Galia Fuchs and Arie Reichel
Introduction
Choosing a tourist destination often involves dealing with various types of perceived risks ranging from disappointment with the expected experience through the waste of precious vacation time, to the fear of physical harm due to disease, crime or terror. When faced with risk associated with purchasing a new product or service, consumers often utilize risk reduction strategies that tend to adjust the level of the perceived risk. Do tourists differ in their perceptions of risk associated with a particular destination? Can we identify tourist characteristics that distinguish between various risk perceptions as well as between various risk reduction strategies? Is the choice of a particular type of tour associated with specific types of risk? Does the country of origin matter in terms of perceived risk? In order to attempt to answer these questions, this exploratory study attempts to examine the relation- ships between destination risk perceptions, risk reduction strategies, tourist characteristics and type of tour. First, the concept of tourist destination risk perception is clarified and elab- orated on through the concept of tourist as a consumer faced with a decision about intangi- ble service. The various dimensions of destination risk perceptions are analyzed in relation to risk reduction strategies as well as tourist characteristics and the type preferred tour.
Consumer behavior literature has been discussing the theory of perceived risk for over four decades (Assael, 1995; Engel, Blackwell, & Miniard, 1995). The theory assumes that consumers perceive risk in their purchasing behavior and generally act to reduce it.
Perceived risk is defined as “a consumer’s perception of the overall negativity of a course of action based upon an assessment of the possible negative outcomes and the likelihood that those outcomes will occur” (Mowen & Minor, 1998, p. 176). According to “classical”
consumer behavior literature (Jacoby & Kaplan, 1972; Peter & Ryan, 1976), consumer per- ceived risk is composed of a number of types of risk: physical — the risk of physical harm to the consumer as a result of the functioning of the product; financial — the risk that the money invested in the product will be lost; performance — the risk identified with the
Progress in Tourism Marketing Copyright © 2006 by Elsevier Ltd.
All rights of reproduction in any form reserved.
ISBN: 0-08-045040-7
161
162 Galia Fuchs and Arie Reichel
possibility that the product will not function as expected; social — the fear that the purchase will not conform to the standards of the reference group; psychological — the fear that the product will not be compatible with the self-image of the consumer; time — the possibility that the consumption of the product will be overly time consuming; and opportunity loss — the risk that by taking a course of one action, the consumer will miss out on doing some- thing else he or she would prefer to do. As soon as consumers have experienced a certain level of risk, their behavior changes, from delaying the purchase to using strategies designed to reduce the risk level to a “tolerable” one (Mowen & Minor, 1998; Roselius, 1971).
Literature Review
Despite the importance of consumer risk perception, tourism literature has only recently turned its attention to this subject. Roehl and Fesenmaier (1992) were among the first to study risk perception in tourism. Utilizing factor analysis, they identified three basic dimensions of perceived risk: physical-equipment risk, vacation risk and destination risk.
Tsaur, Tzeng, and Wang (1997) focused on two main types of risk: physical risk, which refers to the possibility that an individual’s health is likely to be exposed to injury and sick- ness because of conditions such as law and order, weather and hygiene, as well as equip- ment risk, which refers to the dangers arising from the malfunctioning of equipment, such as insufficient telecommunication facilities, unsafe transportation and breakdown of vehi- cles. One of their main findings is that law and order was the most important aspect of tourist perceived risk.
Mitchell and Vassos (1997) found that the risk factor deemed most risky to holiday tourists was “Your hotel may not be as nice as it appears in the brochures”, and the least risky was “Your representative guide will not participate in activities such as windsurfing or scuba diving”. Mäser and Weiermair (1998) found that perceived risk could be used in part as a variable in explaining decision-making processes of tourists: The higher the per- ceived risk, the more information tourists seem to seek and the more rational the decision process becomes. Sönmez and Graefe (1998b) examined types of risk associated with international travel and the overall degree of safety felt by the tourists. They identify sev- eral types of risk such as equipment/functional risk (“possibility of mechanical, equip- ment, organizational problems occurring during travel or at destination (transportation, accommodations, attractions), financial risk, health risk, physical risk, political instability risk, psychological risk, satisfaction risk, social risk, terrorism and time risk. The results revealed that perceived risks were found to be strong predictors of the likelihood of avoid- ing destinations. The higher the perceived risk of the foreign destination, the higher the likelihood that consumers will decide to avoid visiting it (Sönmez & Graefe, 1998a, b).
The present study explores the concept of destination risk perception and attempts to reveal the possible relationships between tourist destination risk perception, tourist char- acteristics, type of travel and usage of risk reduction strategies. It is assumed that tourist characteristics such as country of origin, age, religious persuasion, motivation to visit the destination and past experience have an effect on the level of destination risk perception.
Moreover, the type of travel is related to risk perception in the sense that, for example, group-based package tours require fewer decisions and presumably involve less risk.
Destination Risk Perception and Risk Reduction Strategies 163 Furthermore, risk reduction strategies are clearly related to destination risk perception.
These exploratory interrelationships have to date not been studied simultaneously with respect to a specific tourist destination.
Methodology
A structured tourist destination risk perception questionnaire (see Fuchs & Reichel, 2004;
2006) was developed. Questions asked about the respondents include: (a) overall destina- tion risk perception; (b) types and dimensions of destination risk; (c) risk reduction strate- gies; (d) socio-demographic characteristics, including type of tour. The target population of the main field study was international tourists to Israel, a country known for a long his- tory of tourist crises (Mansfeld, 1999). The choice of a highly risky destination enables to focus on tourists who are in the midst of consuming a risky “tourist products” and to exam- ine variations in attitudes and perception toward risk and risk reduction strategies.
During July 2000, letters were sent to managers of hotels around the country, with the exception of the resort city of Eilat. They were asked for permission to interview tourists staying at the hotels they run. Eilat was excluded from the sample because according to the statistics and expert opinions during the months the research took place (August and September) most of the tourists in Eilat are Israelis. Of the hotels whose managers answered positively to the request and which hosted international tourists in the relevant period, interviews were conducted in 18 hotels and 3 youth hostels in Jerusalem, Tel Aviv, Tiberias, the Dead Sea, Arad, Netanya and in the Solarium at the Dead Sea. Within each site the respondents were randomly approached. The hotels and youth hostels represent a wide range of accommodation, from budget to the luxurious.
The questionnaire was translated from English into French, German and Russian by professional translators and then retranslated into English and Hebrew to assure accuracy of meaning. Fourteen English, German and Russian speaking students trained for inter- views were able to conduct 776 face-to-face interviews from August 17, 2000 through the onset of the Palestinian Al-Aksa Intifada at the end of September 2000. Emphasis was placed on the fact that the research should be conducted in as short a timeframe as possi- ble to avoid interference resulting from various unexpected events such as political, eco- nomic or terrorist acts.
The study’s response rate was extremely high: 98%. The remaining 2% were tourists from the former Soviet Union. It is assumed that this is due to cultural biases associated with the long tradition of avoiding expressing opinion to strangers. The high consent rate may have been due to the interviewing techniques of qualified interviewers and by their approaching the tourists at the right and convenient time for the tourists while in their hotels and not on sites visited. Also, the interviewers reported a very high desire to express feedback on the visit, both negative and positive, as part of the interview process. A total of 760 questionnaires were completed, 415 female respondents (54.6%) and 345 male respondents (45.5%). The ages ranged from 18 to 70⫹, as presented in Table 11.1. The tourists were asked to state their country of residence: the largest category was United States and Canada (n⫽207, 27.2%), while the smallest category was Jordan (n⫽8, 1.1%).
Table 11.2 presents the distribution of perceived average income.
Discussion of Findings
To test the construct validity of the questionnaire, a factor analysis was utilized, employ- ing the method of principal component with Varimax rotation. The summary of the results of the factor analysis is presented in Table 11.3. The cutting point of variable inclusion in a particular factor was above 0.5. Accordingly, 18 variables were grouped into six factors accounting for 53.5% of the variance. The following questions were not included in any factor due to low loading (⬍0.5): Q27 — “Tourist behavior”; Q32 — “Possible strikes”;
Q12 — “Value for money”; Q38 — “Status in life”; Q19 — “Epidemics”; Q21 —
“Personal satisfaction”; and Q28 — “Food would not be good”.
Factor 1, “human-induced risk” includes the questions that measured crime, terror, political instability and crowded sightseeing. This factor reflects the risk perception of possible physical harm stemming from human activities. Factor 2, “financial risk”, includes the questions that measure expenses in Israel, the assumed costs of touring Israel as compared to touring other destinations, extra expenses at home and the influ- ence of the trip to Israel on the financial situation of the tourist. This factor reflects the financial risk perception in selecting a particular destination. Factor 3, “service quality risk”, includes the questions that measure the friendliness of the hosts, quality of facilities 164 Galia Fuchs and Arie Reichel
Table 11.1: Age distribution of interviewees.
Age group Frequency Percentage
18–29 190 25.0
30–39 94 12.4
40–49 136 17.9
50–59 132 17.4
60–69 150 19.7
70⫹ 58 7.6
Total 760 100.0
Table 11.2: Perceived average income.
Income perception Frequency Percentage
Much below average income 34 4.5
Below average income 72 9.5
Same as average income 286 37.6
Above average income 262 34.5
Much above average income 61 8.0
Refused to answer 45 5.9
Total 760 100.0
Destination Risk Perception and Risk Reduction Strategies 165 Table 11.3: Validation results: Factor analysis results (Varimax rotation).
Factor Loading Eigenvalues % of Cronbach’s Pearson
Variance alpha Factor 1
“human-induced risks” 2.90 11.10
Q35 Political unrest 0.81 0.75 —
Q31 Terrorism 0.79
Q29 Crime 0.61
Q23 Crowded 0.51
Factor 2
“financial” 2.58 9.90
Q14 Extra expenses at the
destination 0.73 0.71 —
Q20 More expensive than … 0.71 Q26 Incidental expenses at
home 0.61
Q30 Impact on financial
situation 0.61
Factor 3
“service quality” 2.50 9.67
Q37 Israelis would not be
friendly 0.72 0.75 —
Q34 Facilities would not
be acceptable 0.52
Q18 Hotels unsatisfactory 0.50 Factor 4
“socio-psychological” 2.40 9.34
Q17 What friends think 0.74 0.68 —
Q33 What family thinks 0.72
Q15 Self-image 0.65
Factor 5
“natural disasters and
car accidents” 1.81 6.96
Q22 Natural disasters 0.67 0.35 0.25
Q25 Car accidents 0.64
Factor 6
“food safety problem and
weather” 1.70 6.54 0.37 0.23
Q11 Food safety 0.73
Q13 Weather 0.58
in the country visited and level of satisfaction with the hotels. This factor reflects the risk that the service quality, whether human or physical, at the destination will not be satis- factory. Factor 4, “socio-psychological risk”, includes questions that measure the opin- ions of families and friends of the tourist and the compatibility of the trip with self-image. This factor reflects the socio-psychological risk stemming from the decision to travel to Israel. Factor 5, “natural disasters and car accidents”, includes questions that measure the possibility of these occurrences while staying in Israel. Factor 6, “food safety and weather”, reflects the risk perception stemming from food safety and bad weather conditions.
In addition, overall destination risk perception was measured by an index consisting of the following statements: (1) Israel is a safe country for tourists; (2) I expected my friends would worry about my safety while I was in Israel; (3) Prior to your trip did you consider Israel more dangerous than other places around the world? (4) Considering your experi- ence in Israel so far, how would you rate Israel in terms of risk? (5) To what extent do your friends and relatives see Israel as a risky place to visit?
In the following sections, variables associated with the above destination risk percep- tion factors will be presented in terms of statistically significant T-test results as well as ANOVA along with Post-Hoc Scheffe results. Specifically, numerous possible relations among risk factors and tourist characteristics were examined in exploratory fashion. Yet, only significant results will be presented below, as related to country of origin, age, reli- gious persuasion, motivation for visiting the destination and past experience in interna- tional travel. The relationship between risk perception factors and risk reduction strategies were examined by Pearson correlations. In order to explore risk perceptions and risk reduction strategy variations between tourists who chose different types of tour (FIT vs.
group travel) a two-group discriminant analyses were utilized.
Tourist Characteristics
Country of origin (residence) The overall destination risk perception of tourists from Germany was higher than that of tourists from the USA and Canada, France and other Western European countries (mean of 3.63 vs. 3.04, 2.80 and 2.90, respectively). The human-induced risk perception of tourists from Germany was higher (m⫽3.18) than that of tourists from France (m⫽2.53). With regard to financial risk, tourists from Germany and France perceived higher levels of risk than those from the USA and Canada (means of 2.58, 2.59 vs. 2.01, respectively). Furthermore, it was found that tourists from Africa per- ceived higher levels of socio-psychological and food safety and weather problems than tourists from Germany, USA and Canada (socio-psychological: mean⫽1.97 vs. 1.30, 1.22, respectively; food safety: mean⫽3.21 vs. 1.97 and 2.39, respectively).
Age The sample was divided into six age groups: 18–29, 30–39, 40–49, 50–59, 60–69 and 70+. The risk perception of the youngest group was higher than that of all other age groups in terms of the overall destination risk perception, human-induced risk, financial risk as well as service quality risk. For example, with respect to overall risk perception, the group of 18–29, mean⫽3.46 vs. m⫽2.50 in the age group of 60–69. Also, human-induced risk:
the 18–29 group’s mean⫽3.26 vs. mean⫽2.5 in the 60–69 group.
166 Galia Fuchs and Arie Reichel
Religious persuasion The overall and the human-induced risk perceptions of Jewish tourists were lower than those of Catholic and Protestant tourists, and of those who claimed “no religious affiliation” (the overall risk: 2.6 vs. 3.28, 3.37, 3.35, respectively;
human-induced risk: 2.37 vs. 2.95, 3.17, 3.10, respectively). Service quality risk and nat- ural disasters and car accidents risk perceptions of Catholic tourists were lower than that of Jewish tourists and those with “no religious affiliation” (service risk: 1.65 vs. 2.09, 2.52 respectively; natural disasters and car accidents: 1.35 vs. 1.79, 1.82, respectively).
Motivation for visiting the destination The overall destination risk perception and the human-induced risk perception of tourists, whose principal motive for visiting the desti- nation was visiting friends and relatives, were lower than those of tourists whose motives for visiting were sightseeing, religious or cultural. For example, the overall risk perception mean of the visiting friends and family segment was 2.54 vs. sightseeing⫽3.47; religious segment⫽3.21 and cultural tourism⫽3.11.
Past experience in international tourism Financial, service quality, socio-psychologi- cal, natural disaster and car accidents, food safety and weather risk perceptions of tourists with no past experience in international tourism were somewhat higher than those of expe- rienced tourists. For example, in terms of financial risk, the formers mean was 2.88 vs.
2.36 of the latter. However, past experience was not found to be a factor that influenced the overall destination and human-induced risk perceptions. Furthermore, it was found that the greater the past experience in visiting the particular destination (Israel), the lower the over- all risk perception (r⫽ ⫺0.21).
Risk Reduction Strategies
The analyses of the study’s results imply that tourists use various strategies to reduce the level of destination risk perceptions to levels that enable them to actually visit the destina- tion. The strategies of risk reduction include purchasing inexpensive tourist products, developing loyalty (to hotels in which they have stayed before, to the travel agent or to a particular destination), searching for information (from brochures, tourist organizations, the Internet, friends and relatives), cooperative decision making, consulting people who have visited the destination in the past, watching television programs on the destination and reading articles about the destination.
The results indicate that the higher the overall risk perception of the destination and its components, the higher the utilization of risk reduction strategies. The strategies most used were the following (in decreasing order): (1) consulting with past visitors to the destina- tion (Israel); (2) reading articles on the destination; (3) loyalty to hotels they had stayed at in the past; and (4) gathering information from friends and relatives. A link was also found between several risk reduction strategies and various risk dimensions. For example, a pos- itive moderate association was found between the perceived human-induced risk and the search for information from friends and relatives (R2⫽0.23) and between the planning of an inexpensive trip and the financial and service quality perceived risk (R2⫽0.27).
The above analyses focused on destination risk perceptions and socio-demographic characteristics of the tourists as well as the motivation for visiting the destination, past Destination Risk Perception and Risk Reduction Strategies 167
experience in international tourism and risk reduction strategies. It is also interesting to see if the choice of travel mode reflects particular destination risk perceptions. Specifically, would tourists on a group tour exhibit different destination risk perception patterns than those who chose to travel on their own (FIT)? The differences between the two groups were examined by means of discriminant analysis.
Type of Travel and Destination Risk Perceptions
Table 11.4 depicts the results of the discriminant analysis comparing FIT and group travel in terms of destination risk dimensions. As demonstrated in Table 11.4, FIT travelers are associated with natural disaster and car accident, service quality and financial destination risk dimensions. Group travelers, on the other hand, are associated with general risk, human-induced risk, food safety and weather and socio-psychological risk dimensions.
The classification results indicated 67.6% correctly classified cases.
Type of Travel and Risk Reduction Strategies
The choice of a type of travel is assumed to correlate with preferences for the usage of risk reduction strategies. As noted earlier, risk reduction strategies include collecting information from travel agents, friends and relatives, the Internet, TV programs, articles and consulting with people who have previously visited the destination. Moreover, making the vacation short and relatively inexpensive. The results of the discriminant analysis of FIT vs. group travel in terms of risk reduction strategies are presented in Table 11.5. As can be seen in Table 11.5, the FIT segment is associated mainly with choos- ing inexpensive trips, searching information on the Internet, preference for short trips. On the other hand, the group travelers are associated mainly with acquiring information through travel agents, reading articles about the destination, watching TV programs and gathering information from friends. The discriminant function correctly classified 62.2%
of the cases.
168 Galia Fuchs and Arie Reichel
Table 11.4: Discriminate analysis results FIT vs. groups travelers risk dimensions.
Risk dimensions Standardized coefficients
Natural disaster and car accident 0.53
Service quality 0.49
Financial 0.34
General risk ⫺0.30
Human-induced risk ⫺0.19
Food safety and weather ⫺0.17
Socio-psychological ⫺0.05
1. FIT centroid 0.47 2. Group centroid -0.39