FACTORS AFFECTING TOURISTS DESTINATION SATISFACTION: THE CASE OF THE WORLD NATURAL HERITAGE - HA LONG BAY

VIETNAM NATIONAL UNIVERSITY HOCHIMINH CITY INTERNATIONAL UNIVERSITY SCHOOL OF BUSINESS FACTORS AFFECTING TOURISTS DESTINATION SATISFACTION: THE CASE OF THE WORLD NATURAL HERITAGE - HA LONG BAY In Partial Fulfillment of the Requirements of the Degree of BACHELOR OF ARTS in BUSINESS ADMINISTRATION Student s name: NGUYEN THI MAI UYEN (BABAIU10169) Advisor: MAI NGOC KHUONG, (PHD.) Ho Chi Minh City, Vietnam 2014

FACTORS AFFECTING TOURISTS DESTINATION SATISFACTION: THE CASE OF THE WORLD NATURAL HERITAGE - HA LONG BAY APPROVED BY: Advisor APPROVED BY: Committee, Mai Ngoc Khuong, (PhD.) Hồ Thị Bích Vân (PhD.) Nguyễn Thị Hồng Ân (MBA.) Nguyễn Đức Trí (PhD.) THESIS COMMITTEE

ACKNOWLEDGEMENTS This research could never have been done without the assistants, supports and encouragements from a lot of people. First of all, from my heart, I would like to express my gratitude to my professional advisor - Mr. Mai Ngoc Khuong (PhD.) for his tireless assistance, encouragement, and sincere comments. He is the person who suggested the topic for my thesis, and guided me step by step on how to complete it with the best result. More than that, he gave me encouragements so that I can be more confident to undertake my research. In addition, whenever I faced to problems in research process, he is always the person who gave me valuable advices to overcome these problems. Secondly, I also would like to express my grateful thanks to foreign tourists coming to Halong Bay who spent their precious time and evaluation participating in conducting the survey for my research. I would not have completed this research without their sincere cooperation and help. Besides, my special gratitude conveys to owners of hotels and restaurants in Halong Bay for giving me chances to access to foreign tourists who stayed there in order to invite them participating in my survey. I specially thank to the enthusiastic help of Mrs. Van the owner of Van Nam Hotel in VuonDao Street, BaiChay ward, Halong City. She helped and supported me a lot during the time I stayed in Halong Bay for conducting the survey. Last but not least, I own a debt of gratitude to my family who are always by my side to support, encourage, and inspire me physically and mentally. Without my family, I could not have enough power to complete this research.

TABLE OF CONTENTS LIST OF TABLES... viii LIST OF FIGURES... ix ABBREVIATION... x ABSTRACT... xi CHAPTER 1: INTRODUCTION... 1 1. BACKGROUND OF THE RESEARCH... 1 1.1. Tourism Industry in Vietnam... 1 1.2. Brief Introduction to Halong Bay... 2 2. PROBLEM STATEMENT... 3 3. RESEARCH OBJECTIVES... 5 4. RESEARCH QUESTION AND HYPOTHESIS... 5 5. SCOPE AND LIMITATION... 7 5.1. Scope... 7 5.2. Limitation... 8 6. SIGNIFICATION AND IMPLICATION... 8 7. STRUCTURE OF THE RESEARCH... 9 CHAPTER 2: LITERATURE REVIEW... 10 1. TOURISTS SATISFACTION... 10 1.1. Definition... 10 1.2. Measuring Tourists Satisfaction... 14 2. FACTORS AFFECTING TOURISTS SATISFACTION TOWARD A DESTINATION... 15 2.1- Mediating Variable - Perceived Service Quality... 16 2.2- Independent Factors... 19 3. CONCEPTUAL FRAMEWORK... 26 CHAPTER 3: RESEARCH METHODOLOGY... 27 1. RESEARCH DESIGN... 27 2. TARGET POPULATION AND SAMPLE SIZE... 28 v

2.1. Target Population... 28 2.2. Sampling Method... 29 2.3. Sample Size... 29 3. SURVEY INSTRUMENT AND QUESTIONNAIRE DESIGN... 29 4. DATA COLLECTION... 31 4.1. Secondary Data... 31 4.2. Primary Data... 31 5. DATA ANALYSIS... 32 6. FACTOR ANALYSIS AND RELIABILITY... 34 6.1. Factor Analysis of Dependent Variables... 34 6.2. Factor Analysis of Independent Variables... 37 6.3. Revising Model After EFA... 42 CHAPTER 4: DATA ANALYSIS AND DISCUSSION... 44 1. CHARACTERISTICS OF SAMPLE AND DESCRIPTIVE STATISTICS OF INDEPENDENT AND DEPENDENT VARIABLES... 44 1.1. Sample Demographic... 44 1.2. Descriptive Statistic of Dependent and Independent Variables... 51 2. MULTIPLE REGRESSION ANALYSIS... 60 2.1. Correlations between Variables... 60 2.2. Factors Directly Affect Perceived Service Quality... 62 2.3. Factors Directly Affect Tourists Destination Satisfaction... 64 2.4. Perceived Service Quality and Tourists Destination Satisfaction... 66 3. DIRECT AND INDIRECT EFFECTS ON THE TOURISTS DESTINATION SATISFACTION... 68 3.1. Direct Effects on the Tourists Destination Satisfaction... 68 3.2. Indirect Effects of Tourists Destination Satisfaction... 69 3.3. Path Diagram of Tourists Destination Satisfaction... 71 4. TOTAL CAUSAL EFFECTS OF TOURISTS DESTINATION SATISFACTION... 72 CHAPTER 5: FINDINGS, DISCUSSIONS AND RECOMMENDATIONS... 74 1. FINDINGS... 74 vi

1.1. The Impacts of Independent on Perceived Service Quality... 74 1.2. Direct Impacts of Independent Variables on Tourists Destination Satisfaction... 75 1.3. The Impact of Perceived Service Quality and Indirect Impacts of Independent Variables on Tourists Destination Satisfaction... 77 1.4. Summary of Hypotheses Results... 79 2. RECOMMENDATION... 81 2.1. Recommendations for Tourism Agencies in Halong Bay... 81 2.2. Limitation and Recommendation for Further Research... 87 REFERENCES... 89 APPENDIX... 95 vii

LIST OF TABLES Table 1: International Visitors to Vietnam from 2009 to 2013... 2 Table 2: Conceptual and Operational Definitions in Consumer Satisfaction Literature... 11 Table 3: The changing concept of safety and security in the tourism (1950 2010)... 21 Table 4: Interpreting Strength of Path Coefficients... 33 Table 5: KMO and Bartlett's Test of Dependent Variables... 34 Table 6: Total Variances Explained Dependent Variables... 35 Table 7: Factor Loadings and Reliability of Dependent Variables... 36 Table 8: KMO and Bartlett's Test of Independent variables... 37 Table 9: Total Variances Explained Independent Variables... 38 Table 10: Factor Loadings and Reliability of Independent Variables... 39 Table 11: Descriptive Statistics of Tourists Satisfaction... 52 Table 12: Descriptive Statistic of Perceived Service Quality... 53 Table 13: Descriptive Statistic of Cultural Factors... 54 Table 14: Descriptive Statistic of Leisure & Entertainments... 56 Table 15: Descriptive Statistic of Shopping... 57 Table 16: Descriptive Statistic of Safety & Security... 58 Table 17: Descriptive Statistic of Infrastructure... 59 Table 18: Descriptive Statistic of Accessibility... 60 Table 19: Variables Correlations... 61 Table 20: Coefficients between IVs and PERSEQUA... 63 Table 21: Coefficients between IVs and TODESA... 65 Table 22: Coefficients between TODESA and PERSEQUA... 67 Table 23: Direct, Indirect and Total Causal Effects... 72 Table 24: Results of Hypothesis Testing... 79 viii

LIST OF FIGURES Figure 1: Conceptual framework... 26 Figure 2: Revised Research Model after EFA... 42 Figure 3: Foreign Tourists by gender... 45 Figure 4: Foreign Tourists by Age... 46 Figure 5: Foreign Tourist by Nation... 47 Figure 6: Foreign Tourists by Level of Education... 48 Figure 7: Foreign Tourists by Number of Visits... 49 Figure 8: Foreign Tourists by Purpose of Visits... 50 Figure 9: Path Coefficients of the Structural Equation for Hypothesis Testing... 71 ix

ABBREVIATION TODESA Tourists Destination Satisfaction PERSEQUA Perceived Service Quality CULFA Cultural Factor ENTERTAIN Leisure & Entertainment ACESS Accessibility SHOP Shopping INFRASS Infrastructures SECUR Safety & Security x

ABSTRACT This research was conducted to determine the factors that directly or indirectly affect foreign tourists destination satisfaction toward the World Natural Heritage of Halong Bay through the mediating variable perceived service quality. These factors consist of Natural Environment and Resources, Cultural Factor, Leisure & Entertainment, Shopping, Infrastructure, Accessibility, and Safety & Security. Besides, it also examines the impacts of those factors on tourists satisfaction toward Halong Bay destination. Additionally, the empirical information found in this research somewhat showed foreign tourists assessment about Halong Bay order to make appropriate adjustments and effective improvements for creating a better image of Halong Bay in their mind and attract more foreign tourists coming to Halong Bay in the future. Regarding to the results of path analysis that was used to explore the direct and indirect effects of six independent factors on foreign tourists satisfaction toward Halong Bay, this study concluded that Leisure & Entertainment is the most important factor that affected tourists satisfaction toward Halong Bay, followed by Infrastructure, Safety & Security, Cultural Factor, and last is Shopping. Besides, it cannot be denied that Perceived Service Quality also contributes an important part in tourists satisfaction toward Halong Bay destination. In addition, based on these results, some recommendation were given to tourisms agencies in Halong Bay so that they can improve their service, eliminate weaknesses, and then make foreign tourists more satisfied with Halong Bay. In conclusion, from experiences gathered during the process of conducting the research, some limitations of this study were provided, and based on these limitation, some helpful recommendations were also given for further researches so that they can achieve better results. xi

CHAPTER 1: INTRODUCTION This chapter provides readers a general view of the research s background, the reason why the study is conducted and objectives of the research. It consists of the following sections: backgrounds, problem statement, objectives, research question and hypotheses, scopes and limitations. 1. BACKGROUND OF THE RESEARCH 1.1. Tourism Industry in Vietnam At present, the tourism industry is showing a significant growth in over the world. It has received special attentions from every country because of benefits it brings to these countries as well as tour enterprises. In some countries such as Switzerland, Macau, revenue from tourism industry is accounted as a main contribution in Gross Domestic Product (GDP). In Vietnam, total revenue from tourism is significantly increasing: 96 trillion in 2010, 130 trillion in 2011and 160 trillion in 2012, accounting for over5% of the GDP (General Statistic Officer of Vietnam), and tourism has confirmed its own important role in the economic development of the country day by day. In addition, according to the statistic of General Statistic Officer of Vietnam, after being dropped in 2009 due to the impact of the financial crisis and global recession, from 2010 up to now, the number of international visitors to Vietnam has increased year by year (Table 1). This indicates a huge potential for the development of tourism in Vietnam in the future. Moreover, the development of tourism not only contributes to the increase in the GDP, but also creates forces for the development of other related industries such as transports, telecommunication, trade, etc. as well as the entire economy of the country. 1

Table 1: International Visitors to Vietnam from 2009 to 2013 International Visitors to Vietnam International Visitor to Vietnam for Tourism purpose Arrivals (People) Growth Rate (%) Arrivals (people) Growth Rate (%) 2009 3,772,359-11.3% 2,226,440-15.4% 2010 5,049,855 33.9% 3,110,415 39.7% 2011 6,014,031 19.1% 3,651,299 17.4% 2012 6,847,678 13.9% 4,170,872 14.2% 2013 7,572,352 10.6% 4,640,882 12.2% (Source: General Statistic Office of Vietnam) With the geographical advantages of a long coastline of more than 3,000 km, and 3,000 islands, this is a really favorable condition for Vietnam to develop tourism, especially marine tourism. In a recent workshop on the management and development of marine tourism in Vietnam, tourism experts asserted that marine tourism was one in five breakthroughs in the maritime economy. Meanwhile strategy on tourism development until 2020, vision to 2030 pinpoint that the development of marine tourism is the fourth breakthrough contributing about 14-15% of marine economy (Vietnam National Administration of Tourism, 2011). Some famous beaches and bays including Halong Bay attract millions of tourists each year, which significantly contributes to the GDP of the country. 1.2. Brief Introduction to Halong Bay Halong Bay is located in the northeast of Vietnam in the Gulf of Tonkin, within Quangninh province. It includes the sea area of Halong City, CamPha Town and a part of the island district of Van Don. It has a coastline of 120 km with total area of 1553 square kilometers including 1969 islands in which 989 islands are already 2

named and 980 islands are not. In 1994, in the 18th meeting of the Committee of the World Heritages of UNESCO held in Thailand, Halong Bay was officially recognized as the World Natural Heritage because of its universal aesthetic value according to criteria of the Convention. On 2nd December, 2000, at the 24th session of the World Heritage Committee held in Cairns, Queensland, Australia, the World Heritage Committee unanimously decided to recognize the universal geological value of Halong Bay for the second time. The area inscribed by UNESCO is 43,400 ha, consists of 775 islands, and forms a triangle with the island of Dau Go (Driftwood Grotto) to the west, the lake of Ba Ham (Three Shelter Lake) to the south, and the island of Cong Tay to the east. Additionally, in 2012, after voted for four years in over the world, Halong Bay was officially recognized as one of the New Seven Wonders of Nature by New7Wonder, beside South America's Amazon rain forests, and Argentina's Iguazu Falls, South Korea's Jeju Island, Indonesia's Komodo Island, the Philippines' Puerto Princesa Underground River, and South Africa's Table Mountain. With the values and beauties which are internationally recognized, Halong Bay has become one of seven most attractive destinations in Vietnam to foreign tourist according to the Huffington Post magazine of the United State. Beside these available values and beauties from nature, the process of urbanization in Halong City going on quickly and strongly in all aspects is also a firm foundation for the development of tourism. Currently, Halong city has about 300 hotels with quality level from one star to five stars consisting of 4500 rooms and many mini hotels which meet the basic demand of tourists. The growth in the number of tourists in Halong is considered as the fastest one in Vietnam in recent years. 2. PROBLEM STATEMENT With exceptional values, Halong Bay has become one of the New Natural Wonders of the world which gives many opportunities tourism in QuangNinh to 3

develop. In the recent years, Halong Bay is known as one of the most attractive destination for millions of international visitors to Vietnam each year. Moreover, Halong Bay has been listed in the tour list of tourism enterprises in over the world, and dozens of luxury vessels bring tourists to Ha Long Bay each year. It is also considered as the leading destination for Vietnamese tourism industry to promote the country brand, Vietnamese people, and Vietnamese culture internationally. In a decision about the planning on development of coastal economic of Gulf of Tonkin until 2020 (the Prime Minister dated 2-3-2009), Halong City is considered as the center of economic development of the Northern key economic region. The development orientation is to focus on developing tourism and services as key sectors which will promote other sectors. The mission is to make Halong become a modern marine tourism center of the country as well as the world. To obtain these goals, it is very necessary to create a good image of Halong Bay in the tourists mind. However, beside positive feedbacks, Halong Bay has recently also received many drawback. Halong Bay becoming one of the New Seven Wonder caused many people surprise because of complaints about environmental pollution and tourists safety. Some domestic articles such as Dan Tri, Phu Nu Today, Caféf have reported on problems in Halong Bay mainly including environmental pollution, poor service quality, and low travel safety. These things maybe affect to the image of Halong Bay in the eyes of international tourists as well as their satisfaction toward this destination. In addition, according to Jones & Haven-Tang (2005), obtaining a sustainable development in tourism and making it as a vehicle for economic development in any destination depends on maintaining destination competitiveness. Gitman & McDaniel (2005) also claimed that in a competitive market where business competes for customers, customer satisfaction is considered as a key element of business strategy. This is also true in the tourism industry. That s why to be successful in tourism and achieve stated objectives; the very first step need to be taken is to understand tourists to Halong Bay. This also helps Halong Bay to analysis its strengths, weaknesses, opportunities and threats, and based on this, it can improve and build up a good image 4

of Halong Bay in the tourists mind. From these reasons, it is necessary to conduct a research on the factors that affect tourists satisfaction toward Halong Bay to understand what factors negatively contribute to the tourists satisfaction, what factors positively affect foreign tourists satisfaction, and whether foreign tourists satisfy with Halong Bay or not. That s why, I would like to raise a topic for my thesis as: Factors affecting tourists destination satisfaction: the case of the world natural heritage - Halong Bay. 3. RESEARCH OBJECTIVES This research aims to achieve some objectives as following: - To obtain a general understanding about foreign tourists satisfaction toward the World Natural Heritage Halong Bay - To determine which factors directly affect perceived quality and overall satisfaction of foreign tourists to the World Natural Heritage Halong Bay - To evaluate the direct and indirect impacts of the those factors on the overall tourists satisfaction through perceived service quality. - Using research results to give some recommendations to tourist managers of Halong Bay so that they can improve weaknesses, enhance strengths, and build up a better image of Halong Bay in the eyes of foreign tourists. 4. RESEARCH QUESTION AND HYPOTHESIS following: Based on the problem statement, the study raises two research questions as 5

- To what extend the foreign tourists satisfy with the World Natural Heritage of Halong Bay? - Which are factors that directly or indirectly influence to foreign tourists satisfaction with the World Natural Heritage of Halong Bay? To answer above questions, some below hypothesizes will be exercised: H1.1: Natural environment & resources positively and directly affects perceived service quality. H1.2: Cultural factors positively and directly affect perceived service quality. H1.3: Leisure & entertainment positively and directly affects perceived service quality. H1.4: Shopping positively and directly affects perceived service quality. H1.5: Safety & Security positively and directly affects perceived service quality. H1.6: Infrastructure positively and directly affects perceived service quality. H1.7: Accessibility positively and directly affects perceived service quality. H2.1: Natural environment & resources positively and directly affects foreign tourist satisfaction. H2.2: Cultural factors positively and directly affect foreign tourist satisfaction. H2.3: Leisure & entertainment positively and directly affects foreign tourist satisfaction. H2.4: Shopping positively and directly affects foreign tourist satisfaction. H2.5: Safety & Security positively and directly affects foreign tourist satisfaction. H2.6: Infrastructure positively and directly affects foreign tourist satisfaction. 6

H2.7: Accessibility positively and directly affects foreign tourist satisfaction. H3: Perceived service quality positively and directly affects foreign tourist satisfaction. H4.1: Foreign tourist satisfaction is indirectly affected by natural environment & resources through perceived service quality. H4.2: Foreign tourist satisfaction is indirectly affected by cultural factors through perceived service quality. H4.3: Foreign tourist satisfaction is indirectly affected by leisure & entertainment through perceived quality. H4.4: Foreign tourist satisfaction is indirectly affected by shopping through perceived service quality. H4.5: Foreign tourist satisfaction is indirectly affected by safety & security through perceived service quality. H4.6: Foreign tourist satisfaction is indirectly affected by infrastructure through perceived service quality. H4.7: Foreign tourist satisfaction is indirectly affected by accessibility through perceived service quality. 5. SCOPE AND LIMITATION 5.1. Scope This study is conducted within 3 months and a half from January 23 to May 7. The target population of the research is foreign tourists visiting tourist spots in Halong Bay. They must be people that stay here at least two days so that they can experience 7

activities and services in Halong Bay, and then can have an accurate assessment of Halong Bay. 5.2. Limitation Like almost other researches, this research also has some limitations. The first limitations are time limit. Three months and a half to finish a research is really a short time in order to achieve a best quality. Another limitation is lacking experiences of the researcher in the first time conducting a study. That s why the results of the research cannot avoid some mistakes. 6. SIGNIFICATION AND IMPLICATION The research findings firstly bring implications to the World Natural Heritage of Ha Long Bay. The research s implications can be divided into two categories: theoretical implication and managerial implication. Theoretical implication: The research re-affirms factors affecting tourists satisfaction toward a destination. It also becomes a reference for further researches. Managerial implication: the findings do provide some insights and feedback for tourist managers of the World Natural Heritage of Ha Long Bay in drafting various strategies on how to increase the foreign tourist s satisfactions towards Ha Long Bay. From this, they can make it more beautiful in foreign tourists mind and attract more international tourist to come to Ha Long bay as well as Vietnam. 8

7. STRUCTURE OF THE RESEARCH The thesis includes five chapters. The content of each chapter can be briefly described as following: Chapter 1: Introduction This chapter provides readers a general view of the research s background, the reason why the study is conducted and objectives of the research. It consists of the following sections: backgrounds, problem statement, objectives, research question and hypotheses, scopes and limitations. Chapter 2: Literature Review This chapter presents theories and related literature for the research to understand the area of service quality and tourist satisfaction, from which the author builds up a conceptual framework for the research. Chapter 3: Research Methodology This chapter presents the method that used to conduct and analysis the collected data. It contain the following sections: research design, target population and sample size, survey instrument, questionnaire design and measurements, data collection, data analysis, factor analysis and reliability. Chapter 4: Data analysis and discussion This chapter aims to analyze and discuss the results obtained from collected data. This chapter includes sample demographic analysis, descriptive statistic, correlation analysis, regression analysis, and path analysis. Chapter 5: Findings, Discussion and Recommendations This chapter discusses the findings of the study and answer questions of this research. Additionally, it also provides some suggestions to improve the study s problems, and some recommendation for further researches. 9

CHAPTER 2: LITERATURE REVIEW This chapter presents theories and related literature for the research to understand the area of service quality and tourist satisfaction, from which the author builds up a conceptual framework for the research. 1. TOURISTS SATISFACTION 1.1. Definition World Tourism Organization (UNWTO, 1985) defined customer satisfaction as a psychological concept that involves the feeling of well-being and pleasure that results from obtaining what one hopes for and expects from an appealing product and/or service. In marketing literature, the definition of customers satisfaction has been discussed in many researches for many years. Giese and Cote (2000) had summarized the satisfaction definitions used during 30 years into 20 definitions (Table 2). There are three important constituent of consumer satisfaction: 1) summary affective response which varies in intensity; 2) satisfaction focus around product choice, purchase and consumption; and 3) time of determination which varies by situation, but is generally limited in duration. (Giese and Cote, 2000) 10

Table 2: Conceptual and Operational Definitions in Consumer Satisfaction Literature Author Oliver 1997 Halstead, Hartman, Schmidt 1994 and Conceptual Definition The consumer's fulfillment response. It is a judgment that a product or service feature, or the product or service itself, provided (or is providing) a pleasurable level of consumption-related fulfillment, including levels of underor over fulfillment (p. 13) A transaction-specific affective response resulting from the customer s comparison of product performance to some prepurchase standard (e.g., Hunt 1977; Oliver 1989) (p. 122). Mano and Oliver 1993 Fornell 1992 Oliver 1992 (Product satisfaction) is an attitude like post consumption evaluative judgment (Hunt 1977) varying along the hedonic continuum (Oliver 1989; Westbrook and Oliver 1991) (p. 454). An overall post-purchase evaluation (p.11). Examined whether satisfaction was an emotion. Concluded that satisfaction is a summary attribute phenomenon coexisting with other consumption emotions (p. 242). Westbrook Oliver 1991 and A post choice evaluative judgment concerning a specific purchase selection (Day 1984) (p. 84). Oliver and Swan 1989 Tse and Wilton 1988 Cadotte, Woodruff and Jenkins 1987 No conceptual definition. (With the salesperson) a function of fairness, preference, and disconfirmation (pp. 28-29). The consumer s response to the evaluation of the perceived discrepancy between prior expectations (or some norm of performance) and the actual performance of the product as perceived after its consumption (p. 204). Conceptualized as a feeling developed from an evaluation of the use experience (p. 305). Westbrook 1987 Global evaluative judgment about product 11

usage/consumption (p. 260) Also cited Hunt (1977). Day 1984 Bearden and Teel 1983 LaBarbera and Mazursky 1983 The evaluative response to the current consumption event...the consumer s response in a particular consumption experience to the evaluation of the perceived discrepancy between prior expectations (or some other norm of performance) and the actual performance of the product perceived after its acquisition (p.496). No conceptual definition. A function of consumer expectations operationalized as product attribute beliefs (Olson and Dove 1979) and disconfirmation (p. 22). Post-purchase evaluation. Cited Oliver s (1981) definition: An evaluation of the surprise inherent in a product acquisition and/or consumption experience (p. 394). Westbrook Reilly 1983 and An emotional response to the experiences provided by and associate with particular products or services purchased, retail outlets, or even molar patterns of behavior such as shopping and buyer behavior, as well as the overall marketplace (p. 256). An emotional response triggered by a cognitive evaluative process in which the perceptions of (or beliefs about) an object, action, or condition are compared to one s values (or needs, wants, desires) (p. 258). Churchill and Surprenant 1982 Oliver 1981 Swan, Trawick and Carroll 1980 Conceptually, an outcome of purchase and use resulting from the buyer s comparison of the rewards and costs of the purchase relative to anticipated consequences. Operationally, similar to attitude in that it can be assessed as a summation of satisfactions with various attributes (p. 493). An evaluation of the surprise inherent in a product acquisition and/or consumption experience. In essence, the summary psychological state resulting when the emotion surrounding disconfirmed expectations is coupled with the consumer s prior feelings about the consumption experience (p. 27). A conscious evaluation or cognitive judgment that the product has performed relatively well or poorly or that the 12

product was suitable or unsuitable for its use/purpose. Another dimension of satisfaction involves affect of feelings toward the product (p. 17). Westbrook 1980 Hunt 1977 Howard and Sheth 1969 Refers to the favorability of the individual s subjective evaluation of the various outcomes and experiences associated with using or consuming it (product) (Hunt 1977) (p. 49). A kind of stepping away from an experience and evaluating it the evaluation rendered that the experience was at least as good as it was supposed to be (p. 459). The buyer s cognitive state of being adequately or inadequately rewarded for the sacrifices he has undergone (p. 145). (Source: Giese and Cote, 2000, p. 5 8) In this research, the customers satisfaction definition defined by Greenwell et al. (2002) is used. Greenwell stated that satisfaction is a subjective perception, evaluation, or judgment held by customers based on their experience with a service performance rather than a firm s objective standards of quality. The relevance of this definition to this study is that it indicates that customers evaluate the destination based on their actual experiences of traveling to this destination and the rating is done in accordance with their experiences with service performance in this destination. In term of tourism, Baker and Crompton (2000) also defined satisfaction as the tourist s emotional state after experiencing the trip. Tourists satisfaction is considered as one of the crucial elements of successful destination s marketing, which affects the choice of destination and the decision to return (Yoon and Uysal, 2005). Therefore, enhancing tourists satisfaction should be one of the functions of a destination management organization (Morgan and Pritchard, 1998; Pearce, 1997; Seaton, 1997) and a perquisite for the development of a strategy leading to a destination s enhanced attractiveness and its competitive positioning. 13

1.2. Measuring Tourists Satisfaction In the tourism literature, there are a variety of approaches to measure the customers satisfaction. However, only two main approaches are employed to measure it, those are disconfirmation theory and performance-only approach (Ozdemir and Çizel, 2012; Fallon and Schofield, 2004; Wang and Qu, 2006). The disconfirmation theory is based on the post-purchase concept assuming that before customers purchase goods and services, they had pre-purchase expectations about anticipated performance, and then after they buy and use those products or services, outcome will be compared against these expectations. If it matches their expectations, confirmation occurs. When there are differences between expectations and outcomes, disconfirmation occurs. Positive disconfirmation leads to increased satisfaction, while negative disconfirmation has the opposite effects. (Yi, 1990) In the field of tourism, the disconfirmation theory is used as a comparison between pre-travel expectations with actual travel experiences. According to Pizam and Milman (1993), tourists have some pre-travel expectation to the destination to which they will come. After they take a trip to that destination to consume products, use services, and have experiences, they form their judgment of the destination by comparing its actual performance with their pre-expectation. If performance exceeds expectations, they are satisfied. However, according Petrick (2004), this theory has some problems, particularly in tourism context. It has been agued that expectations are inevitably les concrete and less useful because of the intangibility of tourism and leisure product. The performance-only approach measures the tourists satisfaction as the tourists satisfaction by the tourists evaluation of destination attributes (Truong and Foster, 2006; Kozak and Rimmington, 2000; Kozak, 2003). Some researcher pinpointed that the tourists satisfaction with individual component of the destination leads to their satisfaction with the overall destination (Kozak and Rimmington, 2000; 14

Danaher and Arweiler, 1996; Chung and Petrick, 2012). That s why tourists satisfaction can be measured through the summation of the tourists evaluation of each destination attribute (Kozak, 2003). However, this approach also involves some problems. Firstly, consumers normally do not simply sum up their evaluations of each characteristic and do not give an equal weight to each characteristic, as assumed by a summated scale that is often used in such an approach (Oliver, 1997). In addition, as the offer s characteristics are not separated from the measurement of satisfaction researchers are unable to analyze the impact of each specific antecedent (set of characteristics) on customer satisfaction. Additionally, numerous studies used a summative overall item to measure overall tourists satisfaction (Bloemer and Ruyter, 1998; Bolton and Lemon, 1999; Hsu, 2000; 2003; Hsu and Kang, 2007). 2. FACTORS AFFECTING TOURISTS SATISFACTION TOWARD A DESTINATION In tourism literature, many studies were conducted to find out factors affecting tourists satisfaction toward a destination. Based on the results of reviewing tourism literature, this research tries to examine seven independent factors, one mediating variable that may affect to tourist satisfaction with the World Natural Heritage Ha Long Bay. Seven independent factors are: natural environment & resources, cultural factor, leisure & entertainment, shopping, safety & security, infrastructure, and accessibility. And the mediating variable is perceived service quality. 15

2.1- Mediating Variable - Perceived Service Quality 2.1.1. Definition Many researchers have defined perceived service quality in different ways. The concept of perceived service quality was introduced by Gronroos in 1982 (Gronroos, 1984). In his research, Perceived service quality is conceptualized as the customers satisfaction or dissatisfaction formed by their experience of purchase and use of the service. He also proved that perceived service quality differs from objective quality (which can be measured using indicators such as durability and number of defects), and results from an evaluation process, where customers compare their expectations with the service they perceive to the one they have experienced. Bitner, Booms and Mohr (1994) defined service quality as the consumer s overall impression of the relative inferiority / superiority of the organization and its services. Besides, other researchers such as Cronin and Taylor (1994) view service quality as a form of attitude representing a long-run overall evaluation. Parasuraman, Zeithmal, and Berry (1988) defined perceived service quality as "a global judgment, or attitude relating to the superiority of the service, in which, perceived service quality is seen as the difference between customers expectations of service and their perceptions of the actual performance of service (Parasuraman et al., 1988). Thus, it might be said that perceived service quality can be viewed as the customers perception of service performance (Gronroos, 1993). 2.1.2. Measurement There have been many studies on service quality, however, just a few of them in tourism. The measurements of service quality have been constructed by many 16

marketing researchers since 1980s (Jihad, 2012). Parasuraman et al. (1985; 1988) addressed the issue as to how the customers make an assessment of service quality. They came up with ten determinants that can be used to measure service quality. Those are: (1) Access (approachability) (2) Communication (imparting and listening to customer) (3) Competence (having required skill and knowledge to perform the services) (4) Courtesy (demeanor and attitude of contact personnel) (5) Credibility (trustworthiness and honesty) (6) Reliability (consistency of performance and dependability) (7) Responsiveness (timeliness of services and willingness of employees) (8) Security (freedom from danger, risk or doubt) (9) Tangible (physical evident of services) (10) Understanding/knowing customers (making an effort to understanding the customers needs) Parasuraman et al. (1988, 1988) then reduce these ten determinants to five, those are: (1) tangibles, (2) reliability, (3) responsiveness, (4) assurance, and (5) empathy. These five determinants were used in their SERVQUA measurement instrument. This instrument has subsequently become the most widely used one by researchers to measure service quality. However, it also has received many criticisms from other scholars (Cronin and Taylor, 1992; Peter, Churchill and Brown, 1993). The major problem with this instrument is that the five service quality dimensions are not universal and cannot be applied in all service industry (Ladhari, 2009). They ague that these dimensions depend on the context in which they are applied and its use of measurement with different scores will result in different numbers of factor dimensions (Brady, 1997). Parasuraman (1988; 1991) and some other researchers (Beckman & Velfkamp 1995) also stated that although SERVQUAL was designed to measure service quality, it provides only the framework or skeleton and thus has had to be adapted and modified within various service industries. That s why it can be 17

concluded that the SERQUAL instrument is an open model and it can be flexibly applied in different industries (Mai Ngoc Khuong and Hoang Thi Hoang Anh, 2013). Thus, in spite of using SERQUAL model, many researchers did not use all five dimensions; some others add some more dimensions into model so that it can be the most fixed in that industry. In tourism, service quality plays an important role in process of delivery (Wyllie, 2000). As mentioned above, the major service quality evaluation is SERVQUAL model developed by Parasuraman (1988), and Parasuraman also stated that this model can be applied in various service industries. Many tourism researchers have used this model to evaluate the quality of service perceived by tourists (Childress and Crompton 1997; Fick and Ritchie 1991; Leblanc 1992; O Brien and Gordon 1993). For example, Mackay (1987) used SERVQUAL model with the same five dimensions to test the quality of services in the Canadian municipal parks. Bigne et al. (2003) also used SERVQUAL to evaluate the quality of service offered by travel agencies, and they found that it is still valid and reliable. On the other hand, many other researchers built up their own model to measure perceived service quality. For example, Albrecht and Zemke (as cited in Johnston, 1995a) suggested care and concern, spontaneity, problem solving and recovery as their criteria for good service quality. Gronross (1990) also undertook a further research into the determinants of service quality bases on his earlier model. He proposed six criteria of good perceived service quality: (1) professionalism and skills; (2) attitude and behavior; (3) Accessibility and Flexibility; (4) Reliability and Trustworthiness; (5) Reputation and Credibility; and (6) Recovery. 2.1.3. Perceived service quality and tourists satisfaction In marketing literature, the relationship between quality and satisfaction has been debated for a long time. Some researchers ague that satisfaction affects quality 18

(Oliver 1997, 1980), while others view the opposite site in which quality influences satisfaction (Cronin and Taylor, 1992; Parasuraman, 1994; Taylor and Baker, 1994). However, both constructs were derived from the same theoretical source the disconfirmation paradigm, and both quality and satisfaction affect behavioral intention (Baker and Crompton, 2000; Cronin and Taylor, 1992). In the tourism literature, the linkage among tourists satisfaction and perceived service quality has been widely studied by many researchers. However, there have been many debates among the constructs. While many researchers such as Oliver (1997), Taylor and Baker (1994), and Tian-Cole et al. (2002) suggest that perceived service quality and tourists satisfaction are distinct constructs, other researchers have a view of direct effect of the perceived service quality and tourist attraction on tourist satisfaction (McDowall, 2010; Petrick, 2004). In this research, the view of Parasuraman (1994) is applied in which the perceived service quality is an antecedent to customer s satisfaction. Many tourism researches have been done to confirm a positive relationship between perceived service quality at destination and tourists satisfaction (Baker and Crompton, 2000; Murray and Howat, 2002; Rojas and Camarero, 2008; Ruiz et al., 2009). 2.2- Independent Factors 2.2.1. Definitions a. Natural environment & resource Natural resource includes all things that exist in nature and are not made or caused by human. In the field of tourism, natural resource insists of weather, beach, lake, mountain, desert, etc. (Beerli and Martin, 2004). Inskeep (1996) asserted that natural environment had always played an important role and is seen as a main source to tourism sector. Suzan (2012) in her study discovers that the satisfaction 19

level tourist depends on the natural ambiance and climate condition of the geographical location. b. Cultural factor The Oxford advanced learner s dictionary defined culture as the ideas, customs, and social behavior of a particular people or society. In tourism, Beerli and Martin (2004) mentioned quality of life; language barriers; hospitality and friendliness of the local residents; festival or concert; religion; historic attractions; customs and ways of life; political and economic factors as factors of cultural resources. Some researchers have focused on a single event, for instance, a country corn festival (Uysal, Gahan& Martin, 1993) and a hot-air balloon festival (Mohr et al., 1993) in South Carolina, a jazz festival in Umbria (Formica &Uysal, 1996), etc. c. Leisure & entertainment According to Oxford dictionary (2005), leisure is time that is spent doing what you enjoy when you are not working or studying, and entertainment is films/ movies, music, etc. used to entertain people. Mazanec (1997) chooses several important attractions as well as entertainment opportunities such as theatre, concerts, bars, restaurants, discos, etc. Beerli and Martin (2004) also refer some activities as outdoor activities, nightlife, adventure activities, zoos, etc. d. Shopping Shopping is defined as the purchasing of goods from shops (Oxford dictionary, 2005). It is considered as one of the main activities undertaken by tourists (Kent et al., 1983; Choi et al., 1999; Reisinger & Turner, 2002; Snepenger et al., 2003). For some tourists, shopping may be the single most important purpose of tourism (Cohen, 1995; 20

Reisinger & Waryzack, 1996; Huang & Hsu, 2005), or be viewed as a vital part of being a tourist (Heung &Qu, 1998; Yuksel, 2004). Fridgen, (1996) claimed that British tourists visiting North America ranked shopping and taking pictures as the 1st and 2nd preferred activities. e. Safety & security Idso and Jakobsen (2000) defined safety as the protection from unintended incidents, and security as the protection from intended incidents. In context of tourism, the concept of safety and security has been discussed for many years. István Kôvári and Krisztina Zimányi summarized the changing role and concept of safety and security in tourism from in the period of 1950-2010 (see Table 3). Table 3: The changing concept of safety and security in the tourism (1950 2010) Period Mass tourism/11 950-1970 Main characteristic Safety and security in tourism as one of the problems in tourism Simplified approach in the perception of safety and security issues in tourism Features, attributes - Tourism security is a one or two-dimension notion - Only few elements of security issues are in focus (public safety, health safety, road safety etc) - Within the elements of safety and security only a small number of factors were given importance (e.g. heath and hygiene problems: 1. Drinkable water, 2. necessity of vaccination, 3.cleanness of toilets) - Security problems are localized in time and space - Security problems may effect the image of a city or country but not the image of a 21

Mass tourism/2. 1970-1990 Transition to Global Tourism 1990- Period of enlargement of security concept of tourism Period of complex perception of security and safety in tourism whole region - Travel related risks and problems are not raised on the international level of tourism industry (excluding international transport regulations) - Solving problems of security depends mainly on the regulations of the national authorities - Additional risk factors appear in travel and tourism ( airplane hijacking, terrorist actions as a tool of social struggle) - Threats on security reach regional level in some regions of the world (Middle East, Basque country etc.) - Beginning of a wider international cooperation related to security issues - Technical improvements in safety e.g. air transport) - WTO draws attention on safety, security of tourists (Hague Declaration on Tourism, 1989) - Compact but specific (that is to say not general) solutions are created (e.g. the case of El Al Israeli airlines) - Numerous new elements appear within the tourism security issues due to the omnipotent factors of globalization meaning that national/regional economies, societies and cultures become integrated through a worldwide network of communication (internet), mobility (tourism), trade of goods and services. (personal data security, environmental 22

security, natural disasters, pandemics etc) - Security of travel has become a global problem that we can not disregard - Number of destinations, situations and tourists affected by the lack of security is increasing - Lack of security causes regional stagnation or decrease in tourist flows and even on global level (9/11.) - Basic changes in security concept in travel and tourism, understanding the necessity of common actions (Source: István Kôvári Krisztina Zimányi) Beerli and Martin (2004) showed terrorist attacks or crime rate as the items of safety and security in tourism. f. Infrastructure Oxford dictionary (2005) defines infrastructure as the basic physical and organizational structures and facilities (e.g. buildings, roads, power supplies) needed for the operation of a society or enterprise. In term of tourism, according to Beerli and Martin (2004), infrastructure includes general infrastructure (transport facilities, health services, telecommunications etc.) and tourist infrastructure (accommodations, restaurants, hotels, tourist center, etc.) 23

g. Accessibility Gutierrez (1987) defined accessibility may as the easy-to-reach desired destinations by means of a specific transport system. Accessibility is really importance to both regional development and social welfare. It depends on the building of transport infrastructures and in turn influences land use and mobility. Litman (2003) also mentioned that accessibility as the ability to reach desired goods, services, activities and destinations such as availability, affordability and convenient of transport facilities, information or geographic distribution of activities and destinations. 2.2.2. Relationship a. Independent factors and tourists satisfaction In a research, Wang and Qu (2006) tried to identify the destination s attributes at a sea destination that affect tourist satisfaction, which include: tourist infrastructures (accommodation facilities, quality of accommodation, restaurant facilities), general infrastructure (parking facilities) shop/store offering, personal safety (drinkable water, traffic flow), natural environment (beach cleanliness), and state of the roads. Chi and Qu (2008) also found out that accommodation, events and activities, environment and accessibility have effects on tourists destination satisfaction. Girish Prayag (2008) in his research also pinpointed that attributes like comfort facilities, safety, infrastructure, cultural attractions, shopping, and accessibility affects tourist satisfaction. In many other researches, destination s natural environment & resources, entertainment activities, culture, shopping, safety and security, infrastructure, accessibility are also proved to be attributes that influence tourists satisfaction to a 24

destination (Lee T.H., 2009; Alqurneh Majid et al., 2010; Celeste Eusebio et al., 2011; Coban, 2012) b. Independent factors, perceived service quality and tourists satisfaction A recent study in 2010, Zabkar, Brenc, and Dmitrovic prove a complex relationship between main constructs and behavioral intention modeled in which destination attributes affect perceived quality which then affects satisfaction. And then perceived quality and tourists satisfaction affects revisit intention. Although this complex relationship was confirmed, some recommends were given to future studies to test the universality of such a model separately from (destination-specific) attributes set used as indicators for the perceived quality. Bigne et al. (2005) pinpointed that perceived quality acts as a mediator between destination image and satisfaction. 25

3. CONCEPTUAL FRAMEWORK Natural Environment Culture H4 Leisure & Entertainment Shopping H1 Perceived Service Quality H3 Tourist Destination Satisfaction Safety & Security H2 Infrastructures Accessibility Figure 1: Conceptual framework 26

CHAPTER 3: RESEARCH METHODOLOGY This chapter presents the method that used to conduct and analysis the collected data. It contain the following sections: research design, target population and sample size, survey instrument, questionnaire design and measurements, data collection, data analysis, factor analysis and reliability. 1. RESEARCH DESIGN As presented in Chapter 1, this research is a correlation study that attempts to investigate the statistical relationship between the foreign tourists satisfaction with perceived service quality and some independent variables; those are natural environment and resource, cultural factors, leisure & entertainment, shopping, safety & security, infrastructure, and accessibility. Beside that, this research also tries to examine the influence of those factors on tourists satisfaction and test the hypotheses. That s why, in this study, the descriptive research method is employed using quantitative approach. There is no perfect method, like any other method, quantitative method is not an exception; it also has its own advantages and disadvantages. According to Ronald A. Nykiel (2007), the advantages of this method are that it deals with statistical, mathematical, and computational techniques and allows the researchers to measure and analyze data with a large sample size. Moreover, it can study the relationship between an independent and dependent variable. Thus, the result of research could be more scientific, objective and general, and from this it could help decision making base on the result more power. Nevertheless, Ronald A. Nykiel also pinpointed disadvantages of this method. Data collection may sometimes only be a superficial dataset; it is not deeply for everyone. Structural bias can occur because of the development of researcher's standard questions, in which the data only reflects their 27

view instead of customers opinion. Moreover, preset answers will not totally reflect how people really feel about a subject because sometime they just finish it as a duty and do not care about the subject or content of questionnaires. However, not because of those disadvantages that quantitative approach is not preferred. To study customers satisfaction, the researcher needs to conduct a survey with large sample size to get the objective result; therefore, quantitative approach is the most suitable one for this research. As mentioned above, there is no perfect method, so the point is that researcher needs to choose the most accurate method for his/her research, take the advantages of that method and try to control or eliminate the disadvantages it has. To control bias and other disadvantages may occur, reviewing literature was done carefully, and this study is consulted from previous researches which were applied and proved earlier to assure the objectiveness and efficiency of questionnaires. This research will apply quantitative approach only. It means that this study is based on survey. Data was collected from sample in the target population. All questions in the survey were used 5 point Likert scale to measure in which 1 is strongly disagree and 5 is strongly agree. After survey finishes, collected data will be analyzed by using SPSS software. The statistical techniques were applied including factor analysis, multiple regression analysis and path analysis. 2. TARGET POPULATION AND SAMPLE SIZE 2.1. Target Population Because this study focuses on foreign tourists, and questionnaire is designed in English only, the target population of this research will be the international visitors coming to Ha Long Bay, and they need to know English. The respondents can be in any age, occupation, gender, education level, and nationality. 28

2.2. Sampling Method With an expectation of obtaining information quickly, inexpensively and as accurately as possible and due to difficulty of developing a sampling frame, nonprobability sampling is chosen to avoid the cost and hidden bias responses. 2.3. Sample Size The sample size for this study will be 300 respondents. According to Gorsuch (1983) and Hatcher (1994), a minimum subject to item ratio must be at least 5:1 in Exploration Factors Analysis (EFA). Besides, they also have strict rule for when this ratio is acceptable, and they both claimed that higher ratios are generally better. Based on the number of items used to measure dependent variables of tourists destination satisfaction and perceived service quality including 14 items and seven independent variables including 29 items in this study, with sample size of 300 respondents, the ratio applied for EFA of dependent variables was 21:1 and the ratio for EFA of independent variables was 10:1. Statistically, these ratios promise a better reliability and validity of this study. 3. SURVEY INSTRUMENT AND QUESTIONNAIRE DESIGN A questionnaire was used in this study to collect primary data. The questionnaire was designed in the typical form of fixed-response alternative questions that require the respondent to select from a predetermined set of answers to every question. This survey approach is the most common method of primary data collection in marketing research because of simple administration and data consistency (Malhotra and Birks, 2003). The questionnaires employed the Likert non-comparative scaling technique. The respondents were asked to rate the level of agreement or disagreement with each of a 29

series of statements or questions (Albaum, 1997). According to Malhotra and Birks (2003), this rating scale is easy to construct and administer and respondents readily understand how to use the scale. The categories scale should be between 5 and 9 (Aaker, 1997), and odd number so that the number of favorable and unfavorable categories is equal (Spagna, 1984). That s why, a 5-poitn Likert scale ranging from 1 to 5, equivalent to strongly disagree, disagree, neutral, agree and strongly agree respectively was used. Questionnaire was built based on the items of seven independent variables and two dependent variables that the literature reviews in chapter II were mentioned. The questionnaire consists of two sections. In section one, the measurement used is scale in which the respondents were asked to indicate their degree of agreement or disagreement on items measuring dependent and independent variables in this study by choosing from 1 = strongly disagree to 5 = strongly agree for each items in the questionnaire. This section includes 43 items corresponding to 43 questions, in which 14 items were used to measure dependent variables including perceived service quality and tourists satisfaction, and 29 remaining items were used to measure independent variables including natural environment and resource, cultural factors, leisure & entertainment, shopping, safety & security, infrastructure, and accessibility. A copy of questionnaire is shown in Appendix A. These questions were done based on reviewing literature and related previous studies mentioned in chapter II and adjusted as suitable as possible in order to ensure reliability and validity of the research. In section two, the measurement used is nominal which is split data into mutual exclusive and collectively exhausted categories (Sekaran, 2006). It is designed to gather respondent demographic details. This section consists of six questions about personal information including gender, age, nationality, level of education, times traveling to Halong Bay, and the purpose of visit. At the end of questionnaire, an open question was done to get the comments of tourists (if any) for improving the tourist products and services of Halong Bay. 30

In addition, after formulating the questionnaire based on adopted measures from literature, the first draft of questionnaire was sent to the researcher s advisor so that he could give comments and correct the mistakes. After that, survey was revised by researcher and sent back to advisor again for approving. Finally, the final questionnaire was completed and was ready to be delivered to foreign tourists in Halong Bay. 4. DATA COLLECTION 4.1. Secondary Data This research used data collected from published articles, journals, books and researches as well as some statistic from online sources such as web pages, some governmental sites and some reliable newspaper sites. 4.2. Primary Data The first-hand data of this research is collected through personal survey of 300 foreign tourists at tourist spots of Halong Bay. The researcher came to Halong Bay and directly delivered the questionnaires to foreign tourists here and kindly asked for their cooperation. The survey was conducted in two weeks and a haft, from 6 th March to 22 nd March. According to statistic of Department of Culture - Sports Travel, at this time, the number of international tourists coming to Ha Long Bay is largest, and many of them come from the cruise ship, they didn t rent the hotel, eat the food or join in entertainment activities in Halong Bay, they just stopped for sightseeing. However, the target respondents of this research are foreign tourists who experienced tourist products and services in Halong Bay so that they can have accurate evaluations for items mentioned in the questionnaire. Therefore, in order to delivery the 31

questionnaires to true respondents, by the help of hotels owners, the researcher targeted foreign tourists who stayed in hotels or the ones who were waiting the boat to take them to visit Halong Bay at tourist dock in BaiChay ward. 5. DATA ANALYSIS The Statistical Package for Social Sciences (SPSS) 20.0 will be used to analyze the collected data. Because of the objectives of the study, various data analysis technique will be exercised to measure reliability, validity and the relationship between variables. Questionnaire will be coded, computerized, and screened for errors before any statistical analysis. - Descriptive statistics such as percentage and frequency were used to describe the general characteristics of foreign tourists who joined to conduct this research. - Reliability test: to measure consistency in the data, the reliability test will be done. Pallant (2005) defined reliability as an assessment of the degree of consistency between multiple measurements of a variable. The measurement of reliability showed through Cronbach s alpha. According to Maholtra (2007), the reliability acceptance level should be more than 0.6. - Regression analysis: This is a family of techniques that can be used to explore the relationship between one continuous dependent variable and a number of continuous independent variables or predictors. It can provide researcher information about the model as a whole, and the relative contribution of each of the variables that make up the model. As an extension of this, multiple regressions will allow research to test whether adding a variable contributes to the predictive ability of the model, over and above those variables already included in the model (Pallant, 2005). In this research, the multiple regression technique was used to find out how well the independent variables were able to predict perceived service quality and 32

tourists satisfaction. Besides that, it can also exactly show which factors most affected to perceived service quality and tourists satisfaction. - Simple linear regression: This technique can be used to explore the relationship between two dependent variables that are perceived service quality and tourists satisfaction. It also can measure how well perceived service quality can predict tourists satisfaction. - Path analysis: this technique is an extension of the regression model. Its purpose is to provide estimates of the magnitude and significance of hypothesized causal connections between sets of variables. This is best explained by a path diagram. In this study, it was also exercised to test the hypotheses that independent variables and perceived service quality have direct and indirect effects on tourists satisfaction. The effects are reflected in the so-called path coefficient standardized regression coefficient (beta: β). The interpretations of the path coefficients in this study are shown in Table 4 below. Table 4: Interpreting Strength of Path Coefficients Coefficients 0.00 0.01 0.09 0.10 0.29 0.30 0.49 0.50 0.69 0.70 0.89 0.90 Strength of Relationship No association Trivial relationship Low to moderate relationship Moderate to substantial Substantial to very strong Very strong relationship Nearly perfect relationship (Source: Adopted from De Vaus (2002)) 33

6. FACTOR ANALYSIS AND RELIABILITY Exploratory factor analysis (EFA) is a data reduction technique that used to examine how underlying constructs influence the responses on a number of measured variables. In the research, EFA is applied with KMO and Barltlett's test in order to determine the number of common factors influencing a set of measures and the strength of the relationship between each factor and each observed measure, items with low factor loading (<0.5) were deleted. Accordingly, Cronbach s alpha was recalculated for the scales of those items removed (Kalser, 1970). Varimax rotation conducted with the major objective is to have a factor structure in which each item loads highly on one and only one factor. It means that a given item should have a high loading on one factor and near zero loadings on other factors. The output gives the rotated factor solution. This technique is applied in this study in order to improve and obtain the highest reliability and validity for all measures of this study. It was applied for both dependent variables and independent variable. 6.1. Factor Analysis of Dependent Variables In this part, factor analysis was applied for the group of 2 dependent variables including 14 items of perceived service quality and perceived value. Table 5: KMO and Bartlett's Test of Dependent Variables Kaiser-Meyer-Olkin Measure of Sampling Adequacy.678 Approx. Chi-Square 511.525 Bartlett's Test of Sphericity df 28 Sig..000 34

According to Pallant (2005), KMO (Kaiser-Meyer-Olkin) is used to measure of sampling adequacy, KMO greater than 0.6 is a good factor analysis and Test of significance in Bartlett s Test of Sphericity should be at.000 level for factor analysis to be considered appropriate. After analysis, KMO coefficient is 0.678 (greater than 0.6) and Bartlett s Test has Sig. = 0.000 (Table 5). Thus, it indicates that conducting Factor Analysis is appropriate. Table 6: Total Variances Explained Dependent Variables Component Initial Eigenvalues Rotation Sums of Squared Loadings Total % of Cumulative Total % of Cumulative Variance % Variance % 1 2.674 33.430 33.430 2.089 26.116 26.116 2 1.383 17.282 50.713 1.968 24.597 50.713 3...... Note: Extraction Method: Principal Component Analysis In order to determine how many components to extract, it is needed to consider the Kaiser s criteria. According to this, only components that have Eigen-value equal or greater than one are considered appropriate for retaining. Besides that, Total Variance Explained must be over 50%. After test, the Total Variance Explained in Table 6 shows the first 2 components recorded Eigen-values above one. These two components explain 50.713 percent of the total variance in which component 1 explains 33.430 percent, component 2 explains 17.282 percent of the total variance. As mentioned before, items with low loading in varimax rotation (<0.5) will be deleted, and whenever an items was remove, the remaining items must be taken to the 35

second round of rotation. In other words, the EFA test must be exercised again and again each time an item was deleted until remaining items had a high loading on one factor and near zero loadings on other factors. After finishing the EFA test for group of dependent variables, 6 items were removed; the two new variables were created. These factors account for 50.713 percent of the total variance. Factor 1 is Perceived service quality including 4 items; factor 2 is tourists satisfaction including 4 items. Table below showed the final result of EFA test with Factor Loadings of each item in dependent variables and Reliability of those variables. The reliability of Factor 1 (Perceived Service Quality) is 0.669 and Factor 2 (Tourists Satisfaction) is 0.615, according to Maholtra (2007), these Cronbach s alpha are acceptable. So it could be concluded that these items were internally consistent and measured the same thing. Table 7: Factor Loadings and Reliability of Dependent Variables Factor Factor Loading Cronbach s Alpha (N = 302) Factor 1: Perceived Service Quality 0.669 My perception of the tourist product quality of Halong Bay is good My perception of the tourist service quality of Halong Bay is good.784.752 I am satisfied with the infrastructure in Halong Bay.647 The services I used are reliable.575 Factor 2: Tourists Satisfaction 0.615 36

The visit was exactly what I expected.752 My choice to visit Halong Bay was a wise one.737 I am satisfied with entertainment activities in Halong Bay I am satisfied with the natural resources and environment in Halong Bay.707.505 6.2. Factor Analysis of Independent Variables In this part, factor analysis was applied for the group of seven independent variables including 29 items of natural environment and resource, cultural factors, leisure & entertainment, shopping, safety & security, infrastructure, and accessibility. The method involves inspecting the correlation matrix for coefficients of.50 and above. Table 8: KMO and Bartlett's Test of Independent variables Kaiser-Meyer-Olkin Measure of Sampling Adequacy.609 Bartlett's Test of Sphericity Approx. Chi-Square 1542.9 72 df 105 Sig..000 37

As shown in table above, the KMO coefficient is 0.609 (greater than 0.6) and Bartlett s Test has Sig. = 0.000. Thus, it indicates that conducting Factor Analysis is appropriate. Table 9: Total Variances Explained Independent Variables Component Initial Eigenvalues Rotation Sums of Squared Loadings Total % of Cumulative Total % of Cumulative Variance % Variance % 1 3.103 20.687 20.687 2.683 17.887 17.887 2 2.246 14.972 35.659 1.880 12.533 30.419 3 1.803 12.020 47.679 1.855 12.370 42.789 4 1.467 9.778 57.457 1.719 11.457 54.245 5 1.410 9.401 66.859 1.610 10.734 64.979 6 1.240 8.269 75.127 1.522 10.148 75.127 7.718 4.787 79.914 8.570 3.801 83.715 9.527 3.512 87.227 10.447 2.979 90.206 11.383 2.551 92.756 12. Note: Extraction Method: Principal Component Analysis 38

Above table is used to determine how many components to extract. As mentioned before, only components that have Eigen-value equal or greater than one are considered appropriate for retaining. Besides that, Total Variance Explained must be over 50%. After test, the Total Variance Explained in Table 9 shows the first six components recorded Eigen-values above one. These six components explain 75.127% percent of the total variance in which component 1 explains 20.687 percent, component 2 explains 14.972 percent, component 3 explains 12.020, component 4 explain 9.778 percent, component 5 explain 9.401, and component 6 explain 8.269 of the total variance. So, the number of independent factors had been determined. The next step is to figure out what factor should be retained, varimax rotation was applied. As mentioned before, items with low loading in varimax rotation (<0.5) will be deleted, and whenever an items was remove, the remaining items must be taken to the second round of rotation. In other words, the EFA test must be exercised again and again each time an item was deleted until remaining items had a high loading on one factor and near zero loadings on other factors. After finishing the EFA tests for group of independent variables, just 15 items were remained representing for six factors. These factors account for 75.127 percent of the total variance. Table below showed the final result of EFA test for group of independent factors with Factor Loadings of each item in dependent variables and Reliability of those variables. Table 10: Factor Loadings and Reliability of Independent Variables Factors Factor Loading Cronbach s Alpha (N=302) 39

Factor 1: Cultural Factors.831 Halong Bay offers fascinating historical buildings.820 There are many festivals/ special events and they are so interesting.811 Halong Bay offers remarkable museums and art galleries.802 Halong Bay offers attractive religious sites.790 Factor 2: Leisure & Entertainments.694 Halong Bay is a paradise for health and wellness (massage, facials and other spa treatments) Halong Bay offers exciting activities (cooking classes, sports, sailing, golf, etc.).850.789 Live concerts, bars and clubs are enjoyable.684 Factor 3: Accessibility.887 Local transportation is convenient.938 It is easy to access Halong Bay.930 Factor 4: Infrastructures.791 There is a wide selection of restaurants.908 There is a wide range of accommodations.866 Factor 5: Shopping.702 40

It is so interesting when going shopping for handicraft, souvenir and special gift in shops, native markets and night markets.890 Price for shopping and leisure activities are reasonable.884 Factor 6: Safety and Security.659 Tourists are protected by laws and orders.862 There is a low rate of crime in Halong Bay.839 So, as shown in table above, after finishing the EFA test for independent variables, just six components with 15 items that have Eigen-values above one (shown in Table 10) are retained, those are Cultural Factor, Leisure & Entertainments, Accessibility, Infrastructures, Shopping, and Safety & Security. The remaining factor of natural environment and resource were excluded after test. Additionally, Cronbach s coefficients ranged from.659 to.887 among the retained factors indicating good subscale reliability (Maholtra, 2007). So it could be concluded that items in each factors were internally consistent and measured the same thing. 41

6.3. Revising Model After EFA Because after finish EFA for independent variables and dependent variables, one independent variable was excluded, the model of the research was revised as following: Culture Leisure & Entertainment H4 Shopping Safety & Security Infrastructures H1 Perceived Service Quality H2 H3 Tourist Destination Satisfaction Accessibility Hypothesis: Figure 2: Revised Research Model H1.1: Cultural factors positively and directly affect perceived service quality. H1.2: Leisure & entertainment positively and directly affects perceived service quality. H1.3: Shopping positively and directly affects perceived service quality. H1.4: Safety & Security positively and directly affects perceived service quality. H1.5: Infrastructure positively and directly affects perceived service quality. H1.6: Accessibility positively and directly affects perceived service quality. 42

H2.1: Cultural factors positively and directly affect foreign tourist satisfaction. H2.2: Leisure & entertainment positively and directly affects foreign tourist satisfaction. H2.3: Shopping positively and directly affects foreign tourist satisfaction. H2.4: Safety & Security positively and directly affects foreign tourist satisfaction. H2.5: Infrastructure positively and directly affects foreign tourist satisfaction. H2.6: Accessibility positively and directly affects foreign tourist satisfaction. H3: Perceived service quality positively and directly affects foreign tourist satisfaction. H4.1: Foreign tourist satisfaction is indirectly affected by cultural factors through perceived service quality H4.2: Foreign tourist satisfaction is indirectly affected by leisure & entertainment through perceived quality. H4.3: Foreign tourist satisfaction is indirectly affected by shopping through perceived service quality. H4.4: Foreign tourist satisfaction is indirectly affected by safety & security through perceived service quality. H4.5: Foreign tourist satisfaction is indirectly affected by infrastructure through perceived service quality. H4.6: Foreign tourist satisfaction is indirectly affected by accessibility through perceived service quality. 43

CHAPTER 4: DATA ANALYSIS AND DISCUSSION This chapter aims to analyze and discuss the results obtained from collected data. This chapter includes sample demographic analysis, descriptive statistic, correlation analysis, regression analysis, and path analysis. 1. CHARACTERISTICS OF SAMPLE AND DESCRIPTIVE STATISTICS OF INDEPENDENT AND DEPENDENT VARIABLES 1.1. Sample Demographic With a total of 346 questionnaires directly delivered to foreign tourists in Halong Bay, 332 results were collected. However, just 302 results are valid and they have enough reliability for the research. The rests were biased in which the respondents did not answer all questions or they chose one option for the entire questionnaire. Their reliability is weak for us to take into account for our research. As the result, there are 302 valid questionnaires kept for further analysis. 1.1.1. Gender Among 302 respondents, there are 137 male and 165 females. The following figure illustrates the percentage of gender of foreign tourists coming to Halong Bay who participated in survey. As shown in the figure 3, the percentage of female respondents accounts for 54.64%, while the percentage of male respondents takes 45.36%. The gender 44

distribution of the respondents is quite even. The respondents were taken randomly by the researchers, therefore, it can be said that the number of foreign tourists coming to Halong Bay is close to each other. In other words, it can be seen that there is no different in travel need in both genders, and Halong Bay is attractive to both male and female tourists. Figure 3: Foreign Tourists by Gender 1.1.2. Age In term of age, the respondents were really diversity in all ages and evenly distributed in four of six group of age. The largest one is the group of respondents who are in age ranging from 18-25 with 91 respondents accounting for 30.13%. The other three groups are close to each other that are in age greater than 60 with 68 respondents, age from 26-30 with 67 respondents and 41-60 with 59 respondents 45

accounting for 22.52%, 22.19%, and 19.54% respectively. The figure below shows the percentages of respondents by age. Figure 4: Foreign Tourists by Age From the figure, it is easy to see that the predominant one is group of respondent with age from 18-25 with 30.13%, and the third-raked group includes respondents in age range from 26-30 with 22.19%. This result is easy to understand because the respondents in this range of age are young and active, and most of them are in college and universities, they have not worked yet, they love to explore the world, come to famous sites in over the world and to gain new experiences. The second-ranked group is group of the respondents who have age greater than 60. They are old people that already retired and they want to spend their valuable time travelling and relaxing after many years of hard-working. It is similar with the forth-ranked group with respondents in age ranging from 41-60. The last two groups just contribute a small percentage; those are 9 respondents who belong to age below 18 with 3%, and 8 46

respondents who are in age ranging from 31-40 and occupying only 2.6%. It can be explained that the first one including respondents under 18 years old, they do not have enough time and budget for their traveling. About the second one, they are people in the hard-working age, so they do not have much time for travelling abroad, excepting for business purpose. 1.1.3. Nationality A question about tourists nation was also added in the profile question to see where the most potential tourists coming to Halong Bay are. Among 302 respondents, there are 110 respondents from Europe, 82 respondents from USA and Canada, 65 respondents from Australia and New Zealand, 19 respondents from Latin America, 19 respondents from Africa, and only 7 respondents from Africa. This result was predictable which is in favor of countries where English is common because the questionnaire was designed in English only. Figure 5: Foreign Tourist by Nation 47

Figure 5 represents the percentage of respondents by nation. As shown in the figure, it can be easy to see that the respondent nation from Europe is the largest proportion with 36.42%. The respondents from Australia/New Zealand and from USA/Canada have close proportion with 21.52% and 27.15% respectively. Latin America and Africa take the same percentage of respondent account for 6.29%. The smallest proportion of respondents belongs to Asia with only 2.32%. As mentioned before in Chapter 1, this is a limitation of this study because the result cannot cover all groups of tourist and perhaps, it biased on the foreign tourists who came from English-speaking countries. 1.1.4. Level of education Figure 6: Foreign Tourists by Level of Education The above figure shows the percentages of respondents by level of education. Accordingly, the respondents who got master degree or higher dominate with 41.72% 48

(126 respondents). The second-ranked group is college degree with 26.49% (80 respondents). The next is group of respondents who got Bachelor degree with 21.19% (64 respondents). The last two groups including group of respondents with high school degree and the other of respondents studying University only had small proportion comparing with other groups, accounting for 3.31% and 7.28% respectively. It can be seen that almost respondents participating in survey have high education, they usually have broader mind with more logical sense of analysis along with careful judgment. That s why their requirement of service quality may be higher. However, this is really profitable for Halong Bay if the service quality here is improved to meet their requirements because they are kind of strict and meticulous, if they satisfy, it is logical to believe that it will satisfy other tourists. 1.1.5. Number of visit Figure 7: Foreign Tourists by Number of Visits 49

The above figure illustrates the percentages of respondents by the number of visits to Halong Bay. Accordingly, it is significantly noted that up to 92.72% (280 respondents) of respondents are the foreign tourists coming to Halong Bay for the first time. Only 7.28% (22 respondents) of the respondents are the foreign tourists coming to Halong Bay for the second time, and none of the respondents comes to Halong Bay for the third time. It seems that foreign tourists come to Halong Bay for the first time, and then they never come back. Actually, this is not a new issue in Halong Bay particularly, and Vietnam generally; some researches and articles mentioned it earlier. This is a really important issue that tourist managers should concern for a sustainable and strong development. 1.1.6. Purpose of visits Figure 8: Foreign Tourists by Purpose of Visits 50