Customer Satisfaction in the Tourism and Hospitality Industry: Analysis on Service Quality and Service Failure

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1.0 TITLE OF THE STUDY
Customer Satisfaction in the Tourism and Hospitality Industry: Analysis on service quality and service failure

2.0 BACKGROUND OF THE STUDY / INTRODUCTION
Customer satisfaction plays a crucial role for success and survival in today’s competitive market. Customer satisfaction is considered a prerequisite for customer retention and loyalty, and obviously helps in realizing economic goals like profitability, market share, return on investment, etc. (Scheuing, 1995; Reichheld, 1996; Hackl and Westlund, 2000). Customer’s overall satisfaction with the services of the organization is based on (or a function of) all the encounters/experiences of the customers with the organization. There are many researchers conceptualize customer satisfaction as an individual’s feeling of pleasure or disappointment resulting from comparing a product’s perceived performance in relation to his or her expectations. Satisfaction is a widely researched consumer evaluation because it is of the utmost importance to firms, in order to ensure sustainability. Keeping customers satisfied is vitally important for hospitality industry to generate revenues. To achieve a high level of customer satisfaction, it is important to meet customer expectation. However, it is sometimes difficult to realize what customers expect and unless they wish to feedback their opinions to the restaurant. Listening to the customer can be of strategic importance for the future of hospitality industry. Customer retention has become a continuous focus of service organizations. In hospitality industry, service quality is most important in retaining and gaining customer. Service quality has been defined in different ways. According to the Bitner, Booms and Mohr (1994) define service quality as ‘the customer’s overall impression of the relative inferiority/superiority of the organization and its service’. Parasuraman, Zeithaml and Berry (1985) defined service quality as ‘a function of the differences between expectation and performance along the quality dimensions’. Roest and Pieters’ (1997) define service quality is a relativistic and cognitive discrepancy between experience-based norms and performances concerning service benefits. Other researchers view service quality as a form of attitude representing a long-run overall evaluation. In today’s world of intense competition, the key to sustainable competitive advantage lies in delivering high quality service that will turn result in satisfied customers (Shemwell et al., 1998). Perceptions of service quality could occur at multiple levels such as with the core service, physical environment, etc. (Bitner and Hubert, 1994). The performance of service quality is measure base on customers’ perception and expectation. The differences between expectation and perception of customers represent positive and negative will affect customer satisfactions. Employees in an organization need to deliver excellent services to create positive quality perceived by customers. Service quality influence a customer’s subsequent behaviour, intentions and preferences. If customers chooses a provider that provides service quality that meets or exceeds his or her expectation, he or her will found that service quality has significant effect on repurchase intentions. Service failure can be defined as that service which does not meet the customer’s expectations. Apparently this will have an effect on a customer’s evaluation of service performance, as their expectations are not being met. The hotel industry involves a high degree of interaction between employees and consumers and hotels are characterized by continuous operation and highly fluctuating demand, relative to constant rates of supply. Thus, it provides many opportunities for service failures to occur and is more likely than in other industries. It is difficult to observe hospitality service is often immediate and spontaneous, relying on experiential aspects for consumer evaluation....
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