Tourist Perceived Risk: Something to Avoid or Desire?

Arie Reichel

Ben-Gurion University of the Negev, Israel

ICOT, Rhodes, April 29, 2011

• Consumer behavior literature: consumers avoid risks. (Yet, very few products are risk –free).

• Perceived risk influences the consumer even if, in fact, it does not exist in reality. An unperceived risk will not affect consumer behavior, even if it is real and tangible.

• Risk reduction strategies are employed

• How can we explain tourists who choose risky destinations? adventure and high-risk tourists?

Physical

Financial

Performance

Social

Psychological

Time

Opportunity

Consumer risk perceptions

(Assael 1995; Engel, Blackwell and Miniard 1995; Mowen and Minor 1998; Schiffman and Kanuk 2007)

(Fuchs and Reichel 2004, 2006; Mansfeld 1992; Pizam and Mansfeld 1996; Reisinger and Mavondo 2005; Roehl and Fesenmaier 1992; Seaton and Bennett 1996;Sönmez 1998; Sönmez and Graefe 1998a; Tsaur, Tzeng and Wang 1997; Witt and Mountinho 1995, Grönroos, 1990, 2007; Lovelok and Wirtz 2007; Zeithmal, Bitner and Gremler 2006 ).

Tourist perceived risk

Tourism is characterized by service-specific characteristics of: intangibility, inseparability, variability and perishability, prone to bad weather, unfriendly locals, etc.

A continuing interest in the concept of risk in tourism

• Roehl and Fesenmair (1992)• Tsaur, Tzeng and Wang (1997)• Mitchell and Vassos (1997)• Sönmez and Graefe (1998)• Mäser and Weiermair (1998)• Lepp and Gibson (2003)• Reisinger and Mavondo (2005)• Letho et al. (2004) • Campo-Martinez et al. (2009) • Sharpley (2010)

The importance of the aspects of tourist risk varies across nationalities, religious affiliation and gender.

Main conclusions from literature on tourist perceived risk

Perceived risk is multidimensional.

Perceived risk could be partially used as an explanatory variable in tourists’ decision-making processes.

Risk reduction

Perception of risk affects behavior: from delaying the purchase to using strategies designed to reduce risk to a "tolerable“ level.

Examples: developing brand loyalty; searching for information; using money back guarantees; purchasing a popular brand; purchasing expensive or inexpensive brands.

)Assael 1995; Byzalov and Shachar 2004; Heiman, McWilliams and Zilberman 2001; Mitchell 1993; Mitchell and Greatorex 1993; Mitchell , Moutinho and Lewis 2003; Mitchell and Vassos 1997; Mowen and Minor 1998; Roselius 1971; Schiffman and Kanuk 2007; Shikhar, Sego and

Chanvarasuth 2003; Tan 1999 (

Reading independent travel reviews and purchasingtravel insurance were the most common risk relievingstrategies (Mitchell and Vassos 1997).

Tourist risk reduction

FIT= mainly short and inexpensive trips and search for information on the Internet. Group travelers=information through travel agents, articles, TV programs and friends (Fuchs and Reichel

2006). Familiarity with a destination + information searchbehavior (Tideswell and Faulkner 1999).

Examples of studies on tourist risk perceptions

The existence of variables associated with risk, such as type of tour.

Study 1:Risk perceptions of international tourists arriving at a highly volatile destination (Fuchs and Reichel, 2004)

n=776 face-to-face interviews of international tourists. (Response rate=98%)

an integrative concept of risk perception of a tourism destination and its dimensions.

Destination risk perceptions

“human–induced risk”

“financial risk”

“service quality risk”

“socio-psychological risk”

“natural disasters and car accident risk”

“food safety problems and weather”

)Fuchs and Reichel 2006 (

FIT vs. group traveler risk

dimensions Risk DimensionsStandardized

CoefficientsNatural Disaster and Car Accidents0.53

Service Quality0.49

Financial0.34

General Risk-0.30

Human-Induced Risk-0.19

Food Safety Problems and Weather-0.17

Socio-Psychological-0.05

1 – FIT Centroid 0.472 – Group Centroid -0.39

Study 2:Risk Perceptions of Repeat Visitors vs. First Time Visitors (Fuchs and Reichel, 2010)

Experience and prior knowledge=of risk and uncertainty reduction (Letho, O'Leary and Morrison 2004).

Repeat visits=considered as past experience with thedestination (Kerstetter and Cho 2004).

“First-timers”=commercial information sources such as brochures, advertisements and tour operators. “Repeaters”=both commercial and noncommercial sources such as articles/news, books/movies and reference groups (Baloglu 2001).

Internet usage????

Back to the sample of Study 1:

439 tourists (57.8%)=first time visitors,

321 tourists (42.2%)=repeat visitors.

CROSSTABULATION OF FIRST TIME VS. REPEAT VISITORS AND MAIN MOTIVETION FOR VISIT

MotivesFirst time visitors

Repeat visitors

Total

Religious motives

243 66 309

Health motives

18 58 76

Sightseeing motives

11138 149

Leisure motives

25 61 86

VFR motives

12 87 99

Culture motives

30 11 41

Total 439 321 760

Chi-square=226.03, p=0.00

Profiles of visitors’ destination risk dimensions

Risk DimensionsStandardizedCoefficients

Human–Induced Risk0.95

Financial-0.28

Service Quality-0.52

Socio-Psychological0.26

Natural Disaster and Car Accident

-0.61

Food Safety and Weather0.221 – First time Visitors centroid 0.362 – Repeated Visitors centroid -0.50

Study 3:Destination risk and health and well-beingtourists (Fuchs and Reichel, 2010)

Health and well-being tourists in a volatile, high risk, destination? Is that a logical behavior?

This study compares and contrasts 76 health and wellness tourists; 309 religion motivated tourists; and 149 sightseeing tourists.

Health motivated tourists=destination risk perceptions mainly in terms of "financial“ and "natural disaster and car accidents“ risk factors.

These risk factors may reflect the Dead Sea area that hasremained relatively peaceful and stable without geo-politicalacts of terror.

It seems that health motivated tourists made a wise, logical niche choice within a highly volatile destination.

Risk and adventure are central to the construction of backpacker identity(Elsrud 2001,and Gibbson and Jordan 1998a,1998b).

Study 4: Adventure tourism: backpackers (Reichel, Fuchs and Uriely, 2009)

Israeli backpackers who chose the Far East as their preferred destination vs. those who chose to travel in South America.

“South and Central American” destinations share an image of adventure-related sites that involve risky activities and extreme sports in natural settings, such as jungle trekking and mountain climbing (Noy and Cohen 2005).

Previous research suggests that the imagery of the "Far East“(Southeast Asia) among Israeli backpackers has been that ofspirituality, involving the activities of periods of sojourn inashrams, passive relaxation on tropical beaches and theuse of drugs. (Dayan 1999; Mevorach 1997; Maoz 2006, 2007; Noy and Cohen 2005).

Questionnaire=Fuchs and Reichel (2004)+Specific Issue from the backpacking literature (especially Uriely and Belhassen (2005, 2006)+Elsrud(2001) Lepp and Gibson (2003) insights+15 in-depth interviews.

Snow-ball Sampling: 579 usable questionnaires were collected. 223 backpackers=the “Far East”. 179 =South America.

Dimensions of Backpacking Experience Risk Perceptions

Factor % of Variance Explained

"Site-related physical" 10.53

"Socio-psychological" 9.18

"Physical Harm" 8.92

"Expectations" 8.13

"Socio-political difficulties”

7.96

"Financial" 7.38

"Mass" 5.87

"Self-Behavior" 0.47

Dimensions of Backpacking Risk Perceptions

Factor 1, "Site-related physical" (safety of food, taste of food, cheating, acceptability of facilities, crime and diseases)- the risk perception which stems from visiting particular destinations.

Factor 2, "Socio-psychological" (the compatibility of the trip with the self-image, the backpacker's image in the eyes of his/her family, backpackers’ perception of how the trip might affect his/her future, the way friends think of the backpacker, and the effect of academic, or professional delay on future success). - the socio-psychological risk stemming from the backpacker's decision to take the trip.

Factor 3, "Physical harm" (car accidents, natural disasters, injury and terrorism). - the risk perception of possible physical harm.

Factor 4, "Expectations" (expectations that haven‘t been fulfilled, dissatisfaction with the trip, mistaken choice of

the destination, and the trip as a waste of time). - the fear that the trip would fail to meet expectations.

.

Factor 5, "Socio-political difficulties"(political unrest, hostile natives, and strikes). - the fear of danger that stems from the socio-political condition of the destination.

Factor 6, "Financial risk" (expected extra expenses, impact of trip on the individual's financial situation, and fear that the chosen destination would be more expensive than other destinations).

- the financial risk perception in selecting a particular destination.

Factor 7, "Mass risk"(commercialized and crowded sites).

Factor 8, "Self-behavior risk" (drug abuse side effects and the negative impression his/her conduct might make on locals). - the fear of danger due to the backpacker's behavior.

Discriminant Analysis Results of Far East vs. South America Backpacking Experience Risk

Dimensions Risk DimensionsStandardized

Coefficients

"Mass"0.49

"Socio-psychological"0.46

"Socio–political"-0.28

"Financial"-0.27

"Expectation"0.21

"Behavioral"0.20

"Site-related physical"-0.08

"Physical Harm"-0.02

1 – Far East backpackers N=233

Centroid 0.18

2 – South America backpackers N=179

Centroid –0.24

Discriminant Analysis of Far East vs. South America Backpackers–Risk Reduction Strategies

Risk Reduction StrategiesStandardized Coefficients

Searching for information in stores and meeting places of backpackers

0.83

Searching for information in travel guides

0.58

Searching for information on the Internet

0.45

Gathering information from travel agents

0.32

Gathering information from friends0.28

Cooperative decision making0.18

Consulting with people who had previously visited the destinations

0.14

Limiting the duration of the trip-0.13

Reducing the cost of the trip0.06

Avoiding dangerous destinations0.05

Searching for information in magazines

0.02

1 – Far East backpackers N=233Centroid –0.24

2 – South America backpackers N=179

Centroid 0.32

Study 5:High sensation seeking vs. low sensation seeking backpackers (Fuchs, Uriely and, Reichel)

Examine the relationship between the personality trait of sensation seeking and backpackers‘ risk perceptionsInstruments: study 4 questionnaire + Zuckerman SSS (1994) version V questionnaire (40 statements with binary response options).

TS- A total sensation seeking score=summation of four independent scales:

TAS- Thrill and adventure seeking

ES- Experience seeking

DIS- Disinhibition

BS- Boredom susceptibility

Sensation Seeking Scale (SSS)

Sensation seeking is positively correlated with: motivations for travel, adventure seeking,

participation in challenging high-risk tourist activities (such as mountain climbing, downhill skiing and SCUBA-diving )

Sensation seeking is negatively correlated with: tourist risk perceptions.

(Bouter et al. 1988 ;Fontaine 1994; Fowler, Von Knorring and Oreland 1980; Galloway 2002; Gilchrist, Lorch and Donohew 2002; Heyman and Rose 1980 ; Pizam, Reichel and Uriely 2002; Povey, Dickinson and Povey 1995; Robinson 1985; Zuckerman 1979a; Zuckerman 1979b).

Sensation seeking scores

TS- M=21.14, SD=3.18, Median=21.00

TAS - the desire to engage in risky and adventurous behaviors offering unique sensations: M=5.33, SD=1.59 , Median=5.00

ES - the desire to seek new sensations and to live an unconventional lifestyle: M=6.12, SD=1.40, Median=6.00

DIS - the need to seek social stimulation: M=4.92, SD=1.46, Median=5.00

BS - aversion to routine, repetition and monotony: M=4.78, SD=1.48, Median=5.00

Risk DimensionsTASStandardizedCoefficients

ESStandardizedCoefficients

DISStandardizedCoefficients

BSStandardizedCoefficients

TSStandardizedCoefficients

"Site-related physical"0.40-0.510.36-0.170.28

"Socio-psychological"-0.01-0.03-0.360.360.13

"Physical Harm"-0.06-0.360.730.19-0.45

"Expectation"0.680.060.45-0.170.44

"Socio–political"0.04-0.34-0.32-0.49-0.42

"Financial"0.070.520.030.28-0.08

"Mass"-0.790.12-0.310.160.07

"Behavioral"0.170.650.240.570.86

Discriminant Analysis Results of High SSS vs. Low SSS Backpackers Risk Dimensions

Risk perceptions of high TS; high TAS; high ESand high BS are internally oriented:focusing on their own expectations and/or behavior. These backpackers seem to be concerned about the possibility that the backpacking experience would notmeet their expectations and/or about the consequences of their behavior.

Risk perceptions of low TS and low ES are externally oriented: "physical harm" and "socio-political" risk dimensions (car accidents, natural disasters or terror attacks), not attributed to their own behavior but rather externally inflicted.

Study 6:Tourists vacationing in a terror inflicteddestination: Rationalizations (Uriely, Fuchs, Reichel and Maoz, forthcoming)

Destination risk perceptions and risk rationalizationsof tourists on their way to a terror-stricken destination, under travel advisory.

489 respondents, interviewed a the border

cross:

(252 males; 235 females).

Most studies hardly examine tourists' reaction to terror-related risks while they are actually threatened by terror events.

Exceptions: Two studies that rely on interviews and ethnographic data to provide insight into the cognitive and affective processes experienced by tourists when threatened by terror (Hartz 1989; Uriely, Maoz and Reichel

2009).

Dimensions of tourists' perceived risk of Sinai

Dimensions of Rationalization

Rationalization strategies include three factors that represent two strategies:

Conclusions:Risk is an integral part of the tourism experience.

Tourists are rational in terms of risk–taking behavior.

They do identify risks, yet the behavior is rational.

They utilize a wide range of risk-reduction strategies

Even high sensation seeking identify risks and behave according to what is relevant to them.

Risk-taking behavior is a balance of control-”de-control”.

“There is a clear logic in the madness”

Thank you for your attention