literature on hotel customer retention

8/18/2019 Literature on Hotel Customer retention

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REVIEW OF LITERATURE

This chapter attempts to review different literatures on customer satisfaction with

reference to hotel industry and presents various studies made regarding the issues related

with hotel industry and customer satisfaction.

Customer – DefinitionsPaul S. Goldner (200!1defines" #$a customer is any organi%ation or individual with

which you have done &usiness over the past twelve months'.

Grigoroudis" and Sis)os" * (200+! 2provide definition for ,customer- upon two

approaches /ith reference to loyalty" # customer is the person that assesses the uality

of the offered products and services' and on process oriented approach" #the customer is

the person or group that receives the wor) output' (p.+!.

#ustomer means the party to which the goods are to &e supplied or service rendered &y

the supplier'. 3

Customer Satisfaction – Definitions

Satisfaction has &een &roadly defined &y avra" T.G. (1++4! as a satisfactory post5 purchase e6perience with a product or service given an e6isting purchase e6pectation.7

8oward and Sheth (1++!9define satisfaction as" #The &uyer-s cognitive state of &eing

adeuately or inadeuately rewarded for the sacrifices he has undergone' (p.179!.ccording to /est&roo) and :eilly (1+;3! " customer satisfaction is #an emotional

response to the e6periences provided &y" associated with particular products or services

purchased" retail outlets" or even molar patterns of &ehaviour such as shopping and &uyer

&ehaviour" as well as the overall mar)et place' (p.29!.


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state of mind in which the customer-s needs" wants and e6pectations throughout the

product or service life have &een met or e6ceeded" resulting in su&seuent repurchase and

loyalty'.33


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Cerchant ccount Glossary points out that" #ustomer satisfaction is an am&iguous and

a&stract concept and the actual manifestation of the state of satisfaction will very from

person to person and produce=service to produce=service.....'1

Schiffman and Danu) (2007!14defines customer satisfaction as #The individual-s

perception of the performance of the product or service in relation to his or her

e6pectations'./oodruff and Gardian (1++! 1;define #Satisfaction" then" is the evaluation or feeling

that results from the disconfirmation process. Bt is not the comparison itself (i.e." the

disconfirmation process!" &ut it is the customer-s response to the comparison. Satisfaction

has an emotional component.'

ccording to 8ung (1+44!" #$. satisfaction is a )ind of stepping away from an

e6perience and evaluating it $


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#omparison of e6pectations versus perception of e6perience'.23 # customer-s

perception of the degree to which their reuirements have &een fulfilled.'27 ccording to

@usiness ?ictionary" customer satisfaction is" #?egree of satisfaction provided &y the

goods or services of a firm as measured &y the num&er of repeat customers.'29

These definitions suggest that an evaluative process is an important element underlying

customer satisfaction.2Hotel Industr – Definitions

Peter Eones and ndrew Foc)wood (2002!24provide a simple definition for hotel as" #an

operation that provides accommodation and ancillary services to people away from

home.'

ccording to ?ictionary of merican 8istory2;#The primary purpose of hotels is to

provide travellers with shelter" food" refreshment" and similar services and goods"

offering on a commercial &asis things that are customarily furnished within households

&ut unavaila&le to people on a Aourney away from home'.

8otel industry is a large and highly diverse industry that includes a wide range of

property styles" uses and ualities. 2+Peter Eones and ndrew Foc)wood (2002! defines a hotel as #a" usually large" house run

for the purpose of giving travellers food" lodging etc.' urther add" #an operation that

provides accommodation and ancillary services to people away from home.' 30


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The @uilding ode of the ity of Hew *or) defines" # hotel shall &e ta)en to mean and

include every &uilding" or part thereof" intended" designed or used for supplying food and

shelter to residents or guests" and having a general pu&lic dining5room or a cafI" or &oth

and containing also more than fifteen sleeping rooms.32

Peyton" :.C. et al (2003!33 in their wor)ing paper su&mitted at the llied cademies

Bnternational onference presented a comprehensive review of the literature on variousustomer Satisfaction and ?issatisfaction (S=?! theories proposed. The literatures are

specifically prior to the 1++0s. This review focuses on the maAor components of the

decision5ma)ing process" also addresses the measurement5related issues relevant to this

&ody of literature. The paper analyses four theories under the um&rella of consistency

theory vi%. assimilation theory" contrast theory" assimilation5contrast theory" and negative

theory. Bn addition to presenting a review of theoretical &ases of the research in the area

of consumer satisfaction" the paper also addresses the maAor elements of the most widely

accepted models of onsumer Satisfaction and ?issatisfaction. The authors argue that

even though the satisfaction construct has &een defined in a num&er of ways" satisfaction

has &een defined in terms of need fulfilment" pleasure=displeasure" cognitive state"attri&ute or &enefit evaluation" and su&Aective evaluation of e6perience &y many

researchers. The review concludes" #however" while researchers have used a num&er of

different definitions for satisfaction" they generally agree that satisfaction involved a setof inter5related varia&les rather than a single varia&le' (p.77!.

avra" T.G. (1++4!37 in his &oo) suggests specific programmes to improve the

measurement of customer satisfaction in an organi%ation. The author descri&es five 3


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critical s)ills reuired for this tas) vi%. sampling=customer5participant selection"

uestionnaire design" interviewing=survey administration" data analysis" and uality

function deployment5&uilding action plans. The author argue that to e6tend the

understanding of the e6act relationships preceding and following the formation of

satisfaction" a model of satisfaction would &e very helpful. The model proposed has three

stages antecedents" the satisfaction formation process" and conseuences. Prior e6perience is claimed to &e the most important antecedent of satisfaction" since it serves

as a memory &an) of all previous e6periences. The satisfaction process is claimed to

encapsulate a comparison of e6pectations with perceived performance. 6pectations are

defined as the sum of &eliefs a&out the levels of attri&utes possessed or offered &y the

product or service. Bn the model presented" the concept of desires is adopted as an

influencing factor on the formation of e6pectations. The &ehavioural conseuence of

customer retention is claimed to &e at &est an intermediate sign that has not immediately

alienated a customer. The author further classifies the ,performance- of a product or

service as ,o&Aective- and ,perceived-. To e6pound the &ehaviour of satisfaction as a

phenomenon graphical representation is used. ive theories of satisfaction from social psychology have &een discussed vi%. ssimilation5ontrast Theory" ontrast Theory"

?issonance Theory" Generali%ed Hegativity" and 8ypothesis Testing. The author has

summari%ed the conseuences for satisfaction for all these five theories and presented ina ta&ulation form for easy comparison.

The wor)ing paper &y Silvia igini and Paolo Giudici (2002!39 study the possi&le

methods to o&tain data to measure customer satisfaction" the possi&ilities of methods to

analy%e the collected data" e6plain methodological proposal &ased on discrete graphical

models and a novel theoretical proposal to mi6ture different types 34


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of customer data information" statistical analysis of sample dataset" and in the final

chapter present the conclusions. Present two possi&le novel approach to analy%e customer

satisfaction data. The authors suggest that we& could &e the first contact for collection of

customer satisfaction data and this method facilitates continuous monitoring the opinion

of the visitors to the site. The second contact method identified is telephone and=or

mail=email &ut this method is found to have low response rates. inally face5to5faceinterview option is e6plained as the intimacy can &e used to communicate care and

concern to customers" &ut argue that this method may have the disadvantage that

customers may &e more reluctant to criticise or spea) negatively a&out the program in a

face5to5face interview than in an Bnternet" mail" or telephone survey.

/hile e6plaining measuring the level of satisfaction" the authors opine since it can &e

difficult to o&tain an e6act agreement &etween the customers- opinion and the numerical

value stated" using a limited scale it would &e feasi&le to allow for a small appro6imation

error. urther classify concepts that are not directly measura&le as ,latent varia&les- and

varia&les that can &e directly measured are called ,manifest varia&les-. The paper

proposes five levels of opinions for the customers vi%. ,very unsatisfied" moderatelyunsatisfied" neutral" moderately satisfied" and very satisfied.

/illard 8om (2000!3 presents two &roadly classified customer satisfaction models vi%.

Cacro5models" which place the customer satisfaction among a set of related constructs inmar)eting research and Cicro5models" which theori%e the elements of customer

satisfaction. The paper also gives various models of customer satisfaction from the

perspective of the mar)eting research discipline. The concepts vi%. value" uality"

complaining &ehaviour" and loyalty are la&elled as ,macro5models- 3;


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The mar)eting research literature presented in this study e6tensively covers the elements

that ma)e up the concept of customer satisfaction vi%. disconfirmation of e6pectations"

euity" attri&ution" affect" and regret. These attri&utes are grouped under ,micro5models-.

ccording to the author the macro5model underlies perceived performance" comparison

standards" perceived disconfirmation" satisfaction feeling" and outcomes of satisfaction

feelings. urther su&stantiates that this model highlights the concept of value as a drivingforce in produce choice and satisfaction relationship to it as a &rief psychological reaction

to a component of a value chain. Jnder the Cicro5model the author lists seven models

vi%. (1! 6pectations disconfirmation model" (2! Perceived performance model" (3!

Horms models" (7! Cultiple process models" (9! ttri&ution models" (! ffective

models" and (4! uity models. This paper has covered a vast pool of mar)eting research

in customer satisfaction and simplified the presentation &y grouping under macro5level

and micro5levels.

The study &y le6 C. Suss)ind (2002!34 e6amines how the nature of service failure

together with the restaurant-s service5recovery effort influences customers- intentions to

return to the restaurant and their su&seuent word5of5mouth communication regarding theincident and the restaurant. The study shows how word5of5mouth communication

materiali%es from service e6periences. The author argues that the consumers evaluate the

components of service vi%. food" service" and am&ience rather than as a total picture" andthe customers form an opinion for each item individually. /ord5of5mouth

communication" it is argued" which relates &oth positive and negative evaluations of

service encounters" has &een shown to influence 3+


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other people-s purchase &ehaviour. Bn that sense" word5of5mouth communications" which

are positive" may emerge from customers" who are satisfied with the services > where as

negative word5of5mouth communication emerges from customers who have e6perienced

dissatisfying e6periences or encounters. Bt is also pointed out that dissatisfied customers

spread their dissatisfaction through word5of5mouth communication a&out their &ad

e6perience and dissatisfaction to others than the satisfied customers. The study alsoe6amines the level of complaints regarding service failure and remedies Cinor service

failures may solicit smaller remedies > where as remedies li)e offering free food"

discounts or coupons" or the manager-s intervention are seen as corrections involving a

high degree. urther argues that the degree of correction is not the only element" which

influences consumers- perceptions of the recovery process. lso it is found that negative

aspects have a great influence than the positive attri&utes on the customers- overall

assessment. /hen consumers complain a&out service" they eventually form a Audgment"

conseuently uncorrected service failures create increased dissatisfaction i.e. degree of

level of correction is direction proportional to the customers level of satisfaction.

Sachin Gupta et al (2004!3; demonstrate a methodology to uantify the lin)s &etweencustomer satisfaction" repeat5purchase intentions" and restaurant performance. The

authors has constructed a series of mathematical models using the data from a national

restaurant chain" that predict how the level of customer satisfaction with certain attri&utesof gusts- dining e6perience affects the li)elihood that they will come &ac). The authors

constructed two different models for this study. The first one is to e6plore the relationship

of guest satisfaction with twenty5one distinct attri&utes of the dining e6perienceK the

second model to e6plore the 70


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relationship &etween restaurant performance and customers- reported li)elihood to return.

The study shows how guests- #come&ac)' scores and other varia&les affect restaurant

performance. The authors argue that higher customer satisfaction should lead to increased

pro&a&ility of repeat purchase" which in turn should result in greater restaurant sales. The

study attempts to fill a gap in the empirical literature that focuses on the restaurant sector

&y lin)ing customer satisfaction to restaurant performance.llen ?ay and Celvin :. ras) (2000!3+ argue that if customer satisfaction is viewed as

an outcome" then focusing discussion on its antecedents is also necessary to effect the

desired outcome. The purpose of the paper is (1! to present the synthesis of the value5

related literatures and postulates summari%ing e6tant )nowledgeK (2! to descri&e the

proposal to re5conceptuali%e the value assessment process in terms of perceived ris)K and

(3! to present suggests for future research. The authors claim that they are the first to

suggest the lin) &etween value and dissatisfaction. The authors do not intend to imply

that customers perform a formal analysis in which potential received &enefits are

compared with reuired resource e6penditures" &ut claim that the consumers consider the

li)elihood of #(1! a product performing the function desiredK (2! physical harm or inAuryensuing from product useK (3! gaining approval of othersK (7! achieving a sense of self5

efficacy" and=or (9! wasting money" time or effort in ma)ing a particular choice' (p.9;!.

inally the study concludes" #raming value in terms of perceived ris) not only facilitatesa &etter understanding and measurement of value &ut also &etter ena&les the mar)eting

manager to enhance the perceived value of a product or service. Bn )nowing how to

manipulate value the mar)eting manager in turn has )nowledge essential to satisfying

customers' (p.9;!.71 today-s hotel guests e6pect uality service" product" atmosphere"

entertainment" value for money" reuire high uality e6perience from their stay in hotel.

The authors discuss the significance of service uality and customer satisfaction" and

underta)e a service uality assessment of hotels in ?arwin in the Horthern Territory of ustralia as perceived &y their customers. The authors further analyses and discuss the

response of 17+ respondents a&out their e6pectations from a stay in 75star hotels. The

study finds that 10 per cent of the sample e6pressed degrees of dissatisfaction a&ove

average and it is suggested that these complainers may act as indicators for management.

The study cites that within the literature relating to hospitality and catering" significantattention has &een paid to issues of service uality. The reasons for this" the authors

su&stantiate are that #ustomer satisfaction is a determinant of profita&ility and li)e other

service industries hospitality research is focusing on the relationship &etween customer

satisfaction" repeat sales" and &usiness profits. 72


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purchase" followed &y freuent5stay programmes. urther advocate that a tremendous

loyalty payoff seems to occur when a hotel creates visi&le customer value during every

stay. The findings on the attri&utes that create visi&le value are &ased on the 232

customer5respondents who reported recalling that their hotel created such value.

Bnterpersonal and functional aspects of service were also important sources of customer

value during the hotel e6perience.Eay Dandampully and ?wi Suhartanto (2000!72 conducted a research study on the

customer loyalty in the hotel industry. The o&Aective is to identify factors of image and

customer satisfaction" which are positively related to customer loyalty in the hotel

industry. The research helps e6tend the understanding the relationship &etween customer

loyalty" customer satisfaction" and image. The study identifies that competition has three

maAor implications for the customer" which provides increased choiceK greater value for

moneyK and augmented levels of service. The authors argue that hotels that attempt to

improve their mar)et share &y discounting price" however" run the serious ris) of having

a negative impact on the hotel-s medium and long5term profita&ility. The study advocates

that a dedicated focal point on customer loyalty is li)ely to &ecome a crucial preconditionfor the future survival of hotel organi%ations. Jsing the data collected" the findings

signify that hotel image and customer satisfaction with the performance of house)eeping"

reception" food and &everage" and price are positively correlated to customer loyalty > whether a customer will purchase and=or recommend. The study further illustrates that

customer satisfaction with house)eeping as the only significant factor that determines

customer loyalty. This argument is supported &y an e6planation that house)eeping" from a

customer-s perspective" represents the core &enefit of a hotel" while reception" food and

&everage" 73


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and price are regarded as supporting factors. The study suggests that &oth image and

customer satisfaction should &e included when measuring customer loyalty.

The study conducted &y Tat *. hoi and :aymond hu (2000!73 to analyse the levels of

satisfaction among sian and /estern travellers investigates the perceptions a&out the

service uality of 8ong Dong hotels. The study identifies seven hotel factors out of 33

hotel attri&utes and determines the levels of satisfaction with a :BCL rotationtechniue. The o&Aectives of the study are 1! To develop the underlying dimensions of

hotel attri&utesK and 2! To e6amine the relative impact of the derived hotel factors in

influencing the satisfaction levels of &oth sian and /estern travellers.

Ga&&ie et al (1++!77 have conducted a study to investigate the relationship &etween

uality service and customer e6pectations in the Horthern Breland hotel industry. The

study was conducted in two hotels in Horthern Breland using the S:MJF. Core

specifically the paper tries to identify the service gaps. Two hotels with different

management were selected for the research study. Muestions for data collection were

&ased on the service uality gap model.

The &usiness traveller has an important segment with the hotel industry. :oger E. hallanand Ga&rielle Dyndt (2001!79 have analysed &usiness travellers- customer satisfaction

&ased on various hotel attri&utes with different categories of hospitality customers"

especially &usiness travellers and reviewed various literatures and surveys on hotelattri&utes. preliminary review was made to identify the perceived importance of hotel

attri&utes from the &usiness traveller point of view. 77


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The uestionnaires used for the survey was &ased on these important attri&utes. or the

purpose of this survey" the authors &ased the selection of attri&utes on allan (1++! and

at the same time the findings of other authors were also considered. Two international

five5star hotels were selected for this study > one from @russels and the other from

Canchester. The paper illuminates the following attri&utes as the most important 1!

Security (+3 per cent!K 2! :eservation relia&ility (;+ per cent!K 3! Muietness of room (;4.2 per cent!K 7! Physical condition of the hotel (;3 per cent!K and 9! location (;1 per cent!'

(p.319!. The study finds ,location- as the most important attri&ute for the &usiness

travellers of Canchester customersK car par)ing was less importanceK restaurant and food

availa&ility scored middle order significance. The study also identifies a num&er of

differences in the e6pectations &etween the international and @ritish &usiness traveller.

The paper &y :eginald C. Peyton et al (2003!7 presents a review of literature prior to

the 1++0s related to the areas of consumer satisfaction = dissatisfaction (S=?!. Bt

addresses &oth the theoretical and measurement5related issues involved in these areas of

study.

The study &y Eulie eic)ert et al (200!74 is &ased on the concept of acceptance to paye6tra for certain security measures provided &y the hotel. @ut interestingly the

willingness to pay for the security features decreases as the respondent guest-s age

increased. The authors claim that women were more supportive of strong securitymeasures than men. The study also e6amines the e6tent to which guests would accept

increases in room rates to pay for any of these features. urther points out that #the

magnitude and location of the +=11 attac) on Hew *or) 79


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ity deeply altered travellers- perceptions of safety. The study was &ased on responses

from +30 respondents of different category. The sample was evenly divided &etween men

and women with age group ranging from fourteen to seventy5eight years. The study finds

that respondents were less accepting of over security measures and non5acceptance of

across5the5&oard installation of metal detectors and armed guards. The study concludes"

#8otel guests generally accept the practice of reuiring photo identification of guests atchec)5in" video surveillance in pu&lic areas" and adding first5aid )its to guest rooms. t

the same time" metal detectors" o&vious presence of an armed guard" and chec)ing guests-

identification against law enforcement records were generally less accepta&le.'(p.272!

8alil Hadiri and Dashif 8ussain (2009!7; e6amine the tolerance %one of customers-

service and determine the level of customer satisfaction in Horthern yprus hotels. The

study was conducted at four5star" five5star and resort hotels. The findings demonstrate

that the customers- evaluation of service uality in Horthern yprus hotels has two

dimensions tangi&les and intangi&les. The findings show the e6istence of a narrow %one

of tolerance among the customers. The results also confirm that evaluation of services

can &e scaled according to two different types of e6pectations desired and adeuate.ccording to the outcome of the study #gap5analysis measurement scale is an indicator

for measuring customer satisfaction' (p.243!. lso critically analyses #how mar)eting

strategies can &e designed to manage adeuate service5level e6pectations" the role of predicted service in influencing how consumers evaluate service uality" and how the

hotel industry can use the %one of tolerance concept to formulate mar)eting strategies

effectively' (p.247!. The study emphasi%es that the terms ,satisfaction- and ,uality- have

&een 7


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central in hospitality managementK managers should )eep the service level a&out the

customers- desired e6pectationsK and use of %one of tolerance method provides useful

information to managers for developing uality5improvement strategies.

Darni)eya @udhwar (2007!7+ conducted the research to evaluate the crucial factors that

would impact the restaurant-s success or failureK to identify the gaps &etween

management-s and the customers- perceptionsK and to analyse choice of cuisines > mainlyattri&uted to commercial customers and their &ehaviour. The study covered 7;

restaurants. The study o&serves hygiene and sanitation" location" access" par)ing and

visi&ility" music" supplier-s uality consistency" food cost" design and dIcor as important

varia&les that impact the success of a restaurant. The author suggests that the operators

need to reali%e the level of competitionK it is important to conduct periodic surveys

through customer trail mapping and other such techniuesK the operators should reali%e

the value of courteousnessK and finally the potentiality of we&sites as mar)eting should &e

capitali%ed.

Eohn /.


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contri&ute to consumers- perceptions of fairness vi%. consideration" )nowledge"

consistency" and impartiality. Bt is proposed" #there are ,fairness- &ehaviours that service

wor)ers can act out that affect a customer-s satisfaction and intent to repurchase $$

such employee actions may su&stitute for consumers- loss of perceived control' (p.2+!.

The study was &ased on three hypotheses #Those individuals who perceived more

control of the service encounter would say that they are more satisfied with the e6changeand would &e more li)ely to patroni%e that enterprise againK Those individuals who

e6perienced more fairness in a service encounter would e6press greater satisfaction and

the intent to returnK /hen a service e6change creates low perceptions of control" service

wor)ers- fair &ehaviour could have a compensatory effect on the level of satisfaction and

intent to repurchase' (p.32!. The results support the first and second hypothesesK all the

four perceptions (consideration" consistency" impartiality" and )nowledge! have

significant correlation with satisfaction. The authors insist that customers should &e made

)nown that they can influence the &ehaviour of service providers.

Smith" .D. et al (1+++!93 uses a mi6ed5design e6periment using a survey method. The

concept of the research is &ased on the notion that ,customers often react strongly toservice failures" so it is critical that an organi%ation-s recovery efforts &e eually strong

and effective-. The first o&Aective of the study is to develop a comprehensive model of

customer satisfaction with service failure=recovery encounters. The second o&Aective wasto determine the effects of specific failure=recovery antecedents on customers-

evaluations. nd the third o&Aective was to provide managerial guidelines for effectively

responding to customers &y esta&lishing the proper fit &etween a service failure and the

recovery effort. The study 7+


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used a model of customer satisfaction" developed &y the authors" with service

failure=recovery encounters &ased on an e6change framewor). or this the authors have

preferred two different service settings vi%. ,restaurants- and ,hotels-. The authors argue

that #when a service failure occurs" the organi%ation-s response has the potential either to

restore customer satisfaction and reinforce loyalty or to e6acer&ate the situation and drive

the customer to a competing firm' (p.39!. The authors view that economic and socialinteraction &etween the customer and the organi%ation can &e triggered &y a service

failure=recovery encounter. The findings of the research provide organi%ations with

guidelines for developing service recovery procedures that improve customer service and

enhance customer relationships.

/or)ing paper presented &y :ooma (2004!97 enlightens that customer satisfaction

evaluation is vital for all service firms for &etter performance in the present world of

competition. The paper analyses whether S:MJF dimensions would &e applica&le to

hotel industry and put forward some additional dimensions pertinent to hotel sector. The

tourists visiting the tourist villages at different parts of the island were ta)en as sample

for their study through open5ended uestions on their e6pectations of service ualityavaila&le at their hotels. The findings show that the most important attri&ute represented

in the S:MJF instrument was the core service.


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of service performance where needed &y filling the gaps and the management of

e6pectations regarding uality of service' (p.23!.

Thani)a ?evi Euwaheer and ?arren Fee :oss (2003!99 carried out a study with the

o&Aectives that #to assess the customers- e6pectations and perceptions of uality in hotels

of Cauritius and to identify the gap (if any! &etween those e6pectations and perceptions

and to identify and compare the perceptions of hotel managers who are responsi&le for managing uality and the customers in these hotels who e6perience and Audge it' (p.

10!. The study used a modified version of S:MJF instrument to assess the uality

of target hotels. The survey used Fi)ert5type scale from 1 (very low e6pectation! to 4

(very high e6pectation!. The study identifies nine service uality dimensions with 3

varia&les. Cost of the perceptions scores were found to &e lower" e6cept privacy to the

guests and appealing promotional &rochures. The gaps in service uality dimensions and

e6tra5room facilities were found as largest and smallest respectivelyK and all the nine

perception scores were lower than the e6pectation scores. The overall result found was

that #hotels in Cauritius are not meeting tourists- e6pectations' (p.10+!. The study

e6pose two o&stacles &eing faced &y the hospitality industry managers as 1! #they do not)now what aspects the guests considers to &e important when evaluating the hotel

e6perienceK and 2! they do not have relia&le and valid instruments for measuring service

uality perceptions' (p.112!.The research study of Cahdavinia Seyed 8essamaldin (2004!9 illustrates that tourist

industries have turned into one of the most profita&le sources of income throughout the

world especially in the last decade of the second millennium. The 91


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research aims to investigate the customer satisfaction" in application of S:MJF

model among the two" four5star hotels in Bsfahan. The findings reveal that hotel guests-

perceptions of the offered services were &elow the e6pected average level > an inde6

indicating that none of these hotels in Bsfahan has an optimal service uality.

Grigoroudis" and Sis)os" * (200+!94 discuss the customer satisfaction evaluation

pro&lem. The authors provide three classifications of customers (1! #Self5unit customers > individuals of self unit customers with self inspection" disciplined attitude" and a desire

to e6cellence" (2! Bnternal ustomers > who are personnel within an organi%ation" and (3!

6ternal customers > represented &y the &uyers or users of the final products and services

of the &usiness organi%ation' (p.+!. The authors present an overview of e6isting

methodologies and also the development and implementation of an original method

du&&ed CJS (Culticriteria Satisfaction nalysis!. This method" the author claims" aims

to provide an integrated set of results capa&le of analy%ing customer needs and

e6pectations and to Austify their satisfaction level. The &oo) also deals with customer

satisfaction pro&lem" presenting the various uantitative and related consumer

&ehavioural modelsK uality5&ased approachesK the CJS method and its e6tensions andadvanced topicsK customer satisfaction surveys and &arometersK applications of the

CJS method in real5world customer satisfaction surveysK and different information

technology approaches related to customer satisfaction. inally" the &oo) e6amines thedevelopment of a decision support tool to help understand and apply results and methods

of measuring and implementing service uality is intended for researchers and

practitioners in mar)eting" uality management" and service management.92


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:i%aldi and /iAaya (200!9; analyse the five S:MJF dimensions through

?isconfirmation theory. The theory of disconfirmation has &een used to e6plain the

formation of customer perceived service uality and satisfaction. ccording to this

theory" service uality and satisfaction result from how well the actual service

performance" in other words" the service process and outcome" matches the customer-s

e6pectations. Thus e6pectations and their management are of great significance to perceive service uality and satisfaction. The idea of disconfirmation has its root in

8elson-s adaptation level theory" which suggests that states of satisfaction=dissatisfaction

result from a comparison &etween one-s perception of product performance and one-s

e6pectation level. ccording to widely accepted opinion in service research" customer

perceived service uality results from how well customer e6pectations match actual

e6periences of the service. nd so" &ased on the disconfirmation theory" the writers

conducted a set of research upon Bntrapura :estaurant" located at the heart of msterdam.

To gain the level of customer satisfaction through the customer e6pectation and customer

perception level of Bntrapura-s service uality. The writers used five dimensions of

S:MJF vi%. tangi&le" relia&ility" responsiveness" assurance" and empathy.Fovaglio (2001!9+ critically analyse the satisfaction of consumers towards

products=services offeredK in the evaluation of services the conceptual models proposed

for the indirect estimate of the S go &ac) to the theory of gaps &etween service andthose perceived" separately for the five fundamental dimensions of S:MJF. The aim

of the paper is to propose a general model to estimate latent varia&le customer

satisfactions" which manifest categorical varia&les. The approach amalgamates all the

availa&le information a&out customer satisfaction in the structural 93


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models specified in the ustomer Satisfaction @arometer (S@! and merican ustomer

Satisfaction Bnde6 (SB! models with gap theory of S:MJF.


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thus there e6ists a possi&ility to misAudge customers- true lifetime value. Bt is advocated

that the indirect effects of /


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relationship- The study suggests that Porter-s value chain can &e used to analyse how

customer relationships create value. The author claims that there are delicate differences

using &rand value as a su&stitute for the value of customer even though they seems to

appear similar. The study suggests the following common approaches for valuing the

customer related intangi&le assets 1! ost approachK 2! Car)et approachK and 3! Bncome

approach. The cost approach is &ased on the level of cost to &e incurred to create value.The second approach measures the open mar)et e6penses" while the income approach is

&ased on the level of income the asset would generate. The study also illustrates the

limitations of all the three approaches. The cost approach is distorted &y time value of

money and the evolvement of the competitive environment. The availa&ility of

sufficiently compara&le transactions is identified as the primary wea)ness of the mar)et

approach. The income approach is complicated to carryout. The study concludes that

since customers are the reason for the e6istence of a &usiness" s)ill for managing their

customers profita&ly is crucial.

8olAevac" B.. et al (2000!7 in their wor)ing paper argue that one of the &iggest

contemporary challenges of management in service industries is providing andmaintaining customer satisfaction. The study e6amines hotel Guest omment ards

(Gs! and customer satisfaction management schemes in 29 hotels in


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(2! G attri&ute measurement techniues" (3! G measure of overall customer

satisfaction and loyalty" (7! G mar)eting measures" and (9! effective layout of

uestions. The study com&ines an analysis of customer satisfaction management schemes

and Gs content analysis in the selected hotels. The authors conclude that efficiency of

customer satisfaction measurement with Gs" depends on the measurement

methodology and valua&le information for management decisions regarding a hotel-soffering can &e o&tained only through relia&le and valid data.

The paper presented &y Sutanto (200+!9 at the Bnternational Seminar on Bndustrial

ngineering and Canagement &uilt the model of customer satisfaction on the &asis of

survey and choice data collection &y interviews. The outcome of the study reveals that

full service hotel owners and managers should focus on the following three maAor

elements of service uality technical or outcome dimension" functional or process related

dimension" and corporate image. The result highlights that the varia&le technical or

outcome dimension of service uality was most important to customers. The author

argues that the model used for assessing customer satisfaction in the full service hotel

industry is a useful one. The study suggests that #hotel owners" who truly want to gain acompetitive edge" must continually strive to increase the levels of customer satisfaction

&y emphasi%ing the three significant factors discerned in this study (mentioned a&ove! as

suggested &y the transaction5specific model' (p. .112!.:oya :animi (2004! presented a thesis on the feasi&ility study of ustomer

:elationship Canagement (:C! application in hotel industry. The research study was

conducted on the conte6t that with increased glo&ali%ation" competition" higher 94


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customer turnover" growing customer acuisition costs and rising customer e6pectations

in today-s competitive word" :C is very important for companies. The scholar argues

that the study emphasi%es application of :C in hotel industry &rings increase in the rate

of retention" increase revenue and profita&ility" reduce internal costs" reduce mar)eting

costs" improving customer services" create positive word of mouth" mar)et growth"

improve mar)eting methods" streamlines &usiness process" and finally protects mar)etinginvestment and ma6imi%e returns. The study outlines the four #P's" reuired for a

successful :C initiative Profiles" Preferences" Precision" and Property and points out

,management commitment to em&racing :C as a way of doing &usiness as the fifth

most important element and su&stantiate this argument that without deep and confirmed

leadership" this )ind of initiative will go nowhere. The study finds that customer

satisfaction will cause customer loyalty and retentionK customer retention is important for

&usiness and customersK successful implementation of :C will increase rate of

retention" increase in revenue" profita&ility" reduction in internal costs" reduction in

mar)eting costs" positive word of mouth" &etter understanding of customer reuirements"

and higher employee productivity and concludes that all these &enefits for a hotel can &ea source of long5term and sustaina&le competitive advantage.

Calthouse" .. et al (2003!4 e6amine customer satisfaction across organi%ational units

in their wor)ing paper. The research paper discusses various customer satisfaction modelsfor assessing the relationship of overall satisfaction with a product or service and

satisfaction with specific aspects of the product or service for organi%ations having

multiple units or su&units. The study critically e6amines whether the drivers of overall

satisfaction vary across such units and if so" proposes 9;


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how additional varia&les can &e included in a model to account for the variation. The

research e6amines the hypotheses that different su&units within an organi%ation or

industry may show different relationship &etween specific aspects of satisfaction and

overall satisfactionK in other words" there may &e different utilities for the specific aspects

of satisfaction. The authors argue that variation in the specific5general satisfaction

relationship across organi%ational su&units also has important theoretical implications for satisfaction research and stress the importance of e6plaining the variation effects across

units or su&units. i.e. for one su&unit" some specific type of satisfaction may &e strong

predictor of overall satisfaction" while for another su&unit the same specific type of

satisfaction may have little or no relationship to overall satisfaction. The study assumes

pre5defined su&units. urther illuminates that the attri&utes can have different satisfaction

implications for different customer and mar)et segments. The study concentrates on

newspaper and healthcare industries. or each of the industries" e6tensive case studies

had &een developed through measures of overall satisfaction and satisfaction with

specific attri&utes. The study indicates the need for richer theoretical hypotheses

including more varia&les and also the utility of methodology used for studying thevariation in effects across su&units. The authors e6pound with appropriate illustrations to

highlight the situations where there is no significant variation across su&units as well as

situations where such variation e6ists. Husair et al (2010!; in their study investigated the effects of price discount frames and

price discount levels on consumer perceptions a&out the uality of the service product"

the value of the discount" their purchase intentions etc. The research study included

restaurants" hotels" mailing service" and retail services. The study 9+


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showed that price discount frames and discount levels do affect consumers- perceptions

on the value of the discount and the uality of the service.

Peter Eones and Cichael ?ent (1++7!+ had conducted a research study on the customer

attitudes to waiting times in the hotel and restaurant industry &ased on Caister-s

#Psychology of /aiting Fines'. The study was conducted with a sample of 100

customers > show that customer &ehaviour is affected &y the length of time they have towait. The study compares customer attitudes and the firm-s a&ility to deliverK e6plains

specific e6amples of developments in service systems design and delivery in &oth hotels

and restaurants.

/enAing Shang and Heal 8. 8oo)er (200!40 in their wor)ing paper use survey data to

determine consumer preferences among a set of four alternative food la&els which report

such plant level performance scores. The authors study the product la&el reports of food

producers- hygiene performance and e6plore consumer preferences for the ,right- amount

of information and how to present this information. The authors carried out the study to

verify the following hypotheses 1! Bn terms of presentation format" consumers prefer

num&er system than other visual or ver&al systems" 2! mong the three different levels of information volume sets" consumers don-t always prefer the largest volume set" and 3! Ho

matter what their preferences are" consumers are consistent with their information volume

preferences. The survey was carried out through mail.Eessica Salver (200+!41 in her &oo) traces out the lin) &etween the &rand name and the

customer loyalty. The maAor o&Aective of this wor)s is to e6amine the concept 0


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of &rand management" to adapt and apply it to hotel services" since" the author argues"

customer loyalty is a hot topic in today-s ultra competitive &usiness environment. The

second o&Aective of this study is to determine the connection &etween these two concepts

and to investigate the &eneficial effects of &randing hotel services for the process of

esta&lishing loyalty. The author cites that the original idea of using mar)s to indicate

ownership and origin can &e traced &ac) even for millennia to ancient Gree) and :omeand early hinese dynasties. Core and more &usinesses have come to reali%e the power

and important of &rands and the concept of &rand management has conseuently gained

considera&le interest in recent years. The author further advocates that the hotel industry

> along with many other services > is lagging &ehind manufactured goods &y decades and

nonetheless" there are great potentials for &rand management in the service industry in

general and the hotel industry in particular. s the hotel industry differ from physical

goods in many ways" it is vital to e6amine the concept of &rand management > to adapt

and apply to hotel industries. The author further argues that as competition )eeps

intensifying at steady pace" resulting in a surplus of capacities" the importance of ma)ing

guests return &ecomes a critical issueK it is said that &rands provide the opportunity toencourage the creation of loyalty among consumers.

:esearch study &y Helson Tsang and 8ailin Mu (2000!42 analyses the perceptions of

service uality in hina-s hotel industry from the perspective of &oth internationaltourists and hotel managers. The sample contained +0 hotel managers and 240

international tourists" stayed at various hotels in @eiAing" Shanghai" and Guang%hou. The

study was conducted with the following o&Aectives 1! To assess the current e6pectations

and perceptions held &y international tourists with respect to the 1


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uality of services and products provided &y the hotel industry in hinaK 2! To assess the

current e6pectations and perceptions held &y hotel managers in hina with respect to

uality of hotel service and products providedK and 3! To identify any gap &etween the

perceptions of tourists and hotel managers" with respect to the uality of hotel service and

products provided. The study advocates #The gaps &etween tourists and hotel

management could &e &ridgedK there is room for service uality improvement in the hotelindustry in hinaK managers are too self5assured and somewhat o&livious to their failings

in delivering what tourists e6pectK and therefore" the necessary first step in improving the

service uality is for managers in the hotel industry in hina to acuire accurate

information a&out the driving forces'.

dwin H. Torres and Sheryl Dline (200!43 in their article" see) to develop a managerial

model" which would assist in the successful management of customer relations. Their

study descri&es the concepts of satisfaction and delightK their &ac)ground and potential

outcomes.

Ciguel Bgnacio Gome% et al (2003!47 conducted a study to measure the lin)s &etween

store attri&ute perceptions and customer satisfaction" and &etween customer satisfactionand sales performance in food and retail sector. The study includes the measurement of

comple6ities of the satisfaction5sales performance lin)s &ased on empirical model of first

differences. The study e6pounds that customer satisfaction is vital to the creation of asuccessful &usiness strategy. The study cites that nderson and Sullivan (1++3! addressed

the simultaneous estimation of antecedents to and conseuences of customer satisfaction.

Their model identifies factors that determine 2


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customer satisfaction" which in turn have a positive association with financial

performance.

Stephen @all et al (2004!49 present a detailed historical development of the Bndian hotel

sector. The authors claim that the Bndian hotel sector is in a period of rapid growth and

change &ecause of the rapid e6pansion of &usiness activities" which is the result of the

fast growing Bndian economy. The &oo) illustrates that there were a&out 19"000 tourist5arrivals in Bndia in the 1+90s" followed &y a &oom in 1+; with an inflow of a&out one

million tourists. The &oo) further claims that tourism and hospitality industry in Bndia

employs 29 million people and this will grow to 100 million people in the ne6t 29 years

and Bndian hotel industry accounts for 90 per cent of all foreign e6change in Bndia thus

has &ecome an economic importance. The authors point out that there is a mismatch of

supply and demand in certain areas of the hospitality industry in BndiaK wea) la&our

mar)et is characterised &y e6cess la&ourK and the current curriculum offered &y

universities on hospitality education does not address the glo&al issues.3


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1 Paul S. Goldner (200!. Red-hot Cold Call Selling: Prospecting Techniques that Really

Pay Off . JS C


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12 Gundersen" C.G." 8eide" C. N


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27 ualityisoe6pert.com=glossary=" Fast accessed on 07.09"2010 at 1.90 hrs.

29 http==www.&usinessdictionary.com=definition=customer5satisfaction.html" Fast

accessed on 1+.07..2010 at 0+9+ hrs.

2 *ouAae *i (1+;+!" # ritical :eview of onsumer Satisfaction.' 2or&ing Paper Q

07" The Jniversity of Cichigan" Cichigan.

24 Peter Eones N ndrew Foc)wood (2002!" The Management of 'otel Operations"engage Fearning C. p.1.

2; #?ictionary of merican 8istory.' :etrieved from http==www.high&eam.

com=doc=1G253701;01+73.html. Fast accessed on 0.09.2010 at 0;3+ hours.

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l&any" ?elmar.

30 Peter Eones N ndrew Foc)wood" (2002!. The Management of 'otel Operations.

engage Fearning C. p.1.

31


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3 /illard 8om (2000!" "n Overvie) of Customer Satisfaction Models" :P Group

Proceedings" alifornia ommunity olleges.

34 le6 C. Suss)ind (2002!" #B told you soR :estaurant ustomers- /orld5of5mouth

ommunication Patterns'" Cornell 'otel and Restaurant "dministration !uarterly pr

2002" ol.73" Ho.2.

3; Sachin Gupta" dward CcFaughlin" N Ciguel Gome% (2004!" #Guest Satisfaction and:estaurant Performance. (nalysis of :estaurant Canagement!"' Cornell 'otel 4 Restaurant "dministration !uarterly ugust. 2004.

3+ llen ?ay" and Celvin :. ras) (2000!" #alue ssessment The ntecedent of

ustomer Satisfaction'" %ournal of Consumer Satisfaction# (issatisfaction and

Complaining $ehaviour ol. 3.

70 Cohsin" sad" :yan" N hris" (2009!. Service Muality ssessment of 75star 8otels in

?arwin" Horthern Territory" ustralia. %ournal of 'ospitality and Tourism Management .

pril 01. 2009

71 Faurette ?u&e N Feo C :enganathan (2000!. #reating visi&le customer value'.

Cornell 'otel and Restaurant "dministration !uarterlyK e& 2000 715172 Eay Dandampully and ?wi Suhartanto (2000!. #ustomer loyalty in hotel industry

The role of customer satisfaction and image'. nternational %ournal of Contemporary

'ospitality Management . @radford ol. 12" Bssue .73 Tat *. hoi and :aymond hu (2000!. #Fevels of satisfaction among sian and

/estern travellers'" The nternational %ournal of !uality 4 Relia+ility Management .

@radford 2000" ol. 14" Bssue.2.

77 Ga&&ie" Part B. Managing Service !uality. @edford ol."

Bssue .

79 :oger E. allan and Ga&rielle Dyndt (2001!" #@usiness Travellers- Perception of Service Muality Prefatory Study of Two uropean ity entre 8otels'. The

nternational %ournal of Tourism Research" Eul=ug 2001 3"7K @B=BH


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7 :eginald C. Peyton" Sarah Pitts"and :o& 8. Damery (2003!" #onsumer Satisfaction=

?issatisfaction (S=?! :eview of the Fiterature Prior to the 1++0s'" "llied "cademies

nternational Conference /or)ing Paper.

74 Eulie eic)ertK :ohit ermaK Gerhard Plasch)aK and he)itan S. ?ev. (200!"

#Safeguarding *our ustomers The Guest-s iew of 8otel Security'. Cornell 'otel and

Restaurant "dministration !uarterly" ornell Jniversity ug 200 ol.74" 3.7; 8alil Hadiri and Dashif 8ussain (2009!" #?iagnosing the one of Tolerance for 8otel

Services'" Managing Service !uality" ol.19" 3.

7+ Darni)eya @udhwar (2007!" #Bndependent :estaurants in the ?elhi=Gurgaon :egion

n nalysis of the Gap &etween Canagement Perceptions and ustomer 6pectations'"

%ournal of Services Research" ol.7" Ho.2 (


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99 Thani)a ?evi Euwaheer and ?arren Fee :oss (2003!" # study of 8otel Guest

Perceptions in Cauritius'" nternational %ournal of Contemporary 'ospitality

Management . o. 19" Ho.2.

9 Cahdavinia Seyed 8essamaldin" (2004!. Customer Satisfaction in 5our Star sfahan

'otels: "n "pplication of SER/!."6 Model . Thesis su&mitted to Fulea Jniversity

94 Grigoroudis" N Sis)os" * (200+!. ustomer Satisfaction valuation Cethods for Ceasuring and Bmplementing Service Muality. Springer.

9; :i%aldi" ?. and /iAaya .S. (200!" #nalysis of ive S:MJF ?imensions

through ?isconfirmation Theory pproach to sta&lish a Fevel of ustomer Satisfaction

at Bndrapuyra :estaurant" Hetherlands'" ThesisK Petra hristian Jniversity Fi&rary" The

Hetherlands.

9+ Fovaglio" P.G. (2001!" #The stimate of ustomer Satisfaction' 2or&ing Paper

?epartment of Statistics" Jniversity of Cilano.

0


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model in service industry.' Proceeding# nternational Seminar on ndustrial Engineering

and Management . Bnna Dutta @each 8otel" @ali ?ecem&er 10 N 11" 200+.

:oya :ahimi (2004!" #easi&ility Study of ustomer :elationship Canagement

(:C! pplication in 8otel Bndustry ase of 8amgame rya Group 8otels.' Master

Thesis Fulea Jniversity of Technology.

4 Calthouse" .."

literature on hotel customer retention

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