ENTER 2015 Research Track Slide Number 1

Crowdfunding Success of Tourism Projects. Evidence from Switzerland.

Michael Beier, Kerstin Wagner

Swiss Institute for Entrepreneurship,

University of Applied Sciences HTW Chur, Switzerlandmichael.beier@htwchur.ch

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Introduction

• “Crowdfunding is an open call through the internet for the provision of financial resources, either in the form of donation or in exchange of the future product or other forms of monetary or non-monetary rewards over a fixed time limit” (Belleflamme et al. 2013).

• Two very different types of crowdfunding:– Monetary (lending/equity)

– Non Monetary (donation/reward-based)

• Specification of Crowdsourcing & Co-creation (Zhang/Bai 2012)

• Infrastructure is a mixture of Social Media & eCommerce(Beier/Wagner 2014)

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Crowdfunding-Platform

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Crowdfunding and Tourism

• Until now crowdfunding literature does not differentiate between industries and therefore empirical evidence only covers general success patterns.

• Concerning the field of tourism, merely some first exploratory studies on crowdfunding in general have been published describing tourism projects as exemplary cases (Belleflamme et al. 2014, Yoo/Choo 2014).

• Here, we analyse empirically the factors that lead to fundraising success of tourism crowdfunding projects.

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H1: Project Characteristics

A higher number of project initiators should have a positive influence because of enhanced human capital, networks andconfidence (Hsu 2007, Franke et al. 2008).

H1c: The number of reward segments offered in a crowdfunding campaign is positively related to crowdfunding success of tourism projects.

H1a: The number of project initiators is positively related to crowdfunding success of tourism projects.

Projects attract mainly local donors (Agrawal et al. 2013).

H1b: Tourism projects listed in the national currency will show higher rates of crowdfunding success than others.

Rewards are the most relevant compensation for donors, whichallow to match different customer preferences and price levels.

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H2: Project Presentation

• Media Richness Theory (Daft et al. 1987)

• Exploratory results from crowdfunding in general show that projects with a video are more often funded successfully (Kuppuswamy/Bayus 2013).

• Photos and videos are crucial for communication and promotion of tourism products (Garrod 2009, Lo et al. 2011).

H2a: The number of photos included in the project description is positively related to crowdfunding success

H2b: Tourism projects including a video in the project description will show higher rates of crowdfunding success than others.

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H3: Additional Off-Page Media

• allow individual communication with the stakeholders, what leads to increasing trust and perceived proximity (Wang/Emurian 2005).

• influence the willingness to pay as well as the intention to purchase (Gregg/Walczak 2010).

• generate traffic to the project page on the CF-platform.

H3a: The use of a homepage additional to the project page on the crowdfunding platform is positively related to crowdfunding success.

H3b: Application of a Facebook account additional to the project page on the crowdfunding platform is positively related to crowdfunding success.

H3c: Application of a Twitter account additional to the project page on the crowdfunding platform is positively related to crowdfunding success.

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• data from 100-days.net - one of the two dominant crowdfunding platforms in Switzerland

• 492 projects started and completed on the platform between Feb 2012 and Nov 2013

Data

Categories #

“Food & Beverages” 30

“Dance & Theatre” 18

“Outdoor” 3

“Culture” 23

“Events” 23

“Concerts” 7

Observations in Tourism 104

Other Categories 388

Observations in Total 492

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Results - Descriptives

Variables MIN MAX MEAN STDDEV

Dummy: Language is German 0 1 0.97 0.168

Dummy: Initiator is a Company 0 1 0.71 0.455

Funding Goal 300 29'000 5'821.14 5'429.615

Number of Project Initiators (H1a) 1 12 1.56 1.525

Dummy: Currency is CHF (H1b) 0 1 0.93 0.252

Number of Rewards (H1c) 1 27 6.27 3.768

Number of Photos (H2a) 1 6 3.34 2.088

Dummy: Description Contains Video (H2b) 0 1 0.64 0.484

Dummy: Homepage (H3a) 0 1 0.84 0.372

Dummy: Facebook (H3b) 0 1 0.88 0.332

Dummy: Twitter (H3c) 0 1 0.25 0.435

Observations: 104

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Results – Regression AnalysisVariables Model 1 Model 2

Dummy: Language is German 5.232 4.962

Dummy: Initiator is a Company 0.089 -0.465

Funding Goal -1.098 ** -1.786 ***

Dummy: Category is “Dance & Theatre” -0.185 -0.253

Dummy: Category is “Outdoor” -0.091 -0.078

Dummy: Category is “Culture” -0.178 -0.235

Dummy: Category is “Events” -0.167 -0.218

Dummy: Category is “Concerts” 0.002 0.006

Number of Project Initiators (H1a) 0.425 *

Dummy: Currency is CHF (H1b) 1.078 **

Number of Rewards (H1c) 0.447 *

Number of Photos (H2a) -0.309

Dummy: Description Contains Video (H2b) 0.426

Dummy: Homepage (H3a) -,434

Dummy: Facebook (H3b) 0.062

Dummy: Twitter (H3c) 0.584 **

Constant -1.37

Observations 104 104

Nagelkerkes R2 0.154 0.400

Notes: * 0.1 > p ≥ 0.05; ** 0.05 > p ≥ 0.01; *** p < 0.01 Dependend Variable:

Funding SucessReference Category is “Food & Beverages”

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Limitations / Outlook

• Crowdfunding data profide very detailed insights on innovation, projects, teams and networks in tourismMore qualitative analyses of platform data and content

• Crowdfunding is much more than just a new way offundraising: Premarket-Checks, Preorder-System, Open Innovation Tool, Online-Marketing Project with DMOs of Davos / Klosters and St. Gallen / Bodensee and Swiss Alpine Club (SAC)

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Contact

• Linkedin: linkedin.com/in/michaelbeierorganization

• Facebook: facebook.com/michaelbeier.org

• Blog: michaelbeier.org

• Email: michael.beier@htwchur.ch