Virtual reality in tourism : what implications will virtual reality technology have for business models in the tourism industry?

Abstract

This thesis investigates how business models in the tourism industry will be affected by the rapid emergence of virtual reality technology. The research is based on data gathered from two experiments, one in a lab- and one in a field environment, conducted in the fall of 2016. The implications are considered from a combination of statistical analysis and existing literature. We have examined how effects from advertisement media differ when it is displayed to participants as pictures on a smartphone, compared to those 360-degree images displayed in a virtual reality head mount. The existing literature suggests that the immersive nature of virtual reality should have a positive effect on customers’ willingness to buy, as the risk linked with not being able to properly evaluate the quality of the experience goods should be reduced. Our data has not found support for this claim directly. The only significant finding we have in this regard, is that exposure to virtual reality leads to changes in other dependent variables that are associated with the actual purchase. This finding is only significant when looking through several mediating variables, suggesting that the actual effect is very limited. Our findings do, however, suggest that there might be other implications for business models in the tourism industry. Namely, we found that the use of virtual reality increases the perceived access to information about the quality of the product for the customers. This would theoretically suggest that the risk associated with purchasing the trip is reduced, but we have not been able to confirm this claim statistically. We also found that the perceived quality of the images is better when viewed in 2D than in the virtual reality head mount, but that the participants enjoyed viewing the images more when they looked at them in virtual reality. According to the existing literature, the implications of these findings are that the effects of virtual reality should be higher as the technology improves, and that virtual reality might have value to players in the tourism industry as an integrated part of their value proposition. In conclusion, this research provides critical insights on the limited potential of virtual reality as means to increase customer acquisition, using the confines of our experiments, and contributes to a better foundation for predicting its uses and future implications in the tourism industry.