Editorial Board

A Refereed Monthly International Journal of Management

Investigating Influential Role of Service Quality in Formation of Behavioral Intentions:A Study in The Hotel Industry

Author

Overview and Rationale

Hotel industry is one of the sensitive industries in terms of service quality and customer satisfaction. It must consider loyal customer as real asset to the hotel organization. A customer can be turned into a loyal customer by influencing the behavioral pattern of the hotel guest. For the survival of the hotel organization, it is necessary to meet the needs and requirements of the hotel guests and provide services in a customized manner (Maiyaki & Mokhtar, 2011). Hotel industry needs to provide quality service delivery that enhances the customer satisfaction and thereby leads to positive behavioral intentions. The customer satisfaction leads to repeated purchases and word-of-mouth recommendation (Salazar et al., 2004). Along with that, other most important generic behavioral intentions is willingness to recommend the service to others and repurchase those services (Zeithaml et al., 2009), which also comes from customer satisfaction. So, the behavioral intentions can be studied in several expressions such as word-of-mouth communication (Theodorakis & Alexandris, 2008) and loyalty towards organization (Badarneh & Som, 2011), willingness to pay more (Homburg et al., 2005), recommendation to others (Chen, 2008), revisit intentions (Clemes et al., 2009), complaining behavior (Velazgues et al., 2010). It can be said that behavioral intentions can be viewed as positive and negative consequences of service quality.  Negative WOM and complaining behavior constitutes negative behavioral intentions but these could be beneficial for hotel organization if these are handled carefully. This forces the hotel organization to make changes accordingly to convert negative experiences into positive behavioral intentions through effective complaint handling mechanism and remedial actions in no time.

Effective assessment and evaluation of the behavior intentions could help the hoteliers in this regard. Several studies that have specifically focused on assessment and evaluation of the behavior intentions (Chen & Tsai, 2007; Clemes et al., 2009) state that understanding of future behavior intentions helps in building of attractive image and optimum resource utilization.

Hoteliers must give importance to up scaling the level of customer satisfaction that could be possible only through increasing the quality service delivery process. It will ultimately increase customers’ favourable intentions in the form of revisit and positive word-of-mouth recommendations for the hotel to others (Clemes et al., 2009). Today’s customer gets variety in products and services they buy. Their choices are based on perceptions of quality, value, and service. If their service expectations do not meet with their perceptions, they can easy switch over to another brand. Competitors are also ready with their strategic action plans to gain the switched over customers. Hotels engaged in winning, retaining and deepening customer relationships should give due importance to the customer feedback of their service delivery process, which is a complex influencer of behavioral intentions. Therefore, dimensions of behavioral intentions (loyalty, switch, pay more, external responses and internal responses) have gained significance in today’s cut-throat competition in the hospitality industry and more specifically in hotel industry. In this light, the present study has focused on service quality and behavioral intentions in the hotel industry, which will provide assistance to hoteliers in captivating customers’ confidence.

The linkage of service quality delivery and behavioral intentions from customer’s viewpoint has been evaluated to understand favorable as well as unfavorable impact of service operations on the behavioral intentions of the hotel guests. To identify with delivery of quality service, various back-end operational areas have also been highlighted in this operational and analytical study, which gives impetus to the front-end operations in the hotel industry in India.

Theoretical Framework

Service Quality

Service quality has been crucial area for the hotel organization to gain more business in future. Hotel organization can gain competitive advantage through up leveling of service quality, which helps in survival in competitive business environment (Boshoff & Du Plessis, 2009). The key to success and survival is to serve customers in such a way that their service quality must match or exceed to expected service quality. Customer always compare its expectation with the given service quality to establish perceived service quality. Customer’s perception of service quality has been measured against five dimensions: tangibility, reliability, responsiveness, assurance, and empathy (Parasuraman, et al., 1988). Similarly, hotel guests’ expectation of service delivery process is based on 3S i.e. perfect standardized, streamlined and simplified service delivery. On the basis of these three 3S, guest compares whether E=P, E≤P, E≥P or E≠P. If expectation of the customer not meets with the perception of the customer, then customer is not dissatisfied; whereas, if customer’s expectation meets with the perception of the customers, then customer will be satisfied and happy. Several studies support the view that service quality is must for the customer satisfaction (Clemes et al., 2009; Salazar et al., 2004; Petzer & De Meyer, 2011). Therefore, appealing service quality always makes the hotel customer happy, which enhance the profitability of the hotel.

Behavioral Intentions

Positive image and profitability of the hotel organization can be perfectly determined by the behavioral intentions of the people visiting that hotel. When behavioral intentions has been studied from the service organization’s point of view, it has been found that behavioral intentions has been considered as most important factor that helps the service organization in profit maximization (Salazar et al., 2004). On the another end, from customer’s point of view, customer behavioral intentions is a strong indication of his actual behaviour, therefore, that service providers have emphasized on customer behavior and above all behavioral intentions (Malyaki & Mokhtar, 2011). In broad-spectrum, behavioral intentions correlate customer engagement and customer loyalty. Various dimensions of the behavioral intentions have been identified by different researchers at different point of time, such as behavioral intentions represent the positive word-of-mouth, purchase intentions, price sensitivity, complaint behaviour (Bloemer et al., 1998) whereas, some focused on repurchase intentions as the behavioral intentions (Kim et al., 2006).  Behavioral intentions can be either favourable or unfavourable. Favourable behavioral intentions provides the benefits such as large volume of transactions, strong bonding with customers, positive word-of-mouth advertisement, willing to pay price premium and so on, whereas, unfavourable behavioral intentions has shown results, such as higher probability of brand switching, plan to reduce their volume of business, engage in negative word of mouth, and display an unwillingness to pay premium prices (Zeithaml et al., 1996).

Relationship between Service Quality and Behavioral Intentions

In numerous researches, service quality and behavioral intentions together have considered relevant research area in the service marketing. Several studies have identified that service quality has significant influence on the behavioral intentions (Maiyanki & Mokhtar, 2011; Salazar Costa & e Rita, 2004).  Their effect can be seen in the form of revisit & recommendation of hotels to others (Kandampully & Suhartanto, 2000); loyalty to organization, and share more information with others (Kuruuzum & Koksal, 2010); purchase intentions (Woodside et al., 1989). In context of hotel industry also, evidence has showed that service quality has strong effect on the behavioral intentions of the hotel customers (Kuruuzum & Koksal, 2010). Another investigation has proved that perceived service quality has positive effect on the guest behavioral intentions. It leads to behavioral intentions such as positive word-of-mouth, repurchase intentions, loyalty, and pay more (Lien, 2010). Regarding relationship between service quality and behavioral intentions, different studies has different views. In a study, responsiveness, tangibility and reliability have been identified as most important dimensions of service quality that have significant effect on the behavioral intentions (Kuruuzum & Koksal, 2010). Another study has concluded that among service quality dimensions, tangibility and assurance have been two critical factors related to behavioral intentions in the form of repurchase intentions (Kim et al., 2006). Similarly, empathy and tangibility are the two dimensions having strongest impact on the behavioral intentions in the form of revisit intentions in another study (Al-alak, 2012).

Objectives of the Study

The broad objective of the research study has been to determine the perception of hotel guests towards the quality of service being offered by the hotels operating in the Amritsar city and their consequent impact on behavioral intentions formation towards these hotels. The specific objectives of the study are as follows:

1. To study the relative importance of different behavioral intentions dimensions in respect to hotel guests.
2. To study the impact of service quality operational analytic on behavioral intentions dimensions of the hotel guests.

Research Methodology

Sample and Data Collection

The universe of the study has been comprised of hotel guests stayed in 3-star, 4-star and 5-star hotels in the Amritsar city on account of personal and professional reasons. To serve the objectives of the study, data has been collected from sample size of 231 respondents from 13 hotels. The 3-star, 4-star and 5-star hotels and the respondents have been selected on the basis of randomized-judgement sampling technique. The research methodology has included primary data, which has been collected through structured questionnaire. Among the 300 questionnaires distributed in different hotels, a total of 231 questionnaires have been returned, accounting for the 77 percent response rate. Twenty-eight incomplete questionnaires have been excluded. The questionnaire contained 35 statements with specifying set of alternatives responses with respect to perception of the customers (22 statements) and their behavioral intentions (13 statements). The respondents have been required to select an alternative, which closely reflected their choice on 5-point Likert scale regarding their degree of the agreement or disagreement. The data have been analyzed with the help of descriptive statistics, exploratory factor analysis and regression analysis. Items in the demographic information have been used to yield descriptive information of the respondents (Table 1).

Table 1: Demographic Profile of Respondents

Measurements

To study the perception of hotel guests with respect to different behavioral intentions dimensions and their relative importance, mean scores has been calculated for each behavioral intentions dimension. To measure the perceived service quality, SERVPERF scale has been used which was originally developed by Cronon & Taylor (1992). Behavioral intentions have been measured with the help of 5-dimensional and 13-itemized Behavioral-Intentions Battery, which was developed by Zeithaml, Berry & Parasuraman (1996).

Testing and Reliability

A pilot test has been conducted with 30 hotel guests from different hotels. In all, 30 respondents provided their responses to the questionnaires. The result from the pilot test has assured the content validity of the questionnaire. Construct validity of the questionnaire has also been checked with the help of exploratory factor analysis.

To access the reliability of the scale, Cronbach’s alpha measure has been used. The reliability coefficient for perceived service quality has been 0.897 and for behavioral intentions, it has been 0.773. Generally, 0.6 value or above is considered a satisfactory reliability level (Nunnally, 1967). In perceived service quality and behavioral intentions, it has been above 0.6, hence satisfactory.

Limitations of the Study

The results of the study are specific to the sample selected and dimensions used. Hence, they may not be generalized for the hotel industry in India.

Data Analysis and Interpretation

This sector discusses the summary statistics using primary data. The data collected has been analyzed using descriptive stats, exploratory factor analysis and regression analysis using SPSS 19 version.

Mean Scores of Behavioral Intentions

The average mean scores (Table 2) have been calculated to study the perception of hotel guests with respect to different dimensions of behavioral intentions among loyalty, switch, pay more, external response and internal response and their relative importance thereof. Results have shown that internal response (4.08) is the dimension which has been perceived to be the most important by the hotel guests followed by external response (3.69) and loyalty (3.51).

Table 2: Behavioral Intentions Dimensions as Perceived by Hotel Guests

Impact of Service Quality on Behavioral Intentions

An exploratory factor analysis has been used to test the construct validity as well as to find out whether to proceed with regression analysis (with regard to multicollinearity in data). Eigen values for each dimension and factor loadings have indicated that it is quite appropriate to proceed with the regression analysis to examine the relationship between perceived service quality and behavioral intentions. To determine the adequacy of the data, KMO measure of sampling adequacy is used. KMO measure is .77, which shows data is sufficient to proceed with the factor analysis. Seven factors have been extracted from the twenty-two variables of perceived service quality. These factors, namely empathy (variance explained 19.93 percent), reliability (variance explained 12.15 percent), responsiveness (variance explained 9.71 percent), physical evidence (variance explained 8.57 percent), tangibility (variance explained 8.51 percent), assurance (variance explained 6.96 percent), and safety (variance explained 5.85 percent) have explained 71.69 percentage of cumulative variance (Table 3).

Table 3: Results of Factor Analysis for Service Quality Dimension

Regression Analysis

As explained above, seven factors have been identified through exploratory factor analysis which represents the service quality. On the basis of seven factors, seven null hypotheses have been formed. It has been investigated that whether these dimensions have a significant impact on the behavioral intentions of the hotel guests or not.

H1: Empathy has insignificant impact on behavioral intentions.

H2: Reliability has insignificant impact on behavioral intentions.

H3: Responsiveness has insignificant impact on behavioral intentions.

H4: Physical evidence has insignificant impact on behavioral intentions.

H5: Tangibility has insignificant on behavioral intentions.

H6: Assurance has insignificant impact on the behavioral intentions.

H7: Safety has insignificant impact on behavioral intentions.

Step-wise regression method has been used to analyze the data. Regression has been employed using weighted average scores factor-wise. Weighted average scores have been calculated both for dependent variable as well as independent variables.

F-value of the model has been found to be significant showed that model is best fit to use and model is significant in explaining variation in the dependent variable. To check for the presence of multicollinearity in the data, VIF statistics have also been computed. VIFs of all the independent variables have been found to be lesser than 10, suggesting no violation of the assumption of multicollinearity (Table 4).

Table 4 also reported that R² = 29.1 percent and Adjusted R² (adjusted for d.f.) = 27.9 percent which mean existing model has explained 27.9 percent variance in dependent variable which has been caused by independent variables.

Table 4: Regression Results

Note: ** indicates significant at 1% level, * indicates significant at 5 % level of significance.

The regression result showed that out of the seven independent variables, four have been found to be significant determinants of the behavioral intentions. Empathy (β = .16, p = .000); reliability (β = .09, p = .004); tangibility (β = ­­-.09, p = .005) have been found to be significant at 1 percent level of significance. Responsiveness (β = .07, p = .021) has been found to be significant at 5 percent level of significance. Thus, empathy, reliability, tangibility and responsiveness have significant impact on behavioral intentions. 

On the basis of standardized beta estimates, empathy (β = .39) has emerged as the most important dimension which has highest impact on the behavioral intentions, followed by reliability (β = .21), tangibility (β = -.19) and responsiveness dimension (β = .16).

The hypothesized regression results have been summarized in Table 5.

Table 5: Summary of Regression Results

Discussion and Implications

There is role of back-end and front-end operational management in formation of favorable behavioral intentions analytics. Operations management covers a wide range of tasks which include product/services development, service delivery process designing and redesigning, service delivery improvement, controlling variations, inventory management, supply chain management, internal and external human resource management & relationship, etc. Back-end operations such as order processing, fulfillment and customer service provides support to front-end functions such as overall presentation, pricing, complaint handling, room service, etc. lead to the quality in service delivery. These operations facilitate the front-end interactions with the customers effectively. Efficient service delivery results in favorable behavioral intentions. Various operations management tools & techniques with technology are available to accomplish quality service delivery, but human resource is important for smooth flow of hotel operations. The success of operations management tools and techniques, and its accuracy primarily relies on understanding of human behavior (Bendoly et al., 2006). However, delivery of quality service delivery largely depends upon the interaction between the employees and customers. Thus, formation of employee favorable behavior has provided inclusive management in operations. This approach helps the hoteliers to attain optimum performance. Hence, hotel management attains the objective of providing maximum value to their guests. When hotel management understands the specific requirements of the guest then it helps them to evaluate existing standard operating procedures (SOPs). It facilitates the hotel management to make changes accordingly and implement new SOPs as needed.

The perspective of quality service experience is largely depends upon the front-end operations. But the contribution of back-end operations such as data entry, clams processing, customer administration, billing, order fulfillment, transaction processing, etc is also desirable as it provides the material and information needed by the front-end. The front-end framework such as reception, restaurant service, entertainment, business centre, fitness centre, spa facilities, personal shoppers, private tours, sightseeing, cleaning services, etc are affected by the back-end operations at large. TARP Worldwide is well known for its customer experience consulting work. It has been found that up to 60 percent of customer dissatisfaction sources are found in the back office. Therefore, proper coordination between back-end and front-end operations is required to enhance customers’ experience and formation of positive/favorable behavioral intentions. It also increased the operational efficiencies within the hotel organization to make customers delight.

How does hotels form and modify the positive behavioral intentions of the hotel guests? The answer leads to a strong customer-service orientation, knowledge addition regarding hotel guests and improvement in customer ratings through customer-centric strategic approach. New and advanced level training and development programs would help personnel to be more empathetic, responsive to customers, and techno-savvy. Impact can be seen in the form of increased level of customer satisfaction and favorable behavioral intentions towards the hotels. Although it is difficult to predict the behavioral intentions, but where hotel management is convinced that formation of positive behavioral intentions can be improved by spending more on technology and human resources, it will definitely provide fruitful results to the hotel organization.

Hotel organization should also give due importance to service delivery process. A mere simple change in service delivery procedure and complaint handling procedure can improve the hotel guests experience with the hotel, which may motivate the hotel guests to revisit and to recommend the hotels to other. On the same lines, it also acts as positive word-of-mouth advertisement for the hotel. It leads to high profitability and market value. This empirical study demonstrates that service quality and favorable behavioral intentions provides significant benefits to the hotels in terms of long-term customer relationships and profitability.

Conclusion and Recommendations

It has been concluded that behavioral intentions is the ultimate offshoot of service quality. Results have revealed that an important aspect of behavioral intentions is the complaining behaviour (external & internal response). Hoteliers must consider the internal responses of the customers. Hotels which are very receptive to complains of the customers can easy create a relation of loyalty, trust and commitment. Complaining behaviour of the customer gives the hotels an opportunity to exhibit their responsibility towards customers which drives customers' subsequent attitudes and behavior (Tax et al., 1998). Customers are that sensitive to the complaint, if it is not resolved in quick mode they are ready to switch to the other service providers. Therefore, the management of complaints must strengthen the positive image of the hotel in the hotel guest’s mind. Due importance to internal responses of the customers, It shows significant impact on the perception which ultimately leads to favourable behavioral intentions of the customers.

Results have also revealed that empathy, reliability, responsiveness, tangibility are the service quality dimensions which have significant impact on the behavioral intentions of the hotel guests. Hotels that provide more reliable and credible services and prompt responses to customers’ request will be successful in creation of positive behavioral intentions. In general, customized and individualized hotel service delivery can create and modify the behavioral intentions of customers. If the customer is returned satisfied, then there are more chances of their revisit and recommendation. It is possible through measurement of service quality. Hotel customers’ form their overall service quality perception on the basis of their experience with the hotel which form and influence the behavioral intentions in the form of loyalty to hotel, and reduces the negative effect with propensity to switch, willingness to pay more, external responses and internal responses to problems (complaining behavior). Hoteliers must provide the customized & personalized services and individual attention to their customers which install confidence in the customers. When hotel shows best interest at heart towards customers, it increases the possibility of customers’ revisit and recommendation behavioral intentions. Customer-oriented services delivery leads to guest loyalty and less propensity to switch. Further, prompt services to guest, and employees’ willingness to serve guest in best manner are some important issues which works as positive word-of-mouth advertisement for hotel.

Hoteliers must go through from rigorous evaluation of service delivery process, extensive training and development programs and advanced technological implementation to run hotel at optimum levels throughout all service areas and customers touch-points. Regular inspections of the hotels and continuous evaluation of personnel performance should be done to ensure maximum profitability.

Hoteliers must avoid creating wrong customer impressions with may lead to unfavourable image of hotels. In addition, hoteliers should encourage seeking ways in which they can reduce perceived monetary and non-monetary service costs and increase perceived benefits (Choi et al., 2004). Hoteliers must set the safety standard which made hotel guest feel safe and secure during their stay in hotels. Moreover, hotel management must heavily invest in infrastructure and technology-oriented services to please the customers. Further, proper understanding of pattern of customer behavior would definitely help the hoteliers to build and maintain long-term, healthy and profitable customer relationships.

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Charlestowne Hotels (n.d.) Retrieved  October 23,  2012, from charlestownehotels.com/services/operations-management

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