A Fresh Insight Into Visitors’ Decision-Making Process In Hotel Industry Of Pakistan

Abstract

To investigate the green hotel’s visitors’ decision-making process, this study provides a fresh insight into existing knowledge related to Pakistani consumer’s beliefs regarding green practices, attitudes towards green behaviours, overall image, and behavioural intentions. Using structural equation modelling technique on the data received from 372 Pakistani Lodging consumers, a test model confirmed that attitudes towards green behaviour have a positive influence on the overall image of green hotel, intention to visit green hotels, and willingness to pay more for green hotels. Moreover, environmental and luxury beliefs have a positive influence on attitudes and intentions about visiting a green hotel, and will to spend additional for a green hotel. Furthermore, attitudes towards green behaviors and overall image of green hotels have mediating roles exist in that test model, which is a unique contribution to the knowledge body. These outcomes are expected to help Pakistani marketers and managers, especially green management practitioners, to recognize more subjective initiatives for entering international and local segments.

Keywords: Green ImageConsumer beliefAttitude toward green hotelsBehavioural IntentionGreen Hotel Industry

Introduction

Increasing concern has recently been observed in the hospitality industry In terms of its influence on environmental sustainability (Han & Kim, 2010; Kang, Stein, Heo & Lee, 2012; Line & Hanks, 2016). Due to this, various programs designed to alleviate negative environmental consequences have been implemented by several hospitality businesses (Chan, 2008). The success of those programs can be seen in the form of increasing numbers of green hotels worldwide (Chan, 2013; Dief & Font, 2010; Line & Hanks, 2016), and increasing preferences of visitors to stay inside green hotels (Mensah, 2004). As observed by Penny (2007) most hotel businesses believe that their competitiveness and image is enhanced after launching a ‘go green’ concept in their businesses. Hence, for the implementation of both operational and strategic planning, the role of green management is extremely important, not just a passing interest.

Line & Hanks (2016) noted that consumers’ willingness to spend is as important as the responsibility of an industry to produce green products/services. In other words, the supply of green products/services can only be made possible if there is a sufficient demand for that product in the marketplace. In their introductory phases, many hotels launched ‘go green’ concepts to fulfill the regulations of government, to save capital, and to reduce energy wastage (Lee et al., 2010). Nevertheless, in light of rising demand for green hotels, those hotels have directly associated themselves with several other green management aspects, such as the beliefs of consumers related to green performs (Han et al., 2009; Line & Hanks, 2016); attitudes toward hotels engaging in these practices (Han et al., 2009; Tang & Lam, 2017); the overall image of a green hot (Lee et al., 2010) and subsequent behavior (i.e., consumers’ intention to visit green hotel, and their intention to pay more for green hotel) (Han et al., 2009; Lee et al., 2010; Line & Hanks, 2016; Tang & Lam, 2017).

However, at the same time, among some hoteliers (mostly in China and Europe), a general perception has developed that there is a huge level of unwillingness among the hotel guests to pay for inconvenient green practices (Tang & Lam, 2017). Some hotel guests perceive green products/services as inferior in quality and more costly (Tang & Lam, 2017). In fact, few studies confirm the low demand for green products/services (e.g., Wan, 2007) and guests’ unwillingness to pay a premium price for green products/services (e.g., Manaktola & Jauhari, 2007). Due to this, researchers such as Han & Kim (2010) encouraged other researchers to study visitors’ behaviour regarding a green hotel in more depth.

Problem Statement

In previous studies related to consumer behaviour and marketing (Baloglu & McCleary, 1999; Chen & Tsai, 2007; Lin et al., 2007; Han et al., 2009; Line & Hanks, 2016), it was observed that purchasing behaviour can be formed as a result of positive image of a firm. In addition, the customers’ attitude toward green behavior has a critical role in determining a purchase of green products/services (Laroche et al, 2001; Manaktola & Jauhari, 2007; Han et al., 2009). Nevertheless, in the Pakistani hospitality market context, disconnect exist among consumer’s beliefs about green performs, attitude towards hotels engaging in these performs, the overall image of green hotels and subsequent consumer behavior (i.e., green hotel’s visiting and paying more intentions). Due to this, the extant theoretical perspective in the Pakistani hospitality industry context might not explain the inconsistent results about these constructs and their relationship.

Research Questions

Based on the above mentioned research issue, the core research question addressed in this study is: How a connect between consumers’ belief about green performs, attitudes towards hotels engaged in these performs, the overall image of green hotels and a subsequent consumer behavior (i.e., intention to visit a green hotel, and intention to pay more for green hotel) can extant theoretical perspective in the Pakistani hospitality industry context?

In addition, as currently, the Pakistani hotels are under extreme pressure to apply green management practices due to increasing awareness of the consumers around the globe (Javed & Hussain, 2018), another research question addressed in this study is: How Pakistani hotel marketers and managers, especially green management practitioners, can recognize more subjective initiatives for entering international and local segments?

Purpose of the Study

To help Pakistani hotel marketers and managers, especially green management practitioners, to recognize more subjective initiatives for entering international and local segments, a test model has been developed in this study to investigate the relationships among Pakistani consumer’s beliefs about green performs, attitudes towards green behaviors, overall image, and word-of mouth intentions.

Attitude and Image

Fishbein (1963) observed that an individual’s functions can be classically defined as their attitudes based on: beliefs related to an object, and evaluative aspects of those beliefs. Such functioning flows through a natural and automatic procedure (Ajzen, 2011). For instance, whatever an individual’s belief is developed regarding object(s) (e.g., that a green hotel is more (un)comfortable than a conventional hotel), and whatever the evaluative aspects of those beliefs (e.g., green hotel is good/bad); it would naturally and automatically be reflected in their attitudes (e.g., I like/don’t like visiting a green hotel). In contrast, the definition of Image is found to be exclusive, as there is a disparity between the researchers in this regard. According to some researchers (i.e., Crompton, 1979; Gartner, 1986; Kotler et al., 1993), Image is a combination of an individual’s impressions, thoughts and beliefs about a place, whereas some researchers (i.e., Bloemer & Ruyter, 1999) conceptualize Image as a combination of an individual’s perceptions about salient features of a company. Nevertheless, one of the most precise definitions of Image is provided by Assael (1984), who states Image is the entire perception of a consumer about any product (or company), shaped as an outcome of information processed from various sources.

As there has been a substantial increase in environmental awareness (Han et al., 2009), consumers with a positive attitude towards green behaviour consider themselves as ‘environmentalists’, and prefer purchasing products or services from companies with green practices (Donaton & Fitzerald, 1992). Such consumers, due to their environment-friendly purchasing behaviour, help to build overall images of green companies (e.g., green hotels) (Han et al., 2009). Accordingly, the following hypothesis is proposed:

H1: Attitudes towards green behaviour have a positive influence on the overall image of green hotel.

Behavioural Intention

In existing studies, there is a variation in the definition of behavioral intention. Nonetheless, the general agreement of researchers (e.g., Ajzen, 1991; Oliver, 1997; Han and Ryu, 2006) is that behavioral intention reflects a persons’s readiness to carry out a specific behavior. Consequently, for the hotel industry, behavioral intention can be defined as the visitor’s readiness to carry out hotel-stay behaviour (Han & Ryu, 2006). As affirmed by Ajzen (1991), a person’s readinesses to carry out specific behaviors are indicated through their intentions. Lee et al. (2010) confirmed that an individual’s intention can either be unfavorable or favorable. Such favorability (or un-favorability) corresponds to various factors such as their will of paying additional, purchasing, and/or recommendations (Zeithaml et al., 1996). While the overall image of green hotels can be enhanced through an individual’s positive attitude towards green behavior (Han et al., 2009), these aspects (will of paying additional, purchasing, and recommendations) can eventually trigger promising green behavioral intentions (Lee et al., 2010). In this research, two of the aforementioned aspects (i.e., Intention to visit green hotel, and willingness to pay more for green hotels) are employed to study the influence of a green hotel’s overall image on developing a favorable behavioral intention. Consequently, the following hypotheses are proposed:

H2: The image of green hotel has a positive impact on consumers’ green hotels visiting intention.

H3: The image of green hotel has a positive impact on consumers’ will of paying additional for green hotels.

In theory of planned behaviour, Ajzen (1991) suggests that the attitude (along with subjective norm and perceived behavioral control) towards behavior determines the individual’s behavioral intention. This theory is widely employed in studies related to hotel industry under various categories of consumer behaviour. For instance, Line & Hanks (2016) effectively used the theory of planned behaviour in their study model to investigate the relationship between consumer attitudes towards green hotels and the aforementioned aspects of behavioral intention (i.e., Intentions of visiting and recommending green hotels, and willingness of paying additional for green hotels). Also, Han et al. (2010) used the theory of planned behaviour in their study model to explain the intention of consumers to patronize green hotels. Given that such an established relationship (between attitude and behavioral intention) is reflected through the theory of planned behavior, the following hypotheses are proposed:

H4: Attitude toward green behaviors has a positive impact on consumers’ green hotels visiting intentions.

H5: Attitude toward green behaviors has a positive impact on consumers’ will of paying additional to green hotels.

Belief

Regarding staying at green hotels, the influence of consumers’ beliefs about the environment and luxury and behavioral intention is considered in this study. Line & Hanks (2016) defined both dimensions of belief (environmental and luxury) in the context of the hospitality industry. According to them, environmental beliefs can be defined as the degree of a person’s belief that his (or her) stay inside a green hotel will positively influence general social order and/or the environment. On the other hand, luxury beliefs can be defined as a person’s belief that luxury can be reduced (or enhanced) as a consequence of consuming green products. Line & Hanks further explained that in a hotel context, the concept of ‘more’ (more amenities, more décor, more services, more staff etc.) is often linked with the idea of luxury. Contrary to environmentally friendly acts and green behaviour (less use of resources, less waste, less consumption, and less damage to the planet), the idea of luxury can notably stand in stark contrast.

In the hospitability industry, previous researchers have observed that luxury and environmental beliefs can have a direct and significant influence upon a consumer’s attitude and behavioral intention. For instance, Miao & Wei (2013) observed that when staying at green hotels, consumers are likely to have a positive attitude and behavioral intention once they start believing in the effectiveness of their actions to protect or save the environment. Similarly, (Lee & Oh, 2014) found that a person’s degree of belief towards his (or her) ability to protect or save the environment is likely to form his (or her) intentions to choose a hotel and engage in green behaviour. Although there are arguments about the discrepancy among environmental belief and behaviour, as some consumers (often familiar with the esthetic aspects of luxuries and comforts) consider that buying a green hospitality product or service is less luxurious (Baker et al., 2014; Line & Hanks, 2016), the more common assumption is that green products and services elicit a positive attitude and facilitates pro-environmental consumption. Therefore, we propose the following hypotheses:

H6: Environmental beliefs have a positive impact on consumer’s attitudes about visiting green hotels.

H7: Luxury beliefs have a positive impact on consumer’s attitudes about visiting a green hotel.

H8: Environmental beliefs have a positive impact on consumer’s visiting intentions towards green hotels.

H9: Luxury beliefs have a positive impact on consumer’s visiting intentions towards green hotels.

H10: Environmental beliefs have a positive impact on consumer’s will of paying additional for a green hotel.

H11: Luxury beliefs have a positive impact on consumer’s will of paying additional for a green hotel.

The Mediating role of Attitude and Image

A construct can be measured as a mediator once it carries the control of a given predictor construct to a given outcome construct. In general, mediation can occur when: the predictor construct has a significant influence on the mediator, the mediator has a significant impact on the outcome construct, and predictor construct has a significant impact on outcome construct. Therefore, for this study, the case is likely to consider two constructs (i.e., attitudes toward green behaviors and overall image of green hotels) as mediators, and propose the following hypotheses:

H12: Attitude towards green behaviour mediates the relationship between consumer’s environmental beliefs and green hotels visiting intentions.

H13: Attitude towards green behaviour mediates the relationship between consumer’s environmental beliefs and will of paying additional for a green hotel.

H14: Attitude towards green behaviour mediates the relationship between consumer’s luxury beliefs and green hotels visiting intentions.

H15: Attitude towards green behaviour mediates the relationship between luxury beliefs and will of paying additional for a green hotel.

H16: Overall image of green hotels mediates the relationship between consumer’s attitude and green hotels visiting intentions.

H17: Overall image of green hotels mediates the relationship between attitude and consumer’s will of paying additional for a green hotel.

Research Methods

An online survey was conducted using an online marketing research company’s system and test ran with 45 useable questionnaires. Cronbach’s check was used to appraise the test run, with result reaching 0.911. After further review, some modifications were applied, and the final form was sent to 1743 general Pakistani lodging customers selected randomly from the database of a research company for the purpose of the survey. A cover letter accompanying the form included explanations of the difference between green hotel and regular hotel, and the research’s objectives, as well as assurances of the confidentiality of the participant’s responses. 392 completed questionnaires were received (Table 01 ). 18 of them were removed as extreme outliers and unprocessable data, leaving a remainder of 374 usable data and a 21.45% response rate overall. The participants comprised 52.7% males and 47.3% females mostly between 31 to 50 years, and highly educated – 52.9% undergraduates and above. 65.7% made a monthly income of not less than 50,000 Pakistani Rupees. Lastly, 76.4% agreed they patronize the Green hotels at least once in every three months.

Table 1 -
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Measurement

For measuring variables of this research (i.e., attitude towards green hotels, overall image of green hotels, environmental belief, luxury belief, intention to visit green hotel, and willingness to pay more for green hotels), a five-point Likert scaled survey questionnaire (1=strongly disagree to 5=strongly agree) was designed. That survey questionnaire was modified after reviews from hotel experts, and pilot-tested also to ensure the reliability of scales.

All the measures of constructs were taken from the previous studies (i.e., Han et al., 2009; Lee et al., 2010; Line & Hanks, 2016; Tang and Lam, 2017), in which they were found as valid: To measure attitude towards green hotels, 7 items (i.e., “Bad – good”, “Undesirable –desirable”, “Unpleasant – pleasant”, “Foolish – wise”, “Unfavorable – favorable”, and “Unenjoyable – enjoyable”) were taken from the study of Line & Hanks (2016). Likewise, to measure Overall image of green hotels, 3 items (e.g., “Overall, I have a good image about a green hotel to spend a night(s)” etc.) were taken from the study of Han et al. (2009). Lee et al. (2010) also taken the similar 3 items and found valid in their study. Likewise, to measure environmental belief and luxury belief, 5 items (e.g., “green hotels are personally satisfying”, “green hotels may improve my health” etc.) and 3 items (e.g., “Green practices take away from the luxury experience” etc.) respectively were taken from the study of Line & Hanks (2016). Likewise, to measure Intention to visit green hotel, 3 items (e.g., “I would plan to stay at a green hotel when traveling to this destination” etc.) were taken from the study of Han et al. (2009) and 1 more item (i.e., “I would stay at a green hotel when traveling to this destination”) was taken from the study of Line & Hanks (2016). Likewise, to measure willingness to pay more for green hotels, 3 items (e.g., “It is acceptable to pay more for a hotel that engages in green practices” etc.) were taken from the study of Han et al. (2009). Lee et al. (2010), Line & Hanks (2016), Tang and Lam (2017) also taken the similar 3 items and found valid in their studies.

Findings

Model estimation was done through Structural Equation Modeling (SEM) on Mplus 7.0. Before the estimation of model, data normality was determined. Table 01 below provides insights about the normality indicators of the constructs. Standard deviation, skewness and kurtosis are the core data normality indicators. Kline (2016) highlighted that for the data to be normal, standard deviation and skewness values must be between +2 and -2, while kurtosis should be between +3 and -3. The results indicate that all the constructs values were in the acceptable range (see Table 02 ).

Table 2 -
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Model estimation was done through a two-step process. In the first step, measurement model's reliability and validity was determined. The second step was determination of structural model for the testing of hypotheses.

Measurement Model

A confirmatory factor analysis (CFA) was conducted on Mplus for the determination of measurement model. Figure 1 presents the CFA outcomes. For the validity and reliability of this study model, composite reliability (C.R) and average variance extracted (AVE) are important indicators. C.R values must be greater than 0.7 and AVE values must be above than 0.5. Table 03 provides results of factor loadings, C.R and AVEs which manifestly indicate that all the constructs had no reliability and validity concern.

Figure 1: CFA of the Constructs
CFA of the Constructs
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For the determination of model fitness, chi-square (χ2), degree of freedom (df), RMSEA, SRMR, CFI and TLI values are examined. Following outcomes from CFA were attained: χ2 = 368.442, df = 257, P = 0.000, RMSEA = 0.057, SRMR = 0.024, CFI = 0.982, and TLI = 0.979. The threshold value of RMSEA and SRMR is 0.08, while TLI and CFI must be less than 1. All the values of model fitness indicate that the model is sound enough for further estimation using structural path modeling.

Table 3 -
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Table 04 provides results of Multicollinearity & Discriminant Validity. Maximum shared variance (MSV) must be less than 1, while square correlations in diagonals indicate that there are no validity concerns.

Table 04 provides results of Multicollinearity & Discriminant Validity. Maximum shared variance (MSV) must be less than 1, while square correlations in diagonals indicate that there are no validity concerns.

Table 4 -
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As the model comprised of multiple dependent variables and there was shuffling among mediating and independent variables due to model uniqueness. ENVB and LB acted as exogenous variables while determining the effects on ATGH; therefore it was ensured that direct effects would be investigated in the first phase. This arrangement allows complex modeling to be streamlined. Furthermore, it provides clear insights for the understanding purposes. The causal relationship between Environmental beliefs (ENVB) and Luxury beliefs (LB) was measured on Attitude towards Green hotels (ATGH) (see table 05 ). The results attained provided significant path coefficients as the relationship of ENVB and LB with ATGH provided path coefficients of 0.141 and 0.325 respectively. Similarly, the relationship of LB with IVGH and IPM provided beta values of 0.215 and 0.208 respectively which also reveal positive relationship. The direct effects of ENVB with IVGH and IPM provided beta values of 0.320 and 0.065 respectively. The relationship of ENVB with IPM was significant at confidence level of 0.05. The direct relationship of ATGH with IVGH and IPM provided path coefficients of 0.195 and 0.532 which shows a strong causal relationship. The relationship of ATGH with Sus_img provided a strong outcome of 0.484. The relationship of Sus_Img with IVGH and ENVB with IPM was not significant as t-statsitics were less than 1.96 and p-values were above than 0.05. Lastly, the direct effects of Sus_Img with IPM were supported as the path coefficients value was 0.236. The attainment of positive relationship in the direct effects motivated researchers to conduct complex data modeling by incorporating all the paths simultaneously.

Table 5 -
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After the attainment of positive results in direct relationship measurement, six indirect paths were precisely measured of the respective model. The structural model was estimated for the determination of causal relationships among the constructs. The testing of hypotheses was done in the structural model. Figure 2 provides the illustration of structural model. table 05 provides the results of the hypotheses. The relationship of Attitude towards green hotels (ATGH) with green hotel visiting intentions (IVGH) and will of paying additional for green hotels (IPM) emerged to be 0.135 and 0.425 respectively which accept the established path. Furthermore, ENVB effect on IVGH presented 0.310 path coefficients values which are also constructive. LB effect on IVGH accounted for 0.171, which is positive. The path among ENVB and IPM was found insignificant as t-value was less than 1.96 and beta values were 0.053. Lastly, relationships of LB with IPM provided path coefficients results of 0.114 which accept the established hypothesis.

Figure 2: Structural Model
Structural Model
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Table 6 -
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Table 07 provides the Structural Model fit measures. The χ2/DF must be less than 5, GFI, IFI, CFI, NFI, TLI and AGFI values must be less than 1, while RMSEA and SRMR values should be less than 0.08. Table 06 indicates chi-square value of 1.703, GFI, IFI, CFI, NFI, TLI and AGFI less than 1 and RMSEA & SRMR values to be 0.043 and 0.056 respectively.

Table 7 -
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Conclusion

A test model on green hotel’s visitors’ decision-making was developed in this study; and fresh insight were provided into existing knowledge related to Pakistani consumer’s beliefs regarding green performs, attitude towards green behaviors, overall image, and behavioral intentions. That test model was assessed using 374 general Pakistani lodging customers selected randomly from the database of a research company for the purpose of the survey. The results of unmediated model assessment were mostly in-line with the existing researches in the similar context. For instance, Han et al. (2009) believes that attitude toward a green behavior has a positive impact on overall Image of green hotels; and eventually a positive influence on consumer’s willingness to pay more for green hotels (Han et al., 2009; Lee et al., 2010). Likewise, Line and Hanks (2016) believes that an attitude toward green behaviours has a positive impact on consumer’s intention to visit green hotels and willingness to pay more for green hotels. In fact, the assumption of positive relationship between attitude towards green behaviour and willingness to pay more for green hotels is supported in a more recent study of Tang and Lam (2017) as well. Line and Hanks (2016) further believes that consumer’s environmental and luxury beliefs can directly influence their attitude as we as intention toward visiting a green hotel. Nevertheless, the contrasting investigation of their study to ours is that the nature of relationship between luxury beliefs and other constructs was presumed and found as negative, whereas our results showed a positive relationship instead. In addition, unlike current study, the existing studies does prove that overall image of green hotels positively influence the intentions of consumers to visit green hotels (Han et al., 2009). The likely justification of our results could be the fact that Han et al. (2009) have conducted their studies in United States, which is a different country based on its national culture and/or green branding context.

Although, the test of mediation was a unique contribution in this study, few of the results were still found to be in-line with previous studies. For instance, Han et al. (2009) believed that the relationship between attitude towards green behavior and the behavioral intentional components (i.e., intentions of consumers to visit green hotels, and willingness to pay more for green hotels) are fully mediated by overall image of a green hotel. However, they argued that the role of overall image of green hotels is of a complete mediator, and the direct relationship between an attitude toward green behaviors and the components of behavioral intentions is non-significant. Nevertheless, our study, along with various other studies (Dalton et al., 2008; Line and Hanks, 2016), does not consider the role of overall image of green hotels as a complete mediator. For instance, it was identified by Dalton et al. (2008) in their study that consumers in the favor of environment friendly activities often show their will of staying inside green hotels and paying a premium amount also.

As discussed in the first section, this study’s outcomes are expected to help Pakistani marketers and managers, especially the green management practitioners, to recognize more subjective initiatives for entering international and local segments. Various useful insights can be taken in precise to support green marketing and management campaigns in Pakistan. First, the Pakistani hotels should comprise promotional materials that can enhance the environmental beliefs of general public. One of the possible ways to do so is through developing public awareness (e.g., advertisements, seminars, telethons etc.) about the facts that green hotels are personally satisfying, not harmful to environment, improves health, and benefits other hotel guests. Second, it should be taken as a market challenge that the luxury beliefs (e.g., luxury guest services) of the people can disturb the level of environmental consciousness of the people. Possibly, some celebrity endorsement advertisements (e.g., a celebrity preferring stay in an environmental-friendly hotel) can support to reduce people’s preference of luxury over being environmentally conscious. Last, various environment friendly attitude characteristics (i.e., good, desirable, pleasant, wise, favorable, enjoyable and positive) can support to build a good image about a hotel. Moreover, it can support to build an atmosphere that will enable the potential Pakistani consumers to plan and be willing to stay, or at least make an effort to stay in green hotels. Furthermore, it can support to create those pathways that can assure the green hotels to become premium profit makers compared to traditional hotels.

Even though, this study made important theoretical and practical contributions to develop the knowledge related to visitor’s decision making process in the hotel industry, the need to provide interesting future research avenues cannot be ignored. First, only the Pakistani lodging consumers’ are examined in this study. For further comparison, the future studies should include other demographic groups or cultures. Second, the primary data of this study was collected through web-based survey. To reduce extraneous variance and enhance internal validity, a replication of this study can be conducted using any different data collection method. Third, the precise level of luxury that people are willing to trade over environment consciousness is not defined in this study. To present a more clear picture of our theoretical model, it would be interesting identify a luxury sustainability indifference curve. Last, the analysis of our study assumptions were made through use of structural equation modeling. The future researchers could replicate this study using more enhanced statistical techniques for triangulation purpose.

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17 May 2019

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62

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Business, innovation, sustainability, environment, green business, environmental issues

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Khwaja, M. G., & Bashir*, S. (2019). A Fresh Insight Into Visitors’ Decision-Making Process In Hotel Industry Of Pakistan. In & M. Imran Qureshi (Ed.), Technology & Society: A Multidisciplinary Pathway for Sustainable Development, vol 62. European Proceedings of Social and Behavioural Sciences (pp. 66-79). Future Academy. https://doi.org/10.15405/epsbs.2019.05.02.7