1.

INTRODUCTION

1.1 CUSTOMER LOYALTY

Customer loyalty is both an attitudinal and behavioral tendency to favor one brand over all
others, whether due to satisfaction with the product or service, its convenience or performance,
or simply familiarity and comfort with the brand.  Customer loyalty encourages consumers to
shop more consistently, spend a greater share of wallet, and feel positive about a shopping
experience, helping attract consumers to familiar brands in the face of a competitive
environment.

Customer Loyalty can be defined as a customer continuing to believe that your organization’s
product/service offer is their best option. It best fulfills their value proposition whatever that
may be. They take that offer whenever faced with that purchasing decision.

Moreover, loyalty means hanging in there even when there may be a problem. This occurs
because the organization has been good to them in the past and addresses issues when they arise.
It means that they do not seek out competitors and, when approached by competitors, are not
interested. It also means being willing to spend the time and effort to communicate with the
organization so as to build on past successes and overcome any weaknesses. In a nutshell, loyalty
means a customer wants to do business with you and does

1.1.1 IMPORTANCE OF CUSTOMER LOYALTY

 A few of the most important reasons why customer loyalty is important for businesses are:

REPEAT BUSINESS: Loyal customers, almost by definition, will purchase goods or services
again and again over time. Depending on what type of business have and what the sales cycle is
like, the business may end up selling more to one loyal customer in a year.

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GREATER VOLUME: As they build relationships with their loyal customers, it will become
increasingly easy to sell to them in higher volumes. This may happen naturally, or you may
choose to incentivize the process for your customers. In any case, higher volumes mean greater
sales, which translate to higher overall profits.

CROSS-SELLING OPPORTUNITIES: Customers who exhibit brand loyalty have a

relationship with the business. They trust them to provide quality products and customer service.
They can make sales to loyal customers across product lines and thus increase the overall sales
volume without needing to focus much on attracting new customers.

PROTECTING FROM THE COMPETITION: Establishing strong brand loyalty can make
practically immune to competitive forces. This is especially important in places where new
players enter the marketplace often.

WORD-OF-MOUTH MARKETING: Loyal customers can also bring you new customers.
Customers that have great relationships with businesses tend to talk about it. Happy and satisfied
customers, who keep coming back, are very likely to refer others who may need your product
and/or services.

1.1.2 RIVERS OF CUSTOMER LOYALTY

It is very important for an organization to identify the factors and facets which drive customer
loyalty. These factors help the organization to manage customer loyalty in a better and efficient
way. Following are the drivers of customer loyalty:

1. Attitude: A customer to bear on his loyalty can have following types of attitude:

 Many customers get emotionally attached because of the high name or good image of
the supplier in the market. They feel highly elicited in status for having business deals
with them which could also substantially upraise their image. This helps in increasing

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 loyalty of customer with that particular supplier unless and until customer finds any
other high named supplier who meets all his expectations.
 Some customers will get attached with supplier just because of the excellence in
technical aspects of product which also includes best service and healthy
organizational culture. These types of customers only believe in the fact that all the
products and services work in accordance to them and in an efficacious and efficient
way. This attachment results in customer to become loyal.
 Some customers get highly impressed with the overall behavior of supplier. Soft
spoken and well-mannered executive is always a positive gain for the supplier to get
the customers emotionally attached with him. This behavior could also include
provision of spontaneous responses in an efficient way. All these aspects can increase
customer loyalty to much higher levels.

2. Product and services: Following are the important aspects of product and services that
could substantially help in retaining loyalty of customers.

 Differentiated Products and Services- Differentiation in products and services

help the organization to reduce competition in market and have substantial influence
on customers’ mindset.

 Multiple Products for the same customer- By manufacturing multiple products for
the same customer enhances the relationship with customer which increases loyalty.
If the customer is loyal towards any one brand then there are good chances to retain
his loyalty for whole range of brands.

 High Service Component- The products having a high service component captures

more customer loyalty. This is because the customer does not want to experiment
with other products provided by different supplier. Hence they become loyal to the
existing customer due to the provision of high service components.

3. Technology: The technological aspects of product manufactured by the supplier plays a vital

role in customer loyalty. The more products are technologically sound, more is the loyalty.

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4. Human Resources: Organizational human resource plays a vital role in marketing segments
where customer comes in direct contact. In some consumer sectors like household and
automobiles, the customer gets a chance to evaluate capability of organizational human
assets. If the customer evaluates these human assets as useful and is influenced by the aspects
then he develops a positive feeling against the supplier who possess these enhanced human
assets.
5. Supplier’s Culture: Supplier’s culture is most important driver of customer loyalty. In
consumer sector this culture means quality and in core sector it can be related to technology.
For example, in US ‘Friedrich’ has ranked with good quality, enhanced design and user
friendly features which have created brand loyalty. In Indian the supplier of almost all the
dairy product called ‘Amul’ has pursued customer loyalty because of their overall culture. In
core sector the image of the supplier is the biggest driver of loyalty. This image could add a
status symbol for most of the customers. ‘Mercedes’ automobiles and ‘Ray Ban’ sun-glasses
are example of this. The customers uses these products only for maintaining or enhancing
their lifestyle and always be loyal to them.

1.1.3 CUSTOMER LOYALTY BREAKERS

When customers end up his relationship with suppliers, he breaks the loyalty with
him. Following are the reasons which are responsible for loyalty break ups:

1. Customer dis-satisfaction: Customer dissatisfaction is the primary reason that results in

breaking up the continued loyalty with the supplier. Most of the unsatisfied customers try to
find more prominent alternatives which results in their migration. In most of the cases the
customer does not even complain about the dissatisfaction and simply divert their way to
other supplier.
2. Tough competition and new options availability: Vivid competition also acts as a breaker
of loyalty as it gives customers new options which are exposed in the market and are
sometimes better than before. These new options results in enhancing expectations of

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 customers which leads to accelerating break ups in relationship between supplier and
customers. This happens because the existing customer’s supplier is unable to fulfill their
demands in an appropriate manner.
3. Enhanced product features and advance technology: Due to the abrupt change in market
conditions, inheritance of advanced technology in all ranges of products and service is
inevitable. If the supplier is unable to follow the process of continuously updating
technological related aspects of products and services he may lose customers as they divert in
search of technological sound products and services. Apart from the advanced technology, if
the customers get enhanced and user friendly product features then it acts like additional
incentives for them to migrate.
4. Customer expectation: Expectations of customers can go way beyond expectations of
supplier which results in breaking loyalty. If supplier is not able to meet customers’
expectations then obviously customers would look for better alternatives. These expectations
can be related to cost, quality, product service, efficiency, durability or any other aspect.
Many a times these expectations could be unrealistic or unreasonable due to the market
scenario or some external business pressure. Under this kind of situation it is becomes very
difficult for an organizations to meet all the expectations which result in sudden divert by
breaking loyalty bond. Any supplier which comes close to these unrealistic and unreasonable
expectations of customers could retain him easily.
5. Customer Attitude: Customer attitude plays a vital role in breaking up the loyalty with
existing supplier. This is because some customers have a habit to try new options and change
business tactics. Even if they are fully satisfied with the existing supplier they would attempt
a change for the sake of getting new and better option or because of any change in business
rules and tactics. These types of customers are experimental in nature and try to be
innovative and creative by taking high business risks. These customers are supposed to be
least loyal because they less likely to be attached with any sort of bond with single supplier.
To retain these types of customers is a pain for all the suppliers and they generally try to
change their attitude by inheriting some business tactics in their marketing strategies.
6. Product Services: Providing products with low or bad service components will result in
ending up loyalty with customers. Customers not only use the products but also demands
valuable and spontaneous service. Hence apart from manufacturing good and sound products

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 it is very important for the supplier to provide enhanced service components along with the
product which will act as a roadblock for customer to divert.
7. Market recession: Some unrealistic situation in global market which affects the allover
economy of a country could also be a reason in ending up loyalty bond with customers.
Under this situation called ‘recession’, intense cash flow problem is seen. This leads
customers to cut-off expenses incurred in business and may lead to divert to other suppliers
in search of low cost but reliable products and services.

1.1.4 INCREASING CUSTOMER LOYALTY

It is necessarily required for an organization to interact and communicate with customers on a

regular basis to increase customer loyalty. In these interactions and communications it is required
to learn and determine all individual customer needs and respond accordingly. Following are
some important aspects which suppliers should always keep in mind to increase customer
loyalty:

1. Emotional attachment: Emotional and sentimental attachment plays a vital role in

increasing customer loyalty. Hence it is important for the suppliers to identify the factors
which force the customers to get emotionally attached with them and should mould this
information accordingly to enhance this emotional relationship. There can be a range of
factors for customers that develops these emotional attachment with suppliers, some of which
are discussed below:
1. Many customers get emotionally attached because of the high name or good image of the
supplier in the market. They feel highly elicited in status for having business deals with
them which could also substantially upraise their image. This helps in increasing loyalty
of customer with that particular supplier unless and until customer finds any other high
named supplier who meets all his expectations.
2. Some customers will get attached with supplier just because of the excellence in technical
aspects of product which also includes best service and healthy organizational culture.
These types of customers only believe in the fact that all the products and services work
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 in accordance to them and in an efficacious and efficient way. This attachment results in
customer to become loyal.
3. Some customers get highly impressed with the overall behavior of supplier. Soft spoken
and well-mannered executive is always a positive gain for the supplier to get the
customers emotionally attached with him. This behavior could also include provision of
spontaneous responses in an efficient way. All these aspects can increase customer
loyalty to much higher levels.
2. Supplier’s credibility: Supplier’s credibility helps to elevate customer loyalty. Credibility
provides confidence and comfort to the customers regarding the reliability, durability, quality
and performance of products and services. In industrial sector, the products provided by
suppliers are actually used by customers for production purpose. Hence unavailability,
malfunctioning or low performance of these products could highly affect the profitability in
business. By nullifying all these factors and providing high valued service and high end
products which are available all the time develops a sense of credibility among the
customers. In such case customers develop faith and belief in supplier which obviously
increases customer loyalty.
3. Customer satisfaction: Customer satisfaction is the measure of how the needs and responses
are collaborated and delivered to excel customer expectation. It can only be attained if the
customer has an overall good relationship with the supplier. In today’s competitive business
marketplace, customer satisfaction is an important performance exponent and basic
differentiator of business strategies. However, a satisfied customer may be or may not be
loyal but an unsatisfied customer potentially seeks other options and may migrate easily.
Hence it is important for the supplier to identify dissatisfaction factors and develop corrective
measures to cope up with. It is often seen that if these corrective measures are implemented
successfully to improve satisfaction then satisfaction level increases to a much higher level as
compared to a normal satisfied customer. A satisfied customer mostly tends to be a loyal
customer hence customer satisfaction is an important factor that increases customer loyalty.

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1.1.5 CUSTOMER LOYALTY CYCLE:

1.1.6 FACTORS INFLUENCING CUSTOMER LOYALTY

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1.2 PHYSICAL EVIDENCE

Physical evidence is the ability and environment in which the service is delivered. Both tangible
goods that help to communicate and perform the service, and the intangible experience of the
existing customers and the ability the business to relay that customer satisfaction to potential
customers. Physical Evidence is also called as SERVICESCAPE.

Physical evidence is defined as ‘The environment in which the service is delivered and where
the firm and customer interact, and any tangible components that facilitate performance or
communication of the service’.  Retail premises, bank branches, restaurants, or hotel premises
would be good examples of this.

Physical evidence comprises of the elements which are incorporated into a service to make it
tangible and somewhat measurable. At the same time, physical evidence also helps in the
positioning of the brand and for targeting the right kind of customers. The best example of
Physical evidence in use is the hospitality industry. Airlines offer premium travel as well as
economy classes. Similarly, restaurants are known to be 3 star, 4 star, 5 star. All such
differentiation, and the target customer that accompanies such differentiation, is because of the
use of physical evidence in marketing.

1.2.1 ROLE OF PHYSICAL EVIDENCE

Physical evidence is not a passive setting it plays an important role in service transactions. An
evaluation of the roles they have in service encounters will reveal how important it is to design
an appropriate servicescape. It plays 4 important roles, they are:

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1. PACKAGE:
The packaging role is particularly important in creating expectations for new customers and
for newly established service organizations that are trying to build a particular image. The
physical surroundings offer an organization the opportunity to convey an image in a way not
unlike the way an individual chooses to “dress for success”.

2. FACILITATOR:
The service-scape can also serve as a facilitator in aiding the performances of persons in the
environment. How the setting is designed can enhance or inhibit the efficient flow of
activities in the service setting, making it easier or harder for customers and employees to
accomplish their goals. A well-designed, functional facility can make the service a pleasure
to experience from the customer’s point of view and a pleasure to perform from the
employee’s. On the other hand, poor and inefficient design may frustrate both customers and
employees.

3. SOCIALIZER:
The design of the service-scape aids in the socialization of both employees and customers in
the sense that it helps to convey expected roles, behaviours, and relationships. For example, a
new employee in a professional services firm would come to understand her position in the
hierarchy partially through noting her office assignment, the quality of her office furnishings,
and her location relative to others in the organization. The design of the facility can also
suggest to customers what their role is relative to employees, what parts of the service-scape
they are welcome in and which are for employees only, how they should behave while in the
environment, and what types of interactions are encouraged.

4. DIFFERENTIATOR:
The design of the physical facility can differentiate a firm from its competitors and signal the
market segment the service is intended for. In shopping malls the colours used in decor and
displays and type of music wafting from a store signal the intended market segment. The
design of a physical setting can also differentiate one area of a service organization from
another. This is commonly the case in the hotel industry where one large hotel may have
several levels of dining possibilities, each signed by differences in design.

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While it is useful from a strategic point of view to think about the multiple roles of the service-
scape and how they interact, making actual decisions about service-scape design requires an
understanding of why the effects occur and how to manage them.

1.2.2 ELEMENTS OF PHYSICAL EVIDENCE

Services being intangible, customers often rely on tangible cues, or physical evidence, to
evaluate the service before its purchase and to assess their satisfaction with the service during
and after consumption. General elements of physical evidence are

Ambiance – The look and feel of a restaurant can be described as the ambiance. For example –
the Sofa that the restaurant uses, the music that it plays, the lighting it has maintained etc.

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Spatial layout and functionality spatial layout – The seamless layout of the furnishing which
is used to achieve maximum productivity in the most efficient and effective manners.
Signs, symbols and artifacts and branding – The icons or signals that amplify the message
from the buyer to the intended customers.

1.2.3 POSITIVE AND NEGATIVE IMPACT OF SERVICECAPE

GOOD SERVICESCAPE:
 Create a good, nice and positive feeling of a products/ services
 Lead a customer to conduct transaction for the first time patron and hope to re-
patron
 Emotional response is pleasure
 Leads to customer satisfaction and loyalty

BAD SERVICESCAPE:
 Lead to negative feeling and dissatisfaction
 Lack of customer loyalty
 Emotional response is avoidance.

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1.3 OBJECTIVE

1.3.1 PRIMARY OBJECTIVE

 To analyze the impact of physical evidence on customer loyalty in Hotel Kumararraja

Palace at Yelagiri.

1.3.2 SECONDARY OBJECTIVE

 To understand and explore the concept of Physical Evidence.

 To find out the factors influencing customer loyalty.
 To find whether physical evidence have effect on the customer satisfaction.
 To suggest measure to improve customer loyalty.

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1.4 SCOPE OF STUDY

Hotel industry like many other industries is facing a rapidly changing market, new technologies,
changing trends, fierce competition, and many more demanding customer and changing climate
has presented an unprecedented set of challenges.
Although many studies discuss the relationship between customer satisfaction and loyalty and
customers’ perceptions of service quality, the impact of physical environment in hotel industries
has not been addressed adequately. In other words, little research has been examined how the
various component of physical environment attitudes and behaviours of customers; little
empirical research has been done on the relationship between the physical environment and key
antecedents of perceived quality.
Keeping the objectives in mind, researcher assesses impact of physical evidence on customer
loyalty in hotel Kumararraja palace. For this, a critical analysis is carried out with customers on
various attributes. Descriptive research method helped to know the expectations of the
customers, which will be useful to develop the hotel’s performance.

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1.5LIMITATIONS

 
 The study was confined within specific regions of Yelagiri only. The results therefore are confined to
this area only and need not necessarily be applicable to other area.
 The sample size was limited so the results obtained from the study may not be generalized for the whole
population.
 The time period of the study was not sufficient to measure the consumer’s response
effectively and reach to a more valid conclusion.
 The unwillingness of some respondents to impart with vital information regarding their
experience, opinions was also a barrier.
 The casual attitude of the respondents regarding the imparting of information desired also proved to be a
barrier.
 Only specific and limited sample are studied so the findings may be subjective to the
experiences of the samples.
 Changes of personal bias of the respondents may affect the result of the survey.

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1.6LITERATURE REVIEW

In this chapter relevant theories and models connected with the Physical evidence and customer
loyalty will be explained and discussed.

1.6.1 THEORETICAL ASPECTS

Servicescape

The term servicescape is defined as “the environment in which the service is delivered and in
which the firm and customer interact, and any tangible commodities that facilitate performance
or communication of the service” (Zeithamal, bitner and gremler, 2006, p. 317)

According to Zeithaml et al (2006, p. 317) as services are intangible, the physical evidence is
used to evaluate the service prior to purchase, and evaluate the outcome of the service during and
after consumption. General element of the physical evidence involved all aspect of the
organization physical facility and other tangible communication as shown in the table.

Physical Environment

The physical environment is the space by which you are surrounded when you consume the
service. So for a meal this is the restaurant and for a journey it is the aircraft that you travel
inside. The physical environment is made up from its ambient conditions; spatial layout and
functionality; and signs, symbols, and artifacts (Zeithaml 2000).

Ambient conditions

The ambient conditions include temperature, colour, smell and sound, music and noise. The
ambience is a package of these elements which consciously or subconsciously help you to
experience the service. Ambience can be diverse. The ambience of a health spa is relaxing and
calm, and the music and smells underpin this experience. The ambience of a nightclub will be

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loud noise and bright lights which enhance this customer experience, obviously in a different
way. The marketer needs to match the ambience to the service that is being delivered.

Spatial Layout

The spatial layout and functionality are the way in which furniture is set up or machinery spaced
out. Think about the spatial layout of your local cinema, or a church or temple that you have
visited and how this affects your experience of the service. Functionality is more about how well
suited the environment is to actually accomplish your needs.

Corporate branding (signs, symbols and artifacts)

Finally corporate image and identity are supported by signs, symbols and artifacts of the business
itself. Examples of this would be the signage in Starbucks which reassures the consumer through
branding. When you visit an airport there are signs which guide you around the facility
smoothly, as well as statues and logos displayed throughout the complex. This is all important to
the physical evidence as a fundamental element of the services marketing mix.

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Customer loyalty

Customer loyalty has been described as the concept of repeat purchase behaviour, which can be
regarded as some degree of repetitive purchase of the same brand by the same buyer. Customer
loyalty has been viewed as one the various behavioural consequences of service quality
(Zeithaml, 2000).

Customer loyalty is closely related to the customer satisfaction. As loyalty is a consequence of

satisfaction, these aspects exist all together. It follows that positive communication with the
hotel’s management and employees could create higher customers’ commitment and increase
their loyalty. Long term relationships between customers and the hotel are becoming vitally
important because of the very positive connection between guests' satisfaction level and
probability of their return to the hotel. (Choi & Chu 2001, 290)

Definition of Customer Loyalty

Customer loyalty is defined as a hybrid between behavioural and attitudinal loyalty with a higher
emphasis on the behavioural aspect of customer loyalty (Dick & Basu, 1994). One of the benefits
of maintaining customers’ loyalty is that it increases income and decreases costs when a
company invests in improving customer loyalty because loyal customer recommends the
business to other people. Word of mouth that is free advertisement helps businesses establish a
good reputation and generate income.

Pullman and Gross (2004) acknowledge that loyal customers are the key to success for many
services, particularly those in the hospitality setting. Bowen and Shoemaker (1998) also
maintained that a small increase in loyal customers can result in a substantial increase in
profitability.

Further, Kandampully and Suhartano (2000) claimed that the significance of customer loyalty is
likely to become a necessary prerequisite for the future survival of hotel organizations. Thus, in
the current marketing environment, the keys to success are attracting new customers and

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maintaining good relations with those customers. The focus of this section and the following
section is to show the evolution of the loyalty construct over time, mapping out the construct's
domain and 48 its specific components to provide a clear definition of the service quality
construct used in this study.

Loyalty can be of substantial value to both customers and the firm. Customers are willing to
invest their loyalty in business that can deliver superior value relative to the offerings of
competitors (Reichheld et al., 2000). When customers are loyal to a hotel or a firm, they may
minimize time spent in searching and locating and evaluating purchase alternatives. Also,
customers can avoid the learning process that may consume the time and effort needed to
become accustomed to a new vendor.

Selnes (1993) stated that customer loyalty includes the possibility of repurchase, possibility of
switching and willingness of recommending services to others. Higher customer loyalty leads to
higher switching barriers. Customer loyalty is the relationship between customer’s personal
attitude (cause) and customers’ repurchase (result) (Dick & Basu, 1994).

Jones and Sasser (1993) mentioned two kinds of customer loyalty: long-term loyalty and short-
term loyalty. Customers with short term loyalty switch easily when they have better choices.

Prus and Brandt (1995) mentioned that customer satisfaction leads to customer loyalty.

Customer loyalty is the long-term relationship and customers have with a certain brand or
company. A loyal customer will keep purchasing the same product or service even when there
are other alternatives (Oliver, 1997; Bowen & Shoemaker; 1998).

Hepworth and Mateus (1994) declared that customer loyalty is the customers’ intention of
repurchasing the same products/service or other products/services from the same company. Neal
(1999) stated that “customer loyalty is the frequency customers buy the same product and service
when they need this kind of products or services. Customer loyalty is behaviour and customer
satisfaction is an attitude”.

There are different characteristics for loyal customers. According to Parasuraman et al. (1996),
post-purchase behaviour is loyalty, brand switching, payment, external response and internal
response. Loyalty includes word of mouth and intention of repurchase.

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According to Jones and Sasser (1995), there are three characteristics of customer loyalty:

(1) Intention to repurchase

(2) Primary behaviour-frequency of purchase, consistency of purchasing and length of

being a customer;

(3) Secondary behaviour-providing information and recommending to others.

Prus and Brandt (1995) pointed out that customer loyalty includes intention of repurchasing,
purchasing other products and services of the same company and the intention of recommending
to others.

Moreover, Griffin (2002) mentioned that loyal customer has the following characteristics: repeat
purchase, intention to purchase other products and services of the company, intention of
recommending to others and the ability of not being influenced by competitive brands.

Types of Customer Loyalty

Kotler (2000) identified types of customer loyalty:
 Hardcore loyalist - these are consumers who buy only one brand all the time.
 Split loyalist - these are consumers who are loyal to two or three brands.
 Shifting loyalist - these are consumers who show no loyalty to any brand.

Peter and Olsen (1999) also identified four types of consumer loyalty:
 Brand loyalist: They are the people who have affective ties to one favorite band
that they regularly buy. In addition, they perceive that the product category in
general provides personally relevant consequences. Their intrinsic self-relevance
includes positive means and knowledge about both brand and the product category
and leads them to experience high levels of involvement during decision-making.
They strive to buy brand for their need.
 Routine Brand Buyers: They have intrinsic self-relevance for the product category
but they do not have a favorite brand that they buy regularly (little brand
switching) for the most part, their intrinsic self-relevance with a brand is not based

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 on knowledge about the means-and of product attributes. Instead, these consumers are
interested in other types of consequences associated with regular brand purchase.
These beliefs can lead to consistent purchase, but these consumers are not
interested in getting the “best” brand; a satisfactory one will do. The other two
segments have weaker levels of intrinsic self-relevance for a particular brand.
Information seekers and brand switchers do not have especially positive means and
knowledge about a single, favorite brand.
 Information Seekers: They have positive means and knowledge about the product
category but no particular brand stands out as superior. These consumers use lot
information to find out a good brand. Over time, they tend to buy a variety of brands in
the product category.
 Brand Switchers: They have low intrinsic self-relevance for both the brand and the
product category. They do not see that the brand or the product category provides
important consequence, and they have no interest in buying the best, they have no
special relationship with either the product category or specific brands. Such
consumers tend to respond to environmental factors such as price deals or other short-
term promotions that act as situational source of involvement.

For the purpose of this study we are concerned only with the first type of consumer loyalty
from the two classifications, that is, hardcore loyalist and brand loyalist because these are
the type of consumer loyalty that business.

Need for Consumer Loyalty

Olson and Peter (1999) pointed out that in today’s hyper competitive market place, that
retaining customer is critical for survival and far more profitable than constantly fighting
to attract new customers. However, because of factors such as the abundance of
choices available in most product categories, the availabilities of information about
them, the similarity of many offering, the demand for value and the lack of time to
always find a particular brand, there is evidence that loyalty to particular brand is
decreasing in many product categories

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Kotler and Armstrong (2001) while commenting on the need of consumer loyalty made it clear
that today’s companies face their toughest competition ever. They made it clear that to
succeed in today’s fiercely competitive market place companies must have to move from
focusing on immediate sale, they should focus attention on attracting and retaining
customers. Kotler and Amstrong (2001) also made it clear that companies should try and create
loyalty in their buyers because losing a customer means losing more than a single sale: it means
losing the entire stream of purchase that the customer would make over a life time of patronage.
They defined CUSTOMER LIFETIME VALUE as the amount by which revenues from a given
customer over time will exceed the company’s cost of attracting, selling and servicing that
customer. Kotler and Armstrong went further to say that loyal customer is more likely to
give the company a larger share of the market or the business. They concluded by noting that
loyal customer produce several benefit for the company: loyalty customers are less price
sensitive, talk favorable to other about the company and its products.

Physical evidence and customer loyalty

As a behaviour intention after the performance of service, customer loyalty is considered to be

related to perceptions of quality (Rust & Zahorik, 1993). All of the tangible aspects, which
include building design, décor, layout, ambience, furniture, fixture and equipment, are
considered to have a direct influence on the customer’s perception of service quality.

Bateson (1985) describes tangibles as important factors in managing the service encounter and
reducing a perceived risk. Loyalty includes a variety of attitudes or behaviours or may well be
situation specific (Kroenert et al., 2005). It is affected by a number of variables that are
significant to be studied for finding out the correlation between aspects of services at hotels (i.e.,
tangible and intangible) and customer loyalty.

Recently, Skogland and Siguaw (2004) declare that “research on customer loyalty has primarily
focused on customer satisfaction and involvement” (p. 221). However, they reported that results
on the relationship between repeat-purchase behaviour and satisfaction were unclear. Numerous
studies have indicated significant relationships, whereas others have argued that satisfaction

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explains little in regards to repeat purchases. Skogland and Siguaw suggest antecedent of
involvement on loyalty received inadequate consideration. Their research examined the degree to
which satisfaction impacts loyalty and they explored how satisfaction may affect involvement to
better understand how involvement may directly influence loyalty. The importance of the
physical environment of a hotel has been emphasized by different researchers. The physical
appearances of the hotels’ exterior and public spaces are considered two of the most attributes
that are related to having a decision for selecting a hotel to stay (Dube & Renaghan, 2000).

According to Pizam (2005), physical environment is defined as the material surroundings of a

place (p. 21). For example, a physical environment may be the lobby of a hotel or the swimming
pool/spa area of a property. Early research in the field of environmental psychology focused on
how the physical environment affected behavior in workplace, educational, and penal
institutional/ correctional settings.

Studies on physical environment have focused on various service settings such as hotels
(Countryman & Jang, 2006), restaurants (Jang & Namkung, 2009; Han & Ryu, 2009), casinos
(Hirsh, 1995; Wakefield & Blodgett, 1996), sports stadiums (Wakefield & Blodgett, 1996), and
events (Nelson, 2009).

Bitner (1992) introduced the concept of “servicescape” to examine the effect of “physical
surroundings” on behaviour of customer in the service industry. Bitner suggests three different
environmental dimensions: surrounding condition, spatial layout and functionality and signs.
While surrounding conditions can include temperature and music, spatial layout and
functionality may include furniture and the layout features. Signs may include symbols, artifacts,
signage and style of decor. All of these dimensions are supposed to create an overall perceived
servicescape that activates internal cognitive, emotional and physiological responses with
customers and employees.

Wakefield and Blodgett (1994) studied the servicescapes of two stadiums, one of high quality
and one of low quality. It was determined that greater satisfaction was associated with the
servicescape of higher quality and therefore, people were more inclined to go to games in that
stadium. In another study, facility aesthetics, such as wall colour, wall covering, seats, and
overall facility attractiveness, have been incorporated in the consideration of ambient conditions

23
(Wakefield & Blodgett, 1996). The customer’s perception of seating comfort is an important
component of ambient conditions. It is especially relevant in services where customers sit for
long periods of time. In another study, Wakefield and Blodgett (1999) tested a model that
included the intangible and tangible elements of the service quality scale (SERVQUAL) that was
established by Parasuraman, Zeithaml and Berry (1988). Wakefield and Blodgett included also
an affective or emotional measurement of the customer’s level of excitement. They report in
their study that the tangible elements of the service environment had a positive effect on the
excitement level experienced by customers, which led to a positive effect on repeat-patronage
intentions and a greater willingness to recommend the leisure service to other people such as
friends or relatives.

1.6.2 ABSTRACTS

1: Impact of Physical Environment Factors in Hotels on Arab Customers’ Loyalty

24
by Mr. Omar E. Alsaqre

The objective of this study is “the effects of physical factors at hotels (i.e., exterior design,
equipments, and ambient conditions) on customer loyalty”. Employing a questionnaire, data
were collected from 209 respondents in some hotels in AlLadhiqiyah, Syria. The results also
showed that among the three variables of physical environment, the design of hotels had the
greatest influence on customers’ loyalty with p≤ 0.01. This study shows that the exterior design
of a hotel including the decor and the furniture in the public spaces and rooms have their effect
on customers’ loyalty. In addition, the equipment found at hotels and the conditions of the rooms
and the public spaces in hotels influence customers’ loyalty.

This study emphasizes that the physical environment of hotels is one of the best drives for
customers’ selection and recommendations of hotels to their friends and relatives. The study
results showed that physical environment influences the perceived service quality that relate to
customer loyalty. Thus, managers and owners of hotels should take into consideration of such
factors taking care of the cleanness of the furniture, rooms and public places at hotels.

2: The influence of relationship quality on customer loyalty: Evidence from the practices of
outsourcing in the Malaysian hotel industry by Rahman, Maria Abdul (2014):

This study intends to investigate the role of relationship quality as the mediator between
customer perceived value, relational norms, switching costs, and customer loyalty, and the
moderating role of dependence on the relationship between relationship quality and customer
loyalty. This thesis presents empirical findings from a survey of 158 Malaysian hotel managers,
in which the data was analyzed using Partial Least Squares. The findings of this thesis revealed
that, except for switching costs, customer perceived value and relational norms are important in
affecting relationship quality. However, all these three variables (customer perceived value,
relational norms, and switching costs) do not have any significant influence on customer loyalty.
The results also show that relationship quality positively and significantly affects customer
loyalty, which shows that relationship quality is a necessary determinant of customer loyalty.
The results of this thesis also provide evidence that relationship quality mediates the relationship
between customer perceived value, relational norms, and customer loyalty. However, the

25
findings revealed that dependence does not moderate the relationship between relationship
quality and customer loyalty. Since the results of this thesis showed that customer loyalty is
indirectly influenced by customer perceived value, relational norms, and relationship quality, this
therefore implies that there is a need for the key players in the hotel industry (e.g., Ministry of
Tourism Malaysia, service providers, Malaysian Association of Hotels, and hotel managers,) to
focus on these constructs in the pursuit of a more competitive advantage and long-term profits.

3: The effective use of physical evidence in a service environment by Created by Alison,

Kirsty, Lynda and Jenna, (2010) :
Their findings solid international brand with recognizable logo effective use of physical
evidence; has a clear target market factors of service scape such as food, the brands, colour
scheme, ambience, companies logo, lighting, furniture style, font on logos/menus, location, etc.
Expectations and perceptions can set the standards before guests even turn up. In Their findings,
they believe that Hotel Indigo is a good example of using physical evidence to promote their
business and to entice customers. The hotel has established a clear target market and has
designed the entire feature around this from its location to the free Wi-Fi and branded paper in
the rooms. When customers look at the Hotel Indigo logo, they recognize a quality brand. In
hotel indigos first year of opening in Glasgow, it was rated the number one hotel in Glasgow.
After a year of being opened the hotel has slid to number 2. They believe this may be because it
has such a reputation that customers have expectations which cannot always be met. This put
additional pressure on the staff. They think that the hotel has now got a tight budget and in this
cutbacks have been made in terms of staff. They have found that there is not always an
appropriate number of staff on at busy periods and this may affect the customer experience. To
combat this they suggest forecasting sales to minimise the chance of being understaffed.
Understaffing can cause problems with staff morale which needs to be addressed as it can be
picked up on by guests. They suggest that hotel indigo utilized its guest loyalty programme to
encourage other local businesses to use the hotel.

4: The impact of hotel interiors on customer’s loyalty intentions by Andrei Khanau

26
The purpose of this study is to examine the role of hotel interiors which are perceived by five
atmospheric elements of color, lighting, layout, style, and furnishings on customer’s loyalty
intentions under the two types of service quality: high and low. His finding was , a strong
positive relationship was found between the satisfaction with the interiors of each of three
servicescapes (except for lobby interiors which revealed quite a low influence power) on
respondent’s loyalty intentions both under the high and low perceived service quality, as well as
between the overall satisfaction with interiors and overall loyalty intentions.

4: Customer loyalty in the hotel industry: the role of customer satisfaction and image by
Jay Kandampully, Dwi Suhartanto, (2007):

The objective of this research is to identify the factors of image and customer satisfaction that are
positively related to customer loyalty in the hotel industry. Using data collected from chain
hotels in New Zealand, the findings indicate that hotel image and customer satisfaction with the
performance of housekeeping, reception, food and beverage, and price are positively correlated
to customer loyalty.

5: The Relationship between Service Quality and Customer Loyalty by Yingsheng Du &
Youchun Tang, (2007):

Customer loyalty is the most precious intangible assets of modern enterprise. High loyalty is not
only the key of enterprise competition to win, but also the fundamental guarantee of enterprise’s
stability. In the era of service economy, improving the service quality has always been
considered as one of the effective ways to improve customer loyalty. To a large extent, service
quality can affect customer loyalty to the enterprise. The influence can be direct, and it can also
be indirect. This study aims to sum up a series of function mechanism between service quality
and customer loyalty through the analysis of domestic and foreign literature, which will provide
some ideas of building model in the future research.

27
6: New or repeat customers: How does physical environment influence their restaurant
experience? by Kisang Ryu, Heesup Han

This study proposed a conceptual model to examine how customers’ perceptions of the physical
environment influenced disconfirmation, customer satisfaction, and customer loyalty for first-
time and repeat customers in upscale restaurants. Using a structural equation modeling analysis,
this study showed that facility aesthetics, lighting, layout, and service staff had significant effects
on disconfirmation. Moreover, disconfirmation exerted a direct influence on customer
satisfaction and customer loyalty. Customer satisfaction also positively influenced customer
loyalty. Finally, the impacts of facility aesthetics, lighting, table settings, and service staff on
disconfirmation significantly differed between first-time customers and repeat customers. More
specifically, facility aesthetics, lighting, and service staff were significant predictors of both first
timers’ and repeaters’ perceived disconfirmation, while layout and table settings were significant
determinants of only repeat visitors’ perceived disconfirmation.

7: The roles of price, perception and physical environment in determining customer

loyalty: evidence from fast food restaurant of Malaysia

Authors: 
 Irza Hanie Abu Samah, Intan Maizura Abd Rashid, Mohd Juraij Abd Rani, Nor Irwani Abdul
Rahman, Muhammad Ahmar Ali and Muhammad Fazlee Sham Abdullah

 In order to sustain customer loyalty, fast food restaurants are striving to achieve high customers’
satisfaction through improved of facilities and better price. This study investigated the impact of
physical environment and price perception on customer’s loyalty in fast food restaurant of
Malaysia. Strategy planner or marketers can formulate a good strategy to compete with its
competitors via the information that obtain and try to create loyalties among the consumer. So far
there is no clear evidence about the factors influencing customer loyalty towards fast food
restaurant in Penang, Malaysia. However, this paper stress on the factors that is important for

28
building customer loyalty especially in Penang, Malaysia. Therefore, this paper stressed on the
crucial factors of building customer loyalty in Malaysian food industry.

8: Investigating the effects of tangible and intangible factors on customers’ perceived

service quality and loyalty in hotel industry in al-ladhiqiyah, syria by omar z. Enizan
alsaqre

This study showed that design of the hotels, the equipment at hotels and the ambient conditions
at hotels had their effects on customers’ overall perceptions of service quality. The results also
showed that only intangible factors of empathy and assurance had their significant influence on
customers’ overall perception of service quality. In addition, the results indicated that empathy,
assurance and reliability had a high significant influence on customers’ loyalty. Accordingly, it
was recommended that managers and owners of hotels should give great attention to all tangible
factors of service quality at their hotels because such factors have their influence on customers’
loyalty and can bring more profits to hotels. In addition, intangible factors of reliability,
assurance and empathy should be taken into consideration because they play a great role in
customers’ loyalty.

9: Satisfaction Strength and Customer Loyalty by Murali Chandrashekaran, Kristin Rotte,

Stephen S. Tax, and Rajdeep Grewal (2007)

Their study examines the role of satisfaction strength in shaping the satisfaction–loyalty link
in a business-to-business setting, and a conceptual replication in a business-to-consumer
context. The studies strongly demonstrate that satisfaction strength plays a central role in
the translation of stated satisfaction into loyalty. A key finding is that though satisfaction
translates into loyalty when satisfaction is strongly held (i.e., low uncertainty), the
translation is significantly lowered, on average, by approximately 60% when the same
satisfaction is more weakly held (i.e., high uncertainty). The studies also indicate that prior
relationship aspects (length of relationship, volume of business, and favorability of prior
experiences) result in even greater vulnerability.
29
10: Loyalty Programs: a study case in the Hospitality Industry by Lubica Hikkerova,
(2014) :

IPAG Business School 184, Boulevard Saint-Germain 75006 Paris France

The widespread use of loyalty programs in the tourism sector raises questions about their
differentiating capacity and more broadly about the real advantages they offer firms. The
researcher has chosen to focus on the hotel sector and propose a conceptual model on the
determinants of loyalty to a hotel or a hotel chain. The subjacent hypothesis is to determine if a
loyalty program and its associated advantages manage to take precedence over other factors
which influence choice and thus modify the probability of the hotel being chosen. More
precisely, they seek to better understand the antecedents of commitment and trust and look at
how these factors influence customer loyalty and thus determine the impact of loyalty schemes.
Their empirical study, carried out on a sample group of consumers, enabled them to identify the
four antecedents of loyalty (economic value of the exchange, reputation in terms of quality of the
firm, communication, and shared values) so as to make managerial recommendations concerning
the effectiveness of loyalty programs.

11: International hotels use loyalty programmes to lure customers by ET Bureau (Feb 25,
2012):

NEW DELHI: Travel aficionados appear to have strong allegiance to their favourite hotel
brands, as they claim longer associations with hotel loyalty programmes, than even their
marriages or jobs. With high rate of loyalty among globetrotters, international hotel chains are

30
focusing on India and China, the two fastest growing markets for the industry, to lure members
to their loyalty programmes.

According to a survey commissioned by American hotel chain Starwood Hotels & Resorts,

nearly three-quarter of global travellers said their relationships with hotel loyalty programmes
would last longer than the loyalty rate in marriages or jobs.
International chains such as Starwood, Marriott and InterContinental are ramping up their global
loyalty programmes to get more Indian guests enrolled. Indian hotel brands such as ITC and Taj
group are also waking up to this competition and offering attractive offers to attract members.
According to Starwood Hotels & Resorts, nearly 45% of its guests who stay at its hotels in India
are members of its loyalty programme, Starwood Preferred Guest (SPG). Its membership base
has grown nearly 270% since 2007. Nearly 30% of the revenue of hotel chain comes from
members of the SPG.

"India is the one of the key and one of the fastest growing markets," says Javier Cedillo Espin,
senior director marketing, Starwood Asia Pacific Hotels & Resorts.

International hotel chains have been busy tying up with Indian airlines, cab service providers,
travel portals and even IPL teams such as Delhi Daredevils and Rajasthan Royals to provide
consumers with more region specific options to redeem their points.
InterContinental Hotels (IHG), which has the largest global loyalty programme with about 61
million members, is planning to conduct a study to know more about its Indian consumers.
"With India being a key market for us, we plan to do evaluation of consumer behavior to better
understand their needs from a programme like this," says Chris Moloney, chief operating officer,
IHG-South West Asia. Brand loyalty comes in handy for hotel chains during economic pressures
on the travel industry, he says.

According to Siddharth Thaker, managing partner, Prognosis Global Consulting, "Average

spends made by members of hotel loyalty programmes is nearly 20-22% higher and on an
average 50-55% of the occupancies in hotels are driven by them."

31
Freedom to check in and check out beyond specified time, free internet services, access to
exclusive executive lounge, no blackout days, butler service and free stays are just some of
goodies bestowed on these privileged consumers.

ITC's lifestyle retailing business division -Wills Lifestyle and Hotels Division has merged their
existing loyalty offerings into a unique loyalty programme - Club ITC, which has close to
100,000 consumers. The redemption options extend to ITC's personal care products , ITC foods
as well as Travel House.

12: Customer Loyalty in Hospitality Sector in India: A Case study of Indian Hotels in Goa-
Kerala by Dr. Jaskaran Singh Dhillon, Director Principal (Mar. - Apr. 2013):

In general, perceived service quality seems to be positively related to customers’ likelihood of

remaining a loyal customer and their attitudes toward the service provider (Anton, Camarero, &
Carrero, 2007; Bell, Auh & Smalley, 2005; Aydin & Ozer, 2005). Suhartanto (2011) reported
that there are numerous studies, mostly conducted in developed countries, which examined
service quality as the determinant of customers’ brand loyalty in the hotel industry. This
prompted the researchers to investigate empirically how and to what degree customers’
perceptions on service quality dimensions impact their hotel brand loyalty in developing country
- India. Multiple regression analysis, on survey responses of the customers of 8 different four and
five star hotels, reflected that customers’ perceptions on tangibles, empathy and reliability
contributed to fostering their loyalty with hotel brands. Implications for practitioners and future
researchers were discussed, too

13: Impact of CRM Factors on Customer Satisfaction and Loyalty by Choi Sang Long1,
Raha Khalafinezhad1, Wan Khairuzzaman Wan Ismail2 & Siti Zaleha Abd Rasid (2013):

This paper examined the impact of customer relationship management (CRM) elements on
customer satisfaction and loyalty. CRM is one of the critical strategies that can be employed by

32
organizations to improve competitive advantage. Four critical CRM elements are measured in
this study are behavior of the employees, quality of customer services, relationship development
and interaction management. The study was performed at a Hotel in Tehran, Iran. The study
employed quantitative approach and base on 300 respondents. Multiple regression analysis is
used to examine the relationship of the variables. The finding shows that behavior of the
employees is significantly relate and contribute to customer satisfaction and loyalty.

14: Measuring physical evidences and customers’ satisfactions at hotels & resorts in lumut
by Siti Daleela Mohd Wahid, Nur Izzati Mohamad, Salim Nurul Fadzilah Zahari (2012):

Customer’s satisfaction is identify as the most essential concept of marketing with solid evidence
of strategic links between physical evidences (interior and exterior design) and customer
satisfaction (Bitner, 1992). The spirit of innumerable researches in diverse industries endorse that
the service provider pay greater attention to satisfy their customers. Malaysian government is
serious in making the country as a hub for tourism. Unfortunately, until recently, number of
complaints on physical evidences of the hotels and resorts keep increasing upward. Accordingly,
this current study looks for the impact of physical evidences on the customer’s satisfaction in
hotels and resorts sector of Lumut. Data was collected through survey questionnaire. A
convenience sampling was employed to select the respondents. The results provide a basis from
which within industries benchmarking and the identification of best practices can be captured
and used by practitioners. Therefore, recognition of significant determinants of customer’s
satisfaction may facilitate the higher management in adopting and implementing efficient and
effective customers’ focus strategies.

15: Factors Influence Customer Loyalty in Hotel Industry by Zhang Yan (2015):

The main objective of this research is to examine factors influence customer loyalty in China’s
hotel industry. Review of the gaps in literature concluded that three predictors were counted as
major contribution for customers’ loyalty namely perceived value, service quality, and brand

33
image. Besides, customers’ satisfaction also postulated to mediate such relationship. A survey
among 200 respondents from three star rating hotels in Hebei province, China, indicated that
brand image has significant relationship on customer satisfaction and loyalty. Customer
satisfaction also partially mediates the relationship between brand image and customer loyalty.
Though, it is not statistically significant, hotelier simply cannot ignore the importance of service
quality and perceived value because it is part and parcel of brand image indicators.

2.1 INDUSTRY PROFILE

The history of the hotel industry is as old as the history of tourism and travel industry. In fact,
both are two sides of the same coin. Both are complementary to each other. Hotel is an
34
establishment which provides food, shelter and other amenities for comfort and convenience of
the visitors with a view to make profit (Chakravarti, B.K). Hotel is a commercial establishment
and intends to provide visitors with lodging, food and related services with a view to please them
so as to build goodwill and to let them carry happy memories.

The Indian hospitality industry has emerged as one of the key industries driving growth of the
services sector in India. The fortunes of the hospitality industry have always been linked to the
prospects of the tourism industry and tourism is the foremost demand driver of the industry. The
Indian hospitality industry has recorded healthy growth fuelled by robust inflow of foreign
tourists as well as increased tourist movement within the country and it has become one of the
leading players in the global industry.

2.1.1 TRENDS IN THE INDUSTRY:

1. Budget Hotels as the next trigger

2. Medical Tourism

3. New avenues of growth

4. Shifting focus to Tier II and Tier III cities

5. Marketing Strategies

6. Emergence of Mixed Land Usage

7. Huge spurt of international brands

8. Innovative operating models

The Indian hotel industry is highly fragmented with a large number of small and unorganized
players accounting for a lion's share. The major players in the organized segment include Indian
Hotels Company Ltd, Hotel Leela Venture Ltd, EIH Ltd, ITC Hotels and ITDC. The industry is
likely to experience robust growth on the back of rising disposable incomes and favorable
industry statistics. The market is estimated to reach US$ 30 billion by 2015.

35
2.1.2 FACETS OF HOSPITALITY INDUSTRY

There are broadly five facets of Hospitality Industry:

1. Tourism Management: Tourism is the temporary, short-term movement of people to

destination outside the places where they normally live and work and their activities during the
stay at each destination. It includes movements for all purposes. Tourism management is the
profession of providing positive and successful experiences for such travellers and for the
businesses who cater to them.

2. Hotel Management: Hotel Management involves combination of various skills like

management, marketing, human resource development, financial management, inter personal
skills, dexterity, etc. Hotels are a major employment generator in Hospitality industry. Work in
the area of Hotel Management involves ensuring that all operations, including accommodation,
food and drink and other hotel services run smoothly.

3. Event Management: Event Management is the management of events starting from

conception to reporting and evaluation. Event planners execute all details related to a variety of
meeting formats including seminars, conferences, trade shows, executive retreats, incentive
programs, golf events, and other programs.

4. Convention Management: Some industry experts consider conventions to be the fastest

growing segment of the tourism industry. Special events and conventions are being recognized as
great income generators for a community. A Convention Planner is responsible for some of the
most significant details of a convention, like securing an event location, but also for the smallest
logistics, such as printing an event program. Convention Management and Planning involves
coordinating with many different people, maintaining a tight budget and effectively marketing
yourself and the event that you are planning.

5. Resort Management A program that prepares individuals to plan, manage, and market
comprehensive vacation facilities and services and related products. It includes instructions in
hospitality administration, hotel/motel management, restaurant and food services management,
facilities planning, leisure studies, recreation administration, marketing, recreation equipment
and grounds operations and maintenance, business finance, insurance and taxation, event

36
management and guest services, personnel management, travel and logistics management, safety
and health services, professional standards and ethics, and applications to specific vacation types
and locations.

2.1.3 CLASSIFICATION OF HOTELS:

Since Hotel Industry plays a major role in the hospitality sector let us classify the hotels on the
basis of some major parameters.

1. On the basis of the service levels hotels can be classified as:

a) Budget: A budget hotel is one with limited amenities at a lower average price per night
generally suitable for low cost travel for backpackers and young people.

b) Luxury: Luxury refers to combination of facilities and style and something which one doesn’t
normally experience at home. A luxury hotel is a hotel that is upscale and typically costs more
than the average accommodation.

c) Suite: A suite in a hotel or other public accommodation denotes a class of luxury

accommodations, the key feature of which is multiple rooms. Suites offer multiple rooms, with
more space and furniture than a standard hotel room. A suite will include a living or sitting room.
Kitchen facilities are also added in many suites.

2. On the basis of theme the hotels can be classified as:

a) Boutique: Small but exclusive property that caters to the affluent clientele with an exceptional
level of service at premium prices. Typically boutique hotels are furnished in a themed, stylish
and/or aspirational manner. Boutique hotels also known as Design hotels are often individual and
focused on offering their services in a comfortable, intimate, and welcoming setting
b) Heritage: Heritage means that it is related to the history. Heritage hotels are generally some
old palaces, mansions, bungalows or some other historical places converted into hotels for
guests. 
c) Ecotel: Ecotel is a new concept in hospitality that claims to work for environment protection
and preservation. They recycle things, ask customers to reuse towels, etc. All eco-certified hotels
must pass a detailed inspection and satisfy stringent criteria designed by environmental experts.

37
3. On the basis of the Target Market, Hotels can be classified as:

a) Commercial: Commercial hotel is a hotel for a transient that caters esp. to salesmen (as by
providing rooms for the display of samples). These hotels are in business and downtown areas,
which is where most of the business travelers stay, as well as those just passing through and need
a place just for the night.

b) Resort: A resort hotel is typically in a vacation (resort) area, and caters mostly to vacationers,
especially on beaches. A fashionable hotel in an area where many people go for recreation. Their
goal is to provide every service their customer requires or desires on site.

c) Convention: Convention hotel is a hotel which provides facilities and services geared to meet
the needs of large group and association meetings and trade shows. Typically, these hotels have
more than 500 guest rooms and contain substantial amounts of function and banquet space. It’s a
hotel designed and catering to trade shows and corporate events with adequate conference and
display facilities. 

2.1.4 DEPARTMENTS IN HOSPITALITY INDUSTRY

Let us understand the different departments that run the entire Hospitality Industry. These are the
pillars on which the concept of Hospitality stands.

Housekeeping:

Housekeeping is more than just how to use a mop and broom. This department is responsible for
cleaning and maintaining hotel premises which include public area, guest rooms, lobby,
swimming pool area etc. generally this department is not visible to the guest. It works for guest
satisfaction working round the clock to keep the environment clean and hygiene. This
department works to give pleasant look of the hotel to the guest.

Front Desk:

A front office is the area of a business where clients and employees interact. It is the most
important department of the hotel. The main function of this department is to give warm

38
welcome to the guests. This is the first department where guest comes in contact with. It
generates the maximum revenue for the hotel as it sells room to the guests. 

Food & Beverage:

It is a department which serves food and beverage to the guest in a very attractive and pleasing
manner, which creates good impression on the guest. The food and beverage division is
responsible for all of the dining rooms, restaurant - bars, bars, the galleys (kitchens), clean up
and provisions.

Engineering:

This department provides the day to day basic utility services, electricity, hot water, air-
conditioning and other services and is responsible for repair and maintenance of the equipment,
furniture and fixtures in the hotel.

Health/ sports/ recreation:

The main purpose and motive of this department is to provide health and recreation to the
people. With the increasing need to concentrate on the health issues, many hotels have come up
with health gyms, spas, swimming pools, sports areas like billiards, golf etc. The aim is to
provide a healthy environment both to the guests and the employees.

Safety/ security:

The security of guests, employees, personal property and the hotel itself is the foremost concern
for the hotel. In the past, most security precautions concentrated on the prevention of theft from
guests and the hotel. However, today such violent crimes as murder and rape have become a
problem for some hotels. Unfortunately, crime rates in most major’s cities are rising. Hence
today security department also concentrate on these additional criminal activities too.

Although there are many more departments working backend to keep the hotels running, these
are majorly the departments that cluster under the hospitality.

2.1.5 THE IMPORTANCE OF HOSPITALITY INDUSTRY IN HUMAN LIVES

39
Hospitality affects the customer satisfaction levels. Better the quality of services, more satisfied
the customer feels.

Hospitality Industry has grown vastly in the last few decades with more private players entering
in this sector indicating the ever-increasing scope for the diverse hospitality services, and the
employment of different professionals & personnel. Since the employment prospects are varied
and extensive, there is rapid career- growth with abundant money and freedom, in almost every
kind of hospitality service.

A good hospitality management can also affect a country's image as it tells the quality of a
service of a country. Globally, we need to share best practices for training and retention and
make industry sponsored educational programs more readily available to employees at every
organizational level.

Hospitality Industry captures major tourists and business markets by ensuring that the tourists get
physically energized, mentally rejuvenated, culturally enriched, spiritually elevated and
ultimately feels it from within.

When a company is looking for a place to relocate or to grow its business, many variables are
considered. One such variable is quality of life. Quality of life is measured primarily by three
factors: housing cost, education quality and cultural amenities. The hospitality industry
underpins those cultural amenities that other businesses find attractive. The hospitality industry
plays a significant, supporting role in these business dealings. Companies in the industry help
enable others to do business hence fuels the economic growth

2.2 COMPANY PROFILE

2.2.1 INTRODUCTION

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Hotel Kumararraja Palace is an ideal place to enjoy your weekend or a holiday. The Hotel
presents the ideal location with its salubrious weather and energizing location. The Hotel was
started in the year 2013 by Mr. A. Ramamoorthy. He is the owner of Arul Murugan Builders.
Hotel Kumararraja Palace is their venture into the hotel Industry.

2.2.2 FACILITIES OFFERED BY THE HOTEL

GUEST FACILITY

They have 56 Rooms (40 Standard Rooms + 13 Suite Rooms + 3 Deluxe Rooms) are having a
nice architecture which makes the guest to enjoy their stay as a more pleasant and remarkable
visit to their hotel.

The Hotel provides superior accommodation. Facilities classified into Standard, Deluxe and
Suite rooms. All units are elegantly designed exuding maximum comfort and warmth along with
wide range of modern amenities.

The well-appointed rooms give comfort and warmth to the visitors. These rooms boast of simple
furnishings and comfortable amenities.

The rooms have the following facilities.

41
  24 x 7 hot water

 Cable TV
 Intercom
 Free Wi-Fi internet access

STANDARD ROOM SUIT ROOM

SWIMMING POOL
The hotel offers state-of-the-art facilities like a big swimming pool for kids and adults.
This facility is available only in two to three hotels in yelagiri. They are one in that hotels
category.

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PORSCHE MULTI CUSINE RESTAURANT

Thenkani Food Court

A restaurant called Thenkani offers South Indian, North Indian and Chinese cuisine of both
vegetarian & non-vegetarian. Fresh food and taste makes guests to visit the hotel again and
again.

43
Bargola
Food service is also available at Bargola in Garden.

44
 There are many more state-of-the-art facilities available in this hotel.

 A banquet hall

 A mini hall
 Full power back-up
 Kids play area

 Free Wi-Fi internet access

 Camp fire

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 3. RESEARCH METHODOLOGY

Research in common parlance refers to search for knowledge. Redman and Mory define
research as a “Systematized effort to gain new knowledge. Research is an academic activity and
such the term should be used in technical sense. According to Clifford Woody, Research
comprises defining and redefining problem, formulating hypothesis or suggested solutions;
collecting, organizing and evaluating data; making deductions and research conclusions; and at
last carefully testing the conclusions to determine whether they fit the formulating hypothesis.

Research is thus an original contribution to the existing stock of knowledge making for its
advertisement. It is pursuit of truth with the help of study, observation, comparison and
experiment. In short the search for knowledge through objective and systematic method of
finding solution to problem is research.

3.1 RESEARCH DESIGN

A Research design is the arrangement of conditions for collection and analysis of data in a
manner that aims to combine relevance to the Research purpose with economy in procedure. In
fact the Research design is the conceptual structure within which Research is conducted: it
constitutes the blueprint for the collection measurement and analysis of data.

It must be able to define clearly what they want to measure and must find adequate methods
for measuring it along with a clear cut definition of population wants to study. Since the aim is to
obtain complete and accurate information in these studies, the procedure to be used must be
carefully planned. The research design must make enough provision for protection against bias
and must maximize reliability with due concern for the economical completion of the search
study.

Descriptive research is adopted for this study. It includes surveys and fact finding enquires of
different kinds. The major purpose of descriptive research is description of the state affairs as it

46
exists at present. The main characteristic of this method is that the researcher has no control over
the variables. He can only report what has happened or what is happened.

3.2 SAMPLING DESIGN

A sample design is a definite plan for obtaining a sample from the sampling frame, it refers to
the technique or procedure the researcher would adopt in selecting some sampling units from
which interferences about the population is drawn. Sampling type used is Simple Random
sampling technique.

3.2.1 SAMPLE SIZE

The sample size consisted of 120 respondents. It included those customers who visited Hotel Kumararraja Palace.

3.3 DATA COLLECTIONS

For achieving the specific objectives of this study, data were gathered from both primary and
secondary sources.

3.3.1 PRIMARY SOURCE:
 
Data collected for the purpose or for a particular problem in original is known as Primary Data.
The data has been collected directly from respondent through a field survey with the help of
structured questionnaire. The questionnaire is well designed so as to cover the objective of the
study. It is designed in such a way that the respondents were able to express their opinion frankly
and give their valuable suggestions

3.3.2 SECONDARY SOURCE:

The secondary data was collected from the company report, records,

j o u r n a l , b o o k s , i n t e r n e t , and references from Library.

47
3.4 STATISTICALTOOLS

 Percentage analysis
 Chi-square test
 Multiple Regression

3.4.1 PERCENTAGE ANALYSIS

It refers to a special kind of ratio. Percentage is used in making comparison between two or
more series of data; percentages are used to determine relationship between the series if data
finding the relative differences becomes easier through percentage. It is expressed as,

Percentage (%) = No. of respondents x 100

Total no. of respondents

3.4.2 CHI-SQUARE TEST

The Chi-square test is an important test amongst the several tests of significance developed by
statisticians. Chi-square is a statistical measure used in the context of sampling analysis for
comparing a variance to a theoretical variance. As a non-parametric test, it can be used to
determine if categorical data shows dependency or the two classifications are independent. The
test is, in fact, a technique through the use of which it is possible for all researchers to

i. Test the goodness of fit

ii. Test the significance of association between two attributes and

iii. Test the homogeneity or the significance of population variance.

As a test of independence, χ2 test enables us to explain whether or not two attributes are
associated. In such a situation, we proceed with the null hypothesis that the two attributes are

48
independent. If the calculated value is less than the tabulated value at certain degrees of freedom,
the null hypothesis is accepted and vice versa.

χ2 is calculated as follows:

χ2 = Chi-Square

Oi = Observed Frequency

Ei = Expected Frequency

χ2 is always positive.

The expected value for the contingency tabulated as follows:

E= (Row total*Column total)

Grand total

The χ2 test depends on the set of observed and expected values and on the degrees of freedom.
The χ2 distribution is the limiting approximation designation.

3.4.3 MULTIPLE LINEAR REGRESSIONS

Multiple regressions is a statistical tool used to derive the value of a criterion from several other
independent, or predictor, variables. It is the simultaneous combination of multiple factors to
assess how and to what extent they affect a certain outcome.

The model for multiple linear regression, given n observations, is 

yi =  0 +  x  + 

1 i1 x  + ... 
2 i2 x  + 
p ip  for i = 1,2, ... n.
i

49
Sometimes the dependent variable is also called endogenous variable, prognostic
variable or regressand.  The independent variables are also called exogenous
variables, predictor variables or regressors. There are 3 major uses for Multiple
Linear Regression Analysis –

(1) Causal analysis - it might be used to identify the strength of the effect that the
independent variables have on a dependent variable.

(2) Forecasting an effect - it can be used to forecast effects or impacts of changes.

(3) Trend forecasting - multiple linear regression analysis predicts trends and future
values.

50
 A) PERCENTAGE

4.1 : AGE COMPOSITION OF RESPONDENT

TABLE 4.1 : Table showing age composition of the respondent.

NO. OF
RESPONDEN PERCENTAGE
AGE T (%)
BELOW 25 YRS. 12 10
25 YRS. TO 35
YRS. 45 37.5
36 YRS. TO 45
YRS. 48 40
ABOVE 45 YRS. 15 12.5
TOTAL 120 100

CHART 4.1 : Chart showing age composition of the respondent.

AGE COMPOSITION
45
40
40
35 37.5
30
25 Percentage
20
15
10 12.5
10
5
0
Below 25 yrs 25 yrs to 35 yrs 36 yrs to 45 yrs Above 45 yrs

INFERENCE

51
From the above table and chart, it is inferred that 10 % of the respondent are below the age of 25
years, 37.5% of the respondent are between 25 - 35 years., 40 % of the respondent are between
the group of 36 - 45 years, and 12.5 % of the respondent are above the age group of 45 years.

4.2 : GENDER COMPOSITION

TABLE 4.2 : Table showing gender composition of the respondent.

PERCENTAG
GENDE NO. OF E
R RESPONDENT (%)
MALE 78 65
FEMAL
E 42 35
TOTAL 120 100

CHART 4.2 : Chart showing gender composition of the respondent.

GENDER COMPOSITION

Percentage
65

35

Male Female

INFERENCE

52
From the above table and chart, it is inferred that 65 % of the respondent are male, and 35 % of
the respondent are female.

4.3 : INCOME VARIATION OF RESPONDENT

TABLE 4.3 : Table showing income variation.

PERCENTAG
NO. OF E
PARTICULARS RESPONDENT (%)
LESS THAN 3 LAKH 36 30
3 LAKH TO 5 LAKH 30 25
5 LAKH TO 7 LAKH 30 25
MORE THAN 7 LAKH 24 20
TOTAL 120 100

CHART 4.3 : Chart showing income variation.

INCOME VARIATION
Percentage

30
25 25
20

Less than 3 lakh 3 lakhs to 5 lakhs 5 lakhs to 7 lakhs More than 7 lakhs

53
INFERENCE
From the above table and chart, it is inferred that 30% of the respondent are earning less than 3
lakhs, 25% of the respondent are earning between 3 – 5 lakhs, 25% of the respondent are earning
between 5 – 7 lakhs, and 20 % of the respondent are earning more than 7 lakhs.

4.4 : TYPE OF HOTEL PREFERRED BY RESPONDENT

TABLE 4.4 : Table showing type of hotel preferred by respondent.

NO.
OF PERC
PARTI RESP ENTA
CULA ONDE GE
RS NT (%)
2 STAR 33 27.5
3 STAR 30 25
4 STAR 36 30
5 STAR 21 17.5
TOTAL 120 100

CHART 4.4 : Chart showing hotel type prefered by respondent.

54
 HOTEL TYPE PREFERED
Percentage
30
27.5
25

17.5

2 Star 3 Star 4 Star 5 Star

INFERENCE
From the above table and chart, it is inferred that 27.5% of the respondent prefer 2 star hotels,
25% of the respondent prefer 3 star hotels, 30% of the respondent prefer 4 star hotels, and 17.5
% of the respondent are prefer 5star hotels.

4.5 : RESPONDENT VISIT TO THE HOTEL

TABLE 4.5 : Table showing whether respondent have visited this hotel before.

NO. OF PERCEN
PARTIC RESPO TAGE
ULARS NDENT (%)
YES 33 27.5 CHART 4.5 : Chart showing whether respondent have
NO 87 72.5 visited this hotel before.
TOTAL 120 100

55
 PERCENTAGE (%)

72.5

27.5

YES NO

INFERENCE
From the above table and chart, it is inferred that 27.5% of the respondent have visited this hotel
before, and 72.5 % of the respondent are first time visitors.

4.6 : RESPONDENT PURPOSE OF THEIR VISIT

TABLE 4.6 : Table showing respondent purpose of their visit.

NO. OF PERCENTAGE
PARTICULARS RESPONDENT (%)
VACATION/
HOLIDAYS 33 27.5
BUSINESS TRIP 42 35
FOR LEISURE 45 37.5
TOTAL 120 100

CHART 4.6 : Chart showing respondent purpose of their visit.

56
 PURPOSE OF THEIR VISIT

28%
38% VACATION/ HOLIDAYS
BUSINESS TRIP
FOR LEISURE

35%

INFERENCE
From the above table and chart, it is inferred that 27% of the respondent purpose of their visit is
for vacation/ holidays, 37.5% of the respondent pupose of their visit is for leisure, and 35% of
the respondent purpose of their visit is for business.

4.7 : RESPONDENT KNOWLEDGE ABOUT THE HOTEL

TABLE 4.7 : Table showing how respondent came to know about this hotel.

NO. OF PERCENTA
RESPONDE GE
PARTICULARS NT (%)
RELATIVES 30 25
FRIENDS 39 32.5
ADVERTISEMENT 15 12.5
ONLINE REVIEWS
OR SUGGESTIONS 36 30
TOTAL 120 100

57
CHART 4.7 : Chart showing how respondent came to know about this hotel.

KNOWLEDGE ABOUT THIS HOTEL

30% 25%

RELATIVES

FRIENDS

ADVERTISEMENT

ONLINE REVIEWS OR
13%
33% SUGGESTIONS

INFERENCE
From the above table and chart, it is inferred that 25% of the respondent came to know about the
from relatives, 32.5% of the respondent came to know about the hotel from friends, 30% of the
respondent came to know about the hotel from online reviews and suggestions (internet), and
12.5 % of the respondentcame to know from advertisements.

4.8 : AMBIENCE
4.8.1 : RESPONDENT ATTRACTIVENESS TOWARDS OVERALL OUTSIDE
APPERANCE OF THE HOTEL
TABLE 4.8.1 : Table showing respondent attractiveness towards overall outside apperance of
the hotel.

NO OF PERCENT
PARTICUL RESPOND AGE
ARS ENT (%)
STRONGL
Y AGREE 12 10
AGREE 48 40
MODERAT
E 48 40
DISAGREE 12 10
STRONGL 0 0

58
 Y
DISAGREE
TOTAL 120 100

CHART 4.8.1 : Chart showing respondent attractiveness towards overall outside apperance of
the hotel.

STRONGLY DISAGREE

DISAGREE

MODERATE

AGREE

STRONGLY AGREE

0 5 10 15 20 25 30 35 40

INFERENCE
From the above table and chart, it is inferred that 10% of the respondent strongly agree with the
over all outside apperance of the hotel, 40% of the respondent agree with the over all outside
apperance of the hotel, 40% of the respondent moderately about the over all outside apperance of
the hotel, and 10% of the respondent disagree with the over all outside apperance.
4.8.2 : RESPONDENT VIEW REGARDING HOTEL CLEANLINESS

TABLE 4.8.2 : Table showing respondent view regarding hotel cleanliness.

NO OF PERCENTAGE
PARTICULARS RESPONDENT (%)
STRONGLY AGREE 12 10
AGREE 57 47.5
MODERATE 39 32.5
DISAGREE 12 10
STRONGLY DISAGREE 0 0
TOTAL 120 100

59
 CHART 4.8.2 : Chart showing respondent view regarding hotel cleanliness.

STRONGLY DISAGREE

DISAGREE

MODERATE

AGREE

STRONGLY AGREE

0 5 10 15 20 25 30 35 40 45 50

INFERENCE
From the above table and chart, it is inferred that 10% of the respondent strongly agree with the
hotel cleanliness, 47.5% of the respondent agree with the hotel cleanliness, 32.5% of the
respondent moderately about the hotel cleanliness, and 10% of the respondent disagree with the
hotel clealiness.

4.8.3 : RESPONDENT VIEW REGARDING TEMPERATURE IN THIS HOTEL

TABLE 4.8.3 : Table showing respondent view regarding temperature in this hotel.

PERCENTA
NO OF GE
PARTICULARS RESPONDENT (%)
STRONGLY AGREE 15 12.5
AGREE 60 50
MODERATE 33 27.5
DISAGREE 12 10
STRONGLY
DISAGREE 0 0
TOTAL 120 100

60
CHART 4.8.3 : Chart showing respondent view regarding temperature in this hotel.

STRONGLY DISAGREE

DISAGREE

MODERATE

AGREE

STRONGLY AGREE

0 5 10 15 20 25 30 35 40 45 50

INFERENCE
From the above table and chart, it is inferred that 12.5% of the respondent strongly agree with
the hotel temperature, 50% of the respondent agree with the hotel temperature, 27.5% of the
respondent moderately about the hotel temperature, and 10% of the respondent disagree with the
hotel temperature.
4.8.4 : RESPONDENT VIEW REGARDING HOTEL LOCATION

TABLE 4.8.4 : Table showing respondent view regarding appropriate location of the hotel.

PERCENTAG
NO OF E
PARTICULARS RESPONDENT (%)
STRONGLY AGREE 12 10
AGREE 51 42.5
MODERATE 39 32.5
DISAGREE 18 15
STRONGLY DISAGREE 0 0
TOTAL 120 100

61
CHART 4.8.4 : Chart showing respondent view regarding appropriate location of the hotel.

STRONGLY DISAGREE

DISAGREE

MODERATE

AGREE

STRONGLY AGREE

0 5 10 15 20 25 30 35 40 45

INFERENCE
From the above table and chart, it is inferred that 10% of the respondent strongly agree that the
hotel has approriate location, 42.5% of the respondent agree that the hotel has approriate
location, 32.5% of the respondent moderately about the hotel location, and 15% of the
respondent disagree that the hotel has approriate location.
4.8.5 : RESPONDENT THOUGHT ON THE VIEW FROM THIS HOTEL

TABLE 4.8.5 : Table showing respondent thought on the view from this hotel.

PERCENTAG
NO OF E
PARTICULARS RESPONDENT (%)
STRONGLY AGREE 12 10
AGREE 48 40
MODERATE 48 40
DISAGREE 12 10
STRONGLY DISAGREE 0 0
TOTAL 120 100

62
CHART 4.8.5 : Chart showing respondent thought on the view from this hotel.

STRONGLY DISAGREE

DISAGREE

MODERATE

AGREE

STRONGLY AGREE

0 5 10 15 20 25 30 35 40 45

INFERENCE
From the above table and chart, it is inferred that 10% of the respondent strongly agree with the
view from this hotel, 42.5% of the respondent agree with the view from this hotel, 32.5% of the
respondent moderately about the view from this hotel, and 15% of the respondent disagree with
the view from this hotel.
4.9 : INTERIOR DESIGN AND SPATIAL LAYOUT

4.9.1 : RESPONDENT ATTRACTIVENESS TOWARDS INTERIOR DESIGN

TABLE 4.9.1 : Table showing respondent attractiveness towards interior design of the hotel.

NO OF PERCENTAGE
PARTICULARS RESPONDENT (%)
STRONGLY AGREE 12 10
AGREE 66 55
MODERATE 27 22.5
DISAGREE 15 12.5
STRONGLY DISAGREE 0 0
TOTAL 120 100

63
CHART 4.9.1 : Chart showing respondent attractiveness towards interior design of the hotel.

13% 10%

STRONGLY AGREE
AGREE
23%
MODERATE
DISAGREE
STRONGLY DISAGREE

55%

INFERENCE
From the above table and chart, it is inferred that 10% of the respondent strongly agree that the
hotel interior are attractive, 55% of the respondent agree that the hotel interior are attractive,
22.5% of the respondent moderately about the hotel interior attraction, and 12.5% of the
respondent disagree that the hotel about interior .
4.9.2 : SEATING AND ROOMS OF THE HOTEL ARE ATTRACTI VE AND
APPROPRIATE

TABLE 4.9.2 : Table showing attractive and approprate seating and rooms of the hotel.

PERCENTA
NO OF GE
PARTICULARS RESPONDENT (%)
STRONGLY AGREE 9 7.5
AGREE 42 35
MODERATE 57 47.5
DISAGREE 12 10
STRONGLY
DISAGREE 0 0
TOTAL 120 100

64
CHART 4.9.2 : Chart showing attractive and approprate seating and rooms of the hotel.

PERCENTAGE (%)

1
1

1
0.5 1 1.5 2 2.5 3 3.5 4 4.5 5 5.5

INFERENCE
From the above table and chart, it is inferred that 7% of the respondent strongly agree that the
hotel has attractive and approprate seating and rooms, 35% of the respondent agree that the hotel
has attractive and approprate seating and rooms, 47.5% of the respondent moderately about the
hotel attractive and approprate seating and rooms, and 10% of the respondent disagree that the
hotel has attractive and approprate seating and rooms.
4.9.3 : RESPONDENT VIEW REGARDING COMFORTABLE LAYOUT

TABLE 4.9.3 : Table showing respondent view regarding comfortable layout.

PERCENTA
NO OF GE
PARTICULARS RESPONDENT (%)
STRONGLY AGREE 9 7.5
AGREE 51 42.5
MODERATE 48 40
DISAGREE 12 10
STRONGLY
DISAGREE 0 0
TOTAL 120 100

65
CHART 4.9.3 : Chart showing respondent view regarding comfortable layout.

45

40

35

30

25

20

15

10

0
STRONGLY AGREE AGREE MODERATE DISAGREE STRONGLY DISAGREE

INFERENCE
From the above table and chart, it is inferred that 7.5% of the respondent strongly agree that the
hotel has comfortable layout, 42.5% of the respondent agree that the hotel has comfortable
layout, 40% of the respondent moderately about the hotel comfortable layout, and 10% of the
respondent disagree that the hotel has comfortable layout.

4.9.4 : DECORATION IN THIS HOTEL IS ATTRACTIVE

TABLE 4.9.4 : Table showing respondent view regarding decoration of the hotel.

PERCENTAG
NO OF E
PARTICULARS RESPONDENT (%)
STRONGLY AGREE 9 7.5
AGREE 66 55
MODERATE 33 27.5
DISAGREE 12 10
STRONGLY
DISAGREE 0 0

66
 TOTAL 120 100

CHART 4.9.4 : Chart showing respondent view regarding decoration of the hotel.

60

50

40

30

20

10

0
STRONGLY AGREE AGREE MODERATE DISAGREE STRONGLY DISAGREE

INFERENCE
From the above table and chart, it is inferred that 7.5% of the respondent strongly agree that the
hotel has good decoration, 55% of the respondent agree that the hotel has good decoration,
27.5% of the respondent moderately about the hotel decoration, and 15% of the respondent
disagree that the hotel has good decoration.

4.9.5 : SIGNS AND SYMBOLS PROVIDES SUFFICIENT DIRECTION AND

CLARIFICATION

TABLE 4.9.5 : Table showing respondent thought on signs and symbols in this hotel.

NO OF
PARTICULARS RESPONDENT PERCENTAGE
STRONGLY AGREE 9 7.5
AGREE 42 35
MODERATE 51 42.5
DISAGREE 18 15
67
 STRONGLY DISAGREE 0 0
TOTAL 120 100

CHART 4.9.5 : Chart showing respondent thought on signs and symbols in this hotel.

45

40

35

30

25

20

15

10

0
STRONGLY AGREE AGREE MODERATE DISAGREE STRONGLY DISAGREE

INFERENCE
From the above table and chart, it is inferred that 7.5% of the respondent strongly agree that the
hotel has approriate signs and symbols, 35% of the respondent agree that the hotel has approriate
signs and symbols, 42.5% of the respondent moderately about the hotel signs and symbols, and
15% of the respondent disagree that the hotel has approriate signs and symbols.
4.10 : TANGIBLE ELEMENT

4.10.1 : FURNITURE COMFORTABLITY

TABLE 4.10.1 : Table showing how well the furniture in this hotel are comfortable.

PERCENTAG
NO OF E
PARTICULARS RESPONDENT (%)
STRONGLY AGREE 12 10
AGREE 60 50
MODERATE 36 30
DISAGREE 12 10

68
 STRONGLY
DISAGREE 0 0
TOTAL 120 100

CHART 4.10.1 : Chart showing how well the furniture in this hotel are comfortable.

50

45

40

35

30

25

20

15

10

0
STRONGLY AGREE AGREE MODERATE DISAGREE STRONGLY DISAGREE

INFERENCE
From the above table and chart, it is inferred that 10% of the respondent strongly agree that the
hotel has comfortable furniture, 50% of the respondent agree that the hotel has comfortable
furniture, 30% of the respondent moderately about the hotel furniture, and 10% of the respondent
disagree that the hotel has comfortable furniture.
4.10.2 : PROPER ELECTRICAL EQUIPMENT AND BACKUP

TABLE 4.10.2 : Table showing proper maintence of electrical equipment and backup facility at
the hotel.

PERCENTAG
NO OF E
PARTICULARS RESPONDENT (%)
STRONGLY AGREE 15 12.5
AGREE 57 47.5
MODERATE 39 32.5
DISAGREE 9 7.5

69
 STRONGLY
DISAGREE 0 0
TOTAL 120 100

CHART 4.10.2 : Chart showing proper maintence of electrical equipment and backup facility at
he hotel.

50

45

40

35

30

25

20

15

10

0
STRONGLY AGREE AGREE MODERATE DISAGREE STRONGLY DISAGREE

INFERENCE
From the above table and chart, it is inferred that 12.5% of the respondent strongly agree that the
hotel has proper electrical equipment and back up facilites, 47.5% of the respondent agree that
the hotel has proper electrical equipment and back up facilites, 32.5% of the respondent
moderately about proper electrical equipment and back up facilites, and 7.5% of the respondent
disagree that the hotel has proper electrical equipment and back up facilites.
4.10.3 : APPOPRIATE LIGHTING IN THE HOTEL

TABLE 4.10.3 : Table showing whether the hotel has appropriate lighting.

NO OF PERCENTAGE
PARTICULARS RESPONDENT (%)
STRONGLY AGREE 9 7.5
AGREE 63 52.5

70
 MODERATE 33 27.5
DISAGREE 15 12.5
STRONGLY DISAGREE 0 0
TOTAL 120 100

CHART 4.10.3 : Chart showing whether the hotel has appropriate lighting.

60

50

40

30

20

10

0
STRONGLY AGREE AGREE MODERATE DISAGREE STRONGLY DISAGREE

INFERENCE
From the above table and chart, it is inferred that 7.5% of the respondent strongly agree that the
hotel has approriate lighting, 52.5% of the respondent agree that the hotel has approriate lighting,
27.5% of the respondent moderately about the hotel lighting, and 12.5% of the respondent
disagree that the hotel has approriate lighting.
4.10.4 : NEAT APPEARANCE OF THE EMPLOYEES IN THIS HOTEL

TABLE 4.10.4 : Table showing neat appearance of the employees in this hotel.

NO OF PERCENTAGE
PARTICULARS RESPONDENT (%)
STRONGLY AGREE 15 12.5
AGREE 57 47.5
MODERATE 36 30

71
 DISAGREE 12 10
STRONGLY DISAGREE 0 0
TOTAL 120 100

CHART 4.10.4 : Chart showing neat appearance of the employees in this hotel.

10% 13%

STRONGLY AGREE
AGREE
30% MODERATE
DISAGREE
STRONGLY DISAGREE

48%

INFERENCE
From the above table and chart, it is inferred that 12.5% of the respondent strongly agree that the
hotel employees appearance is neat, 47.5% of the respondent agree that the hotel employees
appearance is neat, 30% of the respondent moderately about employees neat appearance, and
10% of the respondent disagree that the hotel employees appearance is neat.

4.10.5 : TANGIBLE ELEMENTS COMMUNICATE THE THEME OF THE HOTEL

TABLE 4.10.5 : Table showing whether the tangible elements communicate the theme of the
hotel.

PERCENTAG
NO OF E
PARTICULARS RESPONDENT (%)
STRONGLY AGREE 9 7.5

72
 AGREE 57 47.5
MODERATE 42 35
DISAGREE 12 10
STRONGLY
DISAGREE 0 0
TOTAL 120 100

CHART 4.10.5 : Chart showing whether the tangible elements communicate the theme of the
hotel.

10% 8%

STRONGLY AGREE
AGREE
35% MODERATE
DISAGREE
48% STRONGLY DISAGREE

INFERENCE
From the above table and chart, it is inferred that 7.5% of the respondent strongly agree that the
tangible elements communicate the theme of the hotel, 47.5% of the respondent agree that the
tangible elements communicate the theme of the hotel, 35% of the respondent feel moderately
about the theme of the hotel. , and 10% of the respondent disagree that the tangible elements
communicate the theme of the hotel.
4.11 : CUSTOMER LOYALTY

4.11.1 : RESPONDENT SATISFACTION TOWARDS SERVICE RENDED AT THIS

HOTEL
TABLE 4.11.1 : Table showing respondent satisfaction towards service rended at this hotel.

NO OF PERCENTAGE
PARTICULARS RESPONDENT (%)

73
 STRONGLY AGREE 12 10
AGREE 63 52.5
MODERATE 33 27.5
DISAGREE 12 10
STRONGLY DISAGREE 0 0
TOTAL 120 100

CHART 4.11.1 : Chart showing respondent satisfaction towards service rended at this hotel.

STRONGLY DISAGREE 0

DISAGREE 10

MODERATE 27.5
PERCENTAGE (%)

AGREE 52.5

STRONGLY AGREE 10

0 10 20 30 40 50 60

INFERENCE
From the above table and chart, it is inferred that 10% of the respondent strongly agree that the
service at the hotel is satisfiable, 52.5% of the respondent agree that the service at the hotel is
satisfiable, 27.5% of the respondent moderately about the service satifaction, and 10% of the
respondent disagree that the service at the hotel is satisfiable.
4.11.2 : LOYAL GUEST OF THE HOTEL

TABLE 4.11.2 : Table showing whether the respondent is a loyal guest of the hotel.

NO OF PERCENTAGE
PARTICULARS RESPONDENT (%)
STRONGLY AGREE 9 7.5

74
 AGREE 48 40
MODERATE 48 40
DISAGREE 15 12.5
STRONGLY DISAGREE 0 0
TOTAL 120 100

CHART 4.11.2 : Chart showing whether the respondent is a loyal guest of the hotel.

STRONGLY DISAGREE 0

DISAGREE 12.5

MODERATE 40

AGREE 40

STRONGLY AGREE 7.5

0 5 10 15 20 25 30 35 40

PERCENTAGE (%)

INFERENCE
From the above table and chart, it is inferred that 7.5% of the respondent strongly agree that they
are loyal guest of the hotel, 40% of the respondent agree that they are loyal guest of the hotel,
40% of the respondent moderately about their loyalty, and 12.5% of the respondent disagree that
they are loyal guest of the hotel.
4.11.3 : SWITCHING OF LOYALTY TO DIFFERENT HOTEL AS LONG AS THE
RESPONDENT TRAVEL TO THIS AREA

TABLE 4.11.3 : Table showing respondent would not switch loyalty to different hotel as long
as he travel to his area.

NO OF PERCENTAGE
PARTICULARS RESPONDENT (%)

75
 STRONGLY AGREE 9 7.5
AGREE 33 27.5
MODERATE 63 52.5
DISAGREE 15 12.5
STRONGLY DISAGREE 0 0
TOTAL 120 100

CHART 4.11.3 : Chart showing respondent would not switch loyalty to different hotel as long
as he travel to his area.

STRONGLY DISAGREE 0

DISAGREE 12.5

MODERATE 52.5

AGREE 27.5

STRONGLY AGREE 7.5

0 10 20 30 40 50 60

PERCENTAGE (%)

INFERENCE
From the above table and chart, it is inferred that 7.5% of the respondent strongly agreed, 27.5%
of the respondent agreed, 52.5% of the respondent moderately, and 12.5% of the respondent
disagreed.
4.11.4 : RECOMMEDNDATION THIS HOTEL TO FRIENDS, FAMILY, RLATIVES ,
COLLEAGUE AND OTHERS

TABLE 4.11.4 : Table showing whether the respondent would recommend this hotel to their
friends, family, relaties, colleague and others.

PERCENTA
NO OF GE
PARTICULARS RESPONDENT (%)
STRONGLY AGREE 9 7.5

76
 AGREE 54 45
MODERATE 48 40
DISAGREE 9 7.5
STRONGLY
DISAGREE 0 0
TOTAL 120 100

CHART 4.11.4 : Chart showing whether the respondent would recommend this hotel to their
friends, family, relaties, colleague and others.

STRONGLY DISAGREE 0

7.5
DISAGREE

40
MODERATE

45
AGREE

7.5
STRONGLY AGREE

0 5 10 15 20 25 30 35 40 45

PERCENTAGE (%)

INFERENCE
From the above table and chart, it is inferred that 7.5% of the respondent strongly agreed, 45% of
the respondent agreed, 40% of the respondent moderately, and 7.5% of the respondent disagreed.
4.11.5 : RESPONDENT WOULD STAY IN THIS HOTEL EVEN IF THE PRICE
LIKELY TO RISE

TABLE 4.11.5 : Table showing whether respondent would stay in this hotel or not even if the
price likely to rise.

PERCENTAG
NO OF E
PARTICULARS RESPONDENT (%)
STRONGLY AGREE 9 7.5

77
 AGREE 15 12.5
MODERATE 81 67.5
DISAGREE 15 12.5
STRONGLY
DISAGREE 0 0
TOTAL 120 100

CHART 4.11.5 : Chart showing whether respondent would stay in this hotel or not even if the
price likely to rise.

STRONGLY DISAGREE 0

12.5
DISAGREE

67.5
MODERATE

12.5
AGREE

7.5
STRONGLY AGREE

0 10 20 30 40 50 60 70

PERCENTAGE (%)

INFERENCE
From the above table and chart, it is inferred that 7.5% of the respondent strongly agreed, 12.5%
of the respondent agreed, 67.5% of the respondent moderately, and 12.5% of the respondent
disagreed.
4.11.6 : RESPONDENT WOULD SWITCH LOYALTY IF A COMPETING HOTEL
OFFER BETTER PRICE

TABLE 4.11.6 : Table showing whether respondent would switch loyalty not if a competing
hotel offer better price.

PERCENTAG
NO OF E
PARTICULARS RESPONDENT (%)

78
 STRONGLY AGREE 3 2.5
AGREE 12 10
MODERATE 90 75
DISAGREE 12 10
STRONGLY
DISAGREE 3 2.5
TOTAL 120 100

CHART 4.11.6 : Chart showing whether respondent would switch loyalty not if a competing
hotel offer better price.

80

70

60

50

40 75

30

20

10 10 10
2.5 2.5
0
STRONGLY AGREE AGREE MODERATE DISAGREE STRONGLY DISAGREE

PERCENTAGE (%)

INFERENCE
From the above table and chart, it is inferred that 2.5% of the respondent strongly agreed, 10% of
the respondent agreed, 57% of the respondent moderately, 10% of the respondent disagree and
2.5% of the respondent strongly disagreed.
B) STATISTICAL ANALYSIS - CHI-SQUARE TEST

4.12 TABULATION ON - CUSTOMER WOULD NOT SWITCH LOYALTY TO

DIFFERENT HOTEL AS LONG AS THEY TRAVEL TO THIS AREA

79
 NO OF
PARTICULARS RESPONDENT
STRONGLY AGREE 9
STEP 1: SETTING AN
AGREE 33
HYPOTHESIS
MODERATE 63
DISAGREE 15 H0: Customer would not switch
STRONGLY DISAGREE 0
loyalty to different hotel as long
as they travel to this area.

H1: Customer would switch loyalty to different hotel as long as they travel to this area.

STEP 2: CALCULATION OF CHI-SQUARE VALUE

Oi = Observed Frequency

Ei = Expected Frequency

4.12.1 COMPUTATION TABLE FOR χ2

EXPECTE
OBSERVED D (O-E) (O-E)2 (O-E)2 /E
9 24 -15 225 9.375
33 24 9 81 3.375
63 24 39 1521 63.375
15 24 -9 81 3.375
0 24 -24 576 24
TOTAL 103.5

80
STEP 3: LEVEL OF SIGNIFICANCE

Level of significance α = 0.05

Degree of freedom = (n-1) = 5-1 = 4

Tabulated value at 5% level of significance and degree of freedom 4 is 9.49

STEP 4: COMPARING WITH TABLE VALUE

The calculated value is greater than the tabulated value: 103.5 > 9.49

FINDING

Therefore, reject the Null Hypothesis Ho and accept the Alternate Hypothesis H1.

INFERENCE

Customer would switch loyalty to different hotel as long as they travel to this area.

4.13 TABULATION ON - CUSTOMER WOULD STILL CONTINUE TO STAY IN THIS

HOTEL EVEN IF THE PRICE OF THE HOTEL LIKELY TO RISE

NO OF
PARTICULARS RESPONDENT

STRONGLY AGREE 9

AGREE 15 STEP 1: SETTING THE HYPOTHESIS

MODERATE 81

DISAGREE 15
81
STRONGLY
DISAGREE 0
H0: Customer would still continue to stay in this hotel even if the price of the hotel likely to rise.

H1: Customer would not still continue to stay in this hotel even if the price of the hotel likely to
rise

STEP 2: CALCULATION OF CHI-SQUARE VALUE

Oi = Observed Frequency

Ei = Expected Frequency

4.13.1 COMPUTATION TABLE FOR χ2 

OBSERVED EXPECTED (O-E) (O-E)2 (O-E)2/E
9 24 -15 225 9.375
15 24 -9 81 3.375
STEP 3: LEVEL OF
81 24 57 3249 135.375
15 24 -9 81 3.375 SIGNIFICANCE
0 24 -24 576 24
TOTAL 175.5 Level of significance α
= 0.05

Degree of freedom = (n-1) = 5-1 = 4

Tabulated value at 5% level of significance and degree of freedom 4 is 9.49

STEP 4: COMPARING WITH TABLE VALUE

The calculated value is greater than the tabulated value: 175.5 > 9.49

FINDING

82
Therefore, reject the Null Hypothesis Ho and accept the Alternate Hypothesis H1.

INFERENCE

Customer would not still continue to stay in this hotel even if the price of the hotel likely to rise.

4.14 TABULATION ON - CUSTOMER WOULD SWITCH LOYALTY IF A

COMPETING HOTEL WERE TO OFFER A BETTER PRICE OR DISCOUNT.

PARTICULARS NO OF RESPONDENT
STRONGLY AGREE 3
AGREE 12
MODERATE 90

DISAGREE 12

STRONGLY DISAGREE 3

STEP 1: SETTING THE HYPOTHESIS

H0: Customer would not switch loyalty if a competing hotel were to offer a better price or
discount.

H1: Customer would switch loyalty if a competing hotel were to offer a better price or discount.

STEP 2: CALCULATION OF CHI-SQUARE VALUE

83
Oi = Observed Frequency

Ei = Expected Frequency

 4.14.1 COMPUTATION TABLE FOR χ2 

OBSERVED EXPECTED (O-E) (O-E)2 (O-E)2/E
3 24 -21 441 18.375
12 24 -12 144 6
90 24 66 4356 181.5
12 24 -12 144 6
3 24 -21 441 18.375
    TOTAL 230.25

STEP 3: LEVEL OF SIGNIFICANCE

Level of significance α = 0.05

Degree of freedom = (n-1) = 5-1 = 4

Tabulated value at 5% level of significance and degree of freedom 4 is 9.49

STEP 4: COMPARING WITH TABLE VALUE

The calculated value is greater than the tabulated value: 203.25 > 9.49

FINDING

Therefore, reject the Null Hypothesis Ho and accept the Alternate Hypothesis H1.

84
INFERENCE

Customer would switch loyalty if a competing hotel were to offer a better price or discount.

C) MULTIPLE REGRESSION ANALYSIS USING SPSS

The data obtained through the questionnaire were analyzed using SPSS (Statistical Package for
Social Sciences).The data were tabulated and entered in SPSS for Multiple regression analysis.
R-square is the correlation coefficient squared, also referred to as the coefficient of
determination. This value indicates the percentage of total variation of Y.

4.15 PHYSICAL EVIDENCE EFFECT ON CUSTOMER SATISFACTION

Hypothesis

H01: Ambience of the hotel has no effect on Customer satisfaction.

Ha1: Ambience of the hotel has effect on Customer satisfaction.

H02: Spatial layout and interior design of the hotel has no effect on Customer satisfaction.
Ha2: Spatial layout and interior design of the hotel has effect on Customer satisfaction.

H03: Tangible element in the hotel has no effect on Customer satisfaction.

Ha3: Tangible element in the hotel has effect on Customer satisfaction.

85
4.15.1 AMBIENCE WITH CUSTOMER SATISFACTION

Regression Summary

Adjusted R Std. Error of

Model R R Square Square the Estimate F Sig.
1 .995 .990 .989 .084 2159.976 .000

Coefficients
Model Unstandardized Standardized t Sig.
Coefficients Coefficients
B Std. Error Beta
outside .398 .057 .399 6.960 .000
Appearance
Clean .193 .051 .195 3.756 .000
temperature .598 .047 .618 12.822 .000
Location -.329 .044 -.357 -7.436 .000
good view .133 .033 .145 4.063 .000
a. Dependent Variable: CUSTOMER SATISFACTION

The regression the equation indicated an adjusted R 2 of .989 and all of the variables are
significant by the t tests and all of the variables are significant by the t tests This indicates that
the variables R2 explains 99% of the variability of the data, a significant improvement over the
smaller models. The F- ratio of 2159.976 was significant (p=.000).

4.15.2 INTERIOR DESIGN AND SPATIAL LAYOUT WITH CUSTOMER

SATISFACTION

Regression Summary

86
 Adjusted R Std. Error of
Model R R Square Square the Estimate F Sig.
1 .994 .989 .988 .086 2021.681 .000

Coefficients
Unstandardized Coefficients Standardized Coefficients
B Std. Error Beta t Sig.
interior design .297 .031 .309 9.709 .000
seating & room .338 .034 .340 9.926 .000
Layout .073 .027 .073 2.743 .007
decoration .634 .035 .612 18.374 .000
signs & symbols -.311 .032 -.322 -9.696 .000
a. Dependent Variable: CUSTOMER SATISFACTION

The regression the equation indicated an adjusted R 2 of .988 and all of the variables are
significant by the t tests and all of the variables are significant by the t tests This indicates that
the variables R2 explains 98.9% of the variability of the data, a significant improvement over the
smaller models. The F- ratio of 2021.681 was significant (p=.000).

4.15.3 TANGIBLE ELEMENT WITH CUSTOMER SATISFACTION

Regression Summary
Adjusted R Std. Error of
Model R R Square Square the Estimate F Sig.
1 .996 .991 .991 .076 3254.141 .000

Coefficients
Unstandardized Standardized
Coefficients Coefficients
B Std. Error Beta t Sig.
comfortable furniture .972 .117 .976 8.329 .000
electrical equipment &
-.333 .045 -.328 -7.410 .000
backup
Lighting .556 .047 .530 11.753 .000

87
neat appearance of
.556 .047 .574 11.753 .000
employee
communicating the theme .222 .040 .223 5.615 .000
a. Dependent Variable: CUSTOMER SATISFACTION

The regression the equation indicated an adjusted R 2 of .991 and all of the variables are
significant by the t tests and all of the variables are significant by the t tests This indicates that
the variables R2 explains 99.1% of the variability of the data, a significant improvement over the
smaller models. The F- ratio of 2159.976 was significant (p=.000).

FINDINGS

Hypothesis Sig. Null

Hypothesis(H0)
1 Ambience of the hotel has no effect on Customer 0.000 Rejected
satisfaction (p<0.05)
2 Spatial layout and interior design of the hotel has 0.001 Rejected
no effect on Customer satisfaction (p<0.05)
3 Tangible element in the hotel has no effect on 0.000 Rejected
Customer satisfaction (p<0.05

INFERENCE

1. Ambience, such as outside Appearance, cleanliness, temperature, location, and good view
has effect on Customer satisfaction.
2. Spatial layout and interior design, such as design, layout, seating and room, decorations,
signs and symbols of the hotel has effect on Customer satisfaction.
3. Tangible element such as furniture, appearance of employee, electrical equipment and
back up, and lighting in the hotel has effect on Customer satisfaction.

4.16 PHYSICAL EVIDENCE EFFECT ON CUSTOMER RECOMMENDATION

Hypothesis

88
H01: Ambience of the hotel has no effect on Customer Recommendation to others.
Ha1: Ambience of the hotel has effect on Customer Recommendation to others

H02: Spatial layout and interior design of the hotel has no effect on Customer Recommendation
to others.
Ha2: Spatial layout and interior design of the hotel has effect on Customer Recommendation to
others.

H03: Tangible element in the hotel has no effect on Customer Recommendation to others.
Ha3: Tangible element in the hotel has effect on Customer Recommendation to others.

4.16.1 AMBIENCE WITH RECOMMENDATION

Regression Summary

Adjusted R Std. Error of

Model R R Square Square the Estimate F Sig.
1 .972 .944 .942 .186 387.935 .000

Coefficients
Unstandardized Coefficients Standardized Coefficients
B Std. Error Beta t Sig.
outside Appearance .314 .127 .326 2.471 .015
Clean .608 .114 .637 5.332 .000
temperature -.050 .104 -.054 -.484 .029
location .032 .098 .036 .329 .043
good view .031 .073 .035 .421 .045
a. Dependent Variable: RECOMMENDATION

The regression the equation indicated an adjusted R 2 of .942 and all of the variables are
significant by the t tests and all of the variables are significant by the t tests This indicates that

89
the variables R2 explains 94.4% of the variability of the data, a significant improvement over the
smaller models. The F- ratio of 387.935 was significant (p=.000).

4.16.2 INTERIOR DESIGNAND SPATIAL LAYOUT WITH RECOMMENDATION

Regression Summary

Adjusted R Std. Error of

Model R R Square Square the Estimate F Sig.
1 .985a .970 .969 .136 742.404 .000

Coefficients
Standardized
Unstandardized Coefficients Coefficients
B Std. Error Beta t Sig.
interior design .083 .048 .090 1.723 .038
seating & room .132 .054 .138 2.454 .016
layout .733 .042 .760 17.515 .000
decoration .109 .054 .109 1.997 .048
signs & symbols -.084 .051 -.090 -1.663 .029
a. Dependent Variable: RECOMMENDATION

The regression the equation indicated an adjusted R 2 of .969 and all of the variables are
significant by the t tests and all of the variables are significant by the t tests This indicates that
the variables R2 explains 97% of the variability of the data, a significant improvement over the
smaller models. The F- ratio of 742.404 was significant (p=.000).

4.16.3 TANGIBLE ELEMENT WITH RECOMMENDATION

Regression Summary

Adjusted R Std. Error of

Model R R Square Square the Estimate F Sig.
1 .974 .950 .948 .176 541.659 .000

90
Coefficients
Unstandardized Standardized
Coefficients Coefficients
B Std. Error Beta t Sig.
comfortable furniture -
.380 .208 -.379 .020
1.826
electrical equipment &
.351 .104 .358 3.370 .001
backup
lighting .429 .109 .425 3.924 .000
neat appearance of -
-.540 .109 -.579 .000
employee 4.940
communicating the theme .745 .092 .776 8.137 .000
a. Dependent Variable: RECOMMENDATION

The regression the equation indicated an adjusted R 2 of .948 and all of the variables are
significant by the t tests and all of the variables are significant by the t tests This indicates that
the variables R2 explains 95% of the variability of the data, a significant improvement over the
smaller models. The F- ratio of 541.659 was significant (p=.000).

FINDINGS

Hypothesis Sig. Null

Hypothesis(H0)
1 Ambience of the hotel has no effect on Customer 0.026 Rejected
Recommendation to others (p<0.05)
2 Spatial layout and interior design of the hotel has 0.027 Rejected
no effect on Customer Recommendation to others (p<0.05)
3 Tangible element in the hotel has no effect on 0.004 Rejected
Customer Recommendation to others (p<0.05

INFERENCE

91
 1. Ambience, such as outside Appearance, cleanliness, temperature, location, and good view
has effect on Customer Recommendation to others.
2. Spatial layout and interior design, such as design, layout, seating and room, decorations,
signs and symbols of the hotel has effect on Customer Recommendation to others.
3. Tangible element such as furniture, appearance of employee, electrical equipment and
back up, and lighting in the hotel has effect on Customer Recommendation to others.

4.17 PHYSICAL EVIDENCE EFFECT ON CUSTOMER LOYALTY

Hypothesis

H01: Ambience of the hotel has no effect on Customer Loyalty.

Ha1: Ambience of the hotel has effect on Customer Loyalty.

H02: Spatial layout and interior design of the hotel has no effect on Customer Loyalty.
Ha2: Spatial layout and interior design of the hotel has effect on Customer Loyalty.

H03: Tangible element in the hotel has no effect on Customer Loyalty.

Ha3: Tangible element in the hotel has effect on Customer Loyalty.

4.17.1 AMBIENCE WITH CUSTOMER LOYALTY

92
Regression Summary

Adjusted R Std. Error of

Model R R Square Square the Estimate F Sig.
1 .967 .935 .932 .211 328.371 .000

Coefficients
Unstandardized Coefficients Standardized Coefficients
B Std. Error Beta t Sig.
outside Appearance -.113 .144 -.112 -.786 .034
Clean .660 .130 .659 5.098 .000
temperature .117 .118 .119 .993 .023
location -.145 .112 -.155 -1.294 .008
good view .437 .083 .469 5.270 .000
a. Dependent Variable: LOYAL GUEST

The regression the equation indicated an adjusted R 2 of .932 and all of the variables are
significant by the t tests and all of the variables are significant by the t tests This indicates that
the variables R2 explains 93.5% of the variability of the data, a significant improvement over the
smaller models.. The F- ratio of 328.371 was significant (p=.000).

4.17.2 INTERIOR DESIGN WITH SPATIAL LAYOUT WITH CUSTOMER LOYALTY

Regression Summary

Adjusted R Std. Error of

Model R R Square Square the Estimate F Sig.
1 .966 .934 .931 .212 323.016 .000

Coefficients
Unstandardized Coefficients Standardized Coefficients
Model B Std. Error Beta t Sig.
interior design .069 .075 .071 .913 .033
seating & room .649 .084 .646 7.743 .000

93
Layout .240 .065 .237 3.676 .000
decoration .146 .085 .139 1.714 .029
signs & symbols -.086 .079 -.088 -1.089 .048
a. Dependent Variable: LOYAL GUEST

The regression the equation indicated an adjusted R 2 of .931 and all of the variables are
significant by the t tests and all of the variables are significant by the t tests This indicates that
the variables R2 explains 93.4% of the variability of the data, a significant improvement over the
smaller models. The F- ratio of 323.016 was significant (p=.000).

4.17.3 TANGIBLE ELEMENT WITH CUSTOMER LOYALTY

Regression Summary

Adjusted R Std. Error of

Model R R Square Square the Estimate F Sig.
1 .931 .866 .862 .301 186.272 .000

Coefficients
Unstandardized Standardized
Coefficients Coefficients
B Std. Error Beta t Sig.
comfortable furniture -
-.380 .208 -.379 .020
1.826
electrical equipment &
.050 .175 .049 .285 .006
backup
lighting .539 .128 .540 4.221 .000
neat appearance of
.062 .242 .064 .258 .037
employee
communicating the theme .698 .109 .673 6.404 .000
a. Dependent Variable: LOYAL GUEST

The regression the equation indicated an adjusted R 2 of .862 and all of the variables are
significant by the t tests and all of the variables are significant by the t tests This indicates that

94
the variables R2 explains 86.6% of the variability of the data, a significant improvement over the
smaller models. The F- ratio of 186.272 was significant (p=.000).

FINDINGS

Hypothesis Sig. Null

Hypothesis(H0)
1 Ambience of the hotel has no effect on Customer 0.013 Rejected
Loyalty (p<0.05)
2 Spatial layout and interior design of the hotel has 0.022 Rejected
no effect on Customer Loyalty (p<0.05)
3 Tangible element in the hotel has no effect on 0.012 Rejected
Customer Loyalty (p<0.05

INFERENCE

1. Ambience, such as outside Appearance, cleanliness, temperature, location, and good view
has effect on Customer Loyalty.
2. Spatial layout and interior design, such as design, layout, seating and room, decorations,
signs and symbols of the hotel has effect on Customer Loyalty.
3. Tangible element such as furniture, appearance of employee, electrical equipment and
back up, and lighting in the hotel has effect on Customer Loyalty.

95
 5.1 FINDINGS

 It is inferred that 10 % of the respondent are below the age of 25 years, 37.5% of the
respondent are between 25 - 35 years., 40 % of the respondent are between the group of
36 - 45 years, and 12.5 % of the respondent are above the age group of 45 years.
 It is inferred that 65 % of the respondent are male, and 35 % of the respondent are
female.
 It is inferred that 30% of the respondent are earning less than 3 lakhs, 25% of the
respondent are earning between 3 – 5 lakhs, 25% of the respondent are earning between 5
– 7 lakhs, and 20 % of the respondent are earning more than 7 lakhs.
 It is inferred that 27.5% of the respondent prefer 2 star hotels, 25% of the respondent
prefer 3 star hotels, 30% of the respondent prefer 4 star hotels, and 17.5 % of the
respondent are prefer 5star hotels.
 It is inferred that 27.5% of the respondent have visited this hotel before, and 72.5 % of
the respondent are first time visitors.
 Out of 27.5% (33 respondent) of respondent who have visited this hotel already,
63.63%(21 respondent) of the respondent have vistited this hotel 1 time, 15.15% (5
respondent) of the respondent have vistited this hotel 2 times, and the rest 21.22% (7
respondent) of the respondent have vistited this hotel more than 2 times.
 It is inferred that 27% of the respondent purpose of their visit is for vacation/ holidays,
37.5% of the respondent pupose of their visit is for leisure, and 35% of the respondent
purpose of their visit is for business.
 It is inferred that 25% of the respondent came to know about the from relatives, 32.5% of
the respondent came to know about the hotel from friends, 30% of the respondent came
to know about the hotel from online reviews and suggestions (internet), and 12.5 % of the
respondentcame to know from advertisements.

96
 It is inferred that 10% of the respondent strongly agree with the over all outside
apperance of the hotel, 40% of the respondent agree with the over all outside apperance
of the hotel, 40% of the respondent moderately about the over all outside apperance of
the hotel, and 10% of the respondent disagree with the over all outside apperance.
 It is inferred that 10% of the respondent strongly agree with the hotel cleanliness, 47.5%
of the respondent agree with the hotel cleanliness, 32.5% of the respondent moderately
about the hotel cleanliness, and 10% of the respondent disagree with the hotel clealiness.
 It is inferred that 12.5% of the respondent strongly agree with the hotel temperature,
50% of the respondent agree with the hotel temperature, 27.5% of the respondent
moderately about the hotel temperature, and 10% of the respondent disagree with the
hotel temperature.
 It is inferred that 10% of the respondent strongly agree that the hotel has approriate
location, 42.5% of the respondent agree that the hotel has approriate location, 32.5% of
the respondent moderately about the hotel location, and 15% of the respondent disagree
that the hotel has approriate location.
 It is inferred that 10% of the respondent strongly agree with the view from this hotel,
42.5% of the respondent agree with the view from this hotel, 32.5% of the respondent
moderately about the view from this hotel, and 15% of the respondent disagree with the
view from this hotel.
 It is inferred that 10% of the respondent strongly agree that the hotel interior are
attractive, 55% of the respondent agree that the hotel interior are attractive, 22.5% of the
respondent moderately about the hotel interior attraction, and 12.5% of the respondent
disagree that the hotel about interior.
 It is inferred that 7.5% of the respondent strongly agree that the hotel has attractive and
approprate seating and rooms, 35% of the respondent agree that the hotel has attractive
and approprate seating and rooms, 47.5% of the respondent moderately about the hotel
attractive and approprate seating and rooms, and 10% of the respondent disagree that the
hotel has attractive and approprate seating and rooms.
 It is inferred that 7.5% of the respondent strongly agree that the hotel has comfortable
layout, 42.5% of the respondent agree that the hotel has comfortable layout, 40% of the

97
 respondent moderately about the hotel comfortable layout, and 10% of the respondent
disagree that the hotel has comfortable layout.
 It is inferred that 7.5% of the respondent strongly agree that the hotel has good
decoration, 55% of the respondent agree that the hotel has good decoration, 27.5% of the
respondent moderately about the hotel decoration, and 15% of the respondent disagree
that the hotel has good decoration.
 It is inferred that 7.5% of the respondent strongly agree that the hotel has approriate signs
and symbols, 35% of the respondent agree that the hotel has approriate signs and
symbols, 42.5% of the respondent moderately about the hotel signs and symbols, and
15% of the respondent disagree that the hotel has approriate signs and symbols.
 It is inferred that 10% of the respondent strongly agree that the hotel has comfortable
furniture, 50% of the respondent agree that the hotel has comfortable furniture, 30% of
the respondent moderately about the hotel furniture, and 10% of the respondent disagree
that the hotel has comfortable furniture.
 It is inferred that 12.5% of the respondent strongly agree that the hotel has proper
electrical equipment and back up facilites, 47.5% of the respondent agree that the hotel
has proper electrical equipment and back up facilites, 32.5% of the respondent
moderately about proper electrical equipment and back up facilites, and 7.5% of the
respondent disagree that the hotel has proper electrical equipment and back up facilites.
 It is inferred that 7.5% of the respondent strongly agree that the hotel has approriate
lighting, 52.5% of the respondent agree that the hotel has approriate lighting, 27.5% of
the respondent moderately about the hotel lighting, and 12.5% of the respondent disagree
that the hotel has approriate lighting.
 It is inferred that 12.5% of the respondent strongly agree that the hotel employees
appearance is neat, 47.5% of the respondent agree that the hotel employees appearance is
neat, 30% of the respondent moderately about employees neat appearance, and 10% of
the respondent disagree that the hotel employees appearance is neat.
 It is inferred that 7.5% of the respondent strongly agree that the tangible elements
communicate the theme of the hotel, 47.5% of the respondent agree that the tangible
elements communicate the theme of the hotel, 35% of the respondent feel moderately

98
 about the theme of the hotel. , and 10% of the respondent disagree that the tangible
elements communicate the theme of the hotel.
 It is inferred that 10% of the respondent strongly agree that the service at the hotel is
satisfiable, 52.5% of the respondent agree that the service at the hotel is satisfiable,
27.5% of the respondent moderately about the service satifaction, and 10% of the
respondent disagree that the service at the hotel is satisfiable.
 It is inferred that 7.5% of the respondent strongly agree that they are loyal guest of the
hotel, 40% of the respondent agree that they are loyal guest of the hotel, 40% of the
respondent moderately about their loyalty, and 112.5% of the respondent disagree that
they are loyal guest of the hotel.
 It is inferred that 7.5% of the respondent strongly agreed about they would not switch
loyalty to different hotel as long as they travel to yelagiri, 27.5% of the respondent agreed
about they would not switch loyalty to different hotel as long as they travel to yelagiri,
52.5% of the respondent moderate about they would not switch loyalty to different hotel
as long as they travel to yelagiri, and 12.5% of the respondent disagreed about they
would not switch loyalty to different hotel as long as they travel to yelagiri.
 It is inferred that 7.5% of the respondent strongly agreed that they would recommend this
hotel to my friends, family, relatives, and colleague, 45% of the respondent agreed that
they would recommend this hotel to my friends, family, relatives, and colleague, 40% of
the respondent moderate about recommending this hotel to my friends, family, relatives,
and colleague, and 7.5% of the respondent disagreed about recommending this hotel to
my friends, family, relatives, and colleague.
 it is inferred that 7.5% of the respondents strongly agreed for continue to stay in this hotel
if the price of the hotel likely to rise, 12.5% of the respondent agreed continue to stay in
this hotel if the price of the hotel likely to rise, 67.5% of the respondent moderate for
continue to stay in this hotel if the price of the hotel likely to rise, and 12.5% of the
respondent disagreed for continue to stay in this hotel if the price of the hotel likely to
rise.
 It is inferred that 2.5% of the respondent strongly agreed that they would switch loyalty,
if the competing hotel were to offer a better price or discount, 10% of the respondent
agreed that they would switch loyalty, if the competing hotel were to offer a better price

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 or discount, 57% of the respondent moderate that they would switch loyalty, if the
competing hotel were to offer a better price or discount, 10% of the respondent disagree
and 2.5% of the respondent strongly disagreed that they would switch loyalty, if the
competing hotel were to offer a better price or discount.
 The calculated value is greater than the tabulated value: 103.5 > 9.49. Therefore, reject
the Null Hypothesis Ho and accept the Alternate Hypothesis H1. Customer would switch
loyalty to different hotel as long as they travel to this area
 The calculated value is greater than the tabulated value: 175.5 > 9.49. Therefore, reject
the Null Hypothesis Ho and accept the Alternate Hypothesis H1. Customer would not
still continue to stay in this hotel even if the price of the hotel likely to rise.
 The calculated value is greater than the tabulated value: 203.25 > 9.49. Therefore, reject
the Null Hypothesis Ho and accept the Alternate Hypothesis H1. Customer would switch
loyalty if a competing hotel were to offer a better price or discount.
 The results from multiple regression analysis of independent variables (Ambience, design
and layout, tangible element) with the dependent variable (customer satisfaction), has
inferred that Physical Evidence has effect on Customer satisfaction.
 The results from multiple regression analysis of independent variables (Ambience, design
and layout, tangible element ) with the dependent variable (customer recommendation of
the hotel to others ), has inferred that Physical Evidence has effect on Customer
Recommendation of the hotel to others
 The results from multiple regression analysis of independent variables (Ambience, design
and layout, tangible element) with the dependent variable (customer loyalty), has inferred
that Physical Evidence has effect on Customer Loyalty.

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 5.2 SUGGESTIONS

 The study found that the hotel has good physical evidence that cater for customer loyalty.
From the finding it is found element of physical evidence has greater influence on
customer satisfaction and recommendation which further influence on customer loyalty.
Although customers are satisfied with the physical evidence of the hotel, there are some
areas which need to improve like outside appearance, rooms and seating, furniture, etc.
 The equipment found at hotels and the conditions of the rooms and the public spaces in
hotels influence customers’ loyalty. Therefore, the owners and managers of hotels should
pay attention for this issue as it may maintain loyal customers that will be a good source
for the profitability of the hotel.
 It is important to recognize that the physical elements of design, equipment and ambient
conditions should be managed to a large extent by hotel managers. Although managing
design and ambience is probably one of the most expensive ways to enhance customer
perceptions of physical environment in hotels, taking this into account can have its
positive effects on customer loyalty. The restaurateurs should seriously consider physical
attributes related to ambience as an operational tool.
 The recognition of the importance of hotel design both from an architectural and interior
design perspective should be realized by managers and owners of hotel.
 The overall perceptions of service quality directly influence customers’ behavioural
intentions, including their tendency to say positive things, to recommend the company
and to remain loyal to the company. The manager should find ways to improve service
quality
 From the findings it is found that the hotel has poor advertising. The manager should
different modes of advertising to attract more customers.

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 6. CONCLUSION

Customer loyalty is always a core issue in any business, whether it is for product or services.
Customer loyalty can be ensured through several means such as satisfaction, quality, innovation,
and feedback. Creating a loyal customer play a major role for all organization especially for
services organization. One a customer is lost, it is difficult to get them back.

Further to the above, competition is an important factor which every organization has to face
irrespective of experience and size.

The physical environment of hotels is one of the best drives for customers’ selection and
recommendations of hotels to their friends and relatives and others. The physical environment
does play an important role in customers’ loyalty and satisfaction process.
The customer service must match with marketing efforts, otherwise the customer would remain a
dissatisfied soul and thus resulting in losing loyal customer.
Hence a successful organization has to consider the above aspect and try to implement both in
the short term as well as long term.

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 BIBLIOGRAPHY

BOOKS

Kotler, P. & Armstrong, G. (2008). Principles of Marketing (12th ed.).

Kotler, P. & Keller, K.L. (2006). Marketing Management (12th ed.).
Roland T. Rust, Anthony J. Zahorik, Timothy L. Keiningham (1996). Service Marketing.
Christopher Lovelock, JochenWirtz, Jayanta Chatterjee (2010). Service Marketing (6 th
ed.).
Zeithaml, Bitner, Gremler. Ajay (2013). Service Marketing (6th ed.).
Kothari .C .R (2004). Research Methodology : Methods and Techiques (3rd ed.).

REFERENCE

www.krpalacehotel.in – Hotel Kumararraja Palace

www.google.com
www.hbr.org - Harvard Business Review
www.prloyaltymarketing.com
www.loyaltyresearch.com
www.managementstudyguide.com
www.streetdirectory.com
www.ukessays.com
www.blog.oxfordcollegeofmarketing.com
www.yourarticlelibrary.com
www.eassys.com
www.scribd.com

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 www.ama.org – American Marketing Association
www.slideshare.net

QUESTIONNAIRE

TOPIC: “THE IMPACT OF PHYSICAL EVIDENCE ON CUSTOMER LOYALTY IN

KUMARARRAJA PALACE HOTEL”

Sir/Madam,

I am currently undertaking my M.Com degree at Stella Maris College for Women, Chennai. I am
gathering information for my dissertation, studying “The Impact of Physical Evidence on
customer loyalty in Kumararraja Palace hotel”. Towards this, a survey is being conducted to
gather relevant information through the questionnaire given below. All the information collected
will be kept confidential, and will be used only for academic purpose. So, kindly spare few
minutes to fill up the questionnaire.

This questionnaire consists of three sections. Please answer them all.

Section 1: Demographic data

1) Age:
□ Below 25 yrs. □ 25 yrs. to 35 yrs. □ 36 yrs. to 45 yrs. □ Above 45 yrs.
2) Sex:
□ Male □ Female
3) Income:
□ Less than 3 lakh □ 3 lakh to 5 lakh

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 □ 5 lakhs to 7 lakhs □ Above 7 lakh
4) What type of hotel do you prefer?
□ 2 Stars □ 3 Stars □ 4 Stars □ 5 Stars
5) Have you ever visited this hotel before?
□ Yes □ No
6) If yes, how many times?
_______________________________________________________________________
7) What is the purpose of your visit?
□ Vacation / Holidays □ Business trip □ For leisure
8) How do you come to know about this hotel?
□ Relatives □ Friends □ Advertisement □ Online
reviews or suggestions

Section 2: Physical Evidence

Physical Evidence is the physical environment of the hotel, which is related to the design of the
hotel, the equipment in the hotel, and the surrounding conditions.

Please tick ( √ ) against appropriate options. The options are as follows:

1 - Strongly agree 2 – Agree 3 – Moderate 4 – Disagree 5 – Strongly disagree

Ambience 1 2 3 4 5

9) The overall outside appearance is attractive

10) The hotel is kept clean all the time
11) Temperature in this hotel is comfortable
12) Appropriate location of the hotel
13) View from this hotel are good
Interior Design and Spatial Layout 1 2 3 4 5
14) The interior design is attractive
15) Seating and rooms of the hotel are attractive and
appropriate

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16) Layout makes it easy to get around
17) Decoration in this hotel is attractive
18) The signs and symbols provides adequate
direction and clarification
Tangible Element
19) The furniture in this hotel are comfortable
20) Proper electrical equipment and backup
21) Lighting in this hotel are appropriate
22) The appearance of the employee in this hotel are
neat
23) Tangible elements are communicating the theme
of hotel

Section 3: Customer Loyalty

Customer loyalty is the concept that refers to customer reputation of this hotel and
recommendation of the hotel to their friends and others.

Please tick ( √ ) against appropriate options. The options are as follows:

1 - Strongly agree 2 – Agree 3 – Moderate 4 – Disagree 5 – Strongly disagree

Questions 1 2 3 4 5
24) I am satisfied with service rendered at this hotel
25) I am a loyal guest of the hotel
26) I would not switch loyalty to different hotel as
long as I travel to this area in future
27) I would recommend this hotel to my friends,
family, relatives, and colleague
28) I would still continue to stay in this hotel if the
price of the hotel likely to rise
29) I would switch loyalty, if the competing hotel
were to offer a better price or discount

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30) Any suggestions

Thank you

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