FACTORS INFLUENCING CUSTOMER SATISFACTION IN
HOTEL INDUSTRY IN KENYA
BY
MERCY MUENI KINYINGI
UNITED STATES INTERNATIONAL UNIVERSITY-AFRICA
SPRING 2018
ii
FACTORS INFLUENCING CUSTOMER SATISFACTION
IN HOTEL INDUSTRY IN KENYA
BY
MERCY MUENI KINYINGI
A Research Project Report Submitted to the Chandaria School of
Business in Partial Fulfillment of the Requirement for the Degree of
Masters in Business Administration (MBA)
UNITED STATES INTERNATIONAL UNIVERSITY-AFRICA
SPRING 2018
iii
STUDENT’S DECLARATION
I, the undersigned, declare that this is my original work and has not been submitted to any
other institution, or university other than the United States International University-Africa
in Nairobi for academic credit
Signed___________________ Date____________________
Mercy Mueni Kinyingi (ID 649404)
The research project has been presented for examination with my approval as the appointed
supervisor
Signed___________________ Date______________________
Dr. Joseph Ngugi Kamau
Signed___________________ Date______________________
Dean, Chandaria School of Business
iv
COPYRIGHT
All rights reserved. No part of this project report may be photocopied, recorded or,
otherwise, reproduced, stored in retrieval or transmitted in any electronic or mechanical
means without prior permission of USIU-A or the Author.
Mercy Mueni Kinyingi © 2018.
v
DEDICATION
This project is dedicated to God Almighty, He makes all things possible in His time. To
my dear late dad Christopher Peter Muthoka, who really encouraged me to take up this
course and proudly saw me through half way until his sad sudden demise before I was
through. To my dear mom Joyce Kambua Kinyingi, her loving words of encouragement,
prayers, care and every day reminder that my success was hers too. To my dear siblings
Julianne Nduku Kinyingi, Lydia Nthenya Kinyingi, Alice Ndunge Kinyingi and my dear
nephew Peter Jabali Ndeti for their spiritual, emotional and moral support during the tough
time as I completed my project.
vi
ACKNOWLEDGEMENT
My sincere appreciation goes to my supervisor, Prof. Joseph Ngugi Kamau for his support,
counsel and, guidance throughout the research period. I am also grateful to my family
members for their encouragement during the study period.
vii
ABSTRACT
The hotel industry in Kenya is one of the fastest growing sectors and thus a significant
contribution to the country’s economy. As evidenced, Kenya being the hub of business in
East Africa has had a tremendous target by international brands leading to competition with
the already existing brands in Nairobi its capital city. This vast development has therefore
created a high level of keenness by the hotels’ managements to maintain a sustainable
clientele which at the moment lacks due to lack of competitive advantage.
The general objective of this study was to find out the factors influencing customer
satisfaction and to establish if service quality influences customer satisfaction, to ascertain
if perceptions influence customer satisfaction and to determine if customer expectations
influence customer satisfaction. The researcher employed descriptive research design,
convenient sampling was used to obtain the respondents. The population was USIU-Africa
students who had visited 4 to 5-star hotel between November 2017 and April 2018.
Questionnaire was used to collect data and of 138 sample size, 97.8% responded. The
descriptive and inferential statistics was used in analyzing data.
On objective one, the service quality of customers can influence customer satisfaction (β =
.111, t = 1.257, p>.05, but it was statistically insignificant hence service quality does not
affect customer satisfaction in the hotel industry. Objective two, the perceived value of
customers can influence customer satisfaction (β = .154, t = 1.762, p>.05, but it was
statistically insignificant hence perceived quality does not affect customer satisfaction in
the hotel industry. On the last objective, the customer expectations can influence customer
satisfaction (β = .032, t = .361, p>.05, but it was statistically insignificant hence customer
expectations do not affect customer satisfaction in the hotel industry.
The study concludes, the quality of the hotel and the number of times one visited the hotel
determines the customer satisfaction more than service quality, perceived value quality and
customer expectations. The results from the study could be helpful to the management of
hotels in their policy formulation in the context of improving customer satisfaction and
hence achieve a sustainable clientele. The researcher recommended that since this study
focused only consumers of 4star and 5star hotels, future studies could look into 3star, 2star,
1 star hotels, restaurants, and getaway retreat facilities.
viii
TABLE OF CONTENTS
STUDENT’S DECLARATION ...................................................................................... iii
COPYRIGHT .................................................................................................................... iv
DEDICATION.................................................................................................................... v
ACKNOWLEDGEMENT ................................................................................................ vi
ABSTRACT ...................................................................................................................... vii
LIST OF TABLES ............................................................................................................. x
LIST OF FIGURES .......................................................................................................... xi
ABBREVIATIONS AND ACRONYMS ........................................................................ xii
CHAPTER ONE ............................................................................................................. 1
1.0. INTRODUCTION ................................................................................................... 1
1.1 Background of the Study ............................................................................................ 1
1.2. Statement of the Problem .......................................................................................... 5
1.3 General Objective ....................................................................................................... 6
1.4 Specific Objectives ..................................................................................................... 6
1.5 Significance of the Study ........................................................................................... 7
1.6 Scope of the Study...................................................................................................... 7
1.7 Definition of Terms .................................................................................................... 8
1.8 Chapter Summary ....................................................................................................... 8
CHAPTER TWO ............................................................................................................... 9
2.0 LITERATURE REVIEW ........................................................................................ 9
2.1 Introduction ................................................................................................................ 9
2.2 Effect of Service Quality on Customer Satisfaction .................................................. 9
2.3 Effects of Customer Perceived Value on Customer Satisfaction ............................. 13
2.4 Effects of Customer Expectations on Customer Satisfaction. .................................. 18
2.5 Chapter Summary ..................................................................................................... 22
CHAPTER THREE ......................................................................................................... 23
3.0 RESEARCH METHODOLOGY ......................................................................... 23
3.1 Introduction .............................................................................................................. 23
3.2 Research Design ....................................................................................................... 23
3.3 Population and Sampling Design ............................................................................. 23
3.3.2 Sampling Design ................................................................................................... 24
3.5 Data Collection Methods .......................................................................................... 25
ix
3.6 Research Procedures ................................................................................................ 26
3.7 Data Analysis Methods ............................................................................................ 27
3.8 Chapter Summary ..................................................................................................... 28
CHAPTER FOUR ............................................................................................................ 29
4.0 RESULTS AND FINDINGS ................................................................................. 29
4.1 Introduction .............................................................................................................. 29
4.2 Response Rate .......................................................................................................... 29
4.3 Demographic Characteristics ................................................................................... 29
4.4 Descriptive Analysis of Study Variables ................................................................. 34
4.5 Inferential Analysis .................................................................................................. 39
4.6 Regression Model ..................................................................................................... 44
4.7 ANOVA Tests on Demographic Information and Customer Satisfaction ............... 48
4.8 Chapter Summary ..................................................................................................... 49
CHAPTER FIVE ............................................................................................................. 50
5.0 DISCUSSION, CONCLUSIONS AND RECOMMENDATIONS..................... 50
5.1 Introduction .............................................................................................................. 50
5.2 Summary .................................................................................................................. 50
5.3. Discussion ............................................................................................................... 52
5.4. Conclusions ............................................................................................................. 59
5.5 Recommendations .................................................................................................... 60
REFERENCES ................................................................................................................. 62
APPENDICES .................................................................................................................. 71
APPENDIX I: INTRODUCTION LETTER ................................................................. 71
APPENDIX II: NACOSTI PERMIT ............................................................................. 72
APPENDIX III: RESEARCH QUESTIONNAIRE ...................................................... 73
x
LIST OF TABLES
Table 4. 1 Response rate .................................................................................................... 29
Table 4. 2 Feedback on availability and feedback from management. .............................. 33
Table 4. 3 Service Quality on Customers. ......................................................................... 36
Table 4. 4 Perceived Value Quality. .................................................................................. 37
Table 4. 5 Customer Expectations. .................................................................................... 38
Table 4. 6 Customer Satisfaction. ...................................................................................... 38
Table 4. 7 KMO and Bartlett's Test ................................................................................... 39
Table 4. 8 Total Variance Explained ................................................................................. 40
Table 4. 9 Communalities and Pattern Matrixa .................................................................. 41
Table 4. 10 Construct Reliability ....................................................................................... 42
Table 4. 11 Item- Total Statistics. ...................................................................................... 42
Table 4. 12 Inter-item Correlation Matrix ......................................................................... 43
Table 4. 13 Normality Test ................................................................................................ 43
Table 4. 14 VIF Test .......................................................................................................... 44
Table 4. 15 Model Summary ............................................................................................. 44
Table 4. 16 ANOVA Table ................................................................................................ 45
Table 4. 17 Coefficient Table. ........................................................................................... 45
Table 4. 18 Model Summary ............................................................................................. 45
Table 4. 19 ANOVA Table ................................................................................................ 46
Table 4. 20 Coefficient Table. ........................................................................................... 46
Table 4. 21 Model Summary ............................................................................................. 46
Table 4. 22 ANOVA Table ................................................................................................ 47
Table 4. 23 Coefficient Table. ........................................................................................... 47
Table 4. 24 Regression weights summary ......................................................................... 47
Table 4. 25 ANOVA on Customer Satisfaction and Demographic Information ............... 49
xi
LIST OF FIGURES
Figure 4. 1 Gender. ............................................................................................................ 30
Figure 4. 2 Age Bracket ..................................................................................................... 30
Figure 4. 3 Residence of Living ......................................................................................... 31
Figure 4. 4 Number of Times Visited the Hotel ................................................................ 31
Figure 4. 5 Number of Days in Hotel ................................................................................ 32
Figure 4. 6 Reason of Travel.............................................................................................. 32
Figure 4. 7 Services............................................................................................................ 33
Figure 4. 8 Regression Coefficient Scatterplot. ................................................................. 48
xii
ABBREVIATIONS AND ACRONYMS
CFA Confirmatory Factor Analysis
CPV Customer Perceived Value
DINESERV Dinning Service Quality Model
GDP Gross Domestic Product
HOLSERVE Hotel Service Quality Model
LQI Lodging Quality Index
NACOSTI National Commission for Science, Technology & Innovation
SERVEQUAL Service Quality Model
1
CHAPTER ONE
1.0. INTRODUCTION
1.1 Background of the Study
Tourism industry is one of the most important players in the growth of economies both
locally and globally in the past decades. It is one of the most important industry in the
world and entails very significant infrastructure with service organizations among which
the most prominent feature is the hotel industry (Kleynhans & Zhou, 2012). The hotel
industry provides the necessary substructures for tourism, therefore the growth in tourism
industry depends on growth in Hotel industry (Mohajerani, 2012).
In 2013, Amissah states that there is an increasing demand for better quality products and
services including the hotel services internationally. Customer satisfaction is one of the
greatest tools in steering the growth of the hospitality industry. Forozia et. al.,(2013) in
their study on customer satisfaction in hospitality industry in Malaysia, hospitality is
defined as a particular type of relationship between a host and a traveler. According to (Min
et. al., 2017) hotel service is recently regarded as one of core businesses making up the
tourism complex system. As such tourist satisfaction is a key ingredient for the survival
and success of the hotel industry. Therefore, hotels need to differentiate their service
offerings by meeting the needs of their customers better by improving customer satisfaction
and delivering service quality that is higher than that provided by competitors (Amissah,
2013).
Services offering from hospitality industry are necessities because of change in lifestyle
(Mohajerani, 2012). With that customers need a service as a result of their cost in order to
get services in according with their expectations (Sukaisih & Hamid, 2015). Therefore,
hotel industry will give various best services to customers with expectations that the
customer will come back to use the same services in future. It is not easy to meet various
customers’ needs with different backgrounds, however good customer service is the life
blood of any business and although new customers are important, good customer service
will help generate customer loyalty and repeat business (Lalla et. al., 2015).
According to Eshetie, et. al., (2016) the hotel industry consists of many different services,
including accommodation, restaurants, cafes and catering. Globally, there is an increasing
2
demand for better quality products and services with hotel customers becoming much more
discerning and demanding (Amissah, 2013). Currently, hotels are experiencing the
increased competitive pressures as a consequence of the combined effect of the
globalization, economic-political integration tendencies, consolidation, and growing
supply in emerging and mature tourist destinations (Antwerp, 2013).
In a highly competitive hotel industry, individual hoteliers must find ways to make their
products and services stand out among the others. According (Length, 2014) one way to
achieve this is for hoteliers to understand their customers’ needs and then set out to meet
(or exceed) these needs. In general, service quality promotes customer satisfaction,
stimulates intention to return and encourages recommendations (Length, 2014).Customer
satisfaction also eventually increases profitability (Torres & Kline, 2013) as well as market
share and return on investment.as a result of increased importance from the service sector,
researchers are defining quality from a customer’s perspective (Length, 2014).
Forozia et. al., (2013) states that over the decades, based on the studies of the hospitality
industry, two significant areas have been introduced which are customer satisfaction and
service quality. Forozia further argues that in the hospitality business, both customer
satisfaction and service quality have muscular collision on the presentation of the business
and the treatments of customer. According to (Sukaisih & Hamid 2015) companies can
start a good relationship by creating customer’s confidence and certainty and which showed
a high commitment to provide high quality customer service can improve customer
satisfaction. In 2012, Mohajerani argues that in order to encourage the potential customers
to travel, it is necessary to make them satisfied which leads to repurchase intentions and
positive word-of-mouth. Therefore every business needs not only to retain its current
customers but also to expand customer’s base significantly and it is possible only when
target customer is fully satisfied from company on some parameters (Irfan, 2014).
Mbise (2012) explains that Tanzania had a lot to offer to international market, however the
tourism industry found itself struggling for survival. Philemon (2015) in his study on the
assessment of tourist’s perception and satisfaction of Tanzania destination, states that the
tourism industry is greatly controlled by the discernment that tourists carry with them about
that particular destination. Philemon further argues despite the well-built literature from
western world and the developing economies on tourists’ perception and satisfaction, there
seems to be unsatisfying outcomes regarding what satisfies tourists on each destination. In
3
this regard each destination is entirely unique and hence satisfaction and dissatisfaction of
individual tourists or groups differ in various destinations.
In his study, service quality and customer satisfaction in the hotel industry, (Urge, 2016)
states that customer satisfaction is significant to build long-lasting relationships with
consumers and hence a critical success factor in service oriented companies. As indicated
by (Mubiri et. al., 2016) many researchers have argued that some customers may not
appreciate some services as much as others would. Consequently, ethnic differences may
lead the hotel to modify their services to fit the social and ethnic practices of specific
consumers. Hotel businesses in developing countries also have to compete with each other
and focus on satisfying both local and worldwide customers, because, today’s customers
are more alert, educated and exposed to a lot of information through online sources , social
media , magazines etc. (Urge, 2016).
Mubiri et. al., (2016) argues that in the event consumers are satisfied with services of a
certain hotel, they are most likely to become loyal consumers and keep spreading positive
word of mouth to other consumers. In the study, service quality and customer satisfaction
in the hospitality industry in Ethiopia, (Eshetie et. al., 2016) highlights that the country has
suffered from having world class hotel chains in number and providing international service
standards. In addition, the country also suffered attracting more private hotel owners due
to different reasons and the existed hotels do not perform well as per the international hotel
standards and these clearly showed that the country does not enjoy economic contribution
from hospitality industry as expected (Lalla et. al., 2015).
In Kenya, tourism is the foremost earner of foreign exchange and it contributed to Ksh 100
billion of the GDP in 2011 (Mbuthia, Muthoni, & Muchina, 2013). According to Republic
of Kenya (2012), tourism made a direct contribution to the growth of hotel industry and
other related sectors. There has been a wide range of domestic hotels and hospitality
enterprises whose service offering not only complements those of world class hotels but
also serve the domestics guests or tourists (Mbuthia et. al., 2013). However, according to
(Watiki, 2014) the domestic hotel industry in Kenya is experiencing increasing competition
with major international hotel brands increasingly setting up operations in Kenya, which
has set to increase the competition in the hotel industry.
4
As Kenya focuses to be industrialized by 2030, research foresees the hotel industry as one
of the sectors that will contribute greatly to the industrialization (Schulz, 2012). The hotels
play a central role in the country’s tourism industry, yet the Coast lacks five- star hotels
(Waitiki, 2014) .The Kenya hotel and restaurant regulations of 1988 established standards
upon which classification of hotels is based. Internationally, the classification of hotels and
restaurants creates uniformity in the industry providing common elements in every class of
hotel and restaurant that their clients should expect.
According to (Watiki, 2014)the hotel business is regulated by two Acts of parliament
namely: Hotels and restaurants Act (Cap 494) and the tourist Licensing Act (Cap 381).
Vacation hotels, town hotels and lodges are classified into five classes denoted by stars,
five being the highest and one being the lowest. These star- rated hotels enable both the
domestic and international customers to understand the value of the services they are paying
for. The hotels that are 5-star rated are expected to offer highest standards of facilities and
services Kenya has the best developed hotel industries in Sub-Saharan Africa, offering an
average of 31,400 beds per night (Kenya economic survey 2013). As a result, there has
been unprecedented entry of international Hotel brands in the Kenyan Hotel industry.
Kenya is set to host nine new international hotels which are planning to put up 1437 hotel
rooms to cater for growing demand for travel and accommodation in the country by 2015
(Kenya economic survey 2013). These hotels include Marriot, Accor, Kempiski, Sheraton,
Four Points, Carlson Rezidor group of hotels currently operating Radisson Blue and Park
Inn, and Hilton hotels currently operating Hilton and the new Hilton Garden Inn which is
the latest.
Hotel occupancy in Kenya is relatively stable throughout the year, other than December
due to Christmas and New Year celebrations in December and January which reduce
demand during those months. Although the reasons for the visit to the country vary, with
leisure being a significant driver, the market shows limited seasonality pattern (Waitiki,
2014). The hotel industry is highly service oriented as through the experiences, customers’
form opinions by comparing the service encounters against their expectations. Therefore,
providing high standard of service quality can result in high level of customer satisfaction
(Kariru & Aloo, 2014).
5
An organisation realises that customer satisfaction is of great importance when there are no
customers to consume their products, and therefore is no business. One unsatisfied
consumer or customer can send more business away from an organisation than many
satisfied customers. Thus the more an organisation focuses is on customer retention and
customer support, the more long-term business an organisation will receive (Lalla et. al.,
2015).The qualities of brand characteristics that are offered by a company determine the
level of customer satisfaction (Khan & Afsheen, 2012). Customer satisfaction can be
defined in terms of meeting the expectations of the customers and in terms of parameters
associated with satisfaction (Malik & Ghaffor, 2012). Nomanga (2015) states that
providing the services customers prefer is a starting point for providing customer
satisfaction and in holding an essential role in creating value for customers, hence customer
satisfaction having a direct and indirect impact on business results.
Customer satisfaction as a key marketing tactic in differentiating itself from its competitors
and therefore a heightened understanding of a guest preference and total worth will enhance
a guest experience and maximize hotel revenue (Kangogo & Manyasi, 2013).To survive in
this dynamic and highly competitive business environment the hotel operators will be
forced to critically acknowledge the importance of service improvement in order to gain
competitive advantage (Waitiki, 2014).Customer satisfaction creates high loyalty intention
and that begins with good corporate image (Sukaisih & Hamid, 2015) and attracts new
customers and strengthens business relations.
1.2. Statement of the Problem
Nsobiari and Anyadighibe (2014) argues that the ability to satisfy consumers remains one
of the greatest task for any firm to achieve as customer needs and expectation are changing
at all time. Understanding customers’ expectation is crucial in service industry such as
hospitality and therefore managers should endeavor to carry out initial market surveys to
find out what the market needs which should also give an insight on the market
characteristics (Kabuitu & Ngige, 2016). According to Waitiki, (2014) the management of
organizations should seek to know the level at which the customers are satisfied with their
services and the kind of service quality levels their customers would like in order to offer
the exactly what would be taken positively.
6
Kenya is one of the countries that have been affected by terrorism and as a result the
international market has gone down, leaving the existing hotels relying on domestic
markets for survival or risk closure. Therefore, preparing and maintaining customer
satisfaction is the greatest current confronts of managements (Forozia et. al., 2013) of
various hotels and as they now adjust to the different needs and identify customers’ needs,
desires and expectations (Amissah, 2013) of both international and domestic markets to
remain relevant in the industry.
Forozia et. al., (2013) argues that customer satisfaction is the determinant and inevitable
secret of success and therefore hotels are not able to compete with other competitors
without fulfilling the satisfaction of their guests. Therefore, it is in the rapid growth of new
hotels both local brands and international brands, there has been creation of a big gap in
the hospitality industry as there is an emergence of great competition with thin the market.
The emergence of competition has created a zest in creating sustainable loyal clientele
which highly relies on the fact that customer satisfaction element be addressed in the hotels.
Customer satisfaction and service quality are the key element of attaining competitive
advantage in hospitality industry which will attract customers and maintain them and as a
result, there is great demand for customer satisfaction so as to achieve repeat purchase and
attract new customers (Forozia et. al., 2013).
1.3 General Objective
To investigate the factors that influence customer satisfaction in the hotel industry in
Kenya.
1.4 Specific Objectives
1.4.1 To establish the effect of service quality on customer satisfaction in the hotel industry
in Kenya.
1.4.2 To establish the effects of customer perceived value on customer satisfaction in the
hotel industry in Kenya.
1.4.3 To determine the effect of customer expectation on customer satisfaction in the hotel
industry in Kenya.
7
1.5 Significance of the Study
1.5.1 Significance of the Study to Stakeholders
A thorough understanding and knowledge of the factors that influence customer
satisfaction through providing clear information concerning customers’ expectation,
perception and service quality dimension is useful in guiding hotel stakeholders and owners
so as to design and deliver the right hospitality services and strategies in the current
competitive market.
1.5.2 Significance of the study to policy makers
This study is important to policy makers in the hospitality industry both in the private and
public sector as they gain significant insights from the findings of this study. The
information on service quality, customer perceptions and expectations toward their
influence on customer satisfaction enables them formulate policies that relate to the hotel
industry in Kenya
1.5.3 Significance of the Study to Scholars.
This research has future implications on future studies as it has potential to determine the
mediating role of customer satisfaction and its impact on brand or customer loyalty in
further. It is also useful for academicians to make references and provide additional
information to the body of literature in the field of service quality management and other
studies of the same impact.
1.6 Scope of the Study
This study is broad in nature and voluminous literature. It can be viewed from the banking,
manufacturing and any other service sector, however it is best studied within the hotel
sector and therefore focused on the three major influencers of customer satisfaction within
the hotel industry in Kenya with aspect within the literature. The geographical scope of this
study is Nairobi, the capital city of Kenya. The population scope of this study is USIU
students who have visited 4 and 5 star hotels in the last 6 months of the study. The study
took a timeline of 6 months. There were no limitations as the population was easily
accessible and was cost effective as there was no much travelling to access the respondents
for data collection.
8
1.7 Definition of Terms
1.7.1 Customer Satisfaction
Customer satisfaction refers to the level at which a product’s perceived performance
equals to the buyer’s expectations (Kotler & Armstrong, 2017).
1.7.2 Service Quality
Service quality refers to what the customer acquires and is ready to pay towards it in place
of what the seller puts in to sell. Consequently, service quality can be considered as the
breach between the anticipated service and the concrete perceived service (Al Ababneh,
2017).
1.7.3 Customer Perceived
Customer perceived value refers to the evaluation of the customer on difference in all the
benefits and all the costs of a market offer comparative to those of the competitor’s
offers (Kotler & Armstrong, 2017).
1.7.4 Customer Expectation
Customer expectations refers to the views about service delivery that serve as principles or
opinions in contrast with which performance is judged (Zeithalm, Bitner, & Gremler, 2013).
1.8 Chapter Summary
Chapter one of this study gives a detailed information of the background of the study,
statement of the problem and the general objective with the specific objective. Also the
chapter brings insight to the significance of the research with identification of the study,
and the definition of the terms used. Following chapter one is chapter two which focus on
the empirical review of the specific objectives. Chapter three identifies the research
methodology. Chapter four establishes the data collection and analysis as well as establish
the research findings. Finally, chapter five gives research discussion, the recommendations
and conclusion of the study of the project.
9
CHAPTER TWO
2.0 LITERATURE REVIEW
2.1 Introduction
This chapter covers the relevant literature based on the research objectives in the hotel
industry. The covered topics are; effect of service quality on customer satisfaction, effects
of perceived value on customer satisfaction, and effect of customer expectation on customer
satisfaction.
2.2 Effect of Service Quality on Customer Satisfaction
2.2.1 Models of Service Quality
According to Gupta in (2017) service quality is divided into two parts; first is tangible
services (furniture, building, rooms, décor etc.) and second is intangible services (personal
touch, surprise, felling special).Gupta further argues that in today’s world all hotels are
almost same in their tangible factor, however the thing which impress the consumers are
the intangible services which attract them.
Applying to the hospitality industry, there have been numerous studies that examine
attributes that travellers may find important regarding customer satisfaction (Nomnga,
2015). Among all, three most popular models to measure customer satisfaction and service
quality in the hotel industry are SERVEQUAL, HOLSERVE, Lodging Quality Index (LQI)
and DINESERVE. Each model has its own strong point and has been used flexibly in hotel
industry to present literatures relevant to this research and to provide a theoretical
framework.
In a study conducted by (Awara & Anyadighibe, 2014) on the relationship between
customer satisfaction and loyalty: a study of selected eateries in Calabar, Cross River State,
three categories of service quality have been highlighted. Technical quality which refers to
what the customer is left with after the customer-employee interactions have been
completed. Functional quality which is the process of delivering the same service or
product a Societal (ethical) quality a credence quality, which cannot be evaluated by the
customer before purpose and is often impossible to evaluate after purchase.
10
Nomnga (2015) states that service quality is a complex, elusive, subjective and abstract
concept that means different things to different people. According to (Eshetie et. al., 2016)
the quality in a service business has become a measure of the extent to which the service
provided meets the customer’s expectations. Arguments by (Forozia et. al., 2013) are that
in most of the service industries, service quality plays a fundamental role for companies to
achieve success and therefore it is crucial for management of hotels to have a proper
consideration of what customers’ requirements are.
Poor-quality service produces customer dissatisfaction, and customers may not return to
the establishment in the future or even immediately move their business dealings to other
providers (Prentice, 2013; Cheng & Rashid, 2013). Arguments by Wu et. al., (2014) are
that both perceptions and expectations need to be measured in order to evaluate service
quality. Mauri et. al., (2013) further defines service quality as “a multidimensional concept,
assessed and perceived by consumers, according to a set of essential parts, grouped in five
categories, namely: tangibility, reliability, responsiveness, assurance and empathy”. More
so (Rauch et. al., 2015) indicates that the concept of service quality was initially used as
part of a framework of marketing strategies, by making customers the focal point.
There is abundant literature on the effects of service quality on customer satisfaction in the
hotel industry by (Rauch, Collins, Nale, & Barr, 2015; Mbuthia, Muthoni, & Muchina,
2013; Minh, Ha, Anh, & Matsui, 2017; Abukhalifeh & Mat Som, 2012; Lalla, Cowden, &
Karodia, 2015; G/Egziabher, 2015; Eshetie et. al., 2016). These studies have identified the
SERVQUAL model and highlighted its five dimensions also known as gaps namely;
tangibles, reliability, responsiveness, assurance and empathy.
A study conducted by ( Eshetie et. al., 2016) investigating literature on the Service Quality
and Customer satisfaction in hospitality industry in selected hotels in Ethiopia highlighted
the lodging quality index (LQI) which is multidimensional scale developed on the basis of
SERVQUAL model. The process of the LQI scale was argued that it began with the ten
dimensions that were originally in the first version of SERVQUAL and was highlighted
that the authors claimed that the LQI is a generic measure of hotel service quality. While
investigating their literature (Rauch et. al., 2015; Mbuthia et. al., 2013; Minh et. al., 2017)
have expounded on the LQI model and highlighted its ten dimensions as follows;
tangibility; reliability; responsiveness; competence; courtesy; credibility; security access;
communications; and understanding. The LQI, with its five-factor structure, has been
11
further validated in a study which utilized a sample of 200 Canadian respondents (Ladhari,
2012).
In a study conducted by (Tan, Oriade, & Fallon, 2014) on Service Quality and Customer
Satisfaction in Chinese Fast Food Sector, the DINESERVE scale was used to measure
service quality and was similar to the SERVEQUAL model. The DINESERV instrument
was proposed as a reliable and comparatively easy to use tool for determining how guests
evaluate restaurant service quality. The original DINESERV tool consisted of 29 items and
five SERVEQUAL dimensions( Watiki, 2014). Another study conducted by (Rauch et. al.,
2015) a service quality factor structure with three dimensions; was highlighted which
might serve as an appropriate framework by which customers assess service quality in
hotels. The three dimensions include; service product; service delivery; and service
environment.
Another study conducted by (Minh et. al., 2017), highlights the HOLSERV scale by
extending the SERVQUAL scale to include 27 items with 8 new items. The study tested
the reliability and validity of HOLSERV to which dimension is the best predictor of
overall service quality. Findings were that quality of service in the hospitality industry is
represented by three dimensions relating to employees (behaviour and appearance),
tangibles and reliability, and the best predictor of overall service quality is the dimensions
referred to “employees”.
2.2.2 SERVQUAL Model
According to (Abukhalifeh & Mat Som, 2012) SERVQUAL model allows customers to
evaluate quality of a service based on five distinct dimensions namely tangibles, reliability,
responsiveness, assurance, and empathy on which service quality and customer satisfaction
can be judged (Gupta, 2017). The model was developed by Parasuraman, Zeithaml and
Berry in 1988 as a tool of identifying service quality shortfall and is based on the premise
that customers can evaluate a firm’s service quality by comparing their perception of its
service quality with their own expectations (Waitiki, 2014).
Eshetie et. al., (2016) argues that commitment towards quality improves the guest’s level
of satisfaction and increases profits as well as consequently the benefits gained by the guest
and the employee. Eshetie et. al., (2016), further highlights that on the opposite, mistakes
in service provision cost the hotel money and its reputation may suffer. This is the “non-
quality cost” concept. The scenario created by non-quality service can be daunting for any
hotel manager. However, an unhappy guest does not usually express his or her unhappiness
12
to the management of a hotel, but will on average, inform at least nine other people about
poor service experiences. However happy guest will, by contrast, only inform three people
about his or her good service experiences in a hotel (P, 2014). Eshetie et. al., (2016) goes
ahead to argue that the SERVQUAL instrument is used to assess consumer perceptions and
expectations regarding the quality of a service. The original service dimensions used by
consumers to judge the quality of a service include as follows.
2.2.2.1 Assurance
This refers to the knowledge and courtesy of employees and their ability to inspire, convey
trust and confidence in hotel guests. The assurance dimension may be measured using
elements of knowledgeable trained professionals, communication and taking care of the
customer (Awara & Anyadighibe, 2014).
2.2.2.2 Reliability
This consists of four items, such as “My reservation was handled efficiently (Mbuthia et
al., 2013). Reliability is defined as the dependability, consistency and accuracy with which
the service is performed by the provider (Rauch et. al., 2015), as well as hotel’s ability to
perform services on time right at the first time (Minh et. al., 2017). Dependably is defined
as the service provider is able to provide what is needed and to be trusted while accurately
is defined as service provider is able to achieve the outputs that are correct(Tefera, Africa,
Govender, & Africa, 2017). High service reliability refers to the error-free performance
provided by the service provider. Reliability of service includes complaint handling, pricing
and promises delivery (Rahman et. al., 2014).Besides, customers compare the expectation
and the perception of the company’s delivery performance in order to evaluate their
acceptability (Demoulin & Djelassi, 2013).
2.2.2.3 Responsiveness
This refers to hotel’s willingness and flexibility to serve and help customers(Minh et. al.,
2017) in a timely, efficient manner and includes items such as helpfulness, friendliness and
warmth of the service staff (Rauch et. al., 2015).
2.2.2.4 Empathy
This is related to the caring personal attention extended to customers, as well as the level
of understanding personnel demonstrate relative to customer needs (Rauch et. al., 2015)
13
and the consideration, individualized attention the hotel provides to its guests (Eshetie et.
al., 2016).
2.2.2.5 Tangibles
This refers to the appearance of hotel and hotel staff, equipment personnel, physical
facilities at hotel and rooms, communication materials and visual materials for
customers(Minh et. al., 2017). Elements within the tangibles dimension are cleanliness,
space, atmosphere, appearance of server and location (Awara & Anyadighibe, 2014).
SERVQUAL model further, the model measures customer expectations and perceptions of
service quality. The quality gap (Q) is calculated by subtracting the expectation (E) from
the perception (P) value i.e. P-E=Q. Summation of all the Q values provide an overall
quality rating which is an indicator of relative importance of the service quality dimensions
that influence customers’ overall quality perceptions. SERVQUAL is a standardized
instrument that has been applied across a broad spectrum of service industries.
The SERVQUAL scale (Questionnaire) has two sections: one to measure customer
expectations in relation to a service segment and the other to measure perception regarding
the organization whose service is being assessed. SERVQUAL comprises a 22 items
(Likert-type) with five dimensions of reliability, responsiveness, assurance, empathy and
tangibles. From the 5 dimensions, 22 statements are derived, each measuring both the
expectations and perceptions of customers towards the quality of services of the
organization being assessed. The customers are required to rate, on a 5- point Likert scale,
the degree to which they feel the service provider should deliver for an excellent service.
Another identical scale is provided adjacent to the first one in which the respondents rate
the actual quality of service delivered to them by an organization based on their perceptions.
For each statement, the difference between perception and expectation is calculated; the
averages of the obtained score being the SERVQUAL score (Parasuraman et. al., 1988).
2.3 Effects of Customer Perceived Value on Customer Satisfaction
According to Chinomona et. al., (2014) the customer perceived value concept has attracted
the attention of industrial marketing scholars during the past years and has further attracted
much attention from the industry in recent decades (Tussyadiah, 2014). Customer perceived
14
value has therefore been stated by numerous authors as an aspect which has a great
influence on the decisions making process of customers (Chiang & Lee, 2013).
2.3.1 Customer Perceived Value
Perceived value is referred to the advantage, which is received by customer versus the total
costs, and is generally viewed as a comparative calculation of the costs and the rest of the
economic facets of services (Forozia et. al., 2013). Perceived value also refers to the
difference between the money paid for the service or product and the amount the customer
actually wants to pay (Gumussoy & Koseoglu, 2016). Delivering superior customer value
is an essential strategy for firms to gain competitive advantage and long term success
(Asgarpour, Hamid, Sulaiman, & Asgari, 2015) and in addition, customers make
purchasing decisions based on perceived value, or the degree to which their needs and
expectations about product quality, service quality, and or price are satisfied.
Demirgüneş (2015) states that the concept of “value” is a key-element in marketing and
maintaining customers. Customer perceived value is a concept which has drawn the
attention of industrial marketing researchers during the past years (Chinomona, Masinge &
Sandada, 2014; Vazifehdust, Amaleh, Esmaeilour & Khadang, 2014; Chen, Tsai, Hsu &
Lee, 2013; Razavi, Safari, Shafie & Khoram, 2012). According to (Asgarpour et. al.,
2015), having an understanding of a company’s mission, goals, and strategies and of its
customers’ needs and expectations, the company can develop a value proposition for
delivering superior value to its customers. This therefore the company has to attract new
customers, retain existing customers, and deliver significant profits, hence if a company
maximizes value for its customers, success follows (Asgarpour et. al., 2015).
Several researches according to (Waheed & Hassan, 2016) ,done on customer perceived
value around the world have been shedding more clarity of research measurement scales
over the researches that have been conducted. It helps organizations understand what the
customer expects from what they have purchased (Raza, et. al., 2012). In the past in many
researchers attempted to identify the customer perceived values associated with tourism
and its related services in various countries such as Spa Industry of Thailand (Setiowati &
Putri, 2012), Tourism industry of Malaysia (Haque & Khan, 2013), Hotel and Tourism
industry of China (Chiang & Lee, 2013) and in customer perceived value associated with
tourism in Pakistan examined by Raza et. al., (2012).
15
Further, perceived value has been examined by various authors as a factor which has a great
influence on the decisions making process of customers(Chiang & Lee, 2013).In the study
of the examination of perceived value dimensions of hotel visitors using exploratory and
confirmatory factor analyses (Chiang & Lee, 2013) suggests that the perceived value of
customer play a significant role in determining customer satisfaction, decision making and
purchase behaviours. In addition, the reviewed study on perceived value by Chiang and
Lee in 2013 indicates that perceived value is considered as a significant element in affecting
consumers’ consumption and decision making. Another study carried out on the influence
of e-service quality on customer perceived value , customer satisfaction and loyalty in
South Africa indicates that it’s a practical rule in presenting the customer with high value
hence a key factor in establishing and maintaining long term customer relations (Razavi et.
al., 2012).
In the study conducted by (Shen, 2016) perceived value in tourism experience, perceived
value is defined as the utility individuals derive from tangible products or intangible
services and it consists of what benefits individuals get and what costs they pay.
Researchers interpret perceived value from two perspectives; one-dimensional and multi-
dimensional, the former shows that value is a consumer’s overall evaluation of a product
or service (Yi, Day & Cai, 2014).In the study by (Chiang & Lee, 2013) an examination of
perceived value dimensions of hotel visitors using exploratory and confirmatory factor
analyses, customer perceived value can be described as the evaluation of comparing the
perception of typical perceived value and real outcome of purchase experience. On this
basis, the tourist is probable to interrelate with various components of the tourism product,
evaluate these tourism experiences and form their impression of the trip related experience.
A study carried out by (Demirgüneş, 2015) on the international review of management and
marketing relative importance of perceived value, satisfaction and perceived risk on
willingness to pay more consumers can either sustain the economic benefits of a purchase
process, or can get a better service adapted to their own needs (Morar, 2013). Other benefits
enjoyed by consumers during their purchase processes are the social ones which arise from
the establishment of a specific relationship. Accordingly, keeping a consumer satisfied may
be ten times cheaper than acquiring a new one. So, companies need to make efforts for
retaining customers and must concentrate on managing value perceived by them (Morar,
2013).
16
Demirgüneş (2015) maintains that companies must provide the value which will increase
the shopping intention of consumers by creating and delivering good shopping experiences.
Hence, providing superior value has become important for a company to maintain long-
term relationships with their customers (Ivanauskiene et. al., 2012). According to the study
on importance of perceived value, value is given when a product or service has the ability
to satisfy customer’s needs (Morar, 2013). Companies are operating in a complex
competitive environment and increasing number of customers are demanding the creation
of value. This has created a growing interest in providing greater value to the customer and
hence customer’s perceived value can be defined further from the perspectives of money,
quality, benefit, and social psychology, in which normally from monetary aspect value is
said to be generated when less is paid for goods (Yeh, 2013).
Demirgüneş (2015) explains that the concept of value represents the perception of the utility
that the relationship with the establishment brings. Enriching the relationships with
customers increase their attitudinal loyalty for example; intentions of customers to continue
shopping and a positive impact on the duration and strength of the relationship (Rubio et.
al., 2013). Thus the relationship between perceived value and customer satisfaction has
revealed that customer satisfaction is the result of a customer’s perception of value
received. Perceived value is considered as a construct that captures any benefit-sacrifice
discrepancy in the same way that disconfirmation does for variations between expectations
and perceived performance (Kassim et. al., 2014).
2.3.2 Perceived Value Model
Perceived value is one of the important elements for gaining competitive edge and is
considered to be a significant predictor of customer satisfaction (Demirgüneş,
2015).Various theoretical models and frameworks were developed and empirically tested
to assess the relationship between customer perceived value (CPV) and customer
satisfaction. Some research was purely based on tourism sector. One of the pioneering
model is Dodds and Monroe (1985) Price Quality Model. This framework emphasis on
quality and price.
Trade off model by Zeithaml (1988), is a unidimensional model to measure perceived value
by using quality and price as key variables to measure the customer perception toward the
products and services (Waheed & Hassan, 2016). It is one of the most widely used term of
perceived value which is defined as “the consumer’s overall assessment of the utility of a
17
product (or service) based on perceptions of what is received and what is given”. Within
this definition, Zeithaml (1988) identified four diverse meaning of value: Value is low
price, value is whatever consumer want in a product, value is the quality consumer get for
the price paid and value is what consumer gets for what they give.
The majority of past research on perceived value has focused on the fourth definition
(Bojanic, 1996; Zeithmal, 1985). The most common definition of value is the ratio or trade-
off between quality and price (Monroe, 1991), which is a value-for-money
conceptualization. Clearly, these two components (quality and price) have different and
differential effects on perceived value for money. Zeithaml (1988) argued that some
consumers perceive value when there is a low price, others perceive value when there is a
balance between quality and price. Thus, for different consumers, the components of
perceived value might be differentially weighted. Additionally, Zeithaml (1988) found that
some consumers obtained value from all relevant ‘get’ and ‘give’ components, leading to
her definition of perceived value. In other words, perceived service value is trade-offs of
customer perceptions between what they (customers) give for the service they receive.
Petrick (2002) has produced a multidimensional scale (SER-PERVAL) for measuring the
perceived value of services, based on the Zeithmal (1998) model. There are five dimensions
that has been constructed to measure this scale which are quality, monetary price, behaviour
price, reputation and emotional responses (Petrick, 2002)
Multi-dimensional approaches of assessing CPV associated with services or tangible
products are proposed with the emergence of service sector (Waheed & Hassan, 2016).
Typology for Consumer Value introduced by Holbrook (1999) incorporated variables such
as efficiency, excellence, play, aesthetics, ethics, status, esteem and spirituality as part of
CPV. The Value Hierarchy Model by Woodruff (1997), a widely adopted multi-
dimensional model to assess Customer Perceived Value related with services. The model
identifies about the value perception that keeps on changing and the need to understand the
buyer behaviour of decision making. The model has been used on products and
organizations to understand measures of value in these areas (Moosa & Hassan, 2015).
Alternatively, Consumption Value framework developed by Seth, Norman and Newman
(1991) is a multi-dimensional theory with five consumption values that influences
consumer choice behaviour.
18
A study conducted by (Guterman, 2015) elaborates that customer perceived value is a
customer’s assessment of all the advantages and disadvantages of the offer based on the
real perception of what is given (Zeithaml 1988, 14; Kotler & Armstrong 2010). Also, the
most often perceived value is understood as the trade-off between gains and charges,
therefore, customer satisfaction appears when the total customer benefit adequately
correlates with the total customer cost.
2.4 Effects of Customer Expectations on Customer Satisfaction.
Customers are viewed as champions in modern marketing as they seek to satisfy a set of
needs and wants that are partly related to the essential services offered .Further it is in the
customer expectations on how these needs and wants are met consistently form
impressions about the actual service offered them in comparing with their own
expectations (William, Appiah, & Botchway, 2016). Arguably, the performance of every
organization depends on how well it satisfies its sophisticated customers. Unsatisfied
customers with a product or service are customers that can opt for another company or
spread negative advertising by ‘word-of-mouth’. Aside from customer dissatisfaction, there
are more finally satisfied or indifferent customers that can be drawn to the competition.
In the study by (Forozia et. al., 2013) on customer satisfaction in hospitality industry case
study of middle east tourists at 3star Hotels in Malaysia, customer expectation is defined
as beliefs and sensitivities that each customer has about service derived from what they
require from it and supposes it to do. According (Amissah, 2013) in the academic study
on tourist satisfaction with hotel services in Cape Coast and Elmina, Ghana, expectations
is described as the desires or wants and are in most cases different from what the customer
gets.
A study conducted by (Campos & Marodin, 2012) offers a description of the process in
which the customers create their expectations in relation to the performance of their
providers. According to (Campos & Marodin, 2012) dissatisfaction in services is caused by
existing gaps between the expectations and the results perceived and they identified the
five potential gaps in services as derived by Parasuraman, Zeithaml and Berry (1985) as
follows: consumer expectations and management of perception of expectations;
perceptions of management of consumer expectations and specifications of quality in
services; between the specifications about the quality of service and the service in fact
given; between the service offered to the client and that which is communicated about the
19
service; between the expectations of the consumer and the perceptions of the service
received.
2.4.1 Levels of Customer Expectation
Study conducted by (Yongchaitrakool, 2014) on the effect of customer expectation ,
customer experience and customer price perception on customer satisfaction in hotel
industry indicates that in any service oriented industry, the element of customer
expectation is significant in order to provide quality service. Further in his study
(Yongchaitrakool, 2014) argues that there are two levels of customer expectation, desired
and adequate. The desired expectation is what customers expect to receive from the service
providers, whereas adequate expectation is defined as the service performance that
customers can accept. The desired expectation is in the higher level than the adequate
expectation. It is related to the customers’ evaluation (Yongchaitrakool, 2014).
Brink and Berndt (2008) came up with the explanations that the gap between the desired
and adequate service is called zone of tolerance and that customers are able to accept the
zone of tolerance at different levels, depending on the provided service and other
conditions. For example, if the price is increased, customers tend to have more desired
expectation (zone of tolerance is decreased) which means that they expect to receive more
service. An argument by (Yongchaitrakool, 2014) states scholars mention the relationship
between customer expectation and satisfaction in that customers will be satisfied if a
company or hotel provides services above their expectation as customers who pay for
service or product, normally expect that this service or product is worth their payment.
Mason and Simmons (2012) also connect service quality with customer expectation as they
found that customer expectation occurs when customers predict the service quality by using
their own characteristics, attitudes and preference. Customers perceive the services
differently depending on their perception and expectation whilst customer satisfaction will
be judged by the provided service and customer expectation(Yongchaitrakool, 2014).
According to a study by (William et. al., 2016) on assessment on customer expectations
in service quality, customer expectations are beliefs on service delivery that serve as
standard against the performance done. Further, customers develop a certain set of
expectations based on a variety of inputs and consider their previous experiences with
services in general and with each specific kind of service they have encountered.(William
et. al., 2016) .Customers also develop expectations when they hear about services from
20
others. If you hear that your friend was delighted with her stay at a particular hotel, you are
more likely to expect that same level of service if you stay there. Customers also form
expectations based on service provider’s advertisement and promotions (William et. al.,
2016).
In the study conducted by (Mohajerani, 2012) on customer satisfaction modelling in hotel
industry a case study of Kish Island in Iran customer expectation is described as mutable
internal standard which is based on a multitude of factors including needs, objectives, past
personal or vicarious experiences with the same establishment Hotel, with similar
establishments, and the availability of alternatives. (Mohajerani, 2012) goes ahead to adopt
the customer expectation scale had been adopted from a study from Turkyilmaz and Ozkan
in 2007 indicating that customer expectation had four parts which were: Expectation for
fulfilment of personal need; Expectation for overall quality; Expectation for product quality
and expectation for service quality.
An underpinning theory drawn by Oliver (1977 and 1980) on expectation disconfirmation
theory. This theory posits that expectations, coupled with perceived performance, lead to
post-purchase satisfaction. This effect is mediated through positive or negative
disconfirmation between expectations and performance. If a product or service outperforms
expectation post-purchase satisfaction will result (positive disconfirmation). If a product or
service falls short of expectations the consumer is likely to be dissatisfied (negative
disconfirmation). The dominant model of customer satisfaction is the expectation
disconfirmation theory. Disconfirmation theory declares that satisfaction is mainly defined
by the gap between perceived performance and expectation which is promising approach
to explain satisfaction (Awara & Anyadighibe, 2014).
Expectations are formed by personal experience and understanding of environment, taking
into account practice feasibility based on expectancy theory. Perceived performance is a
relatively less influenced estimation of performance based on objective judgement rather
than emotional reactions. Expectation disconfirmation occurs in three forms: Positive
disconfirmation which occurs when perceived performance exceeds expectations;
Confirmation which occurs when perceived performance meets expectations; Negative
disconfirmation which occurs when perceived performance does not meet and is less than
the expectations (Awara & Anyadighibe, 2014).
21
Further Awara and Anyadighibe argues in 2014 that, it is more feasible for customers to be
satisfied if the service performance meets (validation) or exceeds (positive confirmation)
their expectations. Quite the reverse customers are more likely to be dissatisfied if the
service performance is less than what they expected (negative disconfirmation) discuss that
taking expectation disconfirmation as the only determinant of satisfaction. Therefore, this
theory does not cause the fact that if high expectations are confirmed, it would much more
lead to satisfaction than confirmation of low expectations. To resolve this drawback
perceived performance is included as an additional determinant of satisfaction. In other
words, the only way to really ensure satisfaction is to empirically create disconfirmation by
manipulating expectations and performance (Awara & Anyadighibe, 2014).
2.4.2. Roles of Customer Expectation.
A Study conducted by (Ali, Leifu, Yasirrafiq, & Hassan, 2015) on the roles of customer
expectation on customer satisfaction shows that information of customer expectation is
important because this factor influences the customer behaviour and management within
the limited resources can manage the expectations of the customers. Normally expectations
a customer have about a product or service depend upon the information gathered from the
available resources. Customer expectations could be influenced by the advertising,
promotions and positive word of mouth. When customers have high expectations, and the
reality fall short, they will be disappointed and will likely rate their experience as less than
satisfying. For this reason, a luxury resort, for example, might receive a lower satisfaction
rating than a budget motel even though its facilities and service would be deemed superior
in ‘absolute’ terms.” (Mubiri, 2016).
According to (Ali et. al., 2015) there are many quotations expressing the customer
expectations in different ways like “It is necessary to exceed customer expectations”. It is
very important that if the product or service fulfils the expectation of the customer they will
give more preference of that product or service next time. There is one famous statement
regarding this as “If a customer expects a bad level of quality and receives it, he or she will
reduce his or her level of preference for the brand”. Excellent customer service and high
customer satisfaction begins with understanding customer expectations. It has to be noted
who your customers are and what they want. (Mubiri, 2016).This is why customer
expectation could not be ignored while studying the customer satisfaction because it plays
vital role in customer behaviour regarding future repurchases decision (Ali et. al., 2015).
22
A study conducted by (William et. al., 2016) explains that customers develop a certain set
of expectations based on a variety of inputs and consider their previous experiences with
services in general and with each specific kind of service they have encountered. Customers
also develop expectations when they hear about services from others. If you hear that your
friend was delighted with her stay at a particular hotel, you are more likely to expect that
same level of service if you stay there. Customers also form expectations based on service
provider’s advertisement and promotions. From the same study several levels of customer
expectations have been highlighted as adapted by (Zeithaml and Bitner, 1996; Kurtz and
Clow, 1998) as follow: first, Ideal service level is the highest level of service expectations
defined as the ‘wished-for’ level of service, which customers hope to receive in an idealised
way, secondly the desired service level is lower than the ideal service level. However, it is
the level of performance the customer wants to receive from the service and a blend of what
customers believe can be and should be delivered.
Thirdly, adequate service level which is the lowest level of service expectations defined as
the minimum level of service the customer will tolerate and accept without being frustrated.
Further Willian et. al., (2016) discusses the zone of tolerance referring to the gap between
desired service and adequate service levels. Services performed in this zone will be
accepted as heterogeneity by the customers. If the performance is above the ideal service
level, customer will be very pleased. When the performance falls below the adequate
service level, customers will be dissatisfied and have a negative impression. Lastly,
predicted service level is the level of service customers actually expect from the service
organisation. The predicted service level can range from the ideal level of service to the
adequate level of service by modifying the customers’ expectations accordingly in all
circumstances of service.
2.5 Chapter Summary
Chapter two of this study gives in-depth literature review of the objectives of the study as
well as identifying the depended and independent variables of the study. A review of the
literature indicates that dimensions and models of service quality, perceived value and
customer expectations have an impact on customer satisfaction and how customer
satisfaction is depended on these dimensions. Following chapter two is chapter three which
identify the research methodology and discuss further on the sampling design techniques
and data collection methods and procedures
23
CHAPTER THREE
3.0 RESEARCH METHODOLOGY
3.1 Introduction
This chapter sets out various stages that were followed in completing the study. These
stages are research design, target population, sampling design, data collection instruments,
data collection procedures and data analysis.
3.2 Research Design
Researchers have defined research design in different ways but depicting similarity.
According to (Sekaran, 2013),it involves a sequence of coherent decision-making choices.
It is defined as a blue print for data collection, types of measurement and types of analysis
to be conducted. Also, research design as procedure to be followed when conducting a
study which informs when the study is to be conducted, from whom data will be collected,
and the condition that the data will be obtained (Cooper & Schindler, 2008) There are a
number of research designs with the main categories; exploratory, descriptive, causal and
correlational design (Sekaran, 2013).
Sekaran (2013) explains that descriptive studies are undertaken to understand the
characteristics of organizations that follow certain common practices. Therefore, offers the
researcher a profile on relevant aspects of the phenomena of interest from an individual,
organizational, industry-oriented, or other perspective. Thus, such information may be vital
before even considering certain corrective steps, for instance if the organization consider
changing its practices. This study adopted descriptive research design and the phenomena
of study were the service quality, customer perceived value and customer expectation. The
main data collection instruments were Questionnaires and developed based on the
components of the SERVQUAL Model.
3.3 Population and Sampling Design
3.3.1 Population
Sekaran (2013) , defines a population as the entire group of people, events, or things of
interest that the investigator wishes to investigate.The target population for a study is the
entire set of units for which the survey data are to be used to make references (Cooper &
24
Schindler, 2008). The target population of this study was USIU-Africa community who
had stayed in 4-5 star hotels between November 2017 and April 2018 (last 6 months as to
the date of data collection).
3.3.2 Sampling Design
3.3.2.1 Sampling Frame
The Sampling frame consist of all USIU-Africa students and faculty who had stayed in 4
to 5-star hotel six months prior to the research. Due to the nature of research, the region of
stay was an important aspect of the population hence the population of student was
classified under region. This was captured from USIU Africa fact sheet (2016) and
presented as on table 3.1. The questionnaires were distributed conveniently to students and
faculty at the time of data collection.
Table 3. 1 Sample Frame
Classification Number Percentage
Domestic students 5021 81.3%
International students 917 14.8%
Faculty 241 3.9%
Total 6179 100%
Source: USIU Africa (2017)
3.3.2.2 Sampling Technique
Convenience sampling is a method that includes elements that were met at the appropriate
time in the location of information collection (Gravetter & Forzano, 2015). It is one of the
types of random sampling since the selection of samples is carried out in a random manner.
It selects the elements that are or appear to be most readily available at the time of data
collection. Convenient sampling has been used in the service industry such as marketing
and customer satisfaction to gather the most updated information as it is collected usually
during or not a long time after the product or service consumption as a feedback mechanism
(Guterman, 2015). Further, previous studies have shown the method is very popular
especially in the tourism industry as it is very easy and cheap to conduct it (Gravetter &
Forzano, 2015). In such it is estimated in a muddle class economic set up, 70 to 90% of the
population have used or experienced 4 to 5 start hotel services. Convenience sampling in
25
this study was used to identify only those who had stayed in the hotel for the last six months
prior to the study.
3.4 Sample Size
This study adapted the formula developed by Cochran to determine the sample size (Glenn,
2009).
Where: e is the desired level of precision or margin of error, p is the (estimated) proportion
of the population which has the attribute in question, and q is 1 – p. With the assumption
of 90% of the population have used 4-5star hotels, so p = 0.9. 95% confidence, (gives us Z
values of 1.96) and at least 5 percent—plus or minus—precision. The q value is 1-0.9=0.1
((1.96)2 (0.9) (0.1)) / (0.05)2 = 138.
The total sample size = 138 as presented on the following table
Table 3. 2a Sample Size
Classification Number Percentage Sample size
Domestic students 5021 81.3% 112
International students 917 14.8% 20
Faculty 241 3.9% 6
Total 6179 100% 138
Source: USIU Africa (2017)
3.5 Data Collection Methods
Primary data was used for this study. The data was collected using a standardized
questionnaire comprising of 22 statements derived from the works of Cronin and Taylor
(1992) which involved the modification of SERVQUAL. The questionnaire was modified
to include a section that was used to measure factors influencing customer satisfaction. The
questionnaire comprised of three parts. The first part required the respondents to give their
demographic information. The aim of this part was to provide information on the type of
26
the customer. The second part required the respondents to rate the extent to which they
believed the indicated factors influences customer satisfaction. Part three of the
questionnaire require the respondents to rate their perception levels with the services
provided by the hotels. Likert type scale ranging from 1 to 5 was adopted.
3.6 Research Procedures
3.6.1 Pilot Study
Pilot testing is a vital step before conduct the actual survey process. It examined the
reliability and effectiveness of questionnaire that certify the good quality of the survey
(Trakulmaykee, Lim, & Trakulmaykee, 2013). Small quantity and potential respondents
who have similarity with each other should done the pilot testing. Prior to the actual data
collection, the supervisor approved the questionnaire. Amendments for changes was made
in order to have a better understanding for future respondents. The revised questionnaires
were handed out to 10 respondents for pilot and their feedback was used to correct the
questionnaire before the final data collection.
3.6.2 Reliability of Instruments
The internal consistency of a measurement scale could be determined in many ways, but
the most frequently used is the Cronbach’s coefficient alpha. The value of 0.7 is deemed
acceptable, depending on the nature and purpose of the scale as cited by Pallant (2013).
This was used as the measurement index and of the pilot, the value was 0.81. This was
higher than the reliability of the final data presented on table 4.9.
3.6.3 Validity of Instruments
Confirmatory Factor Analysis (CFA) was conducted using maximum likelihood
estimation, to validate the 5 service quality attributes of the SERVQUAL instrument;
reliability, assurance, tangibles, empathy, and responsiveness (Tefera et. al., 2017).
3.6.4 Administration of Instruments
A questionnaire design can affect the overall quality of research conclusions. A well
questionnaire design is determined by the quality of data that are getting from questionnaire
(Makienko & Bernard, 2012). The questionnaire was adopted from prior research studies
to guarantee the high validity of the questionnaire. The questionnaire had Section A and B.
Section A was the respondents’ demographic profile with 10 questions: gender, age,
27
residency, reason for travel, preferred food and drinks, suggestions and response to
suggestions, number of times stayed in the hotel, number of days in the hotel, and lastly the
services consumed in the hotel. Section A applied nominal and ordinal scale. Section B was
about the independent variables and dependent variable which were reliability, assurance,
tangibles, empathy, responsiveness, toward 4-5 star hotels in Nairobi and Mombasa. Three
IVs consist 5 questions and another three IVs consist 4 questions which discusses about the
elements that influence local tourist satisfaction toward budget hotel by using the Likert
Scale (non-comparative techniques) which is interval scale of measurement. It made up of
an extent of 1-5 starting (1=Strongly Disagree; 2=Disagree; 3=Neutral; 4=Agree;
5=Strongly Agree). DV include 4 questions in the questionnaire. All questions were
designed with closed-ended questions to compute the responses easily.
3.6.5 Ethical Considerations
It is crucial that all researchers are aware of research ethics. Ethics relate to the researcher
who is conducting the study and should be aware of basic responsibilities and obligations
and the respondent who has an obligation to cooperate and be truthful to a survey or
interview. (Sekaran, 2013). The study therefore was conducted with fairness and justice
by eliminating all potential risks. Permission to conduct the study was required from USIU-
Africa research office and from individuals involved. Respect for persons involved was
obtained as they had the right to choose to either participate or not. Confidentiality and
anonymity of respondents was highly considered as well as informed consent. After a full
explanation of the nature of the study, participants were asked to give either verbal consent
of their willingness to participate in the study.
3.7 Data Analysis Methods
Data analysis is a way of gathering, modelling and transforming data with the aim of
highlighting information. It is a practice in which raw data is ordered and organized so that
useful information can be extracted from it (Cooper & Schindler, 2005). Charts, graphs,
and textual write ups formed part of the data analysis for this study. After collecting the
data, was analysed by using Statistic Package for Social Sciences program (SPSS). To deal
with the large numbers, descriptive statistics was used to analyse the effect of service
quality, customer expectation, experience and perceived value on customer satisfaction.
Further, inferential statistics was used to test the relationship between the dependent and
independent variables (Yongchaitrakool, 2014).
28
3.8 Chapter Summary
This chapter has described and justified the research methodology to be used for the
research. The chapter has explained the research design, the sampling design including
population, sampling technique, sampling frame and sample size. The chapter has also
defined the data collection method and detailed the research procedures. Lastly, it has
considered the data analysis techniques used. The next chapter present the analysis of the
study findings. Subsequently, the findings are discussed in chapter five together with
conclusions and recommendations.
29
CHAPTER FOUR
4.0 RESULTS AND FINDINGS
4.1 Introduction
The general objective of this study was to investigate the factors influencing customer
satisfaction in the hotel industry in Kenya. This chapter presents the research findings based
on the data collected from university students and staffs that had visited 4 to 5 start hotels
for the last six months from the date of the research on April 2018. The presentation is done
based on the demographic information and specific study objectives.
4.2 Response Rate
Total of 138 questionnaires were given out and 135 were collected back. This presents
97.8% of the response rate as indicated on table 4.1.
Table 4. 1 Response Rate
Questionnaires Frequency Percentage
Responded 135 97.7%
Did not respond 3 2.3%
Total 138 100.0%
4.3 Demographic Characteristics
Demographic information captured during the study includes: gender, age, residency,
reason for travel, preferred food and drinks, suggestions and response to suggestions,
number of times stayed in the hotel, number of days in the hotel, and lastly the services
consumed in the hotel. This section outlines the findings of each of the demographics of
the respondents.
4.3.1 Gender of Respondents
The number of males participated in the study were more than the number of female at 58%
and 42% respectively. Figure 4.1. Indicates this.
30
Figure 4. 1 Gender.
4.3.2 Age Bracket
The age bracket for the respondents was: 18 to 35 years, 36 to 55 years, 56 to 75 years and
75 years and above. As indicated on figure 4.2, most (96.3%) of the 4 to 5 start hotel users
involved in the study were youths at age 18 to 35 years followed by 3.7% of users aged 36
to 5 5years.
Figure 4. 2 Age Bracket
4.3.3. Residency of Living
On the residence of stay, 75.6% were Kenyan followed by respondents who resided
internationally at 13.4% and lastly, 11.0% were east African residents. This shows the
respondents were varied and presents different views as indicated on figure 4.3.
Male58%
Female42%
18-35 years, 96.30%
36-55 years, 3.70%
31
Figure 4. 3 Residence of Living
4.3.4 Number of Times Visited the Hotel
Respondents were asked to state approximate number of times they have visited hotel for
the last 6 months. There was clear sequence on the dropping of percentage; majority had
visited the hotel for the first time 47.8%, followed by two times at 24.6%, those who had
visited for three times were 13.4%, and the rest was less than 10%: 5 to 10 times at 9%,
weekly at 1.5%, every time one tours the country at 2.2% and monthly at 1.5%. Figure 4.4
shows this.
Figure 4. 4 Number of Times Visited the Hotel
Kenyan, 75.6
East Africa, 11.0
International, 13.4
47.80%
24.60%
13.40%
9%
1.50% 2.20% 1.50%
0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
First visit Second visit Third visit 5-10 visits Weekly Every time Ihave touredthis country
Once in amonth
32
4.3.5 Number of Days in the Hotel
On the number of days that one had spent on the hotel, 39% had spent 3 to 5 days, 36% had
spent less than 3days, 24% had spent 1 to 2 weeks and only 1% had spent 1 month in the
hotel. This shows majority of the hotel visitors were there for shorter period of time as
indicated on figure 4.5.
Figure 4. 5 Number of Days in Hotel
4.3.6 Reason of Travelling
The reason for travel varied from an individual to another. The accumulation of multi-
respondents showed 30.1% travelled for pleasure, 19.2% for work, 12.8% for business,
12.2% for other reasons. Those who travelled for less than 10% travelled for holiday (95)
and visiting people (5.8%). These findings are presented on figure 4.6.
Figure 4. 6 Reason of Travel
Less than 3 days36%
3 to 5 days39%
1 to 2 weeks24%
1 month1%
19.20%
30.10%
9.00%
12.80%10.90%
5.80%
12.20%
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
30.00%
35.00%
Work Pleasure Holiday Business Adventure Visitingpeople
Other
33
4.3.7 Feedback on Expectation.
There was a question on feedback from the services of the hotel. 74.1% indicated they got
the preferred kind of food and drinks in the hotel. 29.5% indicated they had raised
suggestions, complements or complains to the management of the hotel. While 43.4%
suggested the management took action on their complains, suggestions or complements
during their period of stay. Table 4.2 indicates this.
Table 4. 2 Feedback on Availability and Feedback from management.
Yes No
Get preferred kind of foods and drinks in the hotel 74.1% 25.9%
Raised suggestions, complains, complements to the management of
the hotel
29.5% 70.5%
Management take any action on suggestions, complains, complements 43.4% 56.6%
4.3.8 Services Majorly Used.
Besides accommodation and meals, figure 4.7 shows other services that the visitors used in
the hotel. They include swimming pool at 33.9%, SPA at 15.4%, fitness center at 11.5%
and others were below 10%. They include transport services at 8.8%, club at 8.4%,
conference at 6.2%, business at 5.7%, casino at 4.8%, kids friendly services at 4.4.%, and
other services at .9%.
Figure 4. 7 Services
Transport
CasinoSwimming pools
Kidsfriendlyservices
SPAConfere
nceBusinesscentre
Fitnesscentre(gym)
Club Others
Services 8.80% 4.80% 33.90% 4.40% 15.40% 6.20% 5.70% 11.50% 8.40% 0.90%
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
30.00%
35.00%
40.00%
34
4.4 Descriptive Analysis of Study Variables
4.4.1 Hotel Service Quality
Hotel quality had five categories of questions each on a scale of 1 to 5: 1 being strongly
agree, 2 agreed, 3 as neutral, 4 as disagree and lastly 5 as strongly disagree. The categories
of questions were on tangibility (T), reliability (R), responsiveness (RE), assurance (AS)
and empathy (EM). The question and response on tangibility were: Does the hotel have
modern equipment e.g. furniture, telephones, flat screen, cutlery, safe box etc. response,
Strongly Agree at 62.1% and Agree at 21.2%; The physical facilities at the hotel are
visually appealing, response of Strongly Agree at 60.8% and Agree at 23.1%. The menu
offers a wide variety of foodstuff to choose from, response of Strongly Agree at 48.8% and
Agree at 22.5%; Value added activities such as live bands, music etc. are of great quality,
response of Strongly Agree at 38.9% and Agree at 22.1%; and lastly, the hotel has a serene
environment with great ambience, response of Strongly Agree at 55.0% and Agree at
24.4%. In all, strongly agree and agree were highly ranked.
The response on questions on reliability were also highly ranked as strongly agreed and
agreed as follow: Orders are served in a timely manner, response of Strongly Agree at
30.3% and Agree at 44.7%; Hotel management shows interest in solving customer issues
once raised, response of Strongly Agree at 37.9% and Agree at 37.1%; Personnel responds
to customers promptly, response of Strongly Agree at 30.5% and Agree at 42.0%; and
lastly, Hotels services and menus are available at the right place, response of Strongly
Agree at 40.9% and Agree at 33.3%.
Questions on responsiveness were also highly ranked as agreed and strongly agreed as
follow; Personnel in the hotel communicate to customers exactly when services will be
performed, response of Strongly Agree at 20.8% and Agree at 43.9%; Hotel staff give
prompt service to customers, response of Strongly Agree at 22.0% and Agree at 43.9%;
Personnel are always willing to help customers, response of Strongly Agree at 34.8% and
Agree at 40.2%; Hotel staff are never too busy to respond to customers’ requests, response
of Strongly Agree at 24.2% and Agree at 41.7%.
Questions on assurance and response were, I find the hotel facilities to be secure, response
of Strongly Agree at 48.5% and Agree at 34.1%; Food’s well cooked with wide varieties
for selection, response of Strongly Agree at 40.3% and Agree at 34.3%; Personnel are
consistently courteous with customers, response of Strongly Agree at 38.1% and Agree at
35
38.1%; The staff are very helpful to customers and competent in their work, response of
Strongly Agree at 37.6% and Agree at 38.3%; and food is handled and served in clean
environment as well as the rooms are consistently kept clean with the rest of the hotel
premises, response of Strongly Agree at 44.0% and Agree at 38.1%.
Lastly, questions on empathy and responses were: the hotel staff gives customers individual
attention, response of Strongly Agree at 41.8% and Agree at 34.3%; Hotel staff are always
available to serve customers anytime, response of Strongly Agree at 40.2% and Agree at
33.3%; The hotel treats each customer with respect, response of Strongly Agree at 51.1%
and Agree at 23.3%; The hotel has the customers best interests at heart, response of
Strongly Agree at 42.5% and Agree at 33.6%; and the hotel staff understand the specific
needs and preferences of their customers, response of Strongly Agree at 42.5% and Agree
at 29.9%.
All the responses were high as strongly agreed and agreed and were as indicated on table
4.3.
36
Table 4. 3 Service Quality on Customers.
SA A N D SD
T1 Does the hotel have modern equipment e.g.
furniture, telephones, flat screen, cutlery, safe
box
62.1 21.2 7.6 4.5 4.5
T2
The physical facilities at the hotel are visually
appealing
60.8 23.1 8.5 4.6 3.1
T3 The menu offers a wide variety of foodstuff to
choose from
48.8 22.5 17.1 7.8 3.9
T4 Value added activities such as live bands, music
etc are of great quality
38.9 22.1 23.7 6.9 8.4
T5 The hotel has a serene environment with great
ambience
55.0 24.4 8.4 6.9 5.3
R1 Orders are served in a timely manner 30.3 44.7 18.2 3.0 3.8
R2 Hotel management shows interest in solving
customer issues once raised
37.9 37.1 16.7 5.3 3.0
R3 Personnel responds to customers promptly 30.5 42.0 19.8 3.8 3.8
R4 Hotels services and menus are available at the
right place
40.9 33.3 15.2 6.8 3.8
RE1 Personnel in the hotel communicate to customers
exactly when services will be performed
28.0 43.9 20.5 6.1 1.5
RE2 Hotel staff give prompt service to customers 22.0 43.9 22.7 7.6 3.8
RE3 Personnel are always willing to help customers 34.8 40.2 15.9 6.1 3.0
RE4 Hotel staff are never too busy to respond to
customers’ requests
24.2 41.7 19.7 7.6 6.8
AS1 I find the hotel facilities to be secure. 48.5 34.1 10.6 3.0 3.8
Service quality on customer – table continuation SA A N D SD
AS2 Food’s well cooked with wide varieties for
selection
40.3 34.3 14.2 8.2 3.0
AS3 Personnel are consistently courteous with
customers
38.1 38.1 16.4 4.5 3.0
AS4 The staff are very helpful to customers and
competent in their work
37.6 38.3 13.5 8.3 2.3
AS5 Food is handled and served in clean environment
as well as the rooms are consistently kept clean
with the rest of the hotel premises.
44.0 38.1 8.2 3.0 6.7
EM1 The hotel staff gives customers individual
attention
41.8 34.3 12.7 5.2 6.0
EM2 Hotel staff are always available to serve
customers anytime
40.2 33.3 17.4 5.3 3.8
EM3 The hotel treats each customer with respect 51.1 23.3 14.3 6.0 5.3
EM4 The hotel has the customers best interests at heart 42.5 33.6 12.7 8.2 3.0
EM5 The hotel staff understand the specific needs and
preferences of their customers
42.5 29.9 12.7 6.0 9.0
37
4.4.2 Hotels Perceived Value Quality
The description on the hotel perceived value quality had two sets of questions; functional
value and the symbolic value. Unlike questions on service quality that were highly ranked
as strongly agreed and agreed, the questions on perceived value quality were different.
Questions on functional value were; Hotel services are worth the money ranked highly as
agreed at 37.6% followed by strongly agreed at 28.6%. other questions were ranked
differently: hotel services are fairly priced highly ranked as agreed at 36.4% and neutral at
32.6%; hotel services are reasonably priced highly ranked as agreed at 37.1% and neutral
at 31.1%; and lastly, hotel is economical highly ranked as neutral at 41.2% and agreed at
28.2%.
Questions on symbolic value were ranked as strongly agreed and agreed as follow: Hotel
has good reputation, strongly agreed at 53.5% and agreed at 31.0%; Quality of hotel is
outstanding strongly agreed at 45.3% and agreed at 35.9% and lastly, hotel is well thought
off as strongly agreed at 46.1% and agreed at 32.8%. As indicated on table 4.4.
Table 4. 4 Perceived Value Quality.
SA A N D SD
FV1 hotel services are worth the money 28.6 37.6 24.1 6.8 3.0
FV2 hotel services are fairly priced 15.9 36.4 32.6 9.1 6.1
FV3 hotel services are reasonably priced 16.7 37.1 31.1 10.6 4.5
FV4 Hotel is economical 12.2 28.2 41.2 10.7 7.6
SV1 Hotel has good reputation 53.5 31.0 10.1 1.6 3.9
SV2 Quality of hotel is outstanding 45.3 35.9 13.3 2.3 3.1
SV3 Hotel is well thought off 46.1 32.8 10.9 5.5 4.7
4.4.3 Effect of Customer Expectations
Questions on customer expectations were highly ranked as either strongly agreed and
agreed only. The hotel is of good value for the money was rated strongly as agreed at 41.6%
and strongly agreed at 32.8%. Hotel premises are safe and secure was, agreed at 45.7% and
strongly agreed at 38.0%; Employees are never too busy to respond was, agreed at 39.8%
and strongly agreed at 29.7%; the hotel staff is friendly was, agreed at 42.5% and strongly
agreed at 39.4%. Efficiency at the check-in and check-out of the accommodation was rated
strongly as strongly agreed at 42.9% and the hotel has a variety of restaurants, bars,
entertainment and other activities as also strongly agreed at 41.1% and agreed at 33.3%.
Lastly, the hotel meals are of high quality and the hotel is easily accessible were ranked
strongly as a greed and strongly agreed as indicated on table 4.5.
38
Table 4. 5 Customer Expectations.
SA A N D SD
CE1 The Hotel is of good value for
money
32.8 41.6 16.0 7.2 2.4
CE2 Hotel premises are safe and secure 38.0 45.7 9.3 3.1 3.9
CE3 Employees are never too busy to
respond
29.7 39.8 20.3 5.5 4.7
CE4 The hotel staff is friendly 39.4 42.5 10.2 3.9 3.9
CE5 Efficiency at the check-in and
check-out of the accommodation
42.9 35.7 12.7 5.6 3.2
CE6 The hotel has a variety of
restaurants, bars, entertainment
and other activities.
41.1 33.3 17.1 5.4 3.1
CE7 The hotel meals are of high quality 37.2 42.6 12.4 5.4 2.3
CE8 The hotel is easily accessible 34.9 42.6 14.7 4.7 3.1
4.4.4 Customer Satisfaction
On the dependent variable, respondents were asked to rank the factors based on; very
dissatisfied (VD), dissatisfied (D), Neutral (N), satisfied (S) and lastly, very satisfied (VS).
The respondents highly selected satisfied and very satisfied as follow: physical facilities
response were ranked highly as very satisfied at 39.5%, and satisfied at 34.1%. Others
ranked as very satisfied and satisfied were environment at 44.5% (VS) and 32.0% (S) and
services at 37.2% (VS) and 34.9% (S). Equipment were ranked as 41.4% (S) and 32.0%
(VS); personnel at 47.3% (S) and 25.6% (VS); Menu was ranked at 37.1% (S) and 29.0%
(VS). Table 4.6 shows the output.
Table 4. 6 Customer Satisfaction.
VD D N S VS
CS1 Physical facilities 7.0 9.3 10.1 34.1 39.5
CS2 Equipment 7.0 7.8 11.7 41.4 32.0
CS3 Personnel 5.4 9.3 12.4 47.3 25.6
CS4 Menu 4.8 9.7 19.4 37.1 29.0
CS5 Environment 10.2 3.9 9.4 32.0 44.5
CS6 Service 7.0 9.3 11.6 34.9 37.2
CS7 Value added services 5.5 12.5 16.4 39.8 25.8
CS8 Overall rating 4.7 6.2 10.9 41.9 36.4
39
4.5 Inferential Analysis
Inferential statistical was carried out to understand the data in deeper meaning. Also,
different tests were conducted as statistical assumption before testing the specific
objectives. The tests conducted were Factor analysis, Cronbach’s alpha, Inter-item
correlation, while statistical assumptions test were Normality test, and Multi-collinearity
tests. Other tests were correlation and regression model analysis.
4.5.1. Factor Analysis
Under factor analysis, three key tests were conducted; exploratory factor analysis (EFA),
factor pattern loading and lastly, commonality and rotational method by promax with
Kaiser Normalization.
4.5.1.1 Exploratory Factor Analysis
To determine the data factorability, Kaiser Meyer-Olin Measure of Sampling Adequacy,
Bartlett’s Test of Sphericity and communalities was done. Questions that did not relate to
construct were extracted from the analysis. As indicated in table 4.7, the factor derived had
a strong Kaiser-Meyer result of 0.913 (the closer to 1, the stronger the adequacy). The
Bartlett’s test of Sphericity was significant at X2 (1035, N=46) = 5676.178, p<.05. The
factor was adequate for extraction of the component since Kaiser-Meyer-Olkin Measure
was greater than 0.6 and the Bartlett’s test was significant (p<.05).
Table 4. 7 KMO and Bartlett's Test
Kaiser-Meyer-Olkin Measure of Sampling Adequacy. .913
Bartlett's Test of Sphericity
Approx. Chi-Square 5676.178
Df 1035
Sig. .000
4.5.1.2 Total Variance Explained
As indicated on table 4.8, only four factors were extracted from the study which represented
an accumulation of 70.998% on the sum of square loading. Of the four factors, the
eigenvalue is greater than 4.0 with total eigenvalue of not less than 2. This shows the four
factors are strong and represents 70.998% of the total variable of the study involved in this
40
study. The factors extracted were; service quality (SQ), perceived value quality (PQ),
customer expectation (CE) and customer satisfaction (CS).
Table 4. 8 Total Variance Explained
Component Initial Eigenvalues Extraction Sums of Squared
Loadings
Rotation
Sums of
Squared
Loadings a
Total % of
Variance
Cumulative
%
Total % of
Variance
Cumulative
%
Total
1 21.603 46.963 46.963 21.603 46.963 46.963 19.420
2 6.448 14.017 60.980 6.448 14.017 60.980 14.715
3 2.655 5.771 66.752 2.655 5.771 66.752 6.631
4 1.954 4.247 70.998 1.954 4.247 70.998 15.561
Extraction Method: Principal Component Analysis.
a. When components are correlated, sums of squared loadings cannot be added to obtain
a total variance.
4.5.1.3 Communality and Pattern Matrix
The pattern matrix indicates the exact variables extracted from each factor identified on the
total variance explained matrix. The pattern matrix indicates the exact variable to be used
on each factors. While communality measures the percent of variance in a specified
variable and is interpreted as the reliability of the indicator. A low value could indicate that
the variable does not fit well with other variables in its component, and it is unwanted. The
standard measure is above 0.32 but as indicated the values for communalities were above
0.5 demonstrating acceptable factorability for all items. The four component with factor
loading of greater than .5: service quality, perceived value quality, customer satisfaction
and customer expectation as indicated on table 4.9.
41
Table 4. 9 Communalities and Pattern Matrix
Component
Service
quality
Perceived
value
quality
Customer
satisfaction
Customer
expectation Communalities
T1 .807 .772
T2 .885 .834
T3 .771 .724
T4 .786 .528
T5 .830 .832
R1 .870 .670
R2 .545 .693
R3 .744 .685
R4 .560 .667
RE1 .697 .603
RE3 .687 .676
AS1 .828 .727
AS2 .809 .721
AS3 .720 .773
AS4 .741 .703
AS5 .761 .759
EM1 .578 .746
EM3 .561 .728
EM5 .635 .740
FV1 .551 .661
FV2 .825 .654
FV3 .896 .729
FV4 .892 .579
SV1 .666 .670
SV2 .681 .738
SV3 .606 .701
CE1 .748 .556
CE2 .948 .690
CE4 .932 .729
CE5 .640 .657
CE7 .622 .663
CE8 .939 .619
CS1 .886 .827
CS2 .885 .807
CS3 .923 .859
CS4 .813 .690
CS5 .914 .834
CS6 .898 .802
CS7 .856 .721
CS8 .922 .848
Extraction Method: Principal Component Analysis.
Rotation Method: Promax with Kaiser Normalization. a. Rotation converged in 6 iterations.
42
4.5.2 Construct Reliability
Construct reliability was assessed by the measure of Cronbach’s alpha. In this study, the
Cronbach alpha was .746 which was greater than .7 thresholds. This means the variables in
the study demonstrated construct reliability as indicated in table 4.10
Table 4. 10 Construct Reliability
Cronbach's Alpha Cronbach's Alpha Based on
Standardized Items
N of Items
.723 .746 4
4.5.3 Convergent Validity.
To evaluate convergent validity, the variance if item is deleted was used as outlined on
table 4.11. From the table, there is no significant variance on the scale mean if item is
deleted and the alpha value if item is deleted; variance of 0.4. However, on the item total
correlation, the item on customer satisfaction was very low at 1.49 indicating greater
variance on the comparison based on correlation of the items. However, the correlation
table shows the individual variable correlation that explained this result.
Table 4. 11 Item- Total Statistics.
Scale Mean if
Item Deleted
Scale Variance
if Item Deleted
Corrected
Item-Total
Correlation
Squared
Multiple
Correlation
Cronbach's
Alpha if Item
Deleted
SQ 6.2945 4.397 .700 .655 .566
PQ 5.9597 4.180 .673 .572 .566
CE 6.3693 3.924 .661 .583 .565
CS_A 6.0740 5.587 .149 .027 .877
4.5.4 Correlation Coefficient.
Correlation analysis was conducted to test the significant association between customer
satisfaction variable as dependent and the three independent variables. As shown in table
4.12, all the independent variables were not statistically correlated with the dependent
variables. ‘Customer satisfaction (CS)’ was not correlated with ‘SQ’ r =.111, p>.05; ‘PQ’
r =.154, p>.05; and ‘CE’ r =.719, p>.05.
43
Table 4. 12 Inter-item Correlation Matrix
SQ PQ CE CS
SQ Pearson Correlation 1
Sig. (2-tailed)
PQ Pearson Correlation .741** 1
Sig. (2-tailed) .000
CE Pearson Correlation .895** .727** 1
Sig. (2-tailed) .000 .000
CS Pearson Correlation .111 .154 .032 1
Sig. (2-tailed) .211 .080 .719
**. Correlation is significant at the 0.01 level (2-tailed).
4.5.5 Normality Test
Though there was no correlation between the dependent and the independent variable, the
skewness and kurtosis statistics used to test the normality had mixed results. Normality is
positive when Skewness and kurtosis statistics in the range -1.0 and + 1.0. As indicated on
table 4.13, SQ and CE failed the normality test while PQ and CS passed the normality test.
Table 4. 13 Normality Test
SQ PQ CE CS_A
N Valid 134 134 132 129
Missing 1 1 3 6
Skewness 1.581 1.013 1.442 1.303
Std. Error of Skewness .209 .209 .211 .213
Kurtosis 2.529 .750 1.440 .830
Std. Error of Kurtosis .416 .416 .419 .423
4.5.6 Multicollinearity Test
Multicollinearity test was performed to determine if the values of independent variables
and dependent variables had higher similarity that will affect their regression analysis. As
indicated on table 4.14, this was tested by the Variance Inflation Factor (VIF); VIF values
were more than 1 and less than 10 hence the factors were not multi-collerated.
44
Table 4. 14 VIF Test
Model Collinearity Statistics
Tolerance VIF
1
SQ .345 2.897
PQ .432 2.317
CE .418 2.390
a. Dependent Variable: CS_A
4.6 Regression Model
Having passed the test of multicollinearity, normality and linearity, regression model was
adopted to the test the study specific objectives. However, the correlation test was not
statistically significant. Regression analysis determine the relationship, magnitude of the
influence and projection of the influence of personnel expertise, management capability,
and infrastructure flexibility on firms’ performance. The regression weight of the linear
regression was used to test the specific research objectives. The regression weight results
were indicated on table 4.15. The research objectives were:
a. To establish the effect of service quality on customer satisfaction in the hotel
industry in Kenya.
b. To establish the effects of perceived value on customer satisfaction in the hotel
industry in Kenya.
c. To determine the effect of customer expectation on customer satisfaction in the hotel
industry in Kenya.
4.6.1. Effect of Service Quality on Customer Satisfaction in the Hotel Industry
From the model summary table 4.15, the value of variance R2 = 0.012, F (1, 127) =1.579,
p-value >.05. This shows the prediction on the rate at which service quality (SQ) affects
customer satisfaction (SC) cannot be done since its statically insignificant (p>.05).
Table 4. 15 Model Summary
Model R R
Square
Adjusted
R Square
Std.
Error of
the
Estimate
Change Statistics
R Square
Change
F
Change
df1 df2 Sig. F
Change
1 .111a .012 .005 1.02197 .012 1.579 1 127 .211
a. Predictors: (Constant), SQ
45
ANOVA shows whether the regression model was fit to determine the predictor than using
the mean comparison. From the ANOVA table 4.16, the regression model was not suitable
for predicting the outcome variable since p>.05.
Table 4. 16 ANOVA Table
Model Sum of Squares df Mean Square F Sig.
1
Regression 1.649 1 1.649 1.579 .211b
Residual 132.640 127 1.044
Total 134.290 128
a. Dependent Variable: SC_1
b. Predictors: (Constant), SQ
Table 4.17 shows the regression weight coefficients model in this study was not significant.
The analysis showed though the service quality of customers can influence customer
satisfaction (β = .111, t = 1.257, p>.05, it was statistically insignificant hence service
quality does not affect customer satisfaction in the hotel industry.
Table 4. 17 Coefficient Table.
Model Unstandardized
Coefficients
Standardized
Coefficients
t Sig. 95.0% Confidence
Interval for B
B Std.
Error
Beta Lower
Bound
B
1 (Constant) 1.881 .238 7.900 .000 1.410 2.353
SQ .143 .114 .111 1.257 .211 -.082 .368
a. Dependent Variable: SC_1
4.6.2 Effects of Perceived Value on Customer Satisfaction in the Hotel Industry.
From the model summary table 4.18, the value of variance R2 = 0.024, F (1, 127) =3.105,
p-value >.05. This shows the prediction on the rate at which perceived value (PQ) on
customer affects customer satisfaction (SC) cannot be done since its statically insignificant
(p>.05).
Table 4. 18 Model Summary
Model R R
Square
Adjusted
R Square
Std.
Error of
the
Estimate
Change Statistics
R Square
Change
F
Change
df1 df2 Sig. F
Change
1 .154a .024 .016 1.01595 .024 3.105 1 127 .080
a. Predictors: (Constant), PQ
46
ANOVA shows whether the regression model was fit to determine the predictor than using
the mean comparison. From the ANOVA table 4.19, the regression model was not suitable
for predicting the outcome variable since p>.05.
Table 4. 19 ANOVA Table
Model Sum of Squares df Mean Square F Sig.
1
Regression 3.205 1 3.205 3.105 .080b
Residual 131.084 127 1.032
Total 134.290 128
a. Dependent Variable: SC_1
b. Predictors: (Constant), PQ
Table 4.20 shows the regression weight coefficients model in this study was not significant.
The analysis showed though the perceived value of customers can influence customer
satisfaction (β = .154, t = 1.762, p>.05, it was statistically insignificant hence perceived
value quality does not affect customer satisfaction in the hotel industry.
Table 4. 20 Coefficient Table.
Model Unstandardized
Coefficients
Standardized
Coefficients
t Sig. 95.0% Confidence
Interval for B
B Std.
Error
Beta Lower
Bound
B
1 (Constant) 1.748 .250 7.004 .000 1.254 2.242
PQ .181 .103 .154 1.762 .080 -.022 .383
a. Dependent Variable: SC_1
4.6.3 Effect of Customer Expectation on Customer Satisfaction in the Hotel Industry.
From the model summary table 4.21, the value of variance R2 = 0.001, F (1, 127) =0.130,
p-value >.05. This shows the prediction on the rate at which customer expectation (CE) on
customer affects customer satisfaction (SC) cannot be done since its statically insignificant
(p>.05).
Table 4. 21 Model Summary
Model R R
Square
Adjusted
R Square
Std.
Error of
the
Estimate
Change Statistics
R Square
Change
F
Change
df1 df2 Sig. F
Change
1 .032a .001 -.007 1.02777 .001 .130 1 127 .719
a. Predictors: (Constant), CE
47
ANOVA shows whether the regression model was fit to determine the predictor than using
the mean comparison. From the ANOVA table 4.22, the regression model was not suitable
for predicting the outcome variable since p>.05.
Table 4. 22 ANOVA Table
Model Sum of Squares df Mean Square F Sig.
1
Regression 3.205 1 3.205 3.105 .080b
Residual 131.084 127 1.032
Total 134.290 128
a. Dependent Variable: SC_1
b. Predictors: (Constant), PQ
Table 4.23 shows the regression weight coefficients model in this study was not significant.
The analysis showed though the customer expectations can influence customer satisfaction
(β = .032, t = .361, p>.05, it was statistically insignificant hence customer expectations
does not affect customer satisfaction in the hotel industry.
Table 4. 23 Coefficient Table.
Model Unstandardized
Coefficients
Standardized
Coefficients
t Sig. 95.0% Confidence
Interval for B
B Std.
Error
Beta Lower
Bound
B
1 (Constant) 2.080 .235 8.862 .000 1.616 2.545
CE .040 .110 .032 .361 .719 -.177 .257
a. Dependent Variable: SC_1
The following table 4.24 shows summary of the regression analysis output in a regression
weight summary table.
Table 4. 24 Regression Weights Summary
Dependen
t
Independen
t
unstandardize
d estimate
Standar
d Error
Standardize
d estimate
T
value
P
value
CS SQ .143 .114 .111 1.257 .211
CS PQ .181 .103 .154 1.762 .080
CS CE .040 .110 .032 .361 .719
48
The regression standard predictor was presented on the following figure which shows there
was no regression
Figure 4. 8 Regression Coefficient Scatterplot.
4.7 ANOVA Tests on Demographic Information and Customer Satisfaction
Having failed the regression model test, further analysis was conducted to determine factors
that affects customer satisfaction based on the demographic information of the respondents.
the findings were: on the gender, F (36) = 1.040, p=.427 > .05; on age, F (36) = .798,
p=.775 > .05; on residency, F (35) = 1.134, p=.314 > .05; on quality of hotel, F (35) =
1.536, p=.0001 < .05; preferred quality of foods and drinks, F (36) = 1.525, p=.055 > .05;
on complains raised, F (34) = 1.327, p=.146 > .05; on number of complains raised, F (32)
= 1.386, p=.152 > .05; number of times visited the hotel, F (36) = 4.398, p=.001 < .05; and
lastly, the average number of days spend in the hotel, F (36) = .592, p=.654 > .05.
This means, only the quality of hotels and the number of times that client has visited the
hotel for the last six months affects customer satisfaction. Other factors on the
demographics does not affect customer satisfaction. Table 4.25 shows the results.
49
Table 4. 25 ANOVA on Customer Satisfaction and Demographic Information
Sum of
Squares df
Mean
Square F Sig.
Gender Between Groups 9.035 36 .251 1.040 .427
Within Groups 22.190 92 .241
Age Between Groups 1.144 36 .032 .798 .775
Within Groups 3.663 92 .040
Residency Between Groups 19.045 35 .544 1.134 .314
Within Groups 41.752 87 .480
Quality of hotel Between Groups 53.777 35 1.536 3.552 .000
Within Groups 38.495 89 .433
Get preferred kind of foods
and drinks in the hotel
Between Groups 8.993 36 .250 1.525 .055
Within Groups 15.069 92 .164
Raised suggestions,
complains, complements to
the management of the hotel
Between Groups 8.662 34 .255 1.327 .146
Within Groups 17.473 91 .192
Management take any action
on suggestions, complains,
complements
Between Groups 9.612 32 .300 1.386 .152
Within Groups 10.188 47 .217
Number of times visited the
hotel for the last 6 months
Between Groups 158.342 36 4.398 2.347 .001
Within Groups 172.418 92 1.874
Average number of days
spend in the hotel
Between Groups 21.306 36 .592 .884 .654
Within Groups 61.578 92 .669
4.8 Chapter Summary
This chapter presents the findings of the study. The demographic presentation covered
gender, age, residency, reason for travel, preferred food and drinks, suggestions and
response to suggestions, number of times stayed in the hotel, number of days in the hotel,
and lastly the services consumed in the hotel. The first objectives finding indicated; service
quality of customers does not affect customer satisfaction. The second objective indicated;
the perceived value of customers does not influence customer satisfaction. Last objective
indicated the customer expectations does not influence customer satisfaction. From the
ANOVA equations, only quality of hotel and number of times visited the hotel, affects
customer satisfaction.
The next chapter gives the chapter summary, discusses the research findings,
recommendations and conclusion of the study.
50
CHAPTER FIVE
5.0 DISCUSSION, CONCLUSIONS AND RECOMMENDATIONS.
5.1 Introduction
This chapter presents the discussion of findings based on literature review, the conclusion
and recommendations based on the findings: recommendations on areas of improvement
and recommendations on further studies. The presentations are informed by the research
output outlined on chapter four.
5.2 Summary
The general objective of this study was to investigate the factors that influenced customer
satisfaction in the hotel industry in Kenya. The specific objectives were: to establish the
effect of service quality on customer satisfaction in the hotel industry in Kenya; to establish
the effects of perceived value on customer satisfaction in the hotel industry in Kenya and
lastly to determine the effect of customer expectation on customer satisfaction in the hotel
industry in Kenya. The research was significant to scholars, practitioners and decision
makers in the hotel industry in Kenya.
The study adopted descriptive study as it is considered as the most suitable research design
to be descriptive by its nature, because of its high degree of representativeness and the ease
in which a researcher could obtain the participants’ opinion. The main data collection
instruments were Questionnaires and it has been developed based on the components of the
SERVEQUAL Model. The target population of this study was USIU-Africa staff and
students who had travelled and spent at a 4-5 star hotels for the last six months before the
research date: between November 2017 and April 2018; 6 months’ period before the study.
Convenience sampling was used in the study while sample size was obtained by use of
Cochran. Total of 138 questionnaires were distributed and only 135 collected representing
97.8% response rate. Both descriptive and inferential statistics were used to obtain the
output.
Objective one covered the service quality on customer satisfaction. The categories of
questions on objective one were on tangibility (T), reliability (R), responsiveness (RE),
assurance (AS) and empathy (EM). All the questions, strongly agree and agree were highly
ranked at more than 50%. On the inferential, the independent variable was not statistically
51
correlated with the dependent variables. ‘Customer satisfaction (CS)’ was not correlated
with ‘service quality (SQ)’ r =.111, p>.05. The coefficient for the relationship between
service quality and customer satisfaction in the hotel industry in Kenya was positive but
insignificant. The service quality of customers can influence customer satisfaction (β =
.111, t = 1.257, p>.05, but it was statistically insignificant hence service quality does not
affect customer satisfaction in the hotel industry.
Objective two was on perceived value quality. The description on the hotel perceived
quality had two sets of questions; functional value and the symbolic value. Unlike questions
on service quality that were highly ranked as strongly agreed and agreed, the questions on
perceived quality had varied response. Questions highly ranked as agreed or strongly
agreed were; ‘Hotel services are worth the money’ (agreed at 37.6% and strongly agreed at
28.6%). Questions highly ranked as agreed and neutral were; ‘hotel services are fairly
priced’ (agreed at 36.4% and neutral at 32.6%), ‘hotel services are reasonably priced’
(agreed at 37.1% and neutral at 31.1%), and lastly, ‘hotel is economical’ (neutral at 41.2%
and agreed at 28.2%). On the inferential statistics, the independent variable was not
statistically correlated with the dependent variables. ‘Customer satisfaction (CS)’ was not
correlated with ‘PQ’ r =.154, p>.05. The coefficient for the relationship shows the
perceived value of customers and customer satisfaction in the hotel industry in Kenya was
positive but insignificant. The perceived value of customers can influence customer
satisfaction (β = .154, t = 1.762, p>.05, but it was statistically insignificant hence perceived
quality does not affect customer satisfaction in the hotel industry.
The last objective was on customer expectation. The hotel is of good value for the money
was agreed at 74.4%; Hotel premises are safe and secure was, agreed at 83.7%; Employees
are never too busy to respond was agreed at 69.5%; the hotel staff is friendly was agreed at
81.9%; Efficiency at the check-in and check-out of the accommodation was agreed at
42.9% and the hotel has a variety of restaurants, bars, entertainment and other activities as
also strongly agreed at 74.4%. On the inferential statistics, the independent variable was
not statistically correlated with the dependent variables. ‘Customer satisfaction (CS)’ was
not correlated with ‘customer expectation (CE)’ r =.719, p>.05. The coefficient for the
relationship shows the customer expectations and customer satisfaction in the hotel industry
in Kenya was positive but insignificant. The customer expectations can influence customer
satisfaction (β = .032, t = .361, p>.05, but it was statistically insignificant hence customer
expectations does not affect customer satisfaction in the hotel industry.
52
5.3. Discussion
5.3.1. Effect of Service Quality on Consumer Satisfaction in the Hotel Industry in
Kenya.
On the inferential, the independent variable was not statistically correlated with the
dependent variables. ‘Customer satisfaction (CS)’ was not correlated with ‘service quality
(SQ)’ r =.111, p>.05. The coefficient for the relationship between service quality and
customer satisfaction in the hotel industry in Kenya was positive but insignificant. The
service quality of customers can influence customer satisfaction (β = .111, t = 1.257, p>.05,
but it was statistically insignificant. Hence service quality does not affect customer
satisfaction in the hotel industry in Kenya.
The service quality was divided into two parts; first is tangible services (furniture, building,
rooms, décor etc.) and second is intangible services (personal touch, surprise, felling
special). According to Gupta service quality is almost the same in all the hotels in today’s
as a tangible factor due to this, Gupta (2017) concluded one thing which impress the
consumers are the intangible services which attract them. This he also argues depends on
the customer needs, perception and other individual factors which may not be acquired by
the hotels. Nomnga (2015), argue there have been numerous studies that examine attributes
that travellers may find important regarding customer satisfaction but some individuals
factors and expectations that influence their satisfactions are not among these factors and
cannot be measured by standard tool since they are skewed since each model has its own
strong point (Nomnga, 2015). Based on the result of this study, it’s likely the model did not
capture the individuals’ needs that accounts to their satisfaction.
However, some studies favours on this. A study conducted by Awara & Anyadighibe in
2014 on the relationship between customer satisfaction and loyalty: a study of selected
eateries in Calabar, Cross River State, three categories of service quality were highlighted.
The study found out the technical quality which refers to what the customer is left with
after the customer-employee interactions have been completed and functional quality
which is the process of delivering the same service or product a Societal (ethical) quality a
credence quality, cannot be evaluated by the customer before purpose and is often
impossible to evaluate after purchase. Such service quality cannot be attributed to customer
satisfaction if only measured at the end of their interactions ( Awara & Anyadighibe, 2014).
53
Eshetie et. al., (2016), discussed the dissatisfaction of customers. The highlight that on the
opposite, mistakes in service provision cost the hotel money and its reputation may suffer
which is “non-quality cost” concept. The scenario created by non-quality service can be
daunting for any hotel manager. However, an unhappy guest does not usually express his
or her unhappiness to the management of a hotel, but will most likely focus on what made
them happy at the hotel especially on high ends hotels. Although poor-quality service
produces customer dissatisfaction, and customers may not return to the establishment in the
future or even immediately move their business dealings to other providers (Prentice,
2013& Cheng and Rashid, 2013) this is true to the findings as the ANOVA indicated the
rate of the hotel and the number of visits depicted the customer satisfaction.
A study conducted by (Eshetie et. al., 2016) investigating literature on the Service Quality
and Customer satisfaction in hospitality industry in selected hotels in Ethiopia highlighted
the lodging quality index (LQI) which is multidimensional scale developed on the basis of
SERVQUAL model. The process of the LQI scale was argued that it began with the ten
dimensions that were originally in the first version of SERVQUAL and was highlighted
that the authors claimed that the LQI is a generic measure of hotel service quality. While
investigating their literature (Rauch et. al., 2015; Mbuthia et. al., 2013; Minh et. al., 2017)
have expounded on the LQI model and highlighted its ten dimensions as follows;
tangibility; reliability; responsiveness; competence; courtesy; credibility; security access;
communications; and understanding. The LQI, with its five-factor structure, has been
further validated in a study which utilized a sample of 200 Canadian respondents (Ladhari,
2012). The aspect of LQI determines the number of visits and frequency of a customer that
marks the satisfaction on individual’s needs.
However, other studies are positive on how service quality affects customer satisfaction. In
a study conducted by (Tan et. al., 2014) on Service Quality and Customer Satisfaction in
Chinese Fast Food Sector, the DINESERVE scale was used to measure service quality and
was similar to the SERVEQUAL model. The DINESERV instrument was proposed as a
reliable and comparatively easy to use tool for determining how guests evaluate restaurant
service quality. The original DINESERV tool consisted of 29 items and five SERVEQUAL
dimensions (Waitiki, 2014). Another study conducted by (Rauch et. al., 2015)a service
quality factor structure with three dimensions; was highlighted which might serve as an
appropriate framework by which customers assess service quality in hotels. The three
dimensions include; service product; service delivery; and service environment.
54
Another study conducted by (Minh et. al., 2017), highlights the HOLSERV scale by
extending the SERVQUAL scale to include 27 items with 8 new items. The study tested
the reliability and validity of HOLSERV to which dimension is the best predictor of overall
service quality. Findings were that quality of service in the hospitality industry is
represented by three dimensions relating to employees (behaviour and appearance),
tangibles and reliability, and the best predictor of overall service quality is the dimensions
referred to “employees”. The researcher concludes it not in all the aspects that the service
quality of hotels attracts and fulfil the customer satisfaction. Other factors determine the
customer satisfaction.
5.3.2. Effect of Perceived Value Quality on Consumer Satisfaction in the Hotel
Industry in Kenya.
On the inferential statistics, the independent variable was not statistically correlated with
the dependent variables. ‘Customer satisfaction (CS)’ was not correlated with ‘PQ’ r =.154,
p>.05. The coefficient for the relationship shows the perceived value of customers and
customer satisfaction in the hotel industry in Kenya was positive but insignificant. The
perceived value of customers can influence customer satisfaction (β = .154, t = 1.762,
p>.05, but it was statistically insignificant hence perceived quality does not affect customer
satisfaction in the hotel industry.
Demirgüneş (2015) states that the concept of “value” is a key-element in marketing and
maintaining customers. Customer perceived value is a concept which has drawn the
attention of industrial marketing researchers during the past years (Chinomona et. al.,2014
; Vazifehdust et. al., 2014; Chen et. al., 2013; Razavi, et. al., 2012). According to
(Asgarpour et. al., 2015), having an understanding of a company’s mission, goals, and
strategies and of its customers’ needs and expectations, the company can develop a value
proposition for delivering superior value to its customers. This therefore the company has
to attract new customers, retain existing customers, and deliver significant profits, hence if
a company maximizes value for its customers, success follows (Asgarpour et. al., 2015).
However, customer perceived value has therefore been stated by numerous authors as an
aspect which has a great influence on the decisions making process of customers (Chiang
& Lee, 2013) but it does not influence the customer satisfaction at all level.
The act of perception differs with the needs of the customer as discussed by different
researcher on what defines perceived value. Perceived value is referred to the advantage,
55
which is received by customer versus the total costs, and is generally viewed as a
comparative calculation of the costs and the rest of the economic facets of services (Forozia
et. al., 2013). Perceived value also refers to the difference between the money paid for the
service or product and the amount the customer actually wants to pay (Gumussoy &
Koseoglu, 2016). Delivering superior customer value is an essential strategy for firms to
gain competitive advantage and long term success (Asgarpour et. al., 2015) and in addition,
customers make purchasing decisions based on perceived value, or the degree to which
their needs and expectations about product quality, service quality, and or price are
satisfied.
However, most researches have indicated more and more research on how perceived value
informs the customer satisfaction which was negative to this study. According to Waheed
and Hassan (2016) customer perceived value around the world have been shedding more
clarity of research measurement scales over the researches that have been conducted. It
helps organizations understand what the customer expects from what they have purchased
(Raza, et. al., 2012). Further, perceived value has been examined by various authors as a
factor which has a great influence on the decisions making process of customers(Chiang &
Lee, 2013).
In the study of the examination of perceived value dimensions of hotel visitors using
exploratory and confirmatory factor analyses (Chiang & Lee, 2013) suggests that the
perceived value of customer play a significant role in determining customer satisfaction,
decision making and purchase behaviours. In addition, the reviewed study on perceived
value by Chiang and Lee in 2013 indicates that perceived value is considered as a
significant element in affecting consumers’ consumption and decision making. Another
study carried out on the influence of e-service quality on customer perceived value ,
customer satisfaction and loyalty in South Africa indicates that it’s a practical rule in
presenting the customer with high value hence a key factor in establishing and maintaining
long term customer relations (Razavi et. al., 2012).
In the study conducted by (Shen, 2016) perceived value in tourism experience, perceived
value is defined as the utility individuals derive from tangible products or intangible
services and it consists of what benefits individuals get and what costs they pay.
Researchers interpret perceived value from two perspectives; one-dimensional and multi-
dimensional, the former shows that value is a consumer’s overall evaluation of a product
56
or service (Yi et. al., 2014).In the study by (Chiang & Lee, 2013) an examination of
perceived value dimensions of hotel visitors using exploratory and confirmatory factor
analyses, customer perceived value can be described as the evaluation of comparing the
perception of typical perceived value and real outcome of purchase experience.
Tourism and hospitality industry t is probable to interrelate with various components of the
tourism product, evaluate these tourism experiences and form their impression of the trip
related experience. Further, benefits enjoyed by consumers during their purchase processes
are the social ones which arise from the establishment of a specific relationship.
Accordingly, keeping a consumer satisfied may be ten times cheaper than acquiring a new
one. So, companies need to make efforts for retaining customers and must concentrate on
managing value perceived by them (Morar, 2013).
This study concludes though perceived value differs from an individual to another, most
research indicates the perceived value affects the customer satisfaction. However, this study
found out the opposite hence adds knowledge and a point of reference where the hotel
perceived value does not affect the customer satisfaction.
5.3.3. Effect of Customer Expectation on Consumer Satisfaction in the Hotel Industry
in Kenya.
On the last objective, the inferential statistics, the independent variable was not statistically
correlated with the dependent variables. ‘Customer satisfaction (CS)’ was not correlated
with ‘customer expectation (CE)’ r =.719, p>.05. The coefficient for the relationship shows
the customer expectations and customer satisfaction in the hotel industry in Kenya was
positive but insignificant. The customer expectations can influence customer satisfaction
(β = .032, t = .361, p>.05, but it was statistically insignificant hence customer expectations
does not affect customer satisfaction in the hotel industry.
Hotel and generally in service industry, the providers of the service are known to champion
their services in the modern marketing as they seek to satisfy a set of needs and wants that
are partly related to the essential services based on the customer expectations. Further it is
in the customer expectations on how these needs and wants are met consistently form
impressions about the actual service offered them in comparing with their own
expectations (William et. al., 2016). Arguably, the performance of every organization
depends on how well it satisfies its sophisticated customers. However, this has been argued
57
the satisfaction based on the customers expectation are minimal as the standards set by the
high ends hotels are beyond the expectation of customers.
In the study by (Forozia et. al., 2013) on customer satisfaction in hospitality industry case
study of middle east tourists at 3star Hotels in Malaysia, customer expectation is defined
as beliefs and sensitivities that each customer has about service derived from what they
require from it and supposes it to do. According (Amissah, 2013) in the academic study
on tourist satisfaction with hotel services in Cape Coast and Elmina, Ghana, expectations
is described as the desires or wants and are in most cases different from what the customer
gets. This depends on the level of expectation of the customers; there the expectation is
low, customers will be satisfied by the high standards in the hotel but when the expectation
is higher than what they receive in the hotel, they also tend to get satisfied as they level
their expectation on what they have received.
A study conducted by (Campos & Marodin, 2012) offers a description of the process in
which the customers create their expectations in relation to the performance of their
providers. According to (Campos & Marodin, 2012) dissatisfaction in services is caused by
existing gaps between the expectations and the results perceived. According to a study by
(William et. al., 2016) on assessment on customer expectations in service quality, customer
expectations are beliefs on service delivery that serve as standard against the performance
done. Further, customers develop a certain set of expectations based on a variety of inputs
and consider their previous experiences with services in general and with each specific kind
of service they have encountered (William et. al., 2016).Customers also develop
expectations when they hear about services from others. If you hear that your friend was
delighted with her stay at a particular hotel, you are more likely to expect that same level
of service if you stay there. Customers also form expectations based on service provider’s
advertisement and promotions (William et. al., 2016).
Expectations are formed by personal experience and understanding of environment, taking
into account practice feasibility based on expectancy theory. Perceived performance is a
relatively less influenced estimation of performance based on objective judgement rather
than emotional reactions. Expectation disconfirmation occurs in three forms: Positive
disconfirmation which occurs when perceived performance exceeds expectations;
Confirmation which occurs when perceived performance meets expectations; Negative
disconfirmation which occurs when perceived performance does not meet and is less than
58
the expectations. This study was conducted in a university environment while it does not
ignore the level of expectation developed by students in hotels, it depict a picture where the
expectation of students might be low ever than what high ends hotel provides.
However other studies shows expectation influences the customer satisfaction. It is more
probable for customers to be satisfied if the service performance meets (confirmation) or
exceeds (positive confirmation) their expectations. On the contrary customers are more
likely to be dissatisfied if the service performance is less than what they expected (negative
disconfirmation) discuss that taking expectation disconfirmation as the only determinant of
satisfaction; this theory does not cause the fact that if high expectations are confirmed, it
would much more lead to satisfaction than confirmation of low expectations (Awara &
Anyadighibe, 2014). Brink and Berndt (2008) came up with the explanations that the gap
between the desired and adequate service is called zone of tolerance and that customers are
able to accept the zone of tolerance at different levels, depending on the provided service
and other conditions. An argument by (Yongchaitrakool, 2014) states scholars mention the
relationship between customer expectation and satisfaction in that customers will be
satisfied if a company or hotel provides services above their expectation as customers who
pay for service or product, normally expect that this service or product is worth their
payment.
Mason and Simmons (2012) also connect service quality with customer expectation as they
found that customer expectation occurs when customers predict the service quality by using
their own characteristics, attitudes and preference. Customers perceive the services
differently depending on their perception and expectation whilst customer satisfaction will
be judged by the provided service and customer expectation(Yongchaitrakool, 2014).
This study was conducted in a university environment while it does not ignore the level of
expectation developed by students in hotels, it depict a picture where the expectation of
students might be low ever than what high ends hotel provides. There is need for more
research on students’ expectation in hotel industry. However, the negative findings add
value on the body of knowledge with different results.
59
5.4. Conclusions
5.4.1. Effect of Service Quality on Consumer Satisfaction in the Hotel Industry in
Kenya.
On the inferential, the independent variable was not statistically correlated with the
dependent variables. ‘Customer satisfaction (CS)’ was not correlated with ‘service quality.
The coefficient for the relationship between service quality and customer satisfaction in the
hotel industry in Kenya was positive but insignificant. The service quality of customers can
influence customer satisfaction, but it was statistically insignificant hence service quality
does not affect customer satisfaction in the hotel industry in Kenya. The study concludes
service quality has no significant effect on consumer satisfaction in the hotel industry in
Kenya.
5.4.2. Effect of Perceived Value Quality on Consumer Satisfaction in the Hotel
Industry in Kenya.
On the inferential statistics, the independent variable was not statistically correlated with
the dependent variables. ‘Customer satisfaction (CS)’ was not correlated with. The
coefficient for the relationship shows the perceived value of customers and customer
satisfaction in the hotel industry in Kenya was positive but insignificant. The perceived
value of customers can influence customer satisfaction, but it was statistically insignificant
hence perceived quality does not affect customer satisfaction in the hotel industry. The
study concludes perceived value quality has no significant effect on consumer satisfaction
in the hotel industry in Kenya.
5.4.3. Effect of Customer Expectation on Consumer Satisfaction in the Hotel Industry
in Kenya.
On the inferential statistics, the independent variable was not statistically correlated with
the dependent variables. ‘Customer satisfaction (CS)’ was not correlated with ‘customer
expectation (CE). The coefficient for the relationship shows the customer expectations and
customer satisfaction in the hotel industry in Kenya was positive but insignificant. The
customer expectations can influence customer satisfaction (β = .032, t = .361, p>.05, but it
was statistically insignificant hence customer expectations does not affect customer
60
satisfaction in the hotel industry. The study concludes customer expectation has no
significant effect on consumer satisfaction in the hotel industry in Kenya.
5.5 Recommendations
5.5.1. Suggestions for Improvement
5.5.1.1 Effect of Service Quality on Consumer Satisfaction in the Hotel Industry in
Kenya.
The study found out service quality does not affect customer satisfaction. However, the
rating for service quality questions were highly ranked as agreed and strongly agreed. This
shows hotels strive to meet the expectations of the hotel customers through provision of
excellent services in pursuit of customer satisfaction. However, hotels should only focus
on quality services that will lead to increase in quality of the hotel and number of times a
client visits as this determines the customer satisfaction. Further, there is need for policy
on kind of quality that hotels should focus on to avoid wastage.
5.5.1.2 Effect of Perceived Value Quality on Consumer Satisfaction in the Hotel
Industry in Kenya.
The study findings shows perceived quality as significant factor but does not affect
customer satisfaction on hotel industry. Rather than focus on the perceived value, hotel
industry needs to focus on long term strategy on how current value to affect a client to visit
the hotel severally since the number of visits and quality determines customer satisfaction.
5.5.1.3 Effect of Customer Expectation on Consumer Satisfaction in the Hotel
Industry in Kenya.
On the last objective, the research recommends the hotel to focus on quality and not on the
customer expectations. While hotels base the improvement of the services based on
customer expectations, the focus should be on quality services that will lead to increase in
quality of the hotel and number of times a client visits as this determines the customer
satisfaction.
5.5.2. Further Research
The research focused on the effect of customer satisfaction in hotel industry in Kenya. The
sample size was derived from USIU-Africa hence there is need for such study and the
61
population to be the consumers specific hotel customers. The research also focused on
population which had stayed in the hotel for the last six months before the study – there is
need to conduct research on clients in the hotel at the time of study but not on their past
experiences. Lastly, further research should look at different factors that affects customer
satisfaction besides service quality, perceived value quality and customer expectations.
62
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APPENDICES
APPENDIX I: INTRODUCTION LETTER
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APPENDIX II: NACOSTI PERMIT
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APPENDIX III: RESEARCH QUESTIONNAIRE
This questionnaire is meant to collect information on the factors influencing customer
satisfaction in the hotel 4star or 5star hotel industry in Kenya. This information is being
sought solely for academic purposes and will be treated with strict confidence. Kindly
answer the questions as requested based on the hotel you last visited.
SECTION 1. Background Information
1. What is your gender? [ ] Male [ ] Female
2. Please select your age from the following age brackets.
[ ] 18 years -35 years [ ] 36 years -55 years [ ] 56 years -75 years
[ ] above 75 years
3. What is your residency? [ ] Kenyan [ ] East Africa [ ]
International
4. What was your specific reason of travel?
[ ] Work [ ] Pleasure [ ] Holiday [ ] Business [ ] Adventure [ ] Visiting People
[ ] Other
5. How would you rate the quality of the services offered by the hotel you last visited
in a rating scale of 1 to 5 (1 being the smallest).
Hotel Service quality 1 2 3 4 5
6. Did you get all your preferred kinds of foods and drinks in that specific hotel you
last visited? [ ] Yes [ ] No
7. Have you ever raised suggestions, complains or complements to the management
of the hotel you last visited regarding the quality of their services?
[ ] Yes [ ] No
8. Did the management take any action on your suggestions, complains or
complements (Raised in 7 above)
[ ] Yes [ ] No
9. What is the approximate number of times you have visited the last visited hotel for
the last 6 months?
[ ] First visit [ ] Second visit [ ] Third Visit [ ] 5-10 visits [ ] 10-15 visits
[ ] Daily [ ] Weekly [ ] Every time I have toured this country [ ] Once in a
month
10. What is the average number of days you spend in the hotel?
[ ] Less than 3 days [ ] 3 days to 5 days
[ ] 1 week 2 weeks [ ] 1 month [ ] Over 1 month
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11. Which services do you value other than meals and accommodation?
[ ] Transport [ ] Casino [ ] Swimming Pools
[ ] Kids Club and other kids friendly activities [ ] Spa [ ] Conference
[ ] Business Centre [ ] Fitness Center (gym) [ ] Club [ ] Others
-If others, please specify
SECTION 2. Effect of Service Quality on Customer Satisfaction
A. Tangibility
Kindly indicate your responses to the following statements regarding the relationship
between tangibility and customer satisfaction based on the 4star or 5star hotel that you last
visited. Tick your choice in the appropriate answer box.1 = Strongly Agree, 2 = Agree, 3
= Neutral, 4 = Disagree, 5 = Strongly Disagree.
Does the hotel have modern equipment e.g. furniture,
telephones, flat screen, cutlery, safe box 1 2 3 4 5
The physical facilities at the hotel are visually appealing 1 2 3 4 5
The menu offers a wide variety of foodstuff to choose from 1 2 3 4 5
Value added activities such as live bands, music etc are of
great quality 1 2 3 4 5
The hotel has a serene environment with great ambience 1 2 3 4 5
B. Reliability
Kindly indicate your responses to the following statements regarding the relationship
between Reliability and customer satisfaction based on the 4star or 5star hotel that you last
visited. Tick your choice in the appropriate answer box. 1 = Strongly Agree, 2 = Agree,
3 = Neutral, 4 = Disagree, 5 = Strongly Disagree.
Orders are served in a timely manner 1 2 3 4 5
Hotel management shows interest in solving customer
issues once raised 1 2 3 4 5
Personnel responds to customers promptly 1 2 3 4 5
Hotels services and menus are available at the right place 1 2 3 4 5
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C. Responsiveness
Kindly indicate your responses to the following statements regarding the relationship
between responsiveness and customer satisfaction based on the 4star or 5star hotel that you
last visited. Tick your choice in the appropriate answer box. 1 = Strongly Agree, 2 = Agree,
3 = Neutral, 4 = Disagree, 5 = Strongly Disagree.
Personnel in the hotel communicate to customers exactly
when services will be performed 1 2 3 4 5
Hotel staff give prompt service to customers 1 2 3 4 5
Personnel are always willing to help customers 1 2 3 4 5
Hotel staff are never too busy to respond to customers’
requests 1 2 3 4 5
D. Assurance.
Kindly indicate your responses to the following statements regarding the relationship
between assurance and customer satisfaction based on the 4star or 5star hotel that you last
visited. Tick your choice in the appropriate answer box. 1 = Strongly Agree, 2 = Agree,
3 = Neutral, 4 = Disagree, 5 = Strongly Disagree.
I find the hotel facilities to be secure. 1 2 3 4 5
Food’s well cooked with wide varieties for selection 1 2 3 4 5
Personnel are consistently courteous with customers 1 2 3 4 5
The staff are very helpful to customers and competent in
their work 1 2 3 4 5
Food is handled and served in clean environment as well as
the rooms are consistently kept clean with the rest of the
hotel premises. 1 2 3 4 5
E. Empathy
Kindly indicate your responses to the following statements regarding the relationship
between empathy and customer satisfaction based on the 4star or 5star hotel that you last
visited. Tick your choice in the appropriate answer box. 1 = Strongly Agree, 2 = Agree,
3 = Neutral, 4 = Disagree, 5 = Strongly Disagree.
The hotel staff gives customers individual attention 1 2 3 4 5
Hotel staff are always available to serve customers anytime 1 2 3 4 5
The hotel treats each customer with respect 1 2 3 4 5
The hotel has the customers best interests at heart 1 2 3 4 5
The hotel staff understand the specific needs and
preferences of their customers 1 2 3 4 5
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SECTION 3. Effect off Perceived Quality on Customer Satisfaction
A. Functional Value
Kindly indicate your responses to the following statements regarding the relationship
between functional values on customer satisfaction based on the 4star or 5star hotel that
you last visited
Tick your choice in the appropriate answer box. 1 = Strongly Agree, 2 = Agree,
3 = Neutral, 4 = Disagree, 5 = Strongly Disagree
Hotel services are worth the money 1 2 3 4 5
Hotel services are fairly priced 1 2 3 4 5
Hotel service are reasonably priced 1 2 3 4 5
Hotel is economical 1 2 3 4 5
B. Symbolic Value
Kindly indicate your responses to the following statements regarding the
relationship between symbolic values on customer satisfaction based on the 4star
or 5star hotel that you last visited.
Tick your choice in the appropriate answer box.
1 = Strongly Agree, 2 = Agree, 3 = Neutral, 4 = Disagree, 5 = Strongly Disagree
Hotel has good reputation 1 2 3 4 5
Quality of this hotel is Outstanding 1 2 3 4 5
Hotel is well thought of 1 2 3 4 5
SECTION 4. Effects of Customer Expectations on Customer Satisfaction
Kindly indicate your responses to the following statements regarding the relationship
between customer expectations and customer satisfaction based on the 4star or 5star hotel
that you last visited
Tick your choice in the appropriate answer box. 1 = Strongly Agree, 2 = Agree, 3 = Neutral,
4 = Disagree, 5 = Strongly Disagree.
The Hotel is of good value for money 1 2 3 4 5
Hotel premises are safe and secure 1 2 3 4 5
Employees are never too busy to respond 1 2 3 4 5
The hotel staff is friendly 1 2 3 4 5
Efficiency at the check-in and check-out of the accommodation 1 2 3 4 5
The hotel has a variety of restaurants, bars, entertainment and other
activities. 1 2 3 4 5
The hotel meals are of high quality 1 2 3 4 5
The hotel is easily accessible 1 2 3 4 5
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SECTION 5. Customer Satisfaction
On a scale of 1 - 5 where l = Very dissatisfied, 2=Dissatisfied, 3=Neutral, 4=Satisfied and
5 =Very satisfied, indicate your level of satisfaction with the following aspects of the hotel
offerings based on the 4star or 5star hotel that you last visited.
Physical facilities 1 2 3 4 5
Equipment 1 2 3 4 5
Personnel 1 2 3 4 5
Menu 1 2 3 4 5
Environment 1 2 3 4 5
Service 1 2 3 4 5
Value added services 1 2 3 4 5
Overall rating 1 2 3 4 5
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