travel clubs are
emerging, which lessen the tourists to book package tours through the travel agency.
Because travel agents or the tour operators need to earn margin, there must be a cut
from the money they paid, which is considered to be their profit when tourists book
their package tours through the travel agency. In other words, tourists pay more than
real need when booking a package tour. Hence, if tour operators would like to enhance
the competitiveness of their package tours, they need to increase the novelty and
synergy of their package tours, but not only rely on low-cost advantage. In addition,
package tours tend to be quite structured, so are not suitable if tourists want lots of

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flexibility and freedom on holiday (Quiroga 1990). Tourists would like to control their
own holidays. For example, they want to plan their own schedules as package tours
cannot be that flexible; they want to experience the real traditional culture as in package
tours, but not only walk around in a hurry having a rough idea of the city; and they want
to make friends with the local people, but not to listen to the guide shouting about when
and where to gather. Standardized and rigid package tours give everyone the
possibility to goon vacation for a small amount of money which inevitably led to the
phenomena of mass tourism (Thomson and Pearce 1980).If package tours
are less flexible and customized, they are not able to maintain their popularity in the
future (Evans and Stabler 1995).The motivations that lead tourists to choose a certain
destination have been extensively studied which is reflected in the number of
contributions to the literature in the field. However, the specific motivations that
influence tourists in their choice of a certain type of tour mode have not received the
same amoun tof attention. Choice of tour mode can be considered one decision nested
in travel style choice that tourists prefer for each holiday experience. In this sense, [45]
Woodside and Dubelaar (2002) contend that similar behavior patterns can be found
among visitors to a destination who have chosen the same type of travel style and
made a series of similar decisions as a result. Tourists' motivations play a fundamental
role in the choice of travel style and, therefore, tour mode. Nowadays, in the fiercely
competitive marketplace, companies that constantly offer great values to
consumers have strategic competitive advantages over their counterparts. Woodruff
(1997) claimed that customer value would be the next source for competitive advantage
in the 21st century. But what is value and what constitute value? Different
consumers may have different judgments on a same offer due to various factors,
such as their personality or income level. It is critical to marketers to understand
consumers’ perception of value of a marketing offer. Actually, Gallarza and
Saura (2006) state that “consumer behavior is better understood when
analyzed through perceived value” (p. 437). 8 There is a diversity of ways to define
the concept of value. The early conceptual proposal made by Zeithaml (1988) –“the
overall assessment of the utility of a product based on the perceptions of what is
received and what is given”-is the “most universally accepted definition of perceived

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value, inside and outside the tourism literature”” (Gallarza & Saura, 2006, p. 439).
Understanding what influences travelers’ preference for packages will bring various
benefits to service providers including increased sales, lowed transaction costs, and
better target marketing, etc.(Xu 2009)

There’s a tendency for independent travelers to think tours are only for the
wealthy or the “vacationers”. Some think that those, who book tours are unimaginative
or don’t value an authentic experience. This is simply not the case. Taking tours has
advantages and prices can range from expensive to free. In some cases, it’s cheaper to
take a tour vs planning it on your own. Tours are especially helpful for solo travelers,
who want to alleviate some of the weight of trip planning and minimize their getting lost
time. A do-it-yourself trip doesn’t always mean cheaper expenses or
experiencing more authenticity. Full package tours are all-inclusive from hotels,
transportation, food and activities. They cover a large sample platter of the country in a
compact schedule. Best of all, you get a tour and local guide, who assist with any travel
upsets from lost baggage to getting sick to interpreting the culture.
https://grrrltraveler.com/reasons-to-book-a-tourThe study will provide extensive data
which proves the comparison of DIY(Do-it -Yourself ) travel and guided tour
package services in terms of customers’ needs and wants. Studying the
specific motivations behind choosing package tours is indispensable for many
mass tourism destinations, whose offer is essentially based on the type of product.

The aim of this study is to investigate the factors influencing the customers’
preference in choosing DIY packages and guided tour packages from the
perspective of customers who experienced/purchased these products. A
collection of information using an unstructured interview with 50 customers who
experienced tour packages and DIY packages will be conducted. The study
determines the issues affecting customers’ decision making, the tour experiences
and identify the factors that contribute to the preferences of tourists.

This paper is structured around three elements. First is the identification of customers’
profile and characteristics as factors in choosing package tour tervices. Second, is the
identification of customer’s preference between Guided Tour Packages and DIY

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Packages base on the factors such as flexibility, affordability and need. Third,
identification of the challenges and issues that serves as barriers in
customers’ decision to avail any services.

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