The effect of perceived error stability, brand perception, and relationship norms on consumer reaction to data breaches

Abstract

The issue of data breaches has received increasing attention in the hospitality industry. Companies’ efforts to fix such errors affect consumers’ evaluations and behavioral intentions toward those companies. This study investigates the impact of perceived error stability on hotel guests’ intentions to spread positive word-of-mouth (WOM) about a hotel. The findings reveal that when a data breach occurs, consumers are likely to spread positive WOM about a company that is typically considered competent if the consumers perceive the error stability to be low rather than high. Consumers have similar reactions to companies with which they have communal relationships. This research suggests that hotels should strategically allocate their resources on the basis of brand perception in the minds of their target consumers as well as their relationships with their target markets.