Determinants of Mobile Tourism: An Emerging Market Perspective

CHAPTER 1: INTRODUCTION

1.0 Introduction

Chapter one provides the overview of the research. This chapter covers research background, problem statement, research objectives, hypotheses of study and significance of study.

1.1 Research Background

According to United Nation World Tourism Organization, Malaysia was nominated as one of the top 10 most-visited countries in the world with the record of 25 millions of visitors in year 2012 and earned about 20.25 billion USD (RM65.44 billion) (The Star Online, 2013). The total visitors to Malaysia show an increase of 3.3 percent from January to September in both year 2012 and 2013 with 18,153,643 and 18,756,476 respectively. Even though the result does not show the statistic during the peak period (October to December) yet the visitors that visited Malaysia has increased in year 2013 compared to year 2012 (Tourism Malaysia, 2013) According to our Prime Minister Datuk Seri Najib Tun Razak, 26.8 million tourists will be attracted to Malaysia in 2013/2014 as the Visit Malaysia Year (New Straits Times, 2012).

With the emergence of mobile and wireless networks, it has created a new platform for business to exchange product and service known as mobile commerce (m-commerce). Unlike e-commerce, m-commerce connects wirelessly in a mobile environment using handheld mobile devices. M-commerce was viewed as the use of wireless technology, usually mobile Internet and handheld mobile devices, for transaction processing, information retrieval and user task performance in consumer, business-to-business (B2B) and intra-enterprise communication (Chan & Fang, 2001; Kannan, Chang, & Whinston, 2001; Varshney & Vetter, 2001).

In recent years, statistics from Malaysian Communications and Multimedia Commission (MCMC) (2010) showed that there are more than 33,106,000 mobile phones subscribers in Malaysia with penetration rate of 116.6%. However, the hand phone users survey (2010) conducted by the MCMC revealed that only 39.9% of mobile phone users are aware of m-commerce and only 17.9% of these users purchased products and services via mobile phones. Furthermore, MCMC hand phone users survey report (2012) revealed that there are as much as 68.8% of smartphones users accessed the Internet via their devices, indicating Malaysian are gradually moving towards mobile platform.

It is also undeniable that mobile applications have brought smartphone, tablet and other portable devices to a whole new level in term of functionality. According to Wang, Liao and Yang (2013), mobile application is an software application designed to run on mobile devices. This mobile technology opens up a new opportunity to mobile market in replacing the traditional business model in the tourism industry because mobile apps help to connect users to Internet services via their portable devices more conveniently than ever before.

M-commerce in Malaysia is still at infancy stage as compared to other developed countries such as South Korea and Japan (Wong & Hiew, 2005) and limited research exists on consumers’ behavioral intention to adopt mobile tourism in Malaysia. However, great potential exists in mobile tourism due to the statistics reported by Nielsen Digital Consumer Study 2011. The report revealed that there is an increase mobile shopping spending from RM 101 million in 2010 to RM 467 million in 2011, and predicted that mobile commerce will be valued at RM 3.43 billion by the year 2015 (Mobile88.com, 2012).

1.2 Problem Statement

Although the emerging of technology helps to boost tourists’ experience during their vacation by using mobile service, yet we found that Generation Y (Gen Y) in Malaysia are still not familiarized with the adoption of mobile tourism in Malaysia based on the MCMC report 2010.

Study showed that there has been a considerable growth in the adoption of mobile devices in m-commerce and mobile tourism. M-commerce tends to provide great flexibility in tourism industry for both travelers as well as suppliers. For travelers, they can access the web, news updates and conduct transactions using their mobile devices. From supplier’s point of view, promotional messages can be amended easier and faster as compared to the use of traditional media (Lee & Mills, 2010). Unlike other industries which regard m-commerce as an added convenience to customers, tourism industry regard m-commerce as an essential part of their customers’ travel experiences (Eriksson, 2002). The emergence of innovative mobile devices such as smartphones and Tablet PCs has opened up new ways of communication and non-location based access to information (Lee & Mills, 2010).

Recent studies also revealed that mobile phones influenced every stage in travelers’ behavior, from searching information (Rasinger et al., 2007) to purchasing (Riebeck et al., 2008) and post purchase evaluation (Wang et al., 2011) as well as travel aspects such as providing directions, public transportation navigation and air travel (Hopken et al., 2010). Additionally, mobile tourist application such as AirAsia, MHmobile, Agoda, and Expedia was developed to assist tourist by providing them with information and services given his goal at that moment. Such findings imply that travelers are always looking for interesting, new alternatives to carry out their travel plans.

The rise of mobile subscribers, internet usage and people’s zeal on tourism industry can benefit the mobile tourism in Malaysia. However, the insecurities of users and risk correlating during the process of mobile financial transactions such as software failure, and input mistakes, that caused them to barely trust and confidence on purchasing via new technology because of the fear of outflow on their personal privacy information and were de-motivated (Tai, 2013). The advancement of mobile and other portable devices is clearly becoming more and more advanced.

However, commercial technologies in this respective area have gained only a limited success. The network connectivity influences the adoption of mobile tourism because mobile shopping requires high 3G connection that enables shoppers to purchase tourism products online (Fort, 2013). Shoppers are unable to adopt mobile tourism without a proper network connectivity infrastructure. Therefore, mobile service providers have to look for ways to upgrade the infrastructures and provide wider coverage (Haque, 2004).

The lack of adoption towards mobile tourism in Malaysia may trigger the country’s economy in future. As tourism industry is the third contributor after manufacturing