Research Article, J Tourism Res Hospitality Vol: 11 Issue: 5

Effect of Service Quality on Guest Satisfaction, Perceived Value and Customer Loyalty in Hotels in Awka, Anambra State, Nigeria

Obinwanne Cletus Okechukwu^*1, Emenike Mary Okwuchukwu²

¹Department of Hospitality Management and Tourism, Michael Okpara University of Agriculture, mudike, Abia State, Nigeria

²Department of Hospitality and Tourism, University of South East Campus Enugu, Enugu State, Nigeria

*Corresponding Author: Obinwanne Cletus Okechukwu, Department of Hospitality Management and Tourism, Michael Okpara University of Agriculture, mudike, Abia State, Nigeria, E-mail: obinwanne.cletus@mouau.edu.ng

Received date: 02 May, 2022, Manuscript No. JTRH-22-64658;

Editor assigned date: 04 May, 2022, PreQC No. JTRH-22-64658 (PQ);

Reviewed date: 18 May, 2022, QC No JTRH-22-64658;

Revised date: 24 May, 2022, Manuscript No. JTRH-22-64658 (R);

Published date: 31 May, 2022, DOI:10. 4172/ 2324-8807.1000973

Citation: Okechukwu OC (2022) Effect of Service Quality on Guest Satisfaction, Perceived Value and Customer Loyalty in Hotels in Awka, Anambra State, Nigeria. J Tourism Res Hospitalit 11:4.

Abstract

Keywords: Service quality; Hotel sector; Guest satisfaction; Perceived value; Customer loyalty

Introduction

Hotel sector is majorly more of service oriented than product oriented. Customer service is considered as a main tool for customer satisfaction in hotels [1].

The issue of quality in service delivery basically relies on customer’s judgment. In the present day as competition and cost increase, and as productivity and quality decrease, service firms face the task of increasing their competitive differentiation, service quality and productivity, McCleary, Weaver and Hutchinson 2017.

Quality as a concept is a complex term, made up of several element and criteria [2]. In hotel industry, quality is simply a function of product conformation to specifications while meeting the expectations of the customer.

Since every customer has his or her own expectations, service quality remains a subjective matter that befits objective assessment through understanding of various facets of perception, their measurement and how they relate to satisfaction an issue we shall pursue in this proceeding section.

Customer expectations are the opinions about services, which are provided for customers to deliver as the criterion which the real performance is assessed [3]. Today quality is the result of growing and increasingly diverse needs of the consumers, along with a highly increasing competition, market globalization and the development of modern technology (Table 1).

It is the view of Shalim (2010) that managers in the service sector must demonstrate that their services are customer focused and that continuous performance improvement is being delivered in order to ensure a high quality in service delivery. By providing excellent service quality, a business can create a competitive advantage to distinguish it from other organizations [4].

Table 1: Effect of service quality on guest perceived value in selected hotels. Note: SA=strongly agreed, A= agreed, D=disagreed, SD= strongly disagreed

Service quality is the gap between customers’ expectations about the service that they have perceived and actually received [5]. Service quality is an important subject in both the public and private sectors [6]. Petrick (2014) considers service quality as a critical dimension of competitiveness. Providing excellent service quality and high customer satisfaction is the important issue and challenge facing the contemporary service industry [7].

Service failure occurs when customer perceptions do not meet customer expectations [8]. Service quality is the extent to which a service meets or exceeds customer needs and expectations [9]. Churchill and Surprenant, (2017) discussed that dissatisfaction appears when the customers experience significant difference between their expectations and the quality of services that they receive.

Customer satisfaction is critical for the success of every profitoriented and service-oriented organization. Customer satisfaction is the center competency of every vision-minded and service firms like hotels. Indeed, customer satisfaction has a great significance influence with the future of any Hotel establishment. [10] sees achieving high levels of service quality is one method to keep customers both satisfied and loyal. Customer satisfaction is a key factor of diverse marketing activity that imparts the linkage between the different stages of customer buying behavior [11]. Describe customer satisfaction as the customer’s fulfillment response, post consumption judgment that a given service provides a pleasing level of consumption-related fulfillment including under- or over-fulfillment. Customer satisfaction has come out as a crucial component for the top management of successful business and human element in its own part play essential role to determining the whole perception of service quality and satisfaction [12]. The key to achieving high quality service delivery that is sustainable lies on satisfied customers. According to enterprises exit because they have customers to serve. The biggest challenge in today’s competitive business environment is how to retain customers and ensure customer loyalty. Guest relationships in the hotel industry are strategic assets of the organization and customer satisfaction is the starting points to defining business objectives [13].

Jana and Chandra (2016) have described customer satisfaction as an important aspect of the hotel industry. Hotel industry prospers due to customers’ retention. It is only through customer satisfaction that a hotel can retain its customers. Guests may presume that a hotel with greater ranking may deliver better services than the hotel, which has less star ranking. Customer perceived value is a complex idea to identify and assess. It It is a significant variable that leads the service provider to attain appropriate competitive rank in the market [14].

Hotels are constantly faced with problems of poor service delivery such as front desk services, speed in service delivery, honesty and good attitude towards customers which have prompted hotels to continue to lose customers to competitors and the creation of new customers is below target [15]. It has been observed that customers complained of neglect which becomes more annoying when it is a first time customer. This situation has led to customer dissatisfaction thereby making customers shift their demands and loyalty to other organizations providing similar services in a manner that meets their expectations. However, in the pursuit of Service growth and success, much depends on the performance of the industry which also flows from the quality of the services that are rendered [16]. One perceived problem found in the hotel industry in Nigeria is the differences in the quality of the services that are delivered organizations in the industry. Service quality as the difference between customer expectations of service and perceived service [17]. If expectations are greater than performance, then perceived quality is less than satisfaction and hence customer dissatisfaction occurs. Therefore, hotels have to provide service carefully to attain zero defects in service. Measuring customer’s expectation is the key to being able to serve the customer satisfactorily. With better understanding of customer perceptions, hotel can determine the actions required to meet the customer’s needs. This significance of customer satisfaction in today’s dynamic corporate environment is apparent as it greatly influences customer’s repurchase intentions to switch. Given the vital role of customer satisfaction, it is not surprising that a variety of research has been devoted to investigate the determinants of customer satisfaction (Heide and Grønhaug, 2013). Also, studies have shown that customer satisfaction positively affect business profitability. It is against this background the researcher tends to study the effect of service quality on customer satisfaction in hotel in Awka Anambra State.

Objective of the Study

The broad objective of the study is to evaluate the effect of service quality on customer satisfaction in hotels in Awka anambra State.

The specific objectives of the study include to:

1. Determine the effect of service quality on perceived value in selected hotels in the study area.

2. Determine the influence of service quality on customer satisfaction in selected hotels in the study area.

3. Examine the influence of service quality on customer loyalty in selected hotels in the study area.

4. Determine the effect of perceived price fairness on customer satisfaction in selected hotels in the study area.

Research Questions

The following questions guided the study

1. What is the effect of service quality on guest perceived value in selected hotels in the study area?

2. What is the influence of service quality on customer satisfaction in selected hotels in the study area?

3. What is the influence of service quality on customer loyalty in selected hotels in the study area?

4. What is the effect of perceived price fairness on customer satisfaction in selected hotels in the study area?

Research Hypotheses

The following null hypotheses were tested in this study

H01: There is no significant relationship between service quality and guest perceived value in selected hotels in Awka, Anambra State.

H02: There is no significant relationship between service quality and customer satisfaction in the study area.

Research Methodology

In this study, survey research design was used through administration of questionnaire. The study was carried out in Awka, Anambra State, Nigeria. It lies between Port-Harcourt (to the south) and Enugu to the North [18]. Strategically, Awka is located midway between two major cities in Northern Igbo land, Onitsha and Enugu, which has played a significant role in its choice as an administrative center for the colonial authorities and today as a base for the Anambra State government. The population of the study was made up of hotel guests only. The population figure is infinite because the number is unknown.

The researcher adopted purposive sampling technique in which the researcher relies on his or her own judgment when choosing participants in the study. The people chosen as participants where those guests the researcher had seen to be well informed and has the capacity to respond to the questionnaire. To ensure the determination of accurate sample size, the infinite formula derived by Cochran was employed, and the sample size calculated as follows.

The formula states thus:

n = Sample size

Z = selected critical value of desired confidence level

= 95% (1.96) for 0.25 in each tail

q = 1-P

e = Accepted margin of error for population being estimated i.e

Desired level of precision = (0.75)

p = 25% (0.25), q = 75 (0.75)

To determine “p”, a pilot survey was carried out comprising 20 respondents, who were asked how reliable the employees attitude are in terms of keeping promises, 25% agreed while 75% disagreed

Therefore;

P = 25% (0.25), q = 75% (0.75)

n = 288 samples

n = 288

Therefore the number of respondents was 288

The instrument the researcher used to collect data from the respondents was questionnaire. The questionnaire contained structured questions relating to objectives of the study. The questionnaire was designed in four point rating scale as SA=strongly agreed=4; A=Agreed=3; D=disagreed=2; SD=strongly disagreed=1

Questionnaire was also distributed. Here the researcher met with the guests of the selected hospitality businesses. Questions relating to the subject matter were asked to the respondents. The responses from the respondents helped the researcher in carrying out this research especially in the area of analysis and decision making. The questionnaire was given to three research experts from the Department of Hospitality Management and Tourism for validation.

The test-retest method of reliability was used. Also ten respondents were drawn for reliability test outside the population study. The researcher gave the same test to the same respondents on two separate occasions. The scores on the two occasions were then correlated. This correlation was known as the test-retest-reliability coefficient, or the coefficient of stability. The closer each respondent's scores are the more reliable the test measure (and the higher the coefficient of stability will be [19]. The reliability test result had a value of 0.85 which implies that the instruments are reliable and as such capable of giving accurate result.

A well-structured questionnaire was designed and administered to 288 respondents. The researcher administered the questions with the help of research assistant to enable him carry out the research effectively [20]. The simple descriptive statistics such as frequencies, percentage, mean and standard deviation was used to analyze respondents’ personal data and research questions while regression analysis will be used to test the hypotheses. Based on research questions, mean value above or equal to 2.5 is acceptable. Based on the hypotheses, the p-value less than 0.05 is significant while p-value greater than 0.05 is not significant [21,22].

Results and Discussion

Table 1 revealed that value for price, customer loyalty, customer satisfaction, increased guest purchase behavior, customer expectations and more commitment to the hotel are the effects of service quality on guest perceived value in selected hotels. All the items had an acceptable mean score above 2.5. Customer expectation has the highest mean score of 3.76 followed by value for price with mean of 3.74, then increased guest purchase behavior has a mean score of 3.70 and then customer satisfaction with mean score of 3.61. Hence, customer loyalty and more commitment to the hotel has the lowest mean of 3.58. This implies that there is high level of customer expectations in hotel operations. In line with the result, Tefera and Govender (2017) advised hotel management not to set the customer expectations very high, and they also need to know their customers’ satisfaction levels, by conducting regular satisfaction surveys. Since an improvement in customer loyalty is important for any organization which depends on repeat business. Therefore, providing excellent service quality and high customer satisfaction is the important issue and critical dimension of competitiveness in hotels.

Table 2 showed that all the items had an acceptable mean response score of 2.5. Items 3 has the highest mean of 3.76 followed by item 2 with mean of 3.61 and then item 1,4, and 5 with mean of 3.58. Hence, item 1, 4, and 5 has the lowest mean of 3.58.

Table 2: Influence of service quality on customer satisfaction in selected hotels in the study area. Note: SA=strongly agreed, A= agreed, D=disagreed, SD= strongly disagreed

This implies that there is high level of building the trust of the customer in hotel operations. Efficient service quality helps the hotels to be more competitive in the market and It enhances word of mouth marketing are responses of respondents on the impact of the customer relationship marketing on customers’ retention in selected hotels.

The findings showed that there is high level of customer loyalty, customer retention which builds trust on the customer, it helps the hotels to be more competitive in the market and it enhances word of mouth marketing are the impact of the customer relationship marketing on customers’ retention. Tefera and Govender (2017) reveal that there is high level of impact of the customer relationship marketing on customers’ retention in hotel operations. The finding is also in consistent to the findings of Shimekit, Wondoson and Seid (2016), which revealed that hospitality industry maintains service quality for customers’ retention. Consequently The findings is also consistent to the findings of Shimekit, Wondoson and Seid (2016) showed that there was a negative gap between actual service and expected service in all dimensions of lodging quality index and significant and positive relationships of five service quality dimensions and customers satisfactions.

The result on the mean responses of respondents on the influence of service quality on customer loyalty in selected hotels presented on table 3 shows that trust, commitment, continuous patronage, it improves the daily sales of the hotel and it increases referrals from the customer are responses of respondents on the influence of service quality on customer loyalty in selected hotels.

Table 3: Mean responses of respondents on the influence of service quality on customer loyalty in selected hotels. Note: SA=strongly agreed, A= agreed, D=disagreed, SD= strongly disagreed

All the items had an acceptable mean response score of 2.5. Items 1 and 4 has the highest mean of 3.76 followed by item 3 with mean of 3.70 and then item 2 and 5 with mean of 3.58. Hence, item 2 and 5 has the lowest mean of 3.58. This implies that there is high level of trust and improves in the daily sales of the hotel in hotel operations.

The result on table 3 shows that Trust, Commitment, Continuous patronage, improves the daily sales of the hotel and increases referrals from the customer are influence of service quality on customer loyalty in hotels. The finding is consistent to the findings of Cigdem and Berkehan (2016), which revealed the influence of service quality on customer loyalty in hotels. The findings of Nazri, Raji1 and Zainal (2016), also revealed that that service quality significant to customer loyalty in hotels. The findings is also consistent to the findings of Tefera and Govender (2017), findings reveal that hotel management in Ethiopia should not set the customer expectations very high, and they also need to know their customers’ satisfaction levels, by conducting regular satisfaction surveys. Since an improvement in customer loyalty is important for any organization which depends on repeat business.

The result on the mean responses of respondents on the effect of perceived price fairness on customer satisfaction in selected hotels presented on table 4 shows that repeat purchase, customer loyalty, positive increase sales volume, increase profitability and market share, competitive advantage, and Increase number of patronage are responses of respondents on the effect of perceived price fairness on customer satisfaction in selected hotels. All the items had an acceptable mean response score of 2.5. Items 3 has the highest mean of 3.76 followed by item 2 and 7 with mean of 3.70 and then item 6 with mean of 3.61. Hence, item 1,4and 5 has the lowest mean of 3.58. This implies that there is effect of perceived price fairness on customer satisfaction in selected hotels.

Table 4: Mean responses of respondents on the effect of perceived price fairness on customer satisfaction in selected hotels. Note: SA=strongly agreed, A= agreed, D=disagreed, SD= strongly disagreed

The findings on table 4 above shows that Repeat purchase, Customer loyalty, Positive brand reputation, Increase sales volume, Increase profitability and market share, Competitive advantage and Increase number of patronage are the effect of perceived price fairness on customer satisfaction in hotels. The finding is consistent to the findings of Raditha, Michael and David (2015), which revealed items similar to the above items as the effect of perceived price fairness on customer satisfaction in hotels. The finding is also in consistent to the findings of Mohammed (2018) reveal that hotel perceived value dimensions hedonic, price, quality, transaction had indirect significant positive effect on customer loyalty through customer satisfaction as a mediator it was further reveal that perceived price fairness on customer satisfaction in hotels has effect on hotel performance.

Test of Hypotheses

The four formulated hypotheses to guide in the study were tested as follows:

H01: There is no significant relationship between service quality and perceived value.

H02: There is no significant relationship between service quality and customer satisfaction

The regression result shows the guests perceived value and guest satisfaction of service quality in hotel. The coefficient of determination R-square of 0.813 implied that 81.3% of the sample variation in the dependent variable service quality is explained or caused by the explanatory variables service quality, perceived value, customer satisfaction, customer loyalty, customer retention and customer expectations are achieved while 18.7% is unexplained. This remaining 18.7% could be caused by other factors or variables not built into the model (Table 5). The value of R-square is an indication of a relationship between the dependent variable guest repeat patronage and independent variable service quality, perceived value, customer satisfaction, customer loyalty, customer retention and customer expectations are achieved. The value of the adjusted R2 is 0.781. This shows that the regression line which captures 78.1 per cent of the total variation in service quality is caused by variation in the explanatory variables service quality, perceived value, customer satisfaction, customer loyalty, customer retention and customer expectations are achieved specified in the model with less than 21.9 per cent accounted for the stochastic error term. The F-statistic was also used to test the overall significant of the model. The F-value of 21.00532 is an indication that the model is statistically significant at 5 percent level of significant at degree of freedom df1= 1 and df2= 3. The probability value of 0.00000 is less than 0.05 the null hypotheses is rejected and we therefore conclude that there is significant relationship between service quality and perceived value and significant relationship between service quality and customer satisfaction.

Table 5: Analysis of the significant relationship between service quality and perceived value and customer satisfaction.

Hypothesis one revealed that service quality have a significant effect on customer perceived value in hotel operations. The finding is consistent to the findings of Raditha, Michael and David (2015), who revealed that service quality significantly affect customer perceived value. Also, Nazri, Raji1 and Zainal (2016) agrees with the result that service quality significantly affect customer perceived value. Hypothesis two revealed that service quality has a significant effect on customer satisfaction in hotel operations. The result was in line with the findings of Mohammed (2018), which revealed that service quality have a significant effect on customer satisfaction in hotel operations.

Conclusion and Recommendation

Customers are very crucial part of the success of any company. Their satisfaction with a purchased product or service influences their decision to purchase it again. This holds true for the companies in the hotel industry. Satisfied customers prefer to return to the same hotel or restaurant if they really liked it. Hence, the result revealed that value for price, customer loyalty, customer satisfaction, increase guest purchase behavior, customer expectations, more committed to the hotel are the effect of service quality on guest perceived value in hotels. Influence of service quality on customer satisfaction in selected hotels includes customer loyalty, customer retention, building ofcustomers trust of the customer, helping hotels to be more competitive in the market, enhancement of word of mouth marketing. While Influence of service quality on customer loyalty in hotels has been revealed to include trust, commitment, continuous patronage, it improves the daily sales of the hotel, and increase in referrals from the customer. Effect of perceived price fairness on customer satisfaction are repeat purchase, customer loyalty, positive brand reputation, increase sales volume, increase profitability and market share, competitive advantage, increase number of patronage. Based on the findings of this study, it has been recommended that hotels should be able to identify the service quality strategies that will be instituted for the guest perceived value and growth of the operation. Establishment should examine the impact on the effect of service quality on guest satisfaction of hotel operations to ensure an optimum influence on the business and revenue generated.

References

1. Andreassen, TW, Lindestad B (2012) "Customer loyalty and complex services: The impact of corporate image on quality, customer satisfaction and loyalty for customers with varying degrees of service expertise", Int J Serv Ind Manag 9: 7–23.

   [Crossref] [Google Scholar]

2. Anna (2009) "Strengthening the satisfaction-profit chain." J Serv Res 3: 107-120.

   [Crossref] [Google Scholar]

3. Boon-Liat C, MdZabid Abdul R (2013) Service quality and the mediating effect of corporate image on the relationship between customer satisfaction and customer loyalty in the Malaysian hotel industry. Int J Bus Manag 15: 99-112.

   [Crossref] [Google Scholar]

4. Chen C (2014) Advertising, price and hotel service quality: A signalling perspective. Tourism Economics 20: 1013–1025.

   [Crossref] [Google Scholar]

5. Churchill G, Surprenant C (2017) An Investigation into the determinants of customer satisfaction. Journal of Marketing Research 19: 491-504.

   [Crossref] [Google Scholar]

6. Cigdem A, Berkeha L (2016) Customer satisfaction measurement practice in Taiwan hotels. Hospitality Management 23: 397–408.

   [Crossref] [Google Scholar]

7. Gerosa F (2013) Relationship marketing activities, commitment, and membership behaviors in professional associations. J Mark 64: 34-49.

   [Crossref] [Google Scholar]

8. Heide RT, Grønhaug KN (2019) The hierarchical effects of perceived quality on perceived value, satisfaction, and loyalty: Empirical results from public, outdoor aquatic centres in Australia. Sport Management Review 16: 268-284.

   [Crossref] [Google Scholar]

9. Heide RT, Grønhaug KN (2013) Customer value: The next source for competitive advantage. Journal of the Academy of Marketing Science PP:139-153.

   [Crossref] [Google Scholar]

10. Hung MK, Knight GA, Cronin JJ, Tomas G, Hult M et al., (2003) Removing the contextual lens: A multinational, multi-setting comparison of service evaluation models. Journal of Retailing 81: pp: 215-30.

    [Crossref] [Google Scholar]

11. Jana A, Chandra B (2016) Mediating role of customer satisfaction in the mid- kong: An application of servqual. Service Quality 10: 10-19.

    [Crossref] [Google Scholar]

12. Joby B, Grove MD, Gustafsson A, Fisk T (2016) The effects of satisfaction and loyalty on profits and growth: Products versus services. Total Quality Management 11: 917-927.

    [Crossref] [Google Scholar]

13. Lam T, Zhang H (1999) Service quality of travel agents: The case of travel agents in Hong Kong. Tourism Management 20: 341–349.

    [Crossref] [Google Scholar]

14. McCleary KW, Weaver PA, Hutchinson JC (2017) Hotel selection factors as they relate to business travel situations. J Travel Res 32: 42–48.

    [Crossref] [Google Scholar]

15. Nazri DJ, Raji U, Zainal Z (2016) Customer-service provider relationship: An empirical test of a model of service quality, satisfaction and relationship-oriented outcome. Int J Serv Ind Manag 9: 155–168.

    [Crossref] [Google Scholar]

16. Oliver (2010) Assessing the effects of quality, value, and customer satisfaction on consumer behavioural intentions in service environments. Journal of Retailing 76: 193-218.

    [Crossref] [Google Scholar]

17. Petrick JF (2014) The roles of quality, value, and satisfaction in predicting cruise passengers’ behavioral intentions. J Travel Res 42: 397-407.

    [Crossref] [Google Scholar]

18. Raditha, M, Michael A, David S (2015) Destination Threshold Potential and the Law of Repeat Visitation. J Travel Res 37: 131-137.

    [Crossref] [Google Scholar]

19. Shalim, A (2010) SERVQUAL and Model of Service Quality Gaps: A Framework for Service quality in hospitals: More favourable than you might think:”. J World Bus pp 1-11.

    [Crossref] [Google Scholar]

20. Shimekit ES, Wondoson RF, Seid DA (2016) The impact of demand fluctuation on the quality of service. Int J Serv Ind Manag 9: 155–168.

    [Crossref] [Google Scholar]

21. Simanavicius A (2016) Impact of hotel service quality on the loyalty of customers. Economic research-Ekonomska istraživanja 29: 559-572.

    [Crossref] [Google Scholar]

22. Tefera O, Govender K (2017) From SERVQUAL to HOTSPERF: Towards the development and validation of an alternate hotel service quality measurement instrument. Afr J Hosp Tour Leis 5: 22-25.