e-Review of Tourism Research (eRTR), Vol. 17, No. 4, 2019 http://ertr.tamu.edu 546 Yujia Chen University of Surrey Iis Tussyadiah University of Surrey Anyu Liu University of Surrey Will Guests Use Peer-to-Peer Accommodation Again after a Service Failure? This study applies 3x2 between-subjects design to examine the effects of service failure dimensions and recovery strategies on satisfaction and customer repurchase intention in peer- to-peer accommodation. The preliminary results, which is based on an online survey with 107 respondents, revealed that the three different dimensions of service failure did not yield significant differences in satisfaction and repurchase intention. However, a significant difference was found between “compensation” and “no compensation” recovery strategies in satisfaction and repurchase intention. The types of service failure only affect the relationship between customer satisfaction and repurchase intention when a compensation is provided. This may be due to the limited response in each scenario. Therefore, in future studies, a larger sample is needed to confirm these preliminary results. Key words: service failure, recovery, peer-to-peer accommodation, Airbnb, satisfaction, repurchase intention Yujia Chen School of Hospitality and Tourism Management University of Surrey Guildford GU2 7XH United Kingdom Phone: [44] 7596494993 Email: yujia.chen@surrey.ac.uk Iis Tussyadiah Professor of Intelligent Systems in Service School of Hospitality and Tourism Management University of Surrey Guildford GU2 7XH United Kingdom Phone: [44] 1483684292 Email: i.tussyadiah@surrey.ac.uk Anyu Liu Lecture in Hospitality Management School of Hospitality and Tourism Management University of Surrey Guildford GU2 7XH http://ertr.tamu.edu/ mailto:yujia.chen@surrey.ac.uk mailto:i.tussyadiah@surrey.ac.uk e-Review of Tourism Research (eRTR), Vol. 17, No. 4, 2019 http://ertr.tamu.edu 547 United Kingdom Phone: [44] 7864044654 Email: anyu.liu@surrey.ac.uk Yujia Chen is a Ph.D. student in School of Hospitality and Tourism Management at University of Surrey. Her research interest focuses on the impact of digital technology on consumer behaviour change, centring around service encounter, sharing economy, and P2P accommodation. Iis Tussyadiah is Professor of Intelligent Systems in Service and Head of Department of Hospitality in School of Hospitality and Tourism Management at University of Surrey. Her research interest lies in the intersection of information systems and consumer behaviour. Anyu Liu is Lecturer in Hospitality Management in School of Hospitality and Tourism Management at University of Surrey. His research interests are in the areas of applied economics in tourism and hospitality and tourism and hospitality demand modelling and forecasting. http://ertr.tamu.edu/ mailto:anyu.liu@surrey.ac.uk e-Review of Tourism Research (eRTR), Vol. 17, No. 4, 2019 http://ertr.tamu.edu 548 Introduction As peer-to-peer accommodation continues to grow, there is a mounting evidence of customer dissatisfaction, which may result in a series of negative consequences, such as lower repurchase tendency and discontinuance of use. As previous studies suggest, the cost of attracting new customers is always higher than retaining existing ones (Reichheld & Schefter, 2000). Therefore, it is crucial to understand customer repurchase intention in peer-to-peer accommodation sector, which emerged only a decade ago. Although there are some studies in the peer-to-peer accommodation literature investigated the repurchase intention (e.g., Liang, Choi & Joppe, 2018; Wang &Jeong, 2018), the majority of them only focus on the positive consumer experiences rather than the negative ones. Research on how negative experiences in peer-to-peer accommodation affect customer satisfaction and repurchase intention is still lacking. As failures are oftentimes inevitable in hospitality industry, it is important to identify effective recovery strategies which can compensate guests’ negative experiences and thus retain customers. Therefore, this study aims to investigate the effect of different service failures and recovery strategies on customer satisfaction and intention to use peer-to-peer accommodation again. Theoretically, this study will contribute to a better understanding of post-consumption behaviour in peer-to-peer accommodation. Furthermore, this study will inform practitioners, such as platform providers and service providers, effective ways to manage service failures and negative customer experiences. Service Failure and Recovery Service failures, which occur when service provided falls below the customer’s expectation (Hoffman & Bateson, 2010), are considered to be one of the key determinants of customer dissatisfaction and switching behaviours (Smith, Bolton, & Wagner, 1999; Tax & http://ertr.tamu.edu/ e-Review of Tourism Research (eRTR), Vol. 17, No. 4, 2019 http://ertr.tamu.edu 549 Brown, 1998). Previous research suggests that service failure can be divided into two broad dimensions: outcome and process dimensions (Hoffman & Chung, 1999). Outcome failure normally happens when the core service is not performed as expected to satisfy the customers’ basic needs (i.e., an unavailable service), while process failure refers to the situation when the core services are somehow flawed or deficient during the delivery process (e.g., inattentive service) (Smith et al., 1999). One of the most popular classifications of service failure is proposed by Bitner, Booms, and Tetreault (1990), suggesting that most of service failures result from frontline employees responding poorly towards core service, customers’ needs and requests, and due to their unprompted and unsolicited action. Service failures are inevitable in any service delivery process, thus whether service provider can provide an effective service recovery is crucial . This establishes the need for a good service recovery. Service recovery is a process to turn the dissatisfied customers into satisfied ones by providing a series of actions (Grönroos, 1988). It is very context-specific, which means that effective recovery strategies should be specified to particular service failures. There are eleven frequently adopted recovery strategies in traditional hospitality industry, including compensatory responses (e.g., discount, coupon, free upgrade, etc.), managerial responses, corrective responses (e.g., replacement, correction, etc.), empathetic responses (e.g., apology), and no recovery taken (Hoffman & Chung, 1999). Online service failures and recovery differ from those in traditional services. As technology plays an increasingly important role in service delivery process, some technological issues that are unique to online encounter (e.g., website design, payment, security and privacy) arise (Holloway & Beatty, 2003), as human interaction has been replaced by technology (Fan, Wu, & Wu, 2010; Forbes, Kelley, & Hoffman, 2005). In an online environment, Serenko and Stach (2009) find that when travellers try to book their http://ertr.tamu.edu/ e-Review of Tourism Research (eRTR), Vol. 17, No. 4, 2019 http://ertr.tamu.edu 550 accommodation, service failures are normally related to prices, post-purchase service delivery, information, and cancellation. Peer-to-peer accommodation is not simply a merging of traditional on- and off-line service, but essentially a new concept. Unlike the exchange in traditional accommodation, which is confined in a human-human interaction, the exchange in peer-to-peer accommodation happens through various interfaces both on- and off-line. From the technological perspective, travellers can be confronted with issues such as insufficient and/or misleading information (e.g., fake photo) provided by hosts or platform providers online, and customer service representatives being unprofessional. Because service providers in peer-to- peer accommodation are not professionals but amateurs, their negative attitude such as rudeness and ignorance, as well as the substandard quality of room and facilities can also lead to customer dissatisfaction. Therefore, service failure in peer-to-peer accommodation can be considered multi-dimensional, encompassing core service failure (i.e., tangible), technological service failure (i.e., informational), guest-host interaction failure (i.e., relational), etc. An effective recovery strategy is the key resource for building trust and mitigating risk after a service failure. Overall, the main recovery strategy in peer-to-peer accommodation is for platform provider to have its own call centre to assist customers with different issues. Depending of the failures, customers are often compensated with a refund, a coupon, etc. As suggested in the literature, unprofessional handling of customer complaints at this stage always confounds the failure (Collinson, 2018). Satisfaction and Repurchase Intention The relationship between customer satisfaction and repurchase intention has been under examination in many studies. Indeed, numerous empirical research have supported the http://ertr.tamu.edu/ e-Review of Tourism Research (eRTR), Vol. 17, No. 4, 2019 http://ertr.tamu.edu 551 argument that customer satisfaction positively impacts repurchase intention (Anderson & Sullivan, 1993; Mittal & Kamakura, 2001; Oliver, 1980). However, researchers also found inconsistent results that in some studies customer satisfaction (CS) influenced repurchase intention (RPI), whereas others did not (e.g., Szymanski & Henard, 2001). Given such inconsistencies, there is a need to investigate the CS–RPI link in a new context. In this study, repurchase intention, as a key indicator of customer retention, signifies the likelihood of future purchase behaviour in peer-to-peer accommodation involved in the failure/recovery scenario (Holloway, Wang, & Parish, 2005), while customer satisfaction is conceptualised as an antecedent of repurchase intention to use peer-to-peer accommodation. Method In order to achieve the aim of the study, participants were recruited via Amazon Mechanical Turk with a Human Intelligence Tasks (HITs), targeting those with approval rate over 95% and task master qualification. Only respondents who have used peer-to-peer accommodation in recent one year were included in the study. This study adopted a two- factor between-subjects design (service failure: tangible vs. informational vs. relational) x (recovery: without compensation vs. with compensation). Participants were randomly assigned to one of the six experimental conditions depicting service failure and recovery during their stay in peer-to-peer accommodation. Before beginning the task, respondents were asked to provide their level of familiarity and knowledge about peer-to-peer accommodation. Participants were presented a service failure scenario, representing one of the three types of service failure. They were then presented with a scenario with one of two service recovery strategies. Then, a series of questions in terms of satisfaction and intention to use peer-to-peer accommodation again was presented. The instrument assessed traveller satisfaction and repurchase intention by using a 5-point Likert scale (1= extremely disagree, 5 = extremely agree); items were adapted from http://ertr.tamu.edu/ e-Review of Tourism Research (eRTR), Vol. 17, No. 4, 2019 http://ertr.tamu.edu 552 Lee and Kim (2018) (examples: “I would be pleased to have stayed at Airbnb during my trip”, “I would enjoy staying at Airbnb during my trip” ) and Möhlmann (2015) (examples: “I am likely to choose Airbnb the next time”, “I need an accommodation. In the future, I would prefer a sharing option like Airbnb to an own hotel”), respectively. Preliminary Results and Discussion In total, 107 participants completed this study in September 2019; 68.2% of them were Male and 55.1% between the ages of 35 to 44 years (see Table 1 for participant profiles). The reliability of the scales applied by this study was supported by the Cronbach's alphas, which are both above .7. Exploratory Factor Analysis was carried out to estimate the factor score of the two constructs for inference analysis. ANOVA was implemented to examine the effect of service failure and recovery strategy on satisfaction and repurchase intention. Two-ways ANOVA showed that there was no significant interaction between the effects of service failure and recovery strategy on satisfaction and repurchase intention (F = .648, p = .525). However, there is a significant difference between “no compensation” and “with compensation” conditions on satisfaction (t = -3.100, p = .003) and repurchase intention (t = -3.146, p = 0.015), respectively. In addition, one-way ANOVA showed there is no significant difference in terms of satisfaction (F =.312, p =.733) and repurchase intention (F = .806, p =.918) across different service failure situations. Table 1. Participant Profiles (N = 107) Characteristics Percent Gender Male 68.2% Female 31.8% Age 25-34 3.7% 35-44 55.1% http://ertr.tamu.edu/ e-Review of Tourism Research (eRTR), Vol. 17, No. 4, 2019 http://ertr.tamu.edu 553 Characteristics Percent 45-54 24.3% 55-64 14% ≥60 2.8% Annual Income Less than $20,000 7.5% $20,000 - $29,999 13.1% $30,000 - $39,999 20.6% $40,000 - $49,999 11.2% $50,000 - $59,999 12.1% $60,000 - $69,999 6.5% $70,000 - $79,999 7.5% $80,000 - $89,999 2.8% $90,000 - $99,999 2.8% $100,000 - $149,999 14% $150,000 + 1.9% Country of Residence Canada 0.9% India 40.2% United Kingdom 2.8% United States of America 51.6% To gain further insights into the relationship between satisfaction and repurchase intention in peer-to-peer accommodation, seven linear regression models were implemented to examine the overall impact of satisfaction on repurchase intention and the relationship across the six scenarios. In the overall model, a significant regression model was found (F (1, 105) = 152.369, p < .001), with an R2 of .592. It indicates that, in the overall model, one unit increase of the satisfaction could lead to a 0.752 unit increase of the repurchase intention (b1 = .752, p < .001). A summary of R2 values in the six scenarios to measure goodness-of-fit is presented in Table 2. The R2 values of the six scenarios are all above 0.458, indicating at least 46% of the variance of the repurchase intention can be explained by the information of satisfaction (See Table 2). http://ertr.tamu.edu/ e-Review of Tourism Research (eRTR), Vol. 17, No. 4, 2019 http://ertr.tamu.edu 554 Table 2. Summary of Linear Regression Results (Dependent Variable = Repurchase Intention) Model 1 Model 2 Model 3 Model 4 Model 5 Model 6 Model 7 Modelling content Failure *Recovery Tangible Failure * Without Compensation Tangible Failure * With Compensation Informational Failure * Without Compensation Informational Failure * With Compensation Relational Failure * Without Compensation Relational Failure * With Compensation Satisfaction .752*** .674*** .980*** .609*** 1.095*** .742*** .660*** Constant -.034 -.252 .017 -.063 .023 -.028 .026 R2 .592 .511 .588 .458 .832 .722 .489 F value 152.369 19.845 21.377 14.392 64.591 31.117 18.170 Coefficients Standard Error .064 .151 .212 .160 .136 .133 .155 Note: *** significant at 1% significant level. A Z test [Equation: Z= (b1- b2)/(SE b12 + SE b2 2)1/2] was adopted to understand whether the relationship between satisfaction and repurchase intention is different in the six scenarios (b1 and b2 are coefficients; SE b1 and SE b2 are coefficients standard errors) (Paternoster, Brame, Mazerolle, & Piquero, 1998). When the coefficients of the six scenarios were compared, it was found that if no compensation was provided after a specific service failure, the types of service failure did not have an influence on the relationship between customer satisfaction and repurchase intention. On the contrary, if the compensation was provided to guests, the impact of satisfaction on repurchase intention in the informational failure (Model 5, b = 1.095) is significantly larger than that in the relational failure (Model 7, b = .660) at 95% significant level (Z = 2.11). This suggests that providing compensation after an informational failure would be more effective than after a relational failure. The coefficients in the rest of the scenarios were not significantly different. This finding may be caused by the relatively low number of responses within each scenario. Thus, it is important to collect a larger number of responses to ensure the sample size in each scenario is large enough to generate robust results. http://ertr.tamu.edu/ e-Review of Tourism Research (eRTR), Vol. 17, No. 4, 2019 http://ertr.tamu.edu 555 Conclusion The findings of this study extend understanding of the relationship between customer satisfaction and repurchase intention in peer-to-peer accommodation in light of different service failures and recovery strategies. The findings suggest that the types of service failure may only have an effect on the satisfaction – repurchase intention relationship when a compensation is provided. 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