IMMERSIVE FINANCE: EXPLORING THE ROLE OF VIRTUAL REALITY IN MITIGATING FINANCIAL RISK AND ENHANCING DECISION CONFIDENCE IN TOURISM

Abstract

This study examines the role of Virtual Reality (VR) in mitigating financial risk in tourism, focusing on how perceived usefulness (PUV), perceived immersion (PIV), trust in VR (TVR), and cost efficiency (CEV) influence financial risk mitigation (FRM) through decision confidence (DC) and reduced information asymmetry (RIA). Additionally, technological readiness (TR) is tested as a moderator. The study employs a quantitative research design, collecting data from tourists using VR-based platforms for travel decision-making. Structural Equation Modeling (SEM) using Smart PLS 4 was conducted to analyze the relationships among constructs.

The results confirm that PUV (β = 0.32, p = 0.000) is the strongest predictor of FRM, followed by PIV (β = 0.29, p = 0.001), TVR (β = 0.26, p = 0.002), and CEV (β = 0.24, p = 0.003). Mediation analysis reveals that DC and RIA partially mediate the relationships between VR attributes and FRM, with PUV → DC → FRM (β = 0.12, p = 0.002) having the strongest indirect effect. Technological readiness (β = 0.20, p = 0.004) significantly moderates the impact of VR on FRM, indicating that tech-savvy individuals experience greater financial confidence when using VR.

The study contributes to the Technology Acceptance Model (TAM) and Information Asymmetry Theory, providing insights into how VR can enhance financial decision-making by increasing confidence and reducing uncertainty in tourism investments. Practical implications suggest that VR developers and  tourism marketers should emphasize immersive and cost-efficient experiences to improve financial decision-making for travelers. Future research could explore cultural variations, longitudinal effects, and AI-driven VR advancements in tourism finance.