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The purpose of this study is to examine the causal relationships among the satisfaction of local festival participants, the loyalty to local festivals, and the festival- induced tourism activation effects and to find policy implications on successful local festival strategies. To achieve this purpose, this study reviews the existing literatures about tourism development, local festivals, and customer satisfaction theories, and then formulates 14 study hypotheses, and finally verifies them using a structural equation model. This study uses a field survey data about tourists who participated in ‘2008 Hwacheon Sancheneo Ice Festival’ and the final sample size is 373. The main results of this study are as follows. 1)Participation Motivation, Mass Media Information, Word-of-mouth Information respectively affect Festival Image. And Festival Image affects Festival Expectation and Perceived Quality. 2)Festival Expectation also affects Perceived Quality but doesn't have any statistically significant effects on Perceived Value and Festival Satisfaction. Perceived Quality affects Perceived Value and Festival Satisfaction. And Perceived Value affects Festival Satisfaction. 3)Festival Satisfaction has a very strong positive effect on Loyalty To Festival but doesn't any statistically significant effects on Festival-induced Tourism Activation Effects. But Royalty to Festival does affect Festival-induced regional development very strongly. The policy implications of these findings are as follows. 1)In order to maximize tourists' satisfaction, local government officials and the authorities concerned should make the best efforts to enhance perceived quality of local festivals. 2)To make tourism activation effects come true, it is very important to retain the core customers showing strong loyalty to a certain local festival.