From hype to value. Virtual Reality Tools in the Tourism Industry and their Influence on Booking Behaviour

Table of contents

Zusammenfassung

Abstract

List of figures

List of tables

Acknowledgements

Dedication

1. Introduction
1.1. VR as a trend in travel marketing
1.2. Objective and approach of this study

2. Theoretical background and current state of VR in travel marketing practice
2.1. Booking behaviour in tourism: research overview and benefits of VR
2.2. VR influencing travellers’ purchasing behaviour: Relevant theories, models and research
2.2.1. An extended S-O-R model as a basic framework
2.2.2. The concept of presence in the research of virtual experiences
2.2.3. Research overview: How does Virtual Reality influence buying decision processes of travellers?
2.2.4. The role of technology acceptance in VR-related consumer behaviour
2.3. Practical use of Virtual Reality in tourism
2.4. Conclusion for the study and research model development

3. Research method

4. Data analysis and results

5. Summary and discussion
5.1. Hypothesis review
5.2. Theoretical contribution
5.3. Managerial implications
5.4. Limitations and further research

6. Conclusion and Outlook

7. References

8. Appendix

Zusammenfassung

Angesichts starken Wettbewerbs und sich schnell wandelnder Märkte müssen Reiseunternehmen neue Technologien sinnvoll nutzen, um erfolgreich zu sein. Virtual Reality (VR) ermöglicht es Reisenden, eine Destination schon vorab zu erleben. Das scheint sich positiv auf das Buchungsverhalten auszuwirken. Die Studie untersucht, wie VR-Nutzung den Reisebuchungsprozess beeinflusst, genauer den Einfluss auf Buchungswahrscheinlichkeit, Entscheidungsgeschwindigkeit und Umsatz.

Das vorgeschlagene Strukturmodell integriert die Konzepte presence und technology acceptance in das neobehavioristische stimulus-organism-response Modell und wendet es auf touristische Buchungsentscheidungen an. Getestet wurde das Forschungsmodell auf Basis empirischer Daten einer Befragung von 91 Reisebüroverkäufern, die in ihrem Arbeitsalltag ein VR-Tool einsetzen. Im Unterschied zu bisheriger Forschung untersucht die Studie damit tatsächliche Kaufentscheidungen aus der Perspektive von Verkäufern anstatt geäußerter Kaufabsichten von Konsumenten.

Die Ergebnisse deuten darauf hin, dass virtuelle Erfahrungen einen positiven Einfluss auf die Buchungswahrscheinlichkeit, die Entscheidungsgeschwindigkeit und den Umsatz von Reisebürokunden ausüben. Dabei scheinen hauptsächlich aktivierende Prozesse, vor allen Begeisterung und Interesse, die analysierten Aspekte des Buchungsverhaltens direkt positiv zu beeinflussen. Presence und technology acceptance wirken sich den Daten zufolge wiederum günstig auf die Aktivierung aus. Die Ergebnisse zeigen außerdem einen direkten positiven Einfluss von presence auf Buchungswahrscheinlichkeit und Entscheidungsgeschwindigkeit sowie eine direkte positive Beziehung zwischen technology acceptance auf Buchungswahrscheinlichkeit und Umsatz. Dagegen fand die Studie keinen Einfluss von kognitiven Prozessen und durch VR verbesserter Vorstellungskraft auf die untersuchten Aspekte des Buchungsverhaltens. Die kognitive Vorstellungskraft wird den Daten zufolge auch nicht durch das Gefühl von presence beeinflusst.

Zusätzlich liefert die Studie Ansätze dafür, wie die Ergebnisse in der Praxis umgesetzt werden können, indem der genutzte VR-Content so konzipiert wird, dass die relevanten Konstrukte und damit das Buchungsverhalten positiv werden.

Stichworte: Virtual Reality, Buchungsverhalten, aktivierende Prozesse, kognitive Prozesse, technology acceptance, presence, stimulus-organism-response Modell, Tourismus, Marketing

Abstract

In light of fierce competition and fast changing markets, travel firms have to make reasonable use of new technologies in order to succeed. Virtual Reality (VR) enables travelers to experience a destination in advance and entertains hopes to positively influence the booking behavior of travelers. This research examines the effect of VR exposure on the booking decision process, specifically on the purchasing probability, the speed of decision-making and turnover.

The suggested structural model integrates the concepts of presence and technology acceptance into the neobehavioristic stimulus-organism-response model and applies it to the context of touristic booking decisions. It was tested with empirical data of interviewing 91 travel sales agents experienced with VR-supported selling. Different to other research, the study at hand analyses actual purchasing decisions from the perspective of travel sales agents instead of consumers expressing purchasing intentions.

The results indicate that virtual experiences increase the purchasing probability, speed up the decision-making and increase turnover of travel bureau customers. There is evidence that mainly activating processes, especially enthusiasm and interest, directly influence the analyzed aspects of booking behavior. The feeling of presence and technology acceptance were found to be predictors of activation. Presence was also found to directly influence the purchasing probability and the speed of decision-making. Technology acceptance is suggested to exert direct influence on the purchasing probability and the effect on turnover. The research did not find an effect of cognitive imagination on the analyzed outcomes of the booking process nor presence influencing cognitive imagination.

Additionally, the study supports managerial practice: it indicates how to stimulate the relevant constructs and describes which requirements the used VR content should meet to enhance the analyzed aspects of the booking decision.

Key words: Virtual Reality, Booking Behaviour, Activation, Cognitive Imagination, Technology Acceptance, Presence, stimulus-organism-response model, Tourism, Marketing

List of figures

figure 1: neobehavioristic S-O-R model adapted to VR exposure in the context of travel booking decisions

figure 2: research model and hypotheses traveller purchasing process in a VR context

figure 3: survey question 1 “How long do you already use the VR tool?”

figure 4: survey question 4 “How would you describe your customers’ reactions when you are using the tool?”

figure 5: survey question 6 “From your experience: Which effect does the VR tool have in comparison to selling without the tool?”

figure 6: survey question 8 “If we use the VR tool …”

figure 7: survey question 9 “The VR tool is helpful because…”

figure 8: survey question 10 “From your personal experience: in what respect does the VR tool influence sales talks?”

figure 9: survey question 11 “From your personal experience: how crucial is the influence of the VR tool your customers’ booking decision?”

figure 10: structural model 1: purchasing probability

figure 11: structural model 2: speed of decision-making

figure 12: structural model 3: effect on turnover

figure 13: structural model 1 including path coefficients and coefficient of determination R²

figure 14: structural model 2 including path coefficients and coefficient of determination R²

figure 15: structural model 3 including path coefficients and coefficient of determination R²

List of tables

table 1: results Shapiro Wilk test

table 2: t-test paired samples statistics

table 3: constructs and measurement items

table 4: hypothesis testing

table 5: guidelines for choosing the measurement model mode

table 6: collinearity assessment measurement model

table 7: indicators significance testing results

table 8: collinearity assessment structural model

table 9: significance and relevance of path coefficients

table 10: significance testing results of the total effects

table 11: coefficients of determination

table 12: f² effect size (with exogenous constructs in rows, endogenous constructs in columns)

table 13: predictive relevance Q²

Acknowledgements

The research process for this study has been demanding and challenging, yet also exciting and rewarding.

I would like to thank Professor Jörg Königstorfer for supervising this thesis, especially for his instant responses to my questions and the always helpful feedback.

Further, I would also like to thank Ömer Karaca and Kevin Froese at Schmetterling International for their trust and support of the empirical part of this research. Without their commitment, this study would not have been possible.

Esslingen, April 2018 Carola Epple

Dedication

To Frank. For your endless support and involvement, for sacrificing sleep and your vacations.

And to you, Diana and Valerie. For being there and being as you are.

1. Introduction

In the recent years, accelerating technological innovations and digitalization are affecting the tourism industry more than ever before (Hassan & Rahimi, 2016). The current development considerably affects the way how tourism destinations and touristic products are perceived and how booking decisions take place (Huang, Backman, Backman, & Chang, 2016). With the increasing differentiation of communication technologies and marketing channels, it becomes more and more important how travel companies, as firms in other industries, can optimally allocate their marketing budgets (Pellikan, 2016; Tussyadiah, Wang, Jung, & tom Dieck, 2018). In that context, it is crucial to understand consumer decision processes, especially in the travel and hospitality sector which is of vital importance for the global economy and continues to grow (Crouch & Louviere, 2001).

Moreover, competition increases as tourism has been expanding temporally and spatially (Nejati & Mohamed, 2014). Like many industries, the travel sector faces unstable and fast changing market developments. This includes more international markets due to integrated economic areas, combined with a growing number of market players as well as a changing consumer behavior and new technologies (Foscht & Swoboda, 2011). Thus, travel firms have to make reasonable use of new technologies in order to increase their chances to succeed or to simply survive in the market (Cuomo, Metallo, Scannapieco, & Tortora, 2015).

Virtual Reality (VR) is one of those new media technologies that are expected to have great impact on the tourism industry, providing chances as well as challenges. As new VR devices, tools and applications emerge, the potential uses for VR within the tourism sector will continue to increase in both number and importance (Guttentag, 2010; Tussyadiah et al., 2018).

The first section of this study will provide an overview on the research topic and the specific questions this thesis is going to deal with. The second chapter is dedicated to the scientific background on travel purchasing decisions as well as research on virtual experiences affecting the booking process. It will cover relevant concepts and frameworks in this context while developing hypothesis to be tested. Additionally, it provides an overview on how VR tools are currently used in tourism practice. As a conclusion, a research model will be presented integrating the hypothesis. In the following, the research method, data analysis and results will be presented, followed by a discussion and theoretical as well as managerial implications of the gathered insights.

1.1. VR as a trend in travel marketing

Relevance and potential benefits of VR for tourism marketing

Besides the gaming industry, tourism is considered as one of the most important areas of use of VR, together with education and medicine (Leibfried, 2016; Rosiński, 2015). Virtual experiences have started to play a significant role in marketing and promotion of the tourism industry and are expected to become more popular in the upcoming decades (Wan, Tsaur, Chiu, & Chiou, 2007; Guttentag, 2010; Huang et al., 2016; Tussyadiah et al., 2016).

VR is often seen to not only provide benefits for marketing purposes in travel, but also for travel entertainment, tourism-related training and education as well as cultural preservation.

In terms of how to make touristic marketing campaigns more effective by offering virtual experiences, researchers as well as practitioners consider the technology as promising to improve cognitive imagination of a destination and to generate emotional arousal and rising engagement of potential visitors towards a destination or travel product (Huang et al., 2013; Biesiada, 2017). By providing interactive elements and rich media features often addressing several human senses, immersive virtual experiences are seen superior to brochures or other “traditional” types of media used for travel marketing. By integrating sensory experience into their communication strategies, tourism marketers could more effectively support the tourist’s information search and decision-making process (Wan et al., 2007; Huang et al., 2016). “It's an evolution of marketing platforms,” puts it Tony Corneto, user experience director of the travel agency network Virtuoso. “You started with books, and then you moved to photographs, and then you moved to video, and then you're now moving to VR” (Biesiada, 2017). Virtual tours also offer “action-supportive information “on what users can do with the environment which is considered as a favourable precondition to provide inspiration and support for travel planning (Tussyadiah et al., 2018).

What is meant by “Virtual Reality”?

Neither in practice nor in research, there is a consistent definition of what is meant by “Virtual Reality”. “'Virtual reality' is actually an unhelpful catch-all phrase for vastly different types of immersive experiences” (Pytlik, 2015). Depending on the features of a VR tool and its purpose of operation, the possible effects on consumer behaviour may vary a lot.

In practice, VR is often described to create an experience of being totally immersed in a purely virtual world. Users usually wear an eye-covering headset and possibly headphones for 3D spatial sound. VR tools can additionally be equipped by controllers that allow to interact with objects and to navigate within the experience. More advanced VR technologies will also sense body movement, enabling the user to actually walk and move around within the virtual environment. The equipment is powered by a computer, game console or smartphone with specialized software and sensors (Baran, 2016; Rosiński, 2015).

In view of content, there are two types of VR environments: computer-generated worlds, which are popular in gaming because they enable developers to create fantasy worlds; and real world video environments consisting of filmed, spherical 360° video images or pictures. Movement and interactivity are important differences between coded VR and 360° videos: in a 360° image or video, users can spin around in a virtual space, while computer-generated VR enables the viewer to ultimately move through the environment, whether that involves actual movement of the body or using commands on a control device. In comparison to coded virtual environments, 360° videos can be produced, distributed and consumed with relative ease and do not necessarily require heavy invests in equipment. This is enabled for example by recent updates to YouTube's native player functionality, and the growing popularity of mobile-ready VR solutions like Google Cardboard. 360° videos show fixed paths which restrict the experience to a first person point-of-view and the option to look around. Generating a coded 3D virtual environment requires much more time, different skills and resources. Yet, it can offer spectacular virtual worlds where users have the freedom to move around entirely at their own discretion. In this way, VR allows to overcome the lack of physical tangibility of travel destinations in the booking process and to better showcase destinations and travel products (Baran, 2016; Pytlik, 2015).

In the context of this research, VR will be defined in a marketing-oriented manner following Wang and Datta: They describe VR as a computer-mediated environment that provides users “cues from reality to facilitate their purchase behaviour and decision-making” (Wang & Datta, 2010, p. 59). In line with Guttentag (2010), Wang and Datta specify two fundamental definitional criteria of VR: (1) the possibility to navigate and possibly interact within the experience and to “manipulate” the content (e.g. to click on a button in order to see additional information or move an object)^[1]. (2) delivering “rich content”, which means the extent to which a VR application efficiently uses a combination of text, audio, video and graphic formats to convey information to the user. This ideally results in real-time simulation of one or more of the user’s five senses and instant response to user actions.

Different to other definitions such as the one of William and Hobson (1995) who assess visualization, immersion and interaction as three vital components of VR, this study does not assume immersion as a necessary requirement of VR. Rather, immersion is regarded as a desired effect of a virtual experience: “It is the common goal of VR applications to transport users to a virtual environment and have them experience that environment as though it was real” (Martins et al., 2017, p. 2). The degree of immersion increases significantly with the technological effectiveness of VR applications (Martins et al., 2017), but it presumably also depends on other factors such as how close to reality the coded environment is perceived.

VR in tourism marketing practice

Many marketing practitioners consider VR as an appropriate tool to enhance booking decisions and to increase conversion rates. Currently, VR applications are often offered at events and trade fairs as a serviced offer as it is still in need of explanation for many users (Pellikan, 2016). Often, the interactivity and immersion of virtual experiences is highlighted as the technology’s distinctive feature: “The main thing that makes the virtual experiences unique is that they're interactive. That interactivity leads to immersion, and that immersion leads to conversion," says Abi Mandelbaum, CEO of the VR technology company YouVisit (Baran, 2016).

As a practical example, a traveller could be interested in an island trip. She or he is offered the possibility to explore several alternative islands in advance via a virtual experience, e.g. Hawaii, the Seychelles and the Maldives. By giving a sense of “being there” and including interactively accessible information on the destinations, possible activities and accommodation, a virtual experience can provide a more realistic and comprehensive impression of the island trips in advance, compared to brochures, pictures and “traditional” 2D videos (Biesiada, 2017). Virtual experiences provide opportunities for travel companies to present their offers to visitors, creating awareness in competitive market environment (Guttentag, 2010). In order for such communication to be effective, it is vital for tourism marketers to understand the influential factors that affect virtual tourist experiences and how behavioural intentions within a 3D virtual tourism offer occur (Huang et al., 2016).

From a theoretical as well as a managerial perspective, the following questions arise: Can virtual experiences in effect increase the desire to visit a place and the probability to actually book the trip? If yes, which processes are relevant in this context? If a travel company could make their potential customers feel like they are actually relaxing on a beach, does this mean that it would make them more likely to put (more) money on a trip? Will the enthusiasm evoked by experiencing a virtual environment speed up the decision-making?

1.2. Objective and approach of this study

How do virtual experiences affect booking decisions? fragmented state of research

Indeed, there is evidence in scientific literature that virtual experiences can positively affect consumer attitudes and purchase intentions, especially if they experience involving interaction including immersive experiences (Mollen & Wilson, 2010; Wang & Datta, 2010; Cuomo et al., 2015; Huang et al., 2016; Tussyadiah et al., 2018).

Although studies on virtual experiences have gained momentum in the recent years, no extensive research has been conducted on how exposure to a virtual tourism environments might influence the intra-psychological processes during the booking process and the intention to visit a tourist destination (Huang et al., 2016). Most of the relevant studies are based upon laboratory experiments, striving to ensure the internal validity of the results. However, this often comes at the cost of external validity, as the underlying processes are not observed in a real-life environment (Vekony & Korneliussen, 2016). Tussyadiah et al. state that a “theory-driven and evidence-based research to support these suggested potentials [of VR applications in the tourism industry]” is still lacking (Tussyadiah et al., 2018).

Moreover, research on the impact of VR on purchasing processes has also yielded contradicting results. It can be assumed that this arises from three reasons: (1) Scientific literature indicates that the characteristics of a product have an important impact on how VR tool influence actual purchasing intentions (Suh & Lee, 2005; Wan et al., 2007) – thus there is evidence that it makes a difference whether the booking of a trip is analysed or the purchase of a GPS device. (2) So far, limited research has dealt with virtual experiences of actual environments in contextualized fields such as tourism – in contrast to experiences with fictional, simulated virtual worlds. The virtual world Second Life, a virtual online world were users can interact with each other and companies experimented with virtual shops offering virtual products, was exhaustively used for empiric studies on the effects of virtual experiences. Yet, it differs a lot from currently used touristic VR tools – thus, different stimuli produce divergent results. Empiric studies basing on virtual environments of actual physical places are supposed to lead to better conceptualizations of the role of VR shaping attitudes and behaviour of tourists (Tussyadiah, Wang & Jia, 2016). (3) Inconsistent research findings may also result from the huge variety of technological equipment used in empiric studies.

analysing actual, VR-supported booking decisions in travel bureaus

This study will explore the implications of virtual experiences by dealing with the question how they influence the booking behavior of tourists. Its objective is to give insight into how VR tools can be utilized to enhance travel sales by investigating different aspects of booking behaviour, the underlying processing mechanisms and the relationships between these variables. The corresponding research questions are: How do VR tools in travel bureaus influence booking behavior? Which aspects of booking behavior are influenced? Which underlying processes are relevant in this context?

In difference to most other research in this field, the empirical data for this study will refer to real-life conditions, which means analyzing actual travel sales in travel bureaus involving a VR tool. Data will be obtained by interviewing travel sales agents who use or have used a VR tool in their daily work. This approach also allows going beyond the majority of existing studies by not investigating the possible influence of VR tools on consumers' behavioural intentions but on the observation of actual purchasing decisions. This study will focus on the perspective of sellers and not the direct evaluation of travellers’ perceptions, in contrast to other studies in this field. This different perspective is considered as an important addition to current research, as it cannot be taken for granted that behavioural intentions actually lead to actual booking (Bemmaor, 1995; Morwitz, 1997).

Beyond the theoretical contribution, this study aims at supporting the managerial practice of applying VR tools in travel marketing. The suggested structural model endeavours to predict relevant aspects of the booking decision process and thus to provide guidance on how to positively influence booking decisions with the means of VR. Insights in this field could thus help marketers to use the full potential of the technology by uncovering what is important to keep in mind when developing and producing VR related marketing material (Tussyadiah et al., 2018; Vekony & Korneliussen, 2016).

2. Theoretical background and current state of VR in travel marketing practice

In order to provide a profound theoretical basis for the study at hand, it is mandatory to have a closer look at the characteristics of the travel decision process and the role of virtual exposure in that context. This section will firstly provide a review on research on the booking behaviour of travellers, followed by scientific insights on how VR applications influence purchasing processes in tourism, including relevant scientific concepts in that context. The chapter will be complemented by an overview and examples of how VR is currently used in travel marketing practice and the development of a research model and the hypotheses to be tested.

2.1. Booking behaviour in tourism: research overview and benefits of VR

As a very complex and economically relevant research field, travel decision-making continues to attract active conceptual and empirical attention. Yet, there are still many unanswered questions. In today’s highly competitive travel market environments, the ability to understand, predict, and influence these processes is vital to succeed in the market (Fodness & Murray, 2016). In general, much of tourist behaviour research has been based on classical buyer behaviour theory (Choi, Lehto, Morrison, & Jang, 2011). However, consumer behaviour in the field of tourism and hospitality is characterized by some distinguishing characteristics compared to buying processes in other industries as to the product itself, the timeframe and structure of the decision process. This chapter will give an overview on these special characteristics of travellers’ purchase decisions and the current state of research while relating to the role of VR in the booking process.

popular models in travel decision research

In classical consumer behaviour theory, purchasing decisions are thought to evolve in sequential steps: Problem recognition as a first step is followed by the search for information, alternative evaluation, choice, and finally the outcomes of choice or post-purchase phase. The extent to which each step is undertaken depends upon whether or not the purchase is of sufficient importance to the consumer (Engel, Blackwell, & Kollat, 1978). This is supposed to also be accurate for travel buying decisions (Jeng & Fesenmaier, 2002; Nejati & Mohamed, 2014).

Derived from this basic process, scientific literature suggests a number of decision-making models to describe tourists’ buying processes and to uncover the general dynamics of internal and external factors influencing travellers’ decision making. Comprehensive travel choice decision models as for example proposed by Moutinho (1987) have attracted attention in tourism research (Choi et al., 2011). He proposes a travel decision model that includes numerous relevant internal and external factors such as marketing stimuli, social factors and individual characteristics of the traveller within the pre and post decision phases as well as the phase of future decision making. This and similar “traditional” models have in common that they consider intrapersonal, mental processes and the interaction with psychological variables (e.g., attitudes, motivation, beliefs and intentions) and external, non-psychological variables (e.g. time, pull factors and marketing mix, situational and interpersonal factors). At the same time, they support the idea that travel decision-making is a sequential and contingent process and tourists follow a funnel-like procedure of choosing the optimal solution from a range of alternatives. This approach is also referred to as the choice set theory (Choi et al., 2011; Nejati & Mohamed, 2014). Although these decision models contributed to advance the knowledge about travel decision processes, they have been criticized because of their monolithic and deterministic view of the decision-making process (Dellaert, Ettema, & Lindh, 1998; Jeng & Fesenmaier, 2002).

Recent tourism research literature discusses vacation decision making as a multidimensional and ongoing sequence of decisions and purchases: The travel destination is not the only decision that is typically made before taking a trip. Rather, there is a range of sub-decisions to be considered, such as timing, travel companions, transportation mode, route, accommodations, budget, activities, and others (Choi et al., 2011). It also has to be considered that internal motivations are not the only drivers that guide travel decision making, as also external constraints play an important role such as a lack of money, a lack of time, poor health, safety fears, and concerns about getting along in a foreign environment or the absence of desired travel partners. In contrast to the choice set theory, the perspective of the so-called bounded rationality approach emphasizes that travellers make context-dependent decisions that fit their reality (Guttentag, 2010; Nejati & Mohamed, 2014).

Within the mentioned travel decision models, VR applications would be integrated as a form of information source or marketing stimulus. As such, a virtual experience can be seen as a “perceptive state between direct and indirect experience” that arises from a computer mediated environment (Wang & Datta, 2010, p. 59). In difference to a “traditional” communication medium such as a catalogue or TV commercial, a VR experience is able to transmit more information and to offer the user control in inspecting a product. This brings VR more to the side of direct experiences in a continuum with direct and indirect experiences as two extremes of the spectrum (Wang & Datta, 2010). Direct product experiences have consistently been shown to lead to stronger beliefs and attitudes than indirect experiences such as “traditional” advertising, which would make VR potentially superior in a marketing context compared to more indirect experiences (for an overview, see Wan et al., 2007).

information search strategies and VR as an information tool for travel marketing

Within the process of travel booking decisions, strategies of information search are a further important field of research. In the travel market, countless destinations and tourism companies strive to communicate the respective benefits of their offer to potential tourists. Like in other product fields, the resulting mass of information is far beyond the capacity potential customers can process. So how do consumers work themselves through the large number of alternatives? And how can marketers possibly know which information they should present in regards to each decision element in the multistage sequence of the travel planning process (Choi et al., 2011; Fodness & Murray, 2016)?

Cho, Wang and Fesenmaier (2002) point out that virtual destination experiences, such as virtual tours in a web-mediated virtual environment, make it easier for potential travellers to efficiently search for information that is relevant for their travel decision. Virtual destination experiences can provide extensive and rich information for the consumers, resulting in a better foundation of their destination image. This results in increased confidence of expectation and increased satisfaction with their destination of choice (Cho et al., 2002).

According to Fodness and Murray (2016), consumers weigh costs and benefits of choosing sources for information search. Choosing a given information source is only likely if it is assed to provide vital information for the consumer’s decision making. The perceived effectiveness of any information source varies across consumer segments and depends on situational, marketplace, and individual characteristics.

With its origins in the 1960s, the consumer-oriented uses and gratifications theory is an approach to understanding why consumers actively seek out specific media and what gratification they derive from media exposure (Katz, Blumler & Gurevitch, 1973). In that context, VR tools are expected to provide travel inspiration and to support travel planning by delivering an engaging customer experience including enriched information compared to other information sources (Tromp, 2017, Leibfried, 2016).

characteristics of travel products and the benefits of VR

Holiday trips are different in some ways to most other products consumers buy: Travellers choose an experience which often is a considerable personal financial investment rather than a single-dimension product. There is no economic, tangible “rate of return”, however tourists have individual expectations as to the experience (Moutinho, 1987; Nejati & Mohamed, 2014). Different to tangible consumer products, travel products usually lack tangibility and tactile perceptions during the purchasing process (Hyun, Lee, & Hu, 2009).

For these reasons, most people collect a lot of information about a destination (compared to buying other products) when planning a trip to support their booking decision. Technological advances such as VR enable potential visitors to have experiences of destinations in advance, which can help tourists to choose a trip (Choi, Ok, & Choi, 2015). Guttentag emphasizes that especially “the sense of sight is very important in tourism marketing, where a lot of experiences depend on visual stimulation. This makes any simulation of the real world particularly valuable for destination promotion” (Guttentag, 2010, p. 638). In practice, there is evidence that VR may reduce insecurity, hotels for example report that their guests tend to book faster and more pointedly when using VR tools (Leibfried, 2016)

Previous research in the context of travel choices provides evidence that familiarity, excitement and interest may increase booking intention. Traditionally, word-of-mouth and previous travel experiences are considered as the most effective information channels because they are based on direct experience. Yet, indirect experience such as visiting a destination website or a virtual destination experience can possibly provide a substitute for direct destination experience because it enables consumers to vividly imagine a destination (Lee & Gretzel, 2012; Choi et al., 2015). Thus, the ability of VR tools to provide a sense of what it is like to be in a place – as a “try before you buy” experience – can make VR a powerful tourism marketing tool (Guttentag, 2010; Tussyadiah et al., 2018).

2.2. VR influencing travellers’ purchasing behaviour: Relevant theories, models and research

The role of VR technology in travel and tourism has been anticipated in literature already more than twenty years ago (e.g. Cheong, Williams, & Hobson, 1995). Yet, new technical development such as the release of head mounted VR displays now seem to leverage the potential for mass consumption of VR experiences (Tussyadiah, Wang, & Jia, 2016). With the ongoing technological diffusion of VR tools, the question how they might affect consumer behaviour becomes more relevant.

As already described, research on VR influencing travel decisions is still fragmented and there is little understanding about how to effectively market tourism destinations via virtual environments (Huang et al., 2016). This field of research has gained momentum with the rise of Second Life. A number of studies analysing various effects of Second Life on consumer and booking behaviour was conducted by researchers in different fields. Research attributes positive effects to such a virtual presence in terms of getting extraordinary attention in a new channel, reaching an interesting target group, product knowledge, brand attitudes and actual purchasing intentions (Dobrowolski, Pochwatko, Skorko, & Bielecki, 2014; Kuß & Tomczak, 2007). Yet, the technical development in the field of VR gathers pace, and Second Life in the meantime has to be considered as only one special form of VR. Considering this, the results of respective studies have to be carefully evaluated.

This section will firstly introduce the neobehavioristic S-O-R model as a basic framework to develop a research model on the effects of VR exposure on booking decisions. Subsequently, it will review the current state of research on how VR affects travel booking decisions, while referring to the concepts of (tele-)presence and technology acceptance.

2.2.1. An extended S-O-R model as a basic framework

Consumer behaviour generally is understood as the observable behaviour in the context of buying and consuming goods as well as the not observable “inner” behaviour linked to preferences, emotions and involvement (Kroeber-Riel & Gröppel-Klein, 2013). Traditionally, research on purchasing decisions builds upon psychological and social variables described in the neobehavioristic stimulus-organism-response (S-O-R) model as a framework to analyse purchasing decisions. This approach analyses directly observable variables, which means stimuli directly influencing a consumer (such as sales promotions, a marketing message, a price change or VR exposure) and respective reactions (e.g. demanding information or actually booking a trip). The neobehavioristic paradigm explicitly takes into account the inner, not observable variables that lead to observable behaviour: it assumes that a certain stimulus is evaluated by an organism (e.g. evoking a learning process or changing an attitude) and causes a reaction. This approach leads to an empirical focus of research on purchasing decisions, as stimuli and reactions usually can be analysed as variables in empirical studies (Foscht & Swoboda, 2011; Kroeber-Riel & Gröppel-Klein, 2013; Kuß & Tomczak, 2007).

Mollen and Wilson consider the neobehavioristic S-O-R model as an appropriate theoretical framework for synthesizing existing research on website experience (Mollen & Wilson, 2010). For the study at hand, their approach will be broadened to VR experiences, as it allows integrating specific characteristics and concepts of VR stimuli, especially the concepts of presence and technology acceptance. Hereby, the website or VR experience is considered as the stimulus. The consumer’s internal state including activating and cognitive processes is the response to the stimulus. Mollen and Wilson characterize the consumer’s experiential response “as a dynamic, tiered perceptual spectrum” that ranges from perceived interactivity to telepresence (…) to engagement” as a cognitive and affective commitment to the respective product or brand (Mollen & Wilson, 2010).

Typically, consumers are highly involved in the choices that come along in assembling the elements of a vacation^[2]. Accordingly, highly involved consumers do cognitively and emotionally engage in a decision. As a conclusion, travel choice models must take into account activation as well as cognition (Crouch & Louviere, 2001).

adapting the S-O-R model to the context of VR-supported booking decisions

For individual purchasing decisions, usually activating or affective processes (such as emotion, motivation and attitudes) and cognitive processes (such as perception, learning and memory) interact with each other. These so-called intervening variables represent the theoretical concept for the processes inside the organism, explaining why certain stimuli cause a certain response. As to the current state of research, the not observable variables represent the bases to analyse and explain consumer behaviour. Additionally to these psychological variables, purchasing decisions are influenced by personal, social and cultural variables (Decrop 2010; Foscht & Swoboda, 2011; Kroeber-Riel et al., 2011).

figure 1: neobehavioristic S-O-R model adapted to VR exposure in the context of travel booking decisions

Abbildung in dieser Leseprobe nicht enthalten

source: own illustration basing on Foscht & Swoboda, 2011 p. 30 and Mollen & Wilson, 2010, p. 19

Figure 1 shows how the directly observable and intervening variables are intertwined. For the study at hand, the model has been applied to a VR context and restricted to the variables that are relevant in this context. It will later be transferred into a research model.

As to the response (R) in this model, different aspects of the booking decision will be analysed. In order to explore in advance which aspects are relevant in this specific purchasing process, qualitative telephone interviews were conducted. Six travel agents who have experiences with the VR tool in question were interviewed by telephone. They were asked how long they already use the VR tool and which advantages and disadvantages the use has for them in practice (see Annex 1). From their answers, three relevant aspects of the booking decision were retrieved which are purchasing probability, speed of decision-making^[3] and the effect on turnover.

According to this extended S-O-R model and the related research, the first hypothesis concerning possible effects of the VR stimulus is formulated as follows:

H1: VR exposure increases activation in comparison to personal sales without the VR tool.

H2: VR exposure improves the cognitive imagination of a travel product in comparison to personal sales without the VR tool.

It is further hypothesized that there is an indirect effect of these two processes on the three mentioned aspects of the booking decision:

A higher level of activation … H3a: … increases the booking probability. H3b: … speeds up decision-making. H3c: … has a positive effect on turnover. A better cognitive imagination of a travel product ... H4a: … increases the booking probability. H4b: … speeds up decision making. H4c: … has a positive effect on turnover.

2.2.2. The concept of presence in the research of virtual experiences

Most of the research aiming to explain the effectiveness of VR in shaping attitudinal and behavioural responses is based upon, or integrates, the concept of (tele-)presence. Different studies suggest that VR-induced presence affects information processing, consumer learning, memory, brand recognition, attitudes, engagement, involvement as well as the intention to buy (Mollen & Wilson, 2010; Tussyadiah et al., 2018).

Presence research focuses on how well computer-generated environments induce the feeling of being in a world that exists outside the self (Tussyadiah, Wang, & Jia, 2016). When setting up a definition of presence, it is apparently inevitable to cite Steuer. He conceptualized presence as an experience of being temporarily present in a remote environment rather than in the real physical environment, mediated by any communication medium (Steuer, 1992). In scientific research, the 'transportation' of media users to any virtual environment nowadays is widely measured through the level of presence felt by the users (Martins et al., 2017).

Presence is described as a form of “out-of-the-body experience”, a feeling of “being there” and a sense of immersion. This perception is formed by a technologically-created environment involving sensory outputs (namely visual, including 3D animation, but also aural or olfactory), creating interplay of multi-sensory information and various cognitive and activating processes. It can also be described as the illusion of unmediated perception, so that a user fails to perceive the existence of a medium (e.g. a VR device) and responds as if it was not there. “Following different conceptualizations of presence, researchers measure presence in a variety of different ways depending on the theoretical lens they use: presence as non-mediation, presence as involvement, etc. Most of these conceptual frameworks emphasize the aspects that contribute to presence” (Tussyadiah et al., 2018). The construct of presence is often considered as binary – so we either feel present or feel absent. Other researchers describe presence as a gradual concept, because experiences can often be traced as a continuum (Wang & Datta, 2010). Presence can be evoked by videos, websites and forms of VR (Choi et al., 2015). In a study, Suh and Chang (2006) found that VR interfaces generate significantly higher levels of presence than other interactive or vivid web interfaces (Suh & Chang, 2006).

In the context of travel research, users perceive a virtual destination environment as a ‘place’ rather than a set of images, which is referred to as spatial presence (Tussyadiah, Wang, & Jia, 2016). Such presence-evoking mechanisms work well for travel marketing because they allow travellers to imagine experiences close to reality at a destination (Choi et al., 2015).

As a vital concept in the research on virtual experiences, presence will be integrated in the research model developed for the study at hand.

How does VR induce presence?

If presence is considered to explain the effectiveness of VR as a simulation of travel, it is interesting to get insight on how this feeling is induced. More specifically: which characteristics of a virtual experience generate presence in the minds of VR users? This question conceptualizes the structural perspective of presence research, whereas the descriptive model focuses on describing the dimensions of presence (Tussyadiah et al., 2018).

Especially 3D product presentations obviously improve the experienced tangibility and representational capabilities and induce feelings of presence. Nah, Eschenbrenner, and DeWester (2011) compared the effects of exposing people to 2D versus 3D virtual environments on presence. The participants in the 3D virtual environment were able to move around and interact directly with 3D objects, whereas the people in the 2D condition were exposed to static pictures of the same virtual environment. As a result, increased vividness and interactivity in the 3D condition led to higher levels of presence compared to the 2D environment.

A study of Shafer, Carbonara and Popova found for the context of computer games that higher technological interactivity of motion-based systems increases feelings of spatial presence, perceived reality, and enjoyment (Shafer, Carbonara, & Popova, 2011).

In a recent study, Algharabat confirms for an online retail context that user control, colour vividness and 3D authenticity are the main determinants of presence (Algharabat, 2018).

Following this, it is also argued by some researchers that there is a positive relation between the number of human senses engaged in a virtual experience and the degree of immersiveness. Therefore, Martins et al. suggest that “the closer to reality the VR system is, the greater will be its effectiveness as a marketing tool for tourism.“ (Martins et al., 2017, p. 2).

2.2.3. Research overview: How does Virtual Reality influence buying decision processes of travellers?

There is evidence that VR exposure positively influences purchasing intentions directly as well as indirectly via presence, activating and cognitive processes. In the following, an overview of relevant studies will be provided to give further insights into the interrelationships between these variables.

direct and mediated effects of VR exposure on purchasing decisions

Different studies refer to potential direct and indirect relationships between VR exposure and purchasing decisions or rather purchasing intentions.

A qualitative, exploratory study by Tussyadiah, Wang and Jia (2016) aimed at analysing how VR effects attitude and behaviour toward a destination. The researchers demonstrated that the exposure to touristic VR stimuli has very strong persuasiveness if the users are fully immersed. They found users to be very determined about their interest or disinterest in the touristic destination in qualitative in-depth interviews after an urban virtual environment demonstration. The majority of users in their experiment experienced spatial presence. Yet, there were factors that prevented the users from being fully immersed such as the lack of social experience (not being able to ask or interact with anyone), unrealistic features (e.g. faces blurred for privacy reasons, static images of people “frozen” on the streets or birds in the sky, objects that disappeared when seen from different angles) and distractions or feelings of discontinuity such as being reminded to not bump into a wall, fatigue from holding the device or dizziness. According to their findings, it matters whether a virtual experience is optimized for the purposes of travel marketing: “Most participants stated that VR experience was not more powerful in influencing interest and plan to visit the destinations, placing it behind (detailed) travel guides. Many lamented that the VR imagery was not “beautiful”, which is due to the fact that the app was not designed for promotional purposes. However, some of them suggested that VR would be more influential if the content was made more interesting” (Tussyadiah, Wang, & Jia, 2016).

Martins et al. also conclude from recent research that a tourism experience has to be “emotional and immersive in such a way that the tourist becomes fully involved with the existing surroundings” to become memorable (Martins et al., 2017).

In contrast, Vekony and Korneliussen (2016) could not find a significant total effect of immersive VR technology (vs. 2D pictures) on destination attitude, behavioural intentions and purchasing decision. They conducted a lab experiment and related field study with regard to travelling. However, mediation analyses showed that there are indirect effects or VR exposure on the latent variables through presence, enjoyment, mental imagery, predicted emotions and predicted experiences. In line with Tussyadiah et al. (2016), perceived picture quality acts as a moderator of some of the relationships. They conclude that immersive VR content can have a strong impact on destination attitude, behavioural intentions and ultimately actual purchase, if it is developed especially to stimulate factors that are decisive for actual purchasing decisions and used with high-quality equipment. They report that the participants in their field study, who were in a real-life decision situation, perceived poor picture quality as more important than participants of the lab experiment.

Wan et al. (2007) emphasize that it is critical to take into consideration the characteristics of the promoted destinations when choosing the appropriate advertising format. Their experimental study found that virtual experiences provide better advertising effects than brochures for artificial theme parks and natural parks. However, the effect was greater for artificial theme parks than natural parks. According to Wan et al., “this is due to the capability of virtual experience (user control and media richness) to create an interaction that is highly suitable for presenting the thrilling rides and exciting amenities of artificial theme parks.”

In addition to these findings, a study of Huang et al. (2016) indicated that a virtual touristic environment leads to higher travel intention because of greater perception of autonomy, competence and relatedness of the users.

In the context of online shopping, there is evidence that virtual experiences increase consumers’ exploratory behaviour and buying intention and influence consumers' product knowledge, attitudes towards products, and purchasing intentions, mediated via the feeling of presence. Virtual fitting rooms and other VR applications may compensate the lack of physical apprehension as a major disadvantage of online purchasing (Beck & Crié, 2015; Suh & Chang, 2006). VR-induced presence was also found to reduce consumer perceptions of product risk and discrepancies between online product information and actual products (Suh & Chang, 2006). It might be theorized that these findings can be transferred to the context of travel booking behavior.

Related to a buying decision of a technical product (an automobile global positioning system device) mediated by a VR application, a study by Wang and Datta (2010) confirmed that the possibility to directly manipulate the device had a positive effect on the participants’ virtual experience. Their data provide also evidence that a positive virtual experience from its part has an effect on the attitude towards the product as well as towards the VR interface, which subsequently influences the purchasing intention. In contrast, the richness of a VR application does not seem to have significant effects on the virtual experience. “One explanation is that virtual reality applications often fall prey to delivering overly rich content over the web, thus overwhelming the consumers looking for pertinent information before making a purchase” (Wang & Datta, 2010, p. 67). Thus, it seems to be favourable to leaving it up to the users to decide which information and experiences they want to focus on.

Analysing survey data from registered users of Second Life, a study of Gabisch (2011) indicates that brand experiences in a virtual world have an effect on purchasing behaviour and purchasing intention in reality. According to this research, this relationship is moderated by the factors of “self-image congruence” and “perceived diagnosticity”: “When a virtual world brand experience is considered to be helpful for evaluation and is consistent with the consumer's self-concept, the experience is found to have a stronger influence on real world purchase intentions and behaviour” (Gabisch, 2011, p.18).

the role of VR-induced presence in influencing purchasing processes

In many of the previously mentioned studies, presence played a certain role. Yet, current research indicates that VR-induced presence alone might not influence a relationship with a brand or destination sufficient enough to induce purchase intention (Mollen & Wilson, 2010; Tussyadiah et al., 2018). Indeed, interdependencies between different variables seem to be more complex. Scientific evidence suggests that the effect of VR exposure on behavioural intentions and purchasing decisions might either be direct or be mediated by presence as well as activating and cognitive processes.

A study of Mäntymäki and Salo (2013) examined factors in predicting the intention to engage in purchasing in social virtual worlds. The research model was tested with user data from Habbo Hotel, a popular Massive Multiplayer Online Game. The study shows that virtual purchasing behaviour is substantially influenced by the factors driving usage behaviour. Hence, virtual purchasing can be understood as a means to enhance the user experience: “For virtual world operators, reinforcing the sense of presence of user's social network offers a means to promote virtual purchasing” (Mäntymäki & Salo, 2013, p. 282).

Basing on these findings, it is hypothesized the following relationship:

Presence positively influences …

H5a: … the booking probability.

H5b: … the speed of decision-making.

H5c: … turnover.

effects of presence on activation

There is evidence in research that virtual experiences associated with presence affect consumers’ activating processes. This includes forms of enjoyment, interest and motivation as well as changing or establishing attitudes and preferences towards a product.

In a recent study, Tussyadiah et al. found a direct effect of presence on attitude change towards a touristic destination as well as a mediated influence via enjoyment (Tussyadiah et al., 2018). The goal of their study was to investigate the sense of presence during a virtual walkthrough of a tourism destination and to analyse how presence influences an attitude change toward different examined destinations by comparing pre and post VR attitude. According to two empirical studies they conducted, the feeling of presence increases the enjoyment of a virtual experience as well as liking and preference of a tourism destination. The change towards a more positive attitude towards the destination finally leads to a higher level of visitation intention.

Other research also indicates that VR-induced presence might be helpful for establishing a positive attitude towards a product or brand (Mollen & Wilson, 2010) or to positively influence consumers’ attitude (Dobrowolski et al., 2014).

Wissmath et al. found strong relations between presence, flow and enjoyment in the context of computer gaming. Their research suggests that the concept of flow mediates the relationship between presence and enjoyment (Weibel, Wissmath, Habegger, Steiner, & Groner, 2008). A following study of Weibel and Wissmath (Weibel & Wissmath, 2011) empirically analysed how presence and flow relate to each other, again in the context of different computer games. One finding of their study was that presence enhanced enjoyment. A study of Shafer et al. (2011) confirmed that perceived reality predicted spatial presence; and spatial presence, in turn, was a significant predictor of enjoyment. These findings also refer to a context of computer games, namely golf, racing, and boxing games.

Literature suggests that presence has direct and mediated effects on purchasing intentions. Analysing the effect of presence and fantasy on purchasing intentions, Song, Fiore, and Park (2007) detected that online consumers might experience presence after browsing a stimulus website. Their lab study used a virtual product experience of a brick-and-mortar store. Results showed that presence enhanced shopping enjoyment. Moreover, presence, fantasy, and shopping enjoyment directly contributed to the willingness to purchase from the online retailer.

Recent research supports the findings that presence has a positive impact on user engagement, which in turn positively influences purchase intentions (Algharabat, 2018).

It is therefore hypothesized:

H6a: Presence positively influences activation.

effects of presence on cognitive processes

Scientific literature suggests that virtual experiences positively influence cognitive processes such as information processing, perception and learning by providing an enriched level of information to the user.

A study of Suh and Lee (2005) supports the assumption that VR interfaces increase overall consumer learning about products. They point out that VR enables consumers to learn about products thoroughly by providing high-quality three-dimensional images of products, interactivity with the products and increased presence. Additionally, the effects of VR become more evident when it exhibits products whose characteristic attributes are completely apparent through visual and auditory cues, as today most VR tools only use those two sensory modalities to deliver information. These effects were found more significantly in product experiences where visual and auditory sensory modalities are vitally required for product inspection (Suh & Lee, 2005).

In the context of travel websites, there is evidence that presence and immersion help to keep users on a site for longer and to search it more extensively by supporting a vivid memory and increasing interest. Choi et al (2015) found that presence is an important part of website performance in the context of destination marketing: presence allows users to become more familiar with and more interested in a destination and increases their knowledge about it. According to their research, that is by reinforcing vivid memories of information and making users feel the experience is valuable for their decision process. If users experience a destination website as more useful and/or pleasant this also positively influenced their booking intention. In line with these findings, Shin found in a study that web users who experience presence generally memorize information better that is presented on a screen (Shin, 2006).

Following these findings, it is hypothesized:

H6b: Presence positively influences the cognitive imagination of a travel product.

2.2.4. The role of technology acceptance in VR-related consumer behaviour

Besides inducing positive perceptions about the product, VR applications also induce consumer perceptions toward the application itself: “Consumer attitude toward the virtual reality application is an important antecedent to both their attitude toward the product and their purchase intentions“ (Wang & Datta, 2010, p. 69) For this reason, the attitude towards the VR device will be taken into account when setting up the research model for the study at hand.

The technology acceptance model (TAM) has been validated as a theoretical framework to explain consumption behaviour in computer-mediated environments. It is a popular scientific model and has been empirically validated in different contexts. It is also used for research in the area of tourism and VR as a framework to investigate how virtual experiences affect travellers’ information searching and trip decision making process (Huang et al., 2016).

Based on the theory of reasoned action by Fishbein and Ajzen, the TAM was proposed by Davis (Davis, 1985) to assess an individual’s acceptance of information technology. It postulates that the constructs of “perceived usefulness” and “perceived ease of use” determine an individual’s attitude toward using information technology. In this context, “perceived usefulness” is defined as the degree to which a person believes that a specific tool or system would facilitate a certain task. “Perceived ease of use” is seen as the degree to which a person believes that using this technology would be free of effort. In this model, the intention to use the technology depends on the perceived usefulness and the attitude of the person. Current studies in consumer behaviour literature on the use of information technology support the relationship of these two factors on a person’s attitude as well as on customer motivations and behavioural intentions (Huang et al., 2016).

Kaplanidou and Vogt assessed the influence of tourism website characteristics on perceived website usefulness in planning a trip (Kaplanidou & Vogt, 2016). In their study, the feature of perceived usefulness was a significant predictor of intention to travel to the destination. Motivating visuals were also a significant direct predictor of travel intention, whereas trip information functionality had indirect influence on intentions through website usefulness.

As research suggests that a technology’s perceived usefulness and ease of use has a considerable influence on user experience and purchasing intentions in VR-supported travel marketing, the concept of technology acceptance will also be integrated in the research model used in this study. Following this, it is hypothesized that:

Technology acceptance positively influences … H7a: … the booking probability. H7b: … the speed of decision-making. H7c: … turnover.

Moreover, it is hypothesised that technology acceptance also positively influences activating and cognitive processes. Following Wang and Datta (2010), it is assumed that the physical VR experience as a first step creates an attitude in the sense of perceived usefulness and perceived ease of use towards the VR tool. This attitude towards the technology is assumed to be a precondition for further activating and cognitive processes such as presence, enjoyment and information processing.

Therefore, it is hypothesized:

Technology acceptance positively influences …

H8a: … activation. H8b: … the cognitive imagination of a travel product.

2.3. Practical use of Virtual Reality in tourism

VR has already been used and studied in the travel industry for many years. Yet, only recent technological development has led to the commercial availability of VR tools (Vekony & Korneliussen, 2016). This chapter is going to describe the current role of VR for the tourism industry. Additionally, it will provide an overview of how VR applications are currently used in different areas of tourism by giving some examples. It will also outline which opportunities and challenges practitioners currently see when implementing VR tools.

Typically, travel marketing managers consider VR as a marketing tool to inspire potential customers, to support travel planning, as a product training tool for travel agents and as an opportunity to advertise alongside VR content that is either directly or indirectly related to travel (Biesiada, 2017). As described in the introduction, the most obvious benefits of VR is its ability to provide travellers with a “more direct experience about the tour than just reading other tourists' narratives or watching videos and photos” (Shangzhi, 2016) and to increase conversions by providing immersive and interactive experiences (Baran, 2016). Although VR meanwhile seems to be omnipresent, it has to be stated that market penetration is still not very significant: The number of active users of VR devices worldwide expected by the UK-based research agency Kzero in 2018 is 171 million, which is equivalent to 38% of potential users and 2,3% of the entire world population at that time (Rosiński, 2015). Due to the low market penetration of devices, services such as virtual cruise ship tours today are still mainly offered as a business-to-business marketing tool (Förster, 2016). This comes along with the challenge to educate marketers and make them aware of the technology’s core benefits (Nah, Eschenbrenner, & DeWester, 2011; Ressler, 2017).

Considering the ongoing technological development as well as research efforts, industry practitioners asses the tourism industry still in the early days of VR as a medium for brand advertising. “Travel companies start experimenting with different kinds of VR marketing efforts in order to see what works best for them and to begin to get a better sense of the level of investment required and what the potential returns will be on that investment” (Baran, 2016). The current focus of most travel companies is how they can use the technology to help consumers choosing a vacation spot (Sean O'Neill, 2017). Virtual tours are popularly used as a PR instrument for events such as travel trade fairs where booth visitors are serviced and do not have to bring their own devices. One of the challenges is the measurability of VR usage and its potential effects on booking decisions (Baran, 2016).

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^[1] It has to be emphasized that the degree of interactivity of a VR experience may vary from simple navigation possibilities to complex forms of interaction. The VR tool used for this study enables the user to move around and to explore the virtual environment, whereas the user is not able to move any objects.

^[2] There is no congruent definition of the concept of involvement; however most definitions focus on a person’s perceived relevance of a purchasing object basing on his or her inherent needs, values and interests. Usually, it is assumed that the greater the involvement in a marketing stimulus is, the more attention consumers pay to the advertisement (Trommsdorff and Teichert 2011; Foscht and Swoboda 2011; Kroeber-Riel, Weinberg, and Gröppel-Klein 2011).

^[3] In scientific literature related to real estate and property management, there is evidence that VR tools can help to significantly reduce the amount of time to reach a decision, as virtual tours are able to simulate the product a consumer wants to buy Lerg and Fisher (2016).