ENTER2017 eTourism Conference presentation

1. ENTER 2017 Research Track Slide Number 1
Use of Bitcoin in Online Travel Product Shopping:
The European Perspective
Daniel Leung
Department of Tourism and Service Management, MODUL University Vienna, Austria
Email: daniel.leung@modul.ac.at
Astrid Dickinger
Department of Tourism and Service Management, MODUL University Vienna, Austria
Email: astrid.dickinger@modul.ac.at

2. ENTER 2017 Research Track Slide Number 2
Agenda
• Introduction
 Research background
 Research objective
• Literature Review
 Bitcoin
• Methodology
• Findings and Discussions
• Conclusions and Future Research

3. ENTER 2017 Research Track Slide Number 3
Research background
• Researching and purchasing travel products
online are becoming the mainstream trend
 Two-third of worldwide travellers book accommodation
via online channels for their last vacation (Ipsos, 2015)
• Webrooming mode is still preferable:
 Anxiety of payment security, privacy infringement, and
other potential risks (Brown, Muchira & Gottlieb, 2007;
Kolsaker, Lee-Kelley & Choy, 2004; Lin, Jones & Westwood, 2009)
 Billions of fraudulent credit card transactions
(Mahmoudi & Duman, 2015)

4. ENTER 2017 Research Track Slide Number 4
Research background
#1 Mobile payment
• SMS-based transactional payments
• Direct mobile billing
• Mobile wireless application protocol
• NFC-mobile payment
(Morosan & DeFranco, 2016; Ooi & Tan, 2016)
 Volume of NFC-based transactions will rise from EUR4.6
billion in 2014 to EUR53.8 billion in 2018 (Idate, 2014)
 Levels of convenience and security of NFC-MP are
prominent since signature is not required during the
payment process (Leong, Hew, Tan & Ooi, 2013)

5. ENTER 2017 Research Track Slide Number 5
Research background
#2 Cryptographic currencies / Bitcoin
• Bitcoin is an open source payment system
using a decentralized peer-to-peer network
 NOT backed by precious metals to guarantee its value
 Amounts associated with strings of letters and numbers
• Guarantee of acceptance
 NO legal guarantee of acceptance by governments or
central authorities
 European Union recognized Bitcoin has an equal footing
with mainstream currency (Bodoni & Thomson, 2015)

6. ENTER 2017 Research Track Slide Number 6
Research background
Acceptance of Bitcoin - Consumers
• Number of users who own a blockchain wallet
increases 25 times to 7.7 million between June
2013 and June 2016 (Blockchain Luxembourg, 2016)
Acceptance of Bitcoin - Vendors
• As of February 2015, over 100,000 merchants
accept Bitcoins as a payment method
• Include international online travel agencies and
tourism enterprises like CheapAir, Expedia, MGM
Resorts (Cuthbertson, 2015)

7. ENTER 2017 Research Track Slide Number 7
Research objective
Research gap:
• The success of new technologies is dependent on
the consumers’ uptake
• The empirical investigation that explore
“how users leverage and intend to embrace
Bitcoin as a payment method” is absent
Research objective:
• To examine European travellers’ Bitcoin usage
experience in and Bitcoin usage intention for
online travel product shopping

8. ENTER 2017 Research Track Slide Number 8
Bitcoin
• Invented by Satoshi Nakamoto in 2007
(Subramanian & Chino, 2015)
• Mechanism:
 Seller’s address: AAAAA
 Buyer’s address: BBBBB
 1st transaction record:
AAAAA-12345-BBBBB
 2nd transaction record:
BBBBB-AAAAA-12345-BBBBB-23456-AAAAA
 The veracity of the transactions is verified by other
members in the Bitcoin peer-to-peer network (miners)

9. ENTER 2017 Research Track Slide Number 9
Bitcoin
Phase 1 (2008 – 2011)
• Introduction of its mechanism and uniqueness
• Legality of Bitcoin
 Grinberg (2011): Uncertain legal status
 Jacobs (2011): Liabilities
Phase 2 (2013 - 2016):
• Security and privacy of Bitcoin system
(Androulaki, Karame, Roeschlin, Scherer & Capkun, 2013)
• Impact on financial services & regional economy
(Fanning & Centers, 2016; Gopalkrishnan & Hammond, 2015)

10. ENTER 2017 Research Track Slide Number 10
Bitcoin in Tourism
• Previous studies offer general discussion on usage
of Bitcoin in the tourism context:
 Sigala (2015): Bitcoin can serve as a form of payment to
support customer-to-customer collaborative commerce
 Lub, Rijnders, Caceres and Bosman (2016): Discuss the
potential of Bitcoin in their latest work
• “ How consumers leverage and intend to embrace
Bitcoin as a payment option in online travel purchase? ”

11. ENTER 2017 Research Track Slide Number 11
Survey
• Qualifying question
• Section#1: Bitcoin usage experience (4 questions)
 Have you ever used Bitcoin (as a payment method) for
online travel product shopping before? [Yes / No]
 Which type(s) of travel product they purchased and paid by
Bitcoin before?
• Section#2: Bitcoin usage intention (3 questions)
 How likely are you going to use Bitcoin for shopping travel
product online in the coming 12 months? [10-point Likert]
 Which type(s) of travel product they are likely to purchase
and pay by Bitcoin?
Survey
• Qualifying question
• Section#1: Bitcoin usage experience (4 questions)
 Have you ever used Bitcoin (as a payment method) for
online travel product shopping before? [Yes / No]
 Which type(s) of travel product they purchased and paid by
Bitcoin before?
• Section#2: Bitcoin usage intention (3 questions)
 How likely are you going to use Bitcoin for shopping travel
product online in the coming 12 months? [10-point Likert]
 Which type(s) of travel product they are likely to purchase
and pay by Bitcoin?
Methodology

12. ENTER 2017 Research Track Slide Number 12
Survey
• Section#3: Motivators & Inhibitors (2 questions)
 Motivators: FIVE positive aspects of Bitcoin
 B. payment does not require pin/signature for verification
 B. account is not connected to owner’s identity information
 Inhibitors: FIVE concerns about Bitcoin payment
 Lack of knowledge about Bitcoin
 No legal guarantee of acceptance
• Section#4: Respondent demographic profile
Survey
• Section#3: Motivators & Inhibitors (2 questions)
 Motivators: FIVE positive aspects of Bitcoin payment
 B. payment does not require pin/signature for verification
 B. account is not connected to owner’s identity information
 Inhibitors: FIVE concerns about Bitcoin payment
 Lack of knowledge about Bitcoin
 No legal guarantee of acceptance
• Section#4: Respondent demographic profile
Methodology

13. ENTER 2017 Research Track Slide Number 13
Methodology
Pilot test
• Reviewed by two experienced academics
• Conducted with five graduate students
Data collection
• Between April and May 2016
• Two undergraduate students
• Street-intercept survey@ two tourist spots in Vienna
• 138 (out of 150) valid responses (92%)

14. ENTER 2017 Research Track Slide Number 14
2
Findings and Discussions
Bitcoin usage experience
Yes No
Freq. % Freq. %
Usage experience
Used Bitcoin before (N = 138) 49 35.5 89 64.5
Used for online shopping before (n = 49) 36 73.5 13 26.5
Used for online travel product shopping before (n = 49) 29 59.2 20 40.8
Travel product type
Others: Restaurant and food delivery (n = 29) 9 31.0 20 69.0
Accommodations (n = 29) 6 20.7 23 79.3
Airlines (n = 29) 5 17.2 24 82.8
Travel packages (n = 29) 3 10.3 26 89.7
Car rentals (n = 29) 0 0 29 100
Tickets for attractions (n = 29) 0 0 29 100
Tickets for events (n = 29) 0 0 29 100
Tickets for transportations (n = 29) 0 0 29 100
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15. ENTER 2017 Research Track Slide Number 15
Findings and Discussions
Bitcoin usage intention
Yes No
Freq. % Freq. %
Travel product type
Others: Restaurant and food delivery 35 25.4 103 74.6
Accommodationss 25 18.1 113 81.9
Airlines 19 13.8 119 86.2
Car rentals 16 11.6 122 88.4
Tickets for attractions 14 10.1 124 89.9
Tickets for events 9 6.5 129 93.5
Travel packages 8 5.8 130 94.2
Tickets for transportations 5 3.6 133 96.4
• Likeliness of using Bitcoin for shopping travel product online: M = 3.77 (SD = 2.86)
• Familiarity with Bitcoin: M = 4.31 (SD = 2.79)
• Pearson Correlation: r = 0.46 (p < 0.01)
Others: Restaurant and food delivery 35 25.4 103 74.6
Accommodationss 25 18.1 113 81.9
Airlines 19 13.8 119 86.2
Car rentals 16 11.6 122 88.4
Tickets for attractions 14 10.1 124 89.9
Tickets for events 9 6.5 129 93.5
Travel packages 8 5.8 130 94.2
Tickets for transportations 5 3.6 133 96.4
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16. ENTER 2017 Research Track Slide Number 16
Findings and Discussions
Motivators: Factors encouraging consumers to use Freq. %
Bitcoin account is not connected to owner’s identity information 63 45.7
Bitcoin works anywhere and anytime 57 41.3
Establishment of Bitcoin account does not require credit card/bank account 55 39.9
Lower transaction cost is involved in Bitcoin payment than other systems 46 33.3
Bitcoin payment does not require pin or signature for verification 30 21.7
Inhibitors: Factors discouraging consumers to use Freq. %
Lack of knowledge about Bitcoin 83 60.1
Lack of retailers accepting Bitcoin as a payment method 59 42.8
High risk of loss in value 43 31.2
No legal guarantee of acceptance 35 25.4
Abnormal chargeback mechanism 22 15.9
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17. ENTER 2017 Research Track Slide Number 17
Conclusions
• #1 The penetration of Bitcoin usage in online travel purchase
among European travellers is NOT prominent at present
 European travellers (who participated in the survey) reported that they are less
likely to use Bitcoin for shopping travel product online in the coming future
 Respondents will consider shopping restaurant and food delivery online using
Bitcoin
 Helpful for operators by informing their decision making of whether an investment
should be made in order to accept Bitcoin as a payment option

18. ENTER 2017 Research Track Slide Number 18
Conclusions
• #2 Enriching consumers’ knowledge about Bitcoin is the
leading action that vendors should take
 Vendors should emphasize Bitcoin’s highly secure feature (instead of highlighting
convenience) since it is a key motivator rated by consumers
 Vendors should primarily target those early adopters of Bitcoin in online travel
purchase, who are mainly:
 Aged 15 – 30
 Male
 Having higher level of Internet usage experience
 Having higher level of online purchasing experience

19. ENTER 2017 Research Track Slide Number 19
Limitations & Future Research
Limitations
• Small sample size (i.e., 138)
• Limited geographical coverage of respondents (i.e., Europe)
Directions for future research
• Replicate the study with a larger group of travellers from
various age groups and nationalities

20. ENTER 2017 Research Track Slide Number 20
Questions and comments are welcome !!!

21. ENTER 2017 Research Track Slide Number 21
Freq. % Freq. %
Gender Male 81 58.7 Female 57 41.3
Age
15 - 30 57 41.3 46 - 65 29 21.0
31 - 45 38 27.5 66 or above 14 10.2
Monthly household
disposable income
2000€ or less 36 26.1 3001€ - 4000€ 32 23.2
2001€ - 3000€ 31 22.5 4001€ or above 39 28.3
Nationality
Austria 64 46.4 Italy 11 8.0
Germany 18 13.0 France 9 6.5
Switzerland 16 11.6 Others 20 14.5
Internet usage experience
1 - 2 yrs 4 2.9 7 - 8 yrs 26 18.8
3 - 4 yrs 12 8.7 9 yrs or above 77 55.8
5 - 6 yrs 19 13.8
Online purchasing
experience
Never 9 6.5 11 - 15 times 12 8.7
1 - 5 times 21 15.2 16 times or above 69 50.0
6 - 10 times 27 19.6 above

22. ENTER 2017 Research Track Slide Number 22
Consumers’ Adoption of
Electronic Payment Technologies
• Consumers’ adoption of e-payment technologies has
been extensively investigated and published in
business, information systems and tourism journals
(Özkan, Bindusara & Hackney, 2010)
 He and Mykytyn (2009): Perceived benefits and risk of
online payment system, vendors’ service, website features,
customers’ demographic profiles
 Ooi and Tan (2016): Perceived mobile usefulness is a key
factor affecting mobile users’ intention to use NFC-MP
 Morosan and DeFranco (2016): Performance expectancy,
hedonic motivations, habit, and social influences were
significant predictors of consumers’ intention to use NFC-
MP in the hotel setting