An Exploratory Study of Taiwanese Long-Haul Package Tour Customers' Satisfaction Jui-Chi (Ricky) Chang A thesis submitted in partial fulfillment of the requirements of Oxford Brookes University for the award of Doctor of Philosophy September 2003 - IMAGING SERVICES NORTH Boston Spa, Wetherby West Yorkshire, LS23 7BQ www.bl.uk Appendices AS, A6, A7 and Diagram pg. 42 NOT DIGITISED BY . REQUEST OF THE UNIVERSITY Abstract Taiwan has achieved rapid and continued economic growth over the last thirty years. This economic prosperity has significantly increased the demand for outbound tourism from Taiwan. However, the immature marketing strategies of travel agencies and lack of experience of both travel agencies and outbound tourists has also increased confrontation between the two parties. This research investigated customer satisfaction/dissatisfaction on pre-tour and on-tour service encounters between Taiwanese travel agencies and their customers. It analysed the role of the tour leader and the relationship with customers on guided group tours, and the link between overall satisfaction with a travel agency and the generation of repeat business. This study adopted exploratory research to investigate the service elements provided by travel agencies and the relative factors that affect tourist satisfaction when customers are taking a long-haul package tour. The primary data was collected using three different research methods: in-depth, semi-structured face-to-face interviews with managers from 19 randomly selected Taiwanese travel agencies; participant observation of a ten day Taiwanese guided group (package) tour to Italy; and semi-structured international telephone interviews with 23 of the Taiwanese tour group participants. Additional data was received from the collaborating travel agency, which had conducted its own research on customer satisfaction on the same tour. The primary data of interview transcripts and field notes were analysed using NUDIST software. The transcripts of the findings and discussion provide a detailed ethnographic study of the experiences, which these Taiwanese tourists encountered on a long-haul package holiday. The findings indicated that Taiwanese travellers are price-sensitive, have limited individual initiative and tend to over-rely on travel agencies and tour leaders. The tour leader's performance is the key factor resulting in customers' complaints or contributing to customers' satisfaction on a tour. However, Taiwan's tour leaders are tip-sensitive and the issue of tipping plays a crucial factor in influencing the tour leaders' job performance as well as customer satisfaction. Many travel agencies indicated that customer satisfaction was not so significant and the tour leader's performance was acceptable - providing customers did not complain. A process for the success of a guided-package tour has been developed to enable travel agencies to deliver a better service, as well as engage in more effective marketing campaigns. The differences in perception between service providers and customers have been identified as an important barrier to customer satisfaction. This model suggests that travel agencies should aim at developing customers' expectations to a realistic level during the pre-tour stage. It also suggests building customers' satisfaction to a reasonable !evel during the on-tour encounter. Changing customer satisfaction from merely satisfied to totally satisfied mcreases production and operational costs, which may not be a wise investment in terms of the financial return - particularly in an intensely competitive market where customers are price sensitive. The model suggests that travel agencies should be aware of the importance of the tour leaders' service performance and communication skills, to explain to customers the reason why negative incidents oflow significance (NII.'s) occur and consequently to help reduce customer dissatisfaction. This study identified the key influences on customer satisfaction when customers are taking a guided packa?e tour. Components of satisfaction - expectation, performance, attribution, emotion and equity - Identified and examined. An additional component - communication - emerged which appeared to faclhtate understanding between customers and service providers. The notion of Round Table Theory was put forward as a tool to illustrate equity from a tourist consumer perspective. The variety of research methods allowed due triangulation and so increased the validity of the research. Empirical findings of this study provide a better understanding of the components of customer satisfaction of a long-haul package tour. I Dedication To my parents who supported and believed me without any doubt 11 Acknowledgements Firstly, I would like to thank my director of study David Bowie who guided me, encouraged me, and also treated me as a friend. David, I am fortunate to have you. Secondly, I am also very grateful to Dr. David Bowen, my SUpen:'lsor, for his supervision and expertise. Thirdly, many thanks to my supervisor Professor Nigel Hemmington, Head of School of Service Industries, Bournemouth University, for his guidance and continuous support Fourthly, I am" grateful to all academic and administrate members of staff in the Department of Hospitality, Leisure and Tourism Management, in particular Dr. AngeJa Roper and Judie Gannon for invaluable support and advice. I am also grateful to my University for financial support and my colleagues in the Department of Tourism at Providence University in Taiwan, in particular Dr. Tony Yang for this support. III Table of Contents Abstract ................................................................................................................................. I Dedication ............................................................................................................................ 11 Acknowledgement ............................................................................................................. III Table of Contents ...................... ...................................................................................... IV List of Appendices ............................................................................................................ IX List of Tables ...................................................................................................................... X List of Figures ................................................................................................................... XI List of Abbreviations ....................................................................................................... XI Chapter 1 Introduction ............................................................................... 1 1.1 Introduction ................................................................................................................. 1 1.2 Background and rationale ........................................................................................... 1 1.3 Purpose of the study ...................................................................................................... 3 1.4 The focus of the study ................................................................................................... 5 1.5 Definition of terms ......................................................................................................... 7 1.6 Research structure ........................................................................................................ 9 1.7 Conclusions .................................................................................................................. 11 Chapter 2 Tourism in Taiwan .................................................................. 12 2.1 Introduction ............................................................................................................... 12 2.2 The historical background of Taiwan ..................................................................... 12 2.3 An overview of the Taiwan tourism industry ......................................................... 15 2.3.1 The development of tourism in Taiwan ........................................................ IS 2.3.2 The role and structure of the Tourism Bureau ............................................ 24 2.4 The operation of travel agencies in Taiwan ............................................................ 26 2.4.1 The development of travel agencies ............................................................... 27 2.4.2 Operation and management of travel agencies ............................................ 29 2.4.3 Distribution in Taiwan .................................................................................... 33 2.5 Preferences of Taiwanese travellers ........................................................................ 34 2.6 The package tour ....................................................................................................... 38 2.6.1 The historical development of package tours (inclusive tours) ................... 38 2.6.2 The nature of guided (escorted) package tours ............................................ 39 2.6.3 The difficulties of Taiwan's outbound guided package tours ..................... 42 2.6.4 Disputes between service providers and customers ..................................... 48 2.7 Tour leader ................................................................................................................ 50 2.7.1 The role of the tour leader .............................................................................