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International Journal of Hospitality Management 27 (2008) 391402


www.elsevier.com/locate/ijhosman

The impact of website quality on customer satisfaction and purchase


intentions: Evidence from Chinese online visitors
Billy Baia,, Rob Lawb, Ivan Wenc
a

William F. Harrah College of Hotel Administration, University of Nevada Las Vegas, 4505 Maryland Parkway, Box 456023, Las Vegas, NV 89154, USA
b
School of Hotel and Tourism Management, Hong Kong Polytechnic University, Hung Hom, Kowloon, Hong Kong SAR, China
c
School of Travel Industry Management, University of Hawaii at Manoa, 2560 Campus Road, George Hall, Honolulu, HI 96822, USA

Abstract
With the increasing popularity of online shopping and being the most populated country in the world, China is one of the major online
markets now and is likely to become the largest market in the future. In the academic literature, website quality has generally been
recognized as a critical step to drive business online. As such, numerous studies have been devoted to website quality and evaluations.
Research efforts are, however, in need of understanding the use of websites in regards to online customers behavior, especially Chinese
customers. This study developed and empirically tested a conceptual model of the impact of website quality on customer satisfaction and
purchase intentions. Results indicated that website quality has a direct and positive impact on customer satisfaction, and that customer
satisfaction has a direct and positive impact on purchase intentions. While the inuence of website quality on purchase intentions exists,
customer satisfaction does signicantly mediate this effect. Drawing on the empirical ndings, managerial implications and
recommendations for future research are offered.
r 2007 Elsevier Ltd. All rights reserved.
Keywords: Chinese online visitors; Customer satisfaction; Purchase intentions; Website quality

1. Introduction
At present, online purchases of travel-related products
through web channels have experienced an unprecedented
growth rate. Research by PhoCusWright anticipates that
for the rst time online travel bookings will comprise over
half of all travel transactions in the United States in 2007
(Verikios, 2006). In order to capture this lucrative online business, hospitality and tourism managers have been,
and will continue, enhancing their competitive advantages
by focusing their resources on the virtual business
environment.
In Mainland China (hereafter known as China), the
development of e-commerce has great potential. It has been
reported that there are 94 million Chinese online users, and
this number will reach 140 million by 2007 (iResearch Inc.,
2005). Richardson (2005) stated that China would become
Corresponding author. Tel.: +1 702 895 4844; fax: +1 702 895 4870.

E-mail addresses: billy.bai@unlv.edu (B. Bai), hmroblaw@polyu.


edu.hk (R. Law), ivan.wen@gmail.com (I. Wen).
0278-4319/$ - see front matter r 2007 Elsevier Ltd. All rights reserved.
doi:10.1016/j.ijhm.2007.10.008

the worlds biggest online market in the next few years.


Still, the increasing growth of online consumer purchases
offers both challenges and opportunities for hospitality and
tourism businesses. It is essential to provide well-perceived
service quality, satisfy their customers, and build loyalty
for long-term customer value in the virtual environment.
Various studies have been devoted to the importance
of service quality, customer satisfaction, and customer
experience in the virtual environment (Al-Hawari and Ward,
2006; Parasuraman et al., 2005; Wolnbarger and Gilly,
2003). However, as Fassnacht and Koese (2006) pointed
out, substantial empirical research endeavors are needed for
electronic services in terms of the positive impact of online
service quality on other constructs including customer
satisfaction and loyalty. This is certainly the case toward
a full understanding of how website quality, customer
satisfaction, and purchase intentions interact with each
other in the hospitality and tourism elds. Prior studies
in this area are especially scarce, particularly in regards
to China, the most populated country in the world and
with a promising growth in the eld. This study attempted

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B. Bai et al. / International Journal of Hospitality Management 27 (2008) 391402

to ll the void by developing a structural equation model


to examine the interrelationships of website quality,
customer satisfaction, and purchase intentions with Chinese
online users.
2. Literature review
2.1. Website quality
2.1.1. Online store
Traditionally, the common denitions of a physical retail
store image are based on consumer perceptions of various
store characteristics (Arons, 1961; Kukel and Berry, 1968;
Lindquist, 1974). Evidently, store image is an important
input in the consumer decision-making process (Nevin and
Houston, 1980). Nevin and Houston (1980) suggested,
Image, especially the assortment dimension, was found to
exhibit a strong inuence on consumers levels of liking for
a shopping area (p. 91). Also, store image encompasses
various characteristics. These characteristics include physical environment of the store, service level, and merchandise quality (Baker et al., 1994; Zimmer and Golden, 1988).
In an e-commerce environment, the characteristics of a
virtual store (e-commerce system) image are quite different
from that of a physical retail store (Jahng et al., 2000).
According to Jahng et al. (2000), an e-commerce system
is a one kind of information system. Recently, a number
of studies have addressed the design of web-based
e-commerce application systems and identied many
different design features. For instance, Liu et al. (2000)
identied some key design factors of e-commerce websites.
These key design factors consist of information quality,
service quality, playfulness, system design quality, and
system use. In their study, Liu et al. (2000) found that a
well-designed website would lead to better customer recall
and recognition and a favorable attitude toward the site
and its products.
Basically, the design of a website store is related to both
information system and marketing. For this reason, the
relevant literature from both areas is applicable for a
research framework in this study. Liu et al. (2000)
concluded that a well-designed e-commerce site is positively related to factors such as information quality,
learning capability, playfulness, system use, and service
quality.
As cited in DeLone and McLean (1992), the efforts by
Shannon and Weaver (1949) and Mason (1978) proposed
six distinct categories or aspects of information system,
including system quality, information quality, use, user
satisfaction, individual impact, and organizational impact.
The focuses of this current research were on technical
factors that could affect consumers satisfaction. Some
scholars argued that it is necessary to evaluate the effectiveness of e-commerce website design from the consumers
perspective (Kim and Lim, 2001; Liu et al., 2000). Based on
their research, system quality and information quality
played an important role in consumers satisfaction with

Internet shopping. Therefore, these two factors will be


discussed in the following section.
2.1.2. System quality
In evaluating the contribution of information systems to
the organization, Kriebel and Raviv (1980) focused on the
process itself, which is a productivity model for computer
systems. On the other hand, other authors developed
multiple measures of system quality. For instance, Swanson (1974) used several items to measures MIS appreciation among users. Basically, the items in his study included
reliability of the computer system, online response time,
ease of terminal use, and a few other factors. Similarly,
Emery (1971) suggested that several system characteristics
should be considered in the measure of system quality.
These system characteristics include the content of the
database, aggregation of details, human factors, response
time, and system accuracy. Additionally, Hamilton and
Chervany (1981) suggested that data currency, response
time, turnaround time, data accuracy, reliability, completeness, system exibility, and ease of use as part of a
formative evaluation scheme to measure system quality.
2.1.3. Information quality
In the past, various studies have employed different
measures of success for information systems. Those
measures include user satisfaction (Amoako and White,
1993; Ives et al., 1983; Raymond, 1985), business protability (Barua et al., 1995; Mukhopadhyay et al., 1995),
improved decision quality and performance (Martin, 1982;
Pearson and Shim, 1994; Rivard and Kaiser, 1989; Wilson,
1998), perceived benets of information systems (Davis,
1989; DeLone and McLean, 1992; King and Teo, 1996;
Purvis and Sambamurthy, 1997), and level of system usage
(DeLone, 1988). All these studies emphasized the important point of information quality.
User information satisfaction (UIS) is one evaluation
mechanism. According to Ives et al. (1983), UIS is dened
as the extent to which users believe the information system
that is available to them can meet their information
requirements. In fact, UIS provides a useful measure of an
information system. By applying the behavioral theory of
the rm, Cyert and March (1963) proposed the concept of
UIS. In relation to UIS, Cyert and March suggested that
an information system, which meets the needs of its users,
will reinforce satisfaction with that system. In contrast, if
the system does not provide the needed information, its
users will be dissatised and subsequently look somewhere
else for information needs.
Although some researchers would like to evaluate the
effectiveness of an information system based on its degree
of use in decision making and the resulting productivity
benets, this approach does not seem feasible (Nolan and
Seward, 1974). Ives et al. (1983) suggested that the
satisfaction of users with their information systems is a
potentially measurable, and generally acceptable, surrogate
for utility in decision making (p. 785).

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Under certain conditions, system usage can be a


surrogate indicator of system success. The necessary
conditions include a reliable system and accurate data.
Other than its objective utility in decision making, there are
some other motivations for using the system. For example,
a mandate from management, political motivation, or selfprotection for justifying a poor decision can be appropriate
motivations for using the system. Ives et al. (1983) claimed
that UIS can be more than a substitute for an objective
measure of system success. UIS measures how users view
their information system rather than the technical quality
of the system. In other words, the success of a system is
decided by its users rather than its technical quality.
2.1.4. Assessment of travel websites
According to Law and Cheung (2005), prior research
that assessed performance of travel websites can be
classied as either with or without users involvement,
with the latter focused on the content of websites. For
example, Morrison et al. (1999) applied the balanced
scorecard approach to website evaluation by examining
marketing performance of hotel websites in Scotland. Bai
et al. (2003) developed an operationalized research framework to examine e-relationships on hotel company
websites. Later, Essawy (2005) employed the e-relationship
framework as proposed by Bai et al. (2003) and performed
a content analysis of UK-based national hotel websites.
The other approach to evaluate websites generally
involves the perceptions of users. To illustrate, Jeong and
Lambert (2001) presented a framework of information
quality evaluation, and the framework was empirically
tested with conference attendees. Empirical evidence
showed the framework could be useful for lodging
websites. In resort settings, Perdue (2001) developed and
tested a conceptual model for website evaluations. He
found the overall website evaluation was a function of site
navigation, visual attractiveness, and information content.
As Szymanski and Hise (2000) observed, few studies
have examined the factors that make online customers
satised with their online experiences. With the use of the
qualitative approach for identifying possible antecedents to
online satisfaction, Szymanski and Hise (2000) developed a
conceptual model of website dimensions to assess customers online satisfaction. Based on their studys ndings,
the authors claimed that convenience, site design, and
nancial security are the dominant factors in consumer
assessments of online satisfaction. In the context of Hong
Kong and Mainland China, the functionality performance
of hotel websites was investigated by Chung and Law
(2003) as well as Liang and Law (2003). While functionality
relates to content of a hotel website, the studies by Chung
and Law (2003) and Liang and Law (2003) found that
websites of luxurious hotels did better than economy
hotels. Subsequently, the dimension of usability was added
to better examine customers perceptions on specic travel
website dimensions and attributes (Au Yeung and Law,
2004; Law and Hsu, 2005). Usability refers to design of a

393

website. The studies by Au Yeung and Law (2004) and Law


and Hsu (2005) showed that chain hotels outperformed
independent hotels in website design in this regard.
However, there have been no reported studies that focus
on the impact of website design on customer satisfaction
with travel products, in general and, in particular, in the
context of Chinese online customers.
2.2. Customer satisfaction in the virtual environment
Customer satisfaction can be dened as customers
evaluations of a product or service with regard to their
needs and expectations (Oliver, 1980). Customer satisfaction is not a new concept and a great number of research
efforts have been made to understand its antecedents and
consequences. Marketing scholars have been particularly
interested in the conceptualization and measurement of
service quality that may lead to customer satisfaction. In
general, service quality is dened as the outcome measure
of effective service delivery, and it occurs when customers
receive service that exceeds their expectations (Parasuraman et al., 1988). There are ve dimensions of service
qualitySERVQUALwhich includes tangibles, reliability, responsiveness, assurance, and empathy (Parasuraman
et al., 1994). Modications of SERVQUAL have been
conducted in the hospitality industry such as LODGESERV by Knutson et al. (1990) and DINESERV by
Stevens et al. (1995).
With the use of technology, especially the advent of the
Internet, the traditional ve dimensions of service quality
face scrutiny. Parasuraman and Grewal (2000) indicated
the need for research with regard to the denitions and
relative importance of the ve SERVQUAL dimensions in
an environment where customers interact with technology
rather than service personnel. Research is needed regarding
consumer characteristics, such as their demographics,
lifestyles, experience with other technology-based systems,
and technology readiness, which affect their perceptions of
the quality and values of their interactions with technology.
Zeithaml et al. (2002) examined the key differences between
service quality and electronic service quality. They stated
that when applying traditional measures, such as SERVQUAL, to the online environment, additional dimensions
should be considered, including ease of navigation,
exibility, efciency, site esthetics, and security. Subsequently, these scholars developed a multiple-item scale
(E-S-QUAL) for measuring the service quality delivered by
websites on which customers shop online (Parasuraman et
al., 2005). Using focus groups, Santos (2003) proposed a
conceptual model of the determinants of e-service quality
that has multi-faceted dimensions for increasing hit rates,
stickiness, and customer retention.
Customer satisfaction and service quality are two
separate constructs. Oliver (1993) claimed that quality is
the antecedent of satisfaction. Zeithaml and Bitner (2000)
also stated that service quality assessment focuses primarily
on dimensions of service, and perceived quality is not only

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a component of customer satisfaction but is also inuenced


by product quality, price, customer factors, and situational
factors. In the virtual environment, Anderson and Srinivasan (2003) dened e-satisfaction as the contentment of
the customer with respect to his or her prior purchasing
experience with a given electronic commerce rm (p. 125).
They employed Olivers (1980) multi-item scale to measure
customer satisfaction in an e-retailing context. The marketing literature indicates that customer satisfaction leads to
customer loyalty (Anderson and Fornell, 1994; Oliver,
1999; Pont and McQuilken, 2005). This positive relationship has been proven in the online environment in which
Gommans et al. (2001) reviewed brand loyalty literature
and proposed a conceptual framework of e-loyalty with the
underlying drivers including value propositions, brand
building, trust and security, website and technology, and
customer service. Anderson and Srinivasan (2003) investigated the impact of satisfaction on loyalty in the context
of e-commerce and concluded that e-satisfaction has
an impact on e-loyalty, but the relationship is moderated both by consumers individual factors and rms
business factors.
2.3. Purchase intentions
It is important to understand customers purchase
intentions because customers behavior can usually be
predicted by their intention. As a necessary measure in
understanding customer loyalty, purchase intention has
been considered indispensable in this loyalty construct
(Dick and Basu, 1994; Jacoby and Chestnut, 1978).
However, behavioral-based loyalty has been questioned
because it fails to distinguish between true loyalty and
spurious loyalty (Jacoby and Chestnut, 1978). Oliver and
Rust (1997) asserted that loyalty should include cognitive,
affective, conative (behavioral intent), and action (repeat
purchase behavior) dimensions. According to Day (1969),
intentional measure can be more effective than behavioral
measure in capturing the consumers mind because
customers may make purchases due to constraints instead
of real preferences. According to Zeithaml et al. (1996),
purchase intention is one dimension of behavioral intention. To examine consumers behavioral patterns, purchase
intention has been used to predict actual behavior (Ajzen
and Fishbein, 1980). Purchase intention is reportedly
correlated to actual behavior (Ajzen and Fishbein, 1980;
Oliver and Bearden, 1985) and this relationship has been
empirically tested in hospitality and tourism businesses
(Buttle and Bok, 1996; Ajzen and Driver, 1992). Using an
electronic survey of 1743 online shoppers and hotel
customers, Jeong et al. (2003) found that customers
information satisfaction turns out to be an important
factor of online behavioral intentions, and that website
quality is essential for information satisfaction. In an
attempt to investigate how hotel guests perceived the
importance of hotel website dimensions and attributes,
Law and Hsu (2005) found that customers viewed

reservation information as the most important dimension,


and room rates as the most important attribute, and
interestingly that when customers were looking for high
quality accommodations, website quality affected their
purchase intentions.
Based on the literature review, a conceptual model with
the instrument measures has been developed (Fig. 1). In
addition, the following hypotheses have been formulated:
H1: There is a positive relationship between website
quality and customer satisfaction.
H2: There is a positive relationship between customer
satisfaction and purchase intentions.
H3: There is a positive relationship between website
quality and purchase intentions, and this relationship
is mediated by customer satisfaction.

3. Methodology
3.1. Measurement development
The measurement on website quality was based on the
studies conducted by Au Yeung and Law (2004), Chung
and Law (2003), and Law and Hsu (2005), who empirically
analyzed two major constructs in evaluating websites,
namely functionality and usability. According to these
studies, functionality refers to contents of a website, while
usability relates to issues of design. More specically,
functionality relates to the information richness of a
website, whereas usability refers to the degree of ease with
which users can use a website. The functionality and
usability items were measured in a 7-point Likert type scale
with 7 being Very important and 1 being Not
important at all. In addition, Anderson and Srinivasan
(2003) employed Olivers (1980) multi-item scale to
measure customer satisfaction in an e-retailing context.
This scale was modied to measure online visitors
satisfaction in the current study. These satisfaction items
were also measured in a 7-point Likert type scale ranging
from 7 being Strongly agree to 1 being Strongly
disagree. The variable Purchase intentions was examined in a two-item 7-point Likert type scale ranged from
7 being Very likely to 1 being Very unlikely that
reects online visitors behavioral intentions in the near
future (6 months) and relatively long term (2 years).
Demographic data including gender, age, education, and
annual household income before taxes were also collected
in the study. Altogether there were 11 questions on the
survey.
3.2. A rival model
According to Bollen and Long (1992), not only testing a
proposed model but also comparing rival models has
become an emerging consensus in structural equation
modeling (SEM). Our model posits that functionality and

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395

Website Quality

Functionality
purchase information (Funct1)
service/products information (Funct2)
destination information (Funct3)
quality of information (Funct4)
contact information (Funct5)

Customer Satisfaction
(Satisfaction)

Purchase Intentions
(PurchaseIn)

I am satisfied with my decision


to visit travel websites. (Sat1)
If I had to visit again, I would
feel differently about visiting
travel websites. (Sat2)
My choice to visit travel
websites was a wise one. (Sat3)
I feel badly regarding my
decision to visit travel websites.
(Sat4)
I think I did the right thing by
visiting travel websites. (Sat5)
I am unhappy that I visited
travel websites.(Sat6)

Usability
language (Use1)
layout and graphics (Use2)
information architecture (Use3)
user interface and navigation (Use4)
general (Use5)

How likely will you


purchase from travel
websites within the
next six months?
(PurchIn1)
How likely will you
purchase from travel
websites within the
next two years?
(PurchIn2)

Fig. 1. A conceptual model of website quality, customer satisfaction, and purchase intentions.

3.3. Study sample and data collection


Functionality

Usability

Purchase
Intentions

Customer
satisfaction
Fig. 2. A rival model of website quality, customer satisfaction, and
purchase intentions.

usability inuence their outcomes only through the key


mediating variable of customer satisfaction. Because of
limited empirical support, our model does not permit direct
paths from functionality and usability to purchase intentions. A nonparsimonious rival model would be the one
positing only direct paths from each of the precursors to
the outcome (Morgan and Hunt, 1994). There is no indirect
relationship in the rival model (Fig. 2). For example,
functionality and usability are not allowed to mediate any
of the relationship. Though there is no theoretical
foundation to support the rival model, there are some
discussions and empirical studies which consider functionality and usability to be independent variables which
directly inuence customer purchase intentions (White and
Manning, 1997; Liu et al., 2000).

The study sample included Mainland Chinese who had


visited any travel websites in the last 12 months. A survey
instrument was designed to ask people if and how their
online purchase intentions might be inuenced by travel
website quality and their experiential satisfaction with
travel websites. Data were collected from three hotel
properties ranging 35 stars in Shanghai, the largest
metropolitan city in China, between July 1 and August
22, 2005. With permission of the hotel management,
interviewers approached hotel guests in the hotel lobby
and restaurants for voluntary participation. A total of 300
questionnaires were administered during this period. At the
end of the period, a total of 180 completed and usable
questionnaires were received, generating a response rate
of 60%.
Descriptive statistics was used to provide the sample
prole. The SEM was also employed to examine the
hypothesized relationships among the constructs in the
study. The hypothesized model was tested with the EQS
program (Bentler, 2002).
4. Results
4.1. Sample profile
The demographic breakdown of the respondents is
summarized in Table 1. There were roughly equal numbers
of male (48.9%) and female (46.7%) respondents.

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B. Bai et al. / International Journal of Hospitality Management 27 (2008) 391402

Results indicate that the respondents were relatively


young with 93.8% of them less than 46 years old. The
sample seemed to be a highly educated group, with the
majority of the respondents (55%) holding a college/
Table 1
Demographic prole of the respondents (N 180)
Frequency

Gender
Male
Female
Missing
Total

88
84
8
180

48.9
46.7
4.4
100

Age (yr)
25 or less
2635
3645
4655
5665
66 or above
Missing
Total

74
80
15
4
1
2
4
180

41.1
44.4
8.3
2.2
0.6
1.1
2.3
100

Education
Less than secondary/high school
Secondary/high school
Some college or university
College/university diploma/degree
Postgraduate degree
Missing
Total

5
38
29
77
22
9
180

2.8
21.1
16.1
42.8
12.2
5
100

Annual household incomea


RMB 80,000 or less
80,001245,000
245,001400,000
400,001550,000
550,001800,000
800,001 or more
Unstable
No income
Dont know
Missing
Total

31
40
21
5
11
6
18
5
16
27
180

17.2
22.2
11.7
2.8
6.1
3.3
10
2.8
8.9
15
100

1 RMB US$0.125.

university or postgraduate degree, while 16.1% had some


college or university education. Apparently, the respondents appeared to be a wealthy group, as compared to the
countrys population whose average annual income was
RMB 13,572 (approximately US$1740) (Yu, 2006). Among
those who reported income in this study, 46.1% of the
respondents earned a household income over RMB 80,000
(approximately US$10,000). More than 12% of the respondents reported that their household income reached
over RMB 400,001 (approximately US$50,000).
4.2. Measurement model
Conrmatory factor analysis (CFA) was used to assess
the overall measurement quality (Gerbing and Anderson,
1998). In the initial analysis, the results suggested that eight
items with either low factor loading (below 0.40) or cross
loading on two factors be dropped from further analysis
(Table 2).
The measurement model specied four factorswebsite
usability, website functionality, customer satisfaction, and
purchase intentions. In this model, each indicator was
constrained to load only on the factor it was designated to
measure; the residual terms for all indicators were xed to
be uncorrelated; no equality constraints on the factor
loadings were imposed; and the factor covariances were
free to be estimated. All of the factor loadings exceeded 0.4
and the t-value of each indicator exceeded 2.0 (po0.05).
The w2 statistic was 30.308 with 21 degree of freedom
(p 0.8597 i.e., 40.05). The large p-value means that there
is no difference between observed correlation matrix and
reproduced correlation matrix. The root mean squared
error of approximation (RMSEA) estimates the lack of t
in a model compared to a perfect model. RMSEA was 0.05
with condence intervals between 0.000 and 0.086.
According to Hu et al. (1999), the value of RMSEA of
0.06 or less indicates a good-tting model relative to the
model degrees of freedom. The comparative t index (CFI)
was 0.975, the goodness-of-t index (GFI) was 0.965, the
adjusted GFI (AGFI) is 0.925, the root mean square
residual (RMR) was 0.041, and the standardized RMR

Table 2
Standardized factor loadings and t-values resulting from conrmatory factor analysisa
Functionality
Funct2
Funct5
Use2
Use5
Sat1
Sat3
Sat5
PurchIn1
PurchIn2
Composite reliability
a 2

Usability

Customer satisfaction

Purchase intentions

0.893 (2.077)
0.408 (2.042)
0.684 (5.828)
0.758 (5.826)
0.687 (7.24)
0.713 (6.944)
0.705 (7.204)

0.534

0.682

0.744

0.804 (5.047)
0.766 (5.044)
0.76

w 30.308, d.f. 21, p40.05, CFI 0.975, GFI 0.965, AGFI 0.925, RMR 0.041, RMSEA 0.050 (condence interval 0.0000.086).

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B. Bai et al. / International Journal of Hospitality Management 27 (2008) 391402
Table 3
Convergent validity and discriminant validity
Constructs

Convergent validity

Discriminant validity

Functionality
Usability
Customer satisfaction
Purchase intentions

0.4080.893
0.6840.758
0.6870.713
0.7660.804

0.2160.350
0.3500.641
0.3430.641
0.2160.444

(SRMR) was 0.043. Based on all statistics, the model ts


the data very well, generating a good t to the data.
Variance (R2) in the indicators accounted for by their
corresponding constructs was all signicantly large, ranging from 0.418 to 0.997.
The convergent and discriminant validity of these four
constructs were examined by the results of a CFA (see
Table 3). The result of a CFA included estimates of
covariance between the factors, loadings of the indicators
on their respective factors, and the amount of measurement
error (unique variance) for each indicator. The convergent
validity meant that indicators specied to measure a
common underlying factor all have relatively high-standardized loadings on that factor. For each set of indicators,
the standardized factor loadings were all relatively high,
which suggested convergent validity. The discriminant
validity meant that estimated correlations between the
factors were not excessively high (e.g., 40.85) (Kline,
2005). In relation to discriminant validity, the correlations
between usability, functionality, customer satisfaction, and
purchase intentions were low, which suggests that purchase
intentions and the other three factors were clearly distinct.
4.3. Proposed structural model results
To examine the goodness of t of the hypothesized
models, the measurement model was re-specied by
imposing the structure of each model. The hypothesized
structural model represented good t to the current data.
The w2 statistic is 31.498 with 23 degree of freedom
(p 0.111 i.e., 40.05). RMSEA was 0.045 with condence
interval between 0.000 and 0.081. The CFI was 0.977, the
GFI was 0.964, the AGFI was 0.929, the RMR was 0.048,
and the SRMR was 0.048. All these statistics show that the
model was a good t to the data. The results suggested that
there was no evidence of misspecication of parameters in
the model. All structural regression coefcients presented
in the model were statistically signicant. The model, along
with the estimates of standardized regression coefcients,
factor loadings, and residual variances and covariances, is
presented in Fig. 3.
4.3.1. Functionality, usability, customer satisfaction, and
purchase intentions
The set of hypotheses H1, H2, and H3 studies the
relationship among functionality, usability, customer satisfaction, and purchase intentions. As shown in Fig. 3, the

397

proposed model explains 21.5% of the variance of the


purchase intentions construct. H1 predicts that functionality has a positive impact on customer satisfaction.
Website quality had a direct and positive impact on online
visitors satisfaction. Usability as measured by language,
and layout and graphics seemed to exert more inuence on
satisfaction than the website quality (path coefcient
0.14, po0.1). Therefore, H1 was supported. H2 predicts
that usability has a positive impact on customer satisfaction. The results suggested that online satisfaction was
found to have a direct and positive effect on purchase
intentions (path coefcient 0.60, po0.05). H3 expects
that customer satisfaction positively affect customer purchase intentions. The result of H3 is evidenced by a positive
path estimate (path coefcient 0.463, po0.05). Website
quality inuenced online visitors purchase intentions via
their satisfaction with website functionality and usability
features. In other words, online satisfaction mediates
website quality, which in turn supports H3.
4.4. Testing the rival model
According to James et al. (1982), the following criteria
can be used to compare the proposed model with its rival
model: (1) overall t of the model implied covariance
matrix to the sample covariance matrix which is measured
by CFI; (2) percentage of statistically signicant parameter;
(3) the variance explained by the model; and (4) parsimonious concern. Table 4 presents the comparisons
between the proposed model and the rival model.
The CFI index for the rival model was low (0.954 versus
0.977). None of its hypothesized paths was supported at
the po0.05 level. In contrast, two of three hypothesized
paths in the proposed model were supported at the po0.05
level, and one hypothesized path was supported at the
po0.1 level. Also, the small increment of explanatory R2
was gained from the rival model (0.224 versus 0.215). The
model Akaike Information Criterion (AIC) is used to
assess the t that includes a parsimony adjustment. The
value of the model AIC shows that the rival model was
slightly better than the proposed model. However, the
proposed model was better than the rival model based on
overall model evaluations including w2, R2, and other
model t indices.
5. Discussion of results and implications
This study examined Mainland Chinese online visitors
potential purchase behavior by building a structural
equation model. The inter-relationships between website
quality, online satisfaction, and purchase intentions were
explored. Theoretically, conceptual linkages of the impact
of website quality on customer satisfaction and purchase
intentions were established and empirically tested. The
study compared a rival model with the proposed structural
model. While the literature did not support the direct
paths between high order website quality and purchase

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B. Bai et al. / International Journal of Hospitality Management 27 (2008) 391402

398
E2

E5

0.38

0.92

Funct2

Funct5

0.93

0.39

Functionality

0.14

D4
D3
0.89

0.75

0.34

Customer satisfaction

0.46

0.71

0.53

E17

PurchIn2

0.69

E18

PurchaseIn

0.73
0.69

PurchIn1
0.85

0.70

0.60*

Sat1

Sat3

0.73

Usability

0.67

E11

Sat5

0.70

0.72

E13

E15

0.77

Use2

Use5

0.74

0.64

E7

E10

Fig. 3. A proposed structural model.

Table 4
Analysis of competing model
Proposed model

Rival model

Path

Estimate

Path

Estimate

Direct effect
Satisfaction-purchase intentions

0.209a

Direct effects
Functionality-purchase intentions

0.294c

Indirect effects
Functionality-purchase intentions
0.083b
Usability-purchase intention
0.135b
w2(23) 31.498; GFI 0.964; CFI 0.977; model AIC 14.502

Usability-purchase intention
Customer satisfaction-purchase intentions

0.244c
0.290c

w2(29) 47.655; GFI 0.949; CFI 0.954; model AIC 10.345

N 180.
a
po0.1.
b
po0.05.
c
p40.1.

intentions, the testing of a rival model further conrms that


website quality should be treated as a multi-level construct.
More importantly, it is the totality of website quality that

has been proved to inuence customers purchase intentions. This effort calls for future studies to enhance the
model by considering more related constructs of interest

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B. Bai et al. / International Journal of Hospitality Management 27 (2008) 391402

that may help to further investigate online customers


behavior.
In a practical sense, the results are also helpful in
understanding the impact of website quality on customer
satisfaction and purchase intentions in the online environment where travel products are promoted and sold. Online
satisfaction was found to have a positive impact on
purchase intentions, both short-term and long-term,
mediating the effect of website quality. This nding was
supported by previous studies that satisfaction leads to
purchase intentions in the ofine environment (Anderson
and Fornell, 1994; Oliver, 1999; Pont and McQuilken,
2005). It shows that in the virtual environment, striving for
customer satisfaction is also of signicance to increase
intentions for actual purchase of travel products online. As
a new distribution channel, the Internet offers an unprecedented level of access. From the consumers perspective, the Internet enables consumers to interact directly
with online rms at any time and any place (Olmeda and
Sheldon, 2001). Consumers have also become more
technologically savvy, not only in making purchases on
the Internet but also in planning their vacations online. The
analysis of such online travel planning behavior will
become a hot issue (Bai et al., 2004). To capture the
lucrative online business, hospitality and tourism companies have enhanced their competitive advantages by
focusing their resources on the virtual business environment. Marriott International reported that its online
reservation system generated more than US$1 billion in
gross sales in 2002, a nearly seven-fold increase over a
2-year period (Clabaugh, 2003). It is therefore imperative
that online hospitality and tourism companies make their
online customers satised, which may in turn change
e-browsers into e-buyers, thereby generating more sales.
Results of the study also found that website quality has a
direct and positive impact on satisfaction. It is critical for
online hospitality and tourism companies to continue to
invest in their website quality because online customer
behavior is greatly inuenced by their virtual experience.
Developing a website that is liked by customers can be
challenging. While there have been an increasing number of
approaches toward developing websites in various industries, there have been no reported uniform industrial
standards in the area of evaluating the development of
tourism websites (Law and Bai, 2006). This study utilized
both usability and functionality dimensions to examine
customer perceptions of travel website quality in China
because these dimensions have been empirically tested. For
hospitality and tourism online businesses, both functionality and usability website features must be examined to
enhance purchase intentions. It is important to monitor
which aspects of website quality features are among those
sought after by customers when travel products purchased
online. As discussed by Gefen (2000), cultural difference
may exist in dening website quality.
Results indicate that Chinese online customers seem to
be more interested in contact and destination information,

399

and the language used and specic layout and graphics on


the travel websites they have visited. To target Chinese
online customers, travel websites must focus more on the
previously mentioned website design features. It appears
that when people surf travel websites without an intention
to purchase, the contact information becomes very
important to Chinese online customers. Interestingly,
destination information is also a factor of inuence. It
may imply that Chinese customers are seeking information
online about the destination(s) that they are likely to visit.
Moreover, hospitality and tourism companies must make
their websites more attractive with the effective use of
layout and graphics. For example, pictures should be used
to show travel products. Using pictures for promotion has
been proved to be a successful practice in website design.
Having analyzed pictorial presentations from 203 hotel
websites in New York, Jeong and Choi (2004) found that
the content and realism (pictures with or without people) of
picture presentations are important predictors of customers attitudes toward the website, and their attitudes
appear to be a strong predictor of behavioral intentions. To
make website design more product specic, instead of
making generalizations at large, further studies are also
needed to explore what travel products Chinese online
customers are looking for.
6. Conclusion
This study has developed and empirically tested a
theoretical model of the impact of website quality on
customer satisfaction and purchase intentions in the
Chinese context. The examination of online customer
behavior deserves continuous endeavor from both academic scholars and industry practitioners. Given the size of
its population and economic prosperity, China is likely to
become the worlds largest online market. The demand for
online travel products by this market may thus be
phenomenal. Hospitality and tourism companies should
seize this opportunity to lure this market to their websites.
Website quality is clearly critical in driving trafc, making
people stay, and eventually attracting people to purchase
online products.
Like other research efforts, this study is subject to some
limitations. The study sample was taken in three hotels in a
major metropolitan city in China. The demographic prole
of the respondents indicates that they were relatively
young, well educated, and wealthy. While this sample
prole matches the early adopters of Internet technology as
found by Weber and Roehl (1999), it may not be
representative of the population at large in China. In the
meantime, additional information regarding respondents
use of the Internet may be of interest. Perdue (2001)
analyzed the relationship between the various measures of
consumer experience and the website ratings, and recognized consumer experience for its inuence on assessment
of website characteristics. Also, the sample size in future
studies could be increased in order to have a more

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B. Bai et al. / International Journal of Hospitality Management 27 (2008) 391402

representative sample. In the data collected, there were not


enough responses of actual purchase over the last 12
months. As a result, the perceptions of travel website
quality were based on participants visiting experience
rather than actual purchase behavior. Results may therefore be different if otherwise. Future studies should not
only include people of diverse backgrounds from more
geographic locations in the country but also ensure enough
respondents so that comparisons can be made between
e-browsers and e-buyers for more detailed results. In
addition, as Law and Bai (2006) observed, no single
method seems to outperform others in evaluating tourism
websites. This fact clearly indicates the need to develop
more standardized approaches and evaluation criteria to
measure performance of tourism websites. As a concluding
comment, the assessment of travel websites should employ
other well-developed instruments.
Acknowledgments
The authors would like to thank the constructive
comments offered by the anonymous reviewers. This
research was partly supported by a research grant funded
by the Hong Kong Polytechnic University (under contract
number A-PG87).
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