REVIEW OF RELATED LITERATURE

This chapter reviews the literature on guest satisfaction in services. Although the major focus

is on customer satisfaction in service organizations, this chapter begins with a brief review of the

importance of customer satisfaction and loyalty in the hotel industry. This is followed by a

review of satisfaction literature, which results in the construction of a definition of service loyalty

for use in this study. In particular, emphasis is on customer satisfaction as the most important

determinant for loyalty. This chapter concludes with a discussion of how services differ from

each other and how customer satisfaction may differ across services.

Foreign Literature

Guest Satisfaction in Services

In order to be successful in the market it is not sufficient to attract new customers managers

must concentrate on retaining existing customers implementing effective policies of customer

satisfaction and loyalty. In hotel industry customer satisfaction is largely hooked upon quality of

service. A management approach focused on customer satisfaction can improve customer

loyalty, thus increasing the positive image of the touristic destination. Hence, exploring the

importance for customers of hotel attributes in hotel selection is indispensable .Research on the

topic of guest satisfaction, which translates into the consideration of whether or not customers

will return to a hotel or advise it to other tourists, is pivotal to the success of the hospitality

business. Neglecting to pay attention to those hotel attributes considered most important by

guests, may lead to negative evaluation of the hotel, thus restricting the chance of repeat

patronage. We perform a qualitative analysis of a large hotel in Sicily (IT), the Sporting Club

Hotel in the town Cefalù, using the Critical Incident Approach (Hayes, 2008).Through the

analysis of this case we evaluate the overall customer satisfaction level for the hotel and for
each service supplied. We conclude discussing the result and proposing improvement in

customer satisfaction management of the hotel.

Many hotel of Guest satisfaction in tagaytay city nowadays offer entertainment for a specific

group of traveler. Popular households hotels, hotels for the newlyweds and hotel for individuals

with impairments, each of them has its distinct set of services. Among the services that are

indirectly satisfaction to the guest in hotel are marketing services and accounting of the hotel.

Booking when considered among the main hotel services. All these set against the floral

landscapes, breathtaking scenery, year round cool climate, The tagaytay offer charming,

unbelievably serene spaces. with each reasonably priced accommodation your sure to finally be

in a places where everything becomes unforgettable

(Thelakehotelsatisfactionguestinhotelintagaytaycity.com2014)Discovery country suites in

tagaytay focuses only on giving you these special moments that you simply will never simlpy

forget. Whether being breathtaking views of taal volcano and lake or lounging away a our

distinctively themed rooms, every second spent here should be savored.

Relation between customer satisfaction and loyalty

“Satisfaction” is an attitude,whereas loyalty is described as a behavior. Chen and Wang

(2009) suggest a view of customer satisfaction as a kind of consistency evaluation between

prior expectations and perceived service performance. Accordingly, the positive evaluation of

the product or service that the customer acquires is a major reason to continue a relationship

with a company’s service or products, and an important pillar that upholds loyalty. Satisfied

customers are thus more likely to repurchase, lower their price sensitivity,engageinpositiveword-

of-mouthrecommendation,andbecomeloyal customers(Chen &Wang 2009.)

Customer satisfaction and loyalty represent a top priority of the company's success and profit.

Satisfaction does not automatically lead to loyalty it needs a step by step process. Steps are

described as customers going through different phases suchas awareness,

considered to be a byproduct of customer satisfaction.The satisfaction of business customer

leads to customer loyalty. Customer loyalty will increase significantly when satisfaction

accomplishesat a certainleveland at the same time customer loyalty will decline automatically if

the satisfaction level drops to a certain point. Moreover, highlysatisfied customers are tending to

be more loyal than the customers who are merely satisfied. Overall, it is clear that there is a

significant positive relationship between customersatisfaction and

customerloyalty.Customerloyalty leads to an increase inboth sales and profitability (Chi 2005.)

Importance of customer satisfaction

Customer satisfaction is extremely important because it is the way of getting feedback from

the customers in a waythat theycanuse ittomanageandimprove their business.

Customersatisfactionis thebestindicator of how the business looks like in the future. Customer

satisfaction helps in doing SWOT analysis that could help them to develop their business in an

advance and in a systematic way. Besides this, it will also help in making the right decision to

use the appropriate resources while manufacturing the products. Similarly, it maintains the

relationshipwith the existing customers and also creates thepossibility to acquire others. (SSRS

research 2016.)

When products are bought customers expect perfection instead of quantities. There are

varieties of products that are similarin themarket andsometimesitis difficult to distinguish

whichoneis qualitative anddurable. This is the great opportunity for the business organization

doing marketing of their products and services to understand what exactly customers are

seeking for. Customer satisfaction is a key indicator of the marketplace that evaluates the

success of the organization. People have varieties of tastes and choices and therefore,

satisfaction also differs from one person to another. It also may vary the expectation of the
consumer depending on the option they may have, such as the national and international

market (Kotler & Keller 2006.)

Managing customer relationship

Customers have differentneeds and demands about how they wanted to be treated.

Therefore, very seldom organization satisfy the needs of every potential customer in a similar

manner. In service contexts, it is often difficult to satisfy targeted groups of customers. Because

customers frequently meet and interact with each other and influence fellow customer’s

perception of the service. Therefore, to manage a good customer relationship

organizationshoulddeal with thecustomers in different ways. It is important to haveacustomer

segment to keep in relation to a different targeted group of the customers. It is also important to

keep in mind that customers in a relationship with a service provider often want to be

recognized and treated individually, even though they are part of a larger segment. In addition,

the modern technology available to the firms also supports the individualistic treatment of

customers. Direct customer contacts in most of the services give a good starting point for the

individual treatment of the customers. (Grönroos2007, 362.)

On the other hand, it is important to know the need of the customers. To maintain a

relationshipfirst of all, the service purchased by customers has to fit the customers. Designing

for relationships requires acustomer centered approach. Maintaining customer relationship just

do not happen accidentally, they are constructed through the service and product provided.

Relationships build over to create a loyal customer and loyal customer multiplies the

transactions. The relationship infrastructure consists of the building blocks for a business. The

components of substructure build on top of each other to create a growing infrastructure. A

relationship requires the right blend of the texture and touch. There are some instances where

service industry cannot provide sufficientlevelsto build the relationship. (McDonald & Keen2000.)
 Today, the customer requiresflexibility, availability, creativity and price advantages from the

service provider. Therefore, new attributes are required for an organization to succeed in a

dynamic world where customers wish, customer preferences, customer behavior and loyalties

are equally focused (Swift 2001, 29.)Today, in order to maintain a relationshipwith a customer:

“Customers arealways right” trend has been highly given importance. According to Kumar and

Petersen (2012), the companies who have implemented theideaofcustomer relationship

management arethemost successful ones regardless oftheirbusiness field. Therefore, managing

customer relationships and relationships with other parties require a service oriented culture.

The value of the customers

The most important assets of the firm are long term customers. Firms should know the long-

termvalue of their individual customers. The lifetime value of the customer should be measured

which will help the organization to realize the importance of keeping the existing customers. To

understand the worth of the customer it is important to think broadly about the ways in which

customers add valueto thefirms. Recognizingthevalueofacustomerwill lead to betterdecisions

about howto expand the business activities.

Most businesses understand the costs of acquiring a customer, but they are unawareof the

costs of losing a customer. There are several reasons behind the customers stop doing

business with the firm, such as uncertainties of moving away, not understanding the value of the

customer’s death andso on. Poor service, poor goods, and the quality which doesnot meet the

customer requirements are often the results of the giving the value of the customers away. Here

value does not referto the price it refers to the perceived benefits stood to be gained in the

context of price. Based on the appropriate understanding of the customer situation and needs

firm should create the essential values(Gupta, Lehmann & Stuart2004.)

that should not be confused. Customer value refers to what the customer getsin a product or

service whereas the value of a customer in business is the stand which keeps the company in

running a business. The primary aim of the business organization is to make a clear attempt in

creating customer value in order to attract and retain customer to deliver quality as well

asthesuperior value of the business to the customers. Implementing an effective marketing

strategy concept by offering qualified goods and services of the company will meet and exceeds

the expectations of customer needs better than other competitors. (Jobber &Chadwick

2012.)For the long-term survival of the company and for the success customer value can be

taken as an important prerequisite. In this competitive market, understanding the way of the

customer´s judgment and value a service or a product has been crucial.Although the research

of the customer value in many areas stands still it has already generated a lot of fruitful insights

into the value creation process from customer and company perspectives.

Local Literature

Service Quality

This study aimed at identifying the determining factors of service quality on customer

satisfaction and loyalty towards hotel industry. This study has investigated the different

dimensions of service quality that impact customer satisfaction and customer loyalty. The use of

primary data enabled the researcher to measure all the dimensions. This study is significant in

the sense that it will allow the understanding of the concept and framework of the impact of

service quality on customer satisfaction and customer loyalty that takes into account the

comparative nature with conventional business.

In the Philippines, according to the Department of Tourism, the increase in tourist arrivals

during the months of January to April of 2012 which also contributed to the economic growth of

the country was also due to the contribution of the resort industry that offers good facilities,
products and services both to foreign and local market (Raquel, 2012). Majority of the visitors

were from South Korea, USA, Japan, and China who came to the country to enjoy the holidays,

shopping, dining, accommodation and visit to relatives and friends. They were able to know the

country because of the positive word-of-mouth marketing and recommendations by the travel

agents. Satisfaction is one of the reasons for the continuous increase of tourist arrivals while

positive word-of-mouth marketing and recommendations by others can be a sign of loyalty.

Customer satisfaction and customer loyalty can contribute to financial performance of an

industry (Gruca & Rego, 2005). A satisfied and loyal guest can contribute to the increase in

market share of tourist arrivals in the Philippines and sustainability of the industry. Moreover, an

increase in market share can have a domino effect in the Philippine economy, social and

environment.

In the Philippines, the service industry is 50%. Based on the Department of Tourism,

Philippine tourist arrivals increased from the period January to April 2012, visitors from South

Korea was listed as the highest contributing to 22.05% market share followed by visitors from

the United States which contributed to 16.02% market share. Visitors from Japan and China

followed with 9.21% and 6.78% respectively. Repeat visits from Chinese, Russian, Indian, and

Korean visitors were recorded. Koreans ranked the highest in the daily spending which was due

to shopping. Americans, Hong Kong Nationals, Russians, Indians and Australians followed who

spent mostly on accommodation. More and more visitors are getting information from friends

and business associates through word of mouth such as Americans, Japanese, Hong Kong

Nationals, and Russians while Koreans, Chinese and Taiwanese solicit information from travel

agents. As defined by Olorunniwo et. al. (2006), customer satisfaction can be achieved if the

needs of the customers are fulfilled. It is of primary importance to the companies to anticipate

and manage the expectations of the customers and show the ability to meet them (Dominici,

2010). Customer loyalty relates to a relationship between a company and a customer. Loyalty

includes behaviours where customers make repeat purchases of their current brands, rather
than choosing a competitor brand instead. Studies have found that the level of customer’s

satisfaction has a positive effect on profitability. Researches have shown that when a person is

satisfied with a company or service, they are likely to experience with other people to the order

of perhaps five or six. However, dissatisfied customers are like to tell another ten people of their

unfortunate experience.

Empirical Research on Service Quality

Researchers have innovated various models and mechanisms to define the fundamental

interconnection between service quality and customer contentment. Earlier research by Al-

Karim & Chowdhury (2014) specified the five attributes for service quality as empathy, tangibles,

responsiveness, assurance, and reliability. With the help of the SERVQUAL questionnaire, a

couple of studies show that reliability is the most important dimensional aspect. Al-Tit (2015)

made critical research on the factors affecting service quality within Brazil's hotel industry. This

study established that customers were more concerned with the dimensional aspects of

reliability, assurance, and service tangibility. This author also made a significant emphasis on

reliability as the most crucial aspect of service quality. Despite that, the author notes that

different research scenarios would give varying results. This factor can be attributed to different

social factors like religion and the culture of the customer. On the other hand, Esther &

Bambale's (2016) study on various restaurants in Thailand showed that the most critical service

dimensions included assurance and empathy. The researchers note that most customers use

these two essential factors to assess service quality within restaurants.

Hapsari et al.'s study in 2017 shows that customer expectations are higher on attributes like

service promptness, transaction accuracy, and service security. The authors urge hotel

managers to focus more on accuracy and promptness in working on customer complaints.

Moreover, the authors noted that there exists a subjective association between customer

expectation and perception. This factor varies based on different economic scenarios. Lee &
Madanoglu (2018) researched managerial perception about customers' expectations from

various hotels in Australia. The results of this investigation indicated that the critical factors

affecting service quality included tangibles, assurance, and empathy. However, this research's

limiting factor is that more emphasis was placed on the managerial perception rather than

customer perception. Therefore, this study does not give a clear description of customer

perception with regards to service quality. Gopi & Samat (2020) analysed how customer

satisfaction impacts performance within the hotel industry in Oman. The investigation reported

that clients were content with the standards of food offered, the reception, and the reservation

factor. Moreover, customers fairly rated product prices, hotel amenities, and security features.

Despite that, clients were unhappy with the personalised services provided by the hotel industry.

Gopi & Samat (2020) also noted that customer satisfaction led to positive aspects like

improvement in hotel image, market share, and sales.

Factors Affecting Customer Satisfaction

Elvira & Shpetim (2016) state that customer satisfaction can be impacted by various issues,

including service features, consumer emotions, customer perception, workplace colleagues,

friends, and family. Hapsari et al. (2017) believe that customer satisfaction is influenced in most

instances by the customer service a given organisation offers as well as the price it charges for

such services. Al-Karim & Chowdhury (2014), Rita et al. (2019), and Fida et al. (2020) outlined a

couple of features that influence customer contentment. These include physical facilities,

service timelines, the presentation of hotel staff, available types of equipment, communication

techniques, response to customer complaints, efficiency, data accuracy, service consistency,

problem resolution duration, attention to detail, staff flexibility, positivity towards offering

customer support, staff behaviour, customer security, courtesy, staff competence, personalised

customer attention, service availability in all durations, and understanding of guest-specific

preferences.
How Service Quality Relates With Customer Satisfaction

There exists varying opinions from researchers regarding which factor precedes the other of

the two concepts. Some analysts are of the opinion that service quality precedes customer

satisfaction, whereas others argue the contrary opinion. However, opinions by Othman et al.

(2019) and Fida et al. (2020) emphasise the fact that “service quality” is a precursor to

“customer satisfaction.” Ideally, this factor implies that an organisation should improve its

services before yearning for customer satisfaction and positive feedback. Based on these

arguments, it is stipulated that there exists a direct correlation between service quality and client

satisfaction (Al-Tit, 2015). Despite that, Danish (2018) argues that service quality impacts

customer satisfaction but is not directly related to it. On the other hand, Zameer et al. (2015)

propose that a maximum perception of standard of service results in a direct maximisation of

customer satisfaction. In their 2020 study, Fida et al. defined a significant connection between

service quality and customer contentment.

Furthermore, the authors outline that the five service quality dimensions (responsiveness,

tangibility, assurance, reliability, and empathy) are fundamental towards achieving customer

satisfaction. Based on this study, it was concluded that customer satisfaction can only be

realised with constant improvement of the service quality dimensions.

Customer behavior

Customer behavior can be significantly influenced by ambient elements (touch, sound, taste,

scent), design elements (layout, store decoration), and social elements (interaction with

employees). Lim (2010) emphasized that a better standard of product and service, combined

with a pleasant environment, is particularly essential for a restaurant since it can lead to a

greater level of satisfaction and even affect the actions of customers (Zhong and Moon, 2020).

Happiness is an optimistic decision from the personal point of interest of a person who is happy

with his or her existing condition, and customer satisfaction relates to feelings linked to
consumer behavior (Varshneya et al., 2017). In addition, consumer satisfaction is the degree to

which their quality of life and wellbeing is increased. The goal of customer service is redirected

from rewarding customers to increasing their satisfaction, which goes far beyond the definition

of fulfillment. Happiness reflects a stronger quality of customer satisfaction. Satisfaction,

combined with specific life-related events, will maximize customer satisfaction (Sweeney et al.,

2015).

Foreign Studies

Customer Loyalty

According to Jana & Chandra (2016), customer satisfaction has become an important aspect

of the hotel industry. Unlike other industries, the hotel industry prospers due to customers’

retention. It is only through customer satisfaction that a hotel can retain its customers. Basically,

customers’ loyalty is dependent on the quality of the services that they get in a hotel. Moreover,

the hospitality industry has experienced the en- trance of many investors who are willing to meet

all the needs of their customers. Therefore, if customers are not satisfied by the services they

receive in one hotel, they will look for better services elsewhere (Jana & Chandra, 2016).

A few studies uncovered that customer loyalty is the main reason as to why some brands of

hotels prosper while other lag behind. One key factor in customer retention is to guarantee

quality services. In hotel industry customer loyalty is an element that shows the effectiveness of

the and all the stakeholders. A management approach focused on customer loyalty can

improve the competitiveness of the hotel (Tsiotsou & Goldsmith, 2012).

To achieve greater heights of customer satisfaction and loyalty, the management must show

the willingness to adapt to the needs of customers. Hotels put a lot effort in understanding

customer needs and fulfilling them end up learning many factors that management contribute to

customer satisfaction. Customer satisfaction should be given utmost consideration by the

management, because it would be more expensive to draw in new customers that retaining the
existing ones. In order to be fruitful, managers must focus on holding existing customers

actualizing compelling arrangements of customer loyalty and steadfastness. This is particularly

valid in the hotel business (Tsiotsou & Gold- smith, 2012).

Danish (2018) describes service quality as the comparative function that links customer

expectations to the provided service. Additionally, Elvira & Shpetim (2016) described service

quality as a type of assessment used to represent a long-term evaluation. Despite these varying

definitions, the most commonly used description regarding service quality is that by Danish

(2018) R.L Polk & Co (2014) defined guest satisfaction or customer satisfaction as a

measurement that determines how happy customers are with a company’s products, services,

and capabilities. It has information, including surveys and ratings, can help a company

determine how to best improve or changes its products and services. An organization’s main

focus must be to satisfy its customers. This applies to industrial firms, retail and wholesale

businesses, government bodies, service companies, nonprofit organizations, and every

subgroup within an organization.

Customer satisfaction is the key factor for successful and depends highly on the behaviors of

frontline service providers. Customers should be managed as assets, and that customers vary

in their needs, preferences, and buying behavior. (Lee, 2016)

According to Ahaw (2019) the success of a hospitality business is largely affected by its level

of customer satisfaction. When customers have a pleasant experience, they may return in the

future -- and they share their experience with friends and family members, resulting in even

more sales for the business. On the other hand, customers who have a negative experience at

a hospitality business probably won't return, nor will they recommend the establishment to their

friends or family members.

success depends on the satisfaction of the customers. Whenever a business is about to start,

customers always come “first” and then the profit. Those companies that are succeeding to

satisfy the customers fully will remain in the top position in a market. Today’s business company

has known that customer satisfaction is the key component for the success of the business and

at the same time it plays a vital role to expand the market value. In general, customers are

those people who buy goods and services from the market or business that meet their needs

and wants. Customers purchase products to meet their expectations in terms of money.

Therefore, companies should determine their pricing with the quality of the product that attracts

the customer and maintains the long-term affiliation.

In other studies it is determined which establishment attributes were most important in

contributing to guest satisfaction. They found that product and service quality was rated as most

important, followed by cleanliness and value. Establishment’s atmosphere were ranked as least

important. These findings were significant because they helped fast food restaurant managers

use their resources to make improvements on the store elements considered most influential in

determining customer satisfaction. (Pettijohn & Luke, 2013)

Satisfied customers are looking for a memorable experience and dynamic service where it

counts. From receiving quick service to bending the standard practices such as extending a

guest check-out in a hotel or customizing a menu item in a restaurant – customers want to feel

as if their business is appreciated. Happy customers are loyal customers. Not only is it important

to provide stellar service, but awesome products as well. Make it a point to be on the fast track

for keeping up with trends that customers may follow such as building personal assistance

services for traveling customers or making special concessions for avid repeat consumers.

(Balcher, 2019)
 Furthermore, according to Kapiki (2012), guest satisfaction is a common phenomenon in

marketing and management practices not only in the hotel industry but also in other business

ventures. This satisfaction is essential for corporate growth and continued sustainability of the

business ventures. Customer satisfaction is inculcated in the customers by making them

perceive that the quality of the products and services being offered are the best and satisfies

them fully. Increased customer satisfaction translates to consumer loyalty and hence increased

profits. The hotels and restaurant industry have not been left behind in pursuing the highest

levels of customer satisfaction. Both services and products offered in an ideal hotel or

restaurant should be of the highest quality to ensure that customers’ needs are adequately

attended to. With proper satisfaction to the customer, there is a high likelihood that the firm’s

image is upheld. Positive reputation in the hotel industry is paramount to the success of the

industry.

Wyman (2021) found that cleanliness was the most important factor that impacted the guest

satisfaction in a hotel. While "clean" may be a casual term, the underlying message is clear.

Travellers are looking for "virus-free" accommodation. In fact, 83% of travellers would prefer to

stay at a hotel that advertises precautionary practices on their social media or other channels.

The hospitality sector is known for its focus on quality and customer satisfaction. So, it is no

surprise that in the post COVID times, there is an increased pressure to maintain guest

satisfaction. However, as the industry primarily relies on a human to human interaction, hoteliers

and property managers are now rethinking ways to gain the trust of their customers. After all, it

is more expensive to gain a new customer than to retain an existing one.

There exists varying definitions of customer satisfaction from different researchers. Elvira &

Shpetim (2016) define consumer satisfaction as the client response to the perceived service

based on personal expectations and the service's actual performance. On the other hand, Khan

et al. (2017) define customer contentment as the client's evaluative reaction in relation to a

service or product performance based on their anticipations towards the service. Moreover,

Farooq & Salam (2018) state that customer satisfaction refers to how a service's perceived

performance matches or surpasses customer expectations. Ideally, the inability of service to

meet customer expectations leads to dissatisfaction. These definitions by various authors depict

satisfaction as a general postservice evaluation by a customer.

Service quality and expectations

The tourism industry being considered as one of the fastest growing sector at present is

composed chiefly by services. This sector comprises of various interdependent sub-sectors, for

example boarding and lodging, transportation, food, leisure, recreation, among others. The

‘back bone’ of the tourism system happens to be the hotel industry (Campos &Marodin, 2012).

Crick and Spencer (2011) studied methods used to measure service quality and expectations

and informed that service industry is dynamic in nature where the guest dictates the service

required, and growing competitiveness has caused minimum satisfactory service level

expectations from the guests. Different measurements of expectations from service have been

recommended for the hotel industry but the quality function deployment (QFD) method has most

potential, in which service is treated as a process are measuring guests’ expectation at every

phase so as to create service that meets and potentially exceeds their expectations. The gap

analysis conducted by McCain, Jang & Hu (2005) between loyal patrons and possible switchers

in assessing service quality attributes, the three topmost gaps were all found to be related to
functional quality (exchanges amid guests and employees) and not technical quality and

customer relation.

Level of Service Quality

Mohsin & Lockyer (2010) revealed that the areas like Front Office, Housekeeping, Food and

Beverage Service in Room Service and Restaurants showed guests’ importance perception

higher than performance of the property. Researchers have used assorted variables like service

quality, cleanliness of rooms and public areas, price, employee skills, security, pleasant staff,

reception speed, image of hotel etc. ( Mey et al., 2006; Dragićević, et al., 2010; Blešić, et al.,

2011; Dunjić, et al., 2012). Guests initially have perceived standards preceding the service

encounter regarding the level of service quality, they then examine service performance, match

performance with standards and form confirmation or disconfirmation perceptions. Hotel

businesses in order to expand service quality and the perceived value for guests to achieve

better customer satisfaction and loyalty, are growing their investments, thus developing in better

relationships with each customer (Jones, Mak & Sim, 2007). Crick & Spencer (2011); Campos &

Marodin (2012); Bradić, Kosar & Kalenjuk (2013); Rao (2013); Chu (2014); Li (2014); Thakkar

(2014); Aswin (2015) have assessed the levels of Guest Satisfaction attained after measuring

the same in different ways. Sureshchandar, Rajendran&Aantharaman (2001) branded five

factors of service quality as crucial from perspective of customers namely - Core service or

service product; Human element of service delivery; Systematization of service delivery:

nonhuman element; Tangibles of service– service escapes and Social responsibility.

Rao (2013) described the expectation and perceptions customers towards the service

quality amongst front office staff in one hotel in Bhubaneswar. The finding established that most

guests derived satisfaction on the service quality aspect of the front office employees at the

hotel under consideration. Bhat (2013) in his study on various hotel categories in Kashmir valley

found that respondents are overall satisfied with the hotel services but overall improvement is

needed in all dimensions of hotel services particularly on Reliability and Responsiveness to

make hotel services more effective and efficient.

A study on factors affecting hotel guests’ satisfaction from front office services & facilities in

Indian hospitality industry revealed that check-in and check-out facilities, concierge facilities,

reservation services, ambience of lobby, competence during check-in and check-out process,

courtesy of the staff and connectivity of the hotel respectively emerged as the important

dimensions influencing satisfaction of guests from front office (Kumar & Malik, 2013). Occasions

when guest’s expectations are met or when they have fallen short of expectations are called as

“moments of truth”. Exchanges of such types which involve service provider and customer to

interact directly, provide the stage where guest’s perception of quality is set. First 10 minutes

are considered most crucial in this regard (Vallen, 2013).

Thakkar (2014) finds the Front Office department to be the main promoter of guest

satisfaction. In-Room Dining’s facilities are another key attribute guest credit their satisfaction to.

Housekeeping department needs to ensure overall cleanliness, especially the bathroom as it is

always given a lot of weight in finding satisfaction out of hotel stay.

Dissatisfaction will take place if the perceived performance stoops below expectations, or if

the perceived performance exceeds the expectations (Isac & Rusu, 2014). With the growing

influence of online social media, organisations progressively taking up effective role in

networking with consumers via social media. For many organisations, their initial job during

online social media is managing responses, which ensures that the management replies to
customers’ remarks about the organisation or its offerings in the form of products and services

(Gu and Ye, 2014).

Local Studies

Satisfied Customer

Dineshkumar (2012) indicated that customer satisfaction is the key factor in knowing the

success of any retail store or business; therefore, it is very important to measure it and to find

the factors that affect the customer satisfaction. Customers most likely to appreciate the goods

and services they buy if they have been specially produced for them or for people like them. It

should be always kept evaluated in order to get feedback for the products and services in order

to develop it further with wide customization. Customer satisfaction levels can be measured

using survey techniques and questionnaires. Gaining high levels of customer satisfaction is very

important to a business because satisfied customers are most likely to be loyal, place repeated

orders and use a wide range of services offered by a business.

Satisfied customers would likely repurchase and influence customer loyalty, thus

understanding customer satisfaction can provide organizations with information to streamline

their operations. It is the aim of this paper to explore the determinants of customer satisfaction

in a Philippine retail chain using factor analysis and aid retail managers and decision makers

with valuable knowledge on customer satisfaction to improve company performance. Using

survey results of 110 customers of a Philippine retail chain, this study showed that the

determinants of customer satisfaction can be classified into three main factors, namely: quality

and quantity of goods and services offered customer experience, and value for money. (Rabo &

Ang, 2018)
 Understanding customer satisfaction can provide companies with information to streamline

their operations and focus improvement programs on achieving cost efficiency to ultimately

achieve better performance (Ilieska, 2016). Satisfied customers would return to purchase and

spread positive word of mouth (Pham & Ahammad, 2017) thus greatly influencing customer

loyalty (Choi & Kim, 2013). It is therefore helpful to identify determinants of customer

satisfaction to improve company performance.

According to Sandoval (2019) improving guest satisfaction in hotels is one of the most

effective and yet least explored ways of building a hotelier’s business. When done right, hotel

customer satisfaction goes a long way in gaining their loyalty. This, in turn, has a direct and

positive impact on a hotel company’s revenue, online reputation as well as word-of mouth

marketing. At a time when of increasing customer demands and higher customer expectations,

the most successful hotel brands are those that are able to consistently deliver constantly

improving levels of customer satisfaction. Hotel brands that stand out are those that are able to

meet both the expressed and the unexpressed needs of customers. Delivering exceptional

customer satisfaction begins with understanding who the customer is, anticipating what their

needs are likely to be and then creating an environment that meets and exceeds those needs.

Surveys among hotel guests have demonstrated that guests frequently use and are

influenced by hotel review websites and recommendations from friends and family. And

cleanliness is highlighted as one of the most important elements influencing hotel

recommendations, in addition to value for the money, quality of service, pleasant atmosphere,

location and brand. (Philippine Statistics Office, 2022)

Guests tend to expect higher standards of cleanliness from internationally known hospitality

brands. Yet, cleanliness expectations do not correlate to the price of the room. When guests are

loyal to the business, the business will surely be successful. A guest’s loyalty is very important

when it comes to beach resorts. And in order to gain guest loyalty a beach resort should always

prioritize giving the best service to its guest that will satisfy them. Giving quality products in an
affordable price and providing excellent service is one way to gain guest loyalty. Another way to

encourage the guests to visit again or purchase again is that the beach resorts should provide

loyalty cards, rewards, free merchandise and coupons because a satisfied guest have a big

chance that they will come back to repurchase. Guest loyalty can also help establishments to

save money in advertising because it is much cheaper to retain old guests that to attract new

ones. Also, guests who experienced a good or better service in a beach resort has a chance to

spread their happiness by telling other people, and that’s advertising through the word of mouth

(Customer loyalty in business, 2018).

Customer satisfaction describes the starting point in forming customer loyalty and long-

lasting connections in business. In other words, it develops hotel customer loyalty and

contributes significantly to improving the corporate image of the overall hotel chain (Radojevic,

2014). Customer satisfaction is viewed to be one of the primary determinants of customer

loyalty. Enhancing customer satisfaction is a critical component of the hospitality industry’s

value proposition to the guests. Tourist appreciation of a destination is a function of attribute

importance, performance, and travel motivation. Tourist satisfaction is also related to target

attributes, including the attractiveness of a destination or establishment itself and the supporting

industry level attributes. It is also essential to consider that guest satisfaction increases

customer loyalty, influences repurchase intentions, and will lead to positive word of mouth.

Qualities of service and customer satisfaction are critical factors for the success of any business.

Hotels and businesses, in general, can go a step further and personalize the friendly,

accommodating, and flexible experience guests receive by customizing the service, guest

satisfaction increases. (Gepilano, 2017) Moreover, the concept of delivering quality service for

ensuring guests’ satisfaction to obtain guests’ loyalty and subsequent repeat business has

continuously been a typical assumption on the part of many theorists and practitioners.

Common dimensions of service satisfaction include service quality, product quality, price, and

location. Researchers suggest the “people factor” may be the most salient of these dimensions
in determining overall satisfaction and in securing repeat business in the service industries. To

achieve customer satisfaction, it is essential to recognize and to anticipate customers' needs

and to be able to satisfy them (Eshetie, Seyoum, & Ali, 2016). Companies that can rapidly

understand and satisfy customers' needs make higher profits than those which fail to

understand and satisfy them (Al-maslam, 2014).

Perceived value

Creating perceived value for customers can be deemed as a key success factor for all

service firms. According to Khalifa (2004), customer value construct has gained appreciation in

numerous streams of marketing literature in recent years and some of the more important

customer value ideas that have been discussed over the past 15 years are being re-examined.

Perceived value is considered as customer recognition and appreciation the utility of a product

that is given by a service provider that may fulfil his/her expectation (Foster, 2004; Heininen,

2004; Walker et al., 2006). Meanwhile, in a service management context, the ability of an

organization to use responsiveness, assurance and empathy in delivering services will increase

customers’ perceptions of value; and this may lead to higher customer satisfaction

(Sureshchandar, 2000; Sureshchandar et al., 2002).

In a study in the financial services industry, Roig et al. (2006) found that the principle source

of competitive advantage is for companies to conceive an offer that provides customers with a

perceived value higher than that of the competition. Hence, the net value received can be

considered as the competitive edge that can lead to brand recognition, loyalty and/or

product/service preference.
Customer satisfaction on quality service

It was originally a framework used to measure quality in service sectors, however, it has

been used in studies toexplain customer satisfaction such as those of Gašević, Vranješ, &

Drinić (2016) and Haldar (2017) on banking services, and Madhavan and George (2017) and

Teshome and Seyoum (2014) on the tourism industry. Although these studies are concentrated

in the service sector, the applicability of SERVQUAL to other industries has led to studies which

focused on determinants of customer satisfaction in a retail industry.

In the Philippine setting, Agulo et al. (2015) assessed one Batangas City department store’s

customer satisfaction on quality service measured in terms of employee’s professional

appearance, customer relation, customer service, and facilities. Zalatar (2017) predicted each

gender’s satisfaction among 200 individual customers of quick service restaurants to improve

service quality dimensions which are tangibles, reliability/responsiveness, and

assurance/empathy. Both studies emphasized on customer profile which is beyond this study’s

scope.

Moreover, this study provides valuable knowledge for decision-making purposes of retail

managers since functional quality (which includes courtesy, good quality of customer service,

and accurate billing details) is a common factor of customer satisfaction but was not found to be

a statistically significant determinant of customer satisfaction with mobile network provider

(Chakraborty & Sengupta, 2014).

Service and customer satisfaction

Simply providing guests average service is not good enough in this competitive environment.

In a market full of tourism suppliers, a company needs to offer more and better service because

guests can always take their business elsewhere. To be successful a tourism firm needs to

understand what quality means to prospective customers and strive to improve the service

quality offered so customers keep will coming back again and again. services they offered.
Recognizing that all guests do not expect the same services nor have the same amount to

spend on lodging, the hotel industry offered a variety of services at different prices aimed at

particular markets (groups whose members have similar expectations and budgets).They are

not all known by the same name and does not offer the same services but there is one thing

they all have in commonextending the spirit of hospitality to overnight guests.

Over the years, a wide range of facilities have been developed to meet travelers’

accommodation needs. Although it can be found in many shapes and sizes, these facilities have

commonly been grouped under the umbrella term lodging. Accommodation provides home

away from home. It creates temporary living quarters for guests through a variety of sources

which includes amenities that contribute to guest comfort. If possible room inspections should

be made to ensure guest comfort. Accommodation implies that procedures are designed around

the customer rather than around the restaurant or its employees. As consumers are consistently

demanding more from their lodging experience, the challenge to hotel operators is to excel in

consistently high quality service that build customer loyalty. These commitments to excellence

mal also involve product differentiation strategies involving imaginative experiences.

Positive effect on consumer satisfaction

In establishing satisfaction and loyalty, food quality plays an important role. Food quality

usually refers to certain aspects, such as the appearance of food, taste, variety of menus, health,

and freshness (Hanaysha, 2016). A strong impact of food quality is a crucial marketing

technique that can satisfy consumers and keep them and provide them with a satisfying buying

experience. The quality of food can provide a significant impact on client experience and

behavioral actions (Gagic et al., 2013). Several studies have shown that food quality can have a

positive effect on consumer satisfaction (Abdullah et al., 2018; Qin and Prybutok, 2009;

Altamore et al., 2018).

in turn leads to the retention of customers (Boonlertvanich, 2011). Therefore, analyzing these

principles may not only allow organizations to achieve or surpass their consumer standards but

also to influence their deliberate behavior (Al-Tit, 2015). The quality of service depends on how

closely consumer expectations relate to customer perceptions of the provided service. Service

quality is being described as having four dimensions: excellence, value, compliance with

requirements, and meeting and/or exceeding standards (Reeves and Bednar, 1994). Kroon

(1995) likewise indicated two dimensions, such as the perception of the industry and strategic

quality. Established over time, service quality contributes to customer satisfaction, while

contentment is transaction-specific. It is a shorter-term indicator that depends on an immediate,

emotional response to service. Consumer satisfaction in goods is the magnitude to which

perceived service exactly matches the standards of the customer (Kumar, 2012). It is an

appraisal of a particular transaction arising through perceived quality (Amaratunga et al., 2010;

Al-Tit, 2015).

Service quality evaluation by customers is a vital piece of knowledge for service providers

directed at boosting profitability, strengthening organizational capabilities, and promoting

themselves further dynamically in the market (Jain and Gupta, 2004; Omar et al., 2016). Greater

economic gains are generated by companies that have better service efficiency and therefore

have a generally satisfied client base (Gilbert et al., 2004). For service providers, therefore, it

has become inevitable to pursue a comparative edge by offering superior service. In the same

way, customer satisfaction is seen as affecting the intentions and behavior of repurchases,

which in turn can contribute to the potential profitability of a company. As a consequence of its

clear relationship with revenues, all businesses, including the restaurant business, are

becoming concentrated on the impact of service quality and customer satisfaction. In an attempt

to retain customers, more businesses are forced to evaluate and improve their standard .
Synthesis

Customer satisfaction is a business philosophy which tends to the creation of value for

customers, anticipating and managing their expectations and demonstrating ability and

responsibility to satisfy their needs. Qualities of service and customer satisfaction are critical

factors for success of any business. (Domonici, 2010). Zairi, (2003) said that “customers are the

purpose of what we do rather than they depending on us, we very much depend on them. The

customer is not the source of a problem, we shouldn’t perhaps make a wish that customers

‘should go away’ because our future and our security will be put in jeopardy”.

Consumer Satisfaction refers to as a post-purchase evaluation of product quality given pre-

purchase expectations (Kotler et al., 2003). Different studies have investigated the relationship

between service quality, satisfaction, and customer loyalty (Skogland & Siguaw, 2004; Yee et al.,

2009). Research studies suggest that service quality leads to customer satisfaction, attraction of

new customers, positive word-of-mouth, repeat visits, enhanced corporate image, increased

business performance and so forth (Akbaba, 2006; Reid & Bojanic, 2009; Zabkar et al., 2009;

Zeithaml et al., 2006). Yee et al. (2009) found that service quality has a significant and direct

impact on customer satisfaction and that the relationship between customer satisfaction and

loyalty is also highly significant.

Customer satisfaction has been heavily emphasized in the hospitality industry. Most recently,

more and more researches have reported that even though customers had been satisfied or

very satisfied with their original provider, they still switch to a different provider (Skogland &

Siguaw, 2004). Thus, if the companies want to increase customer loyalty, then they need to

consider ways to build a relationship with customers, including the way satisfaction influences

their decision to return to the same hotel. Customers display varying degrees of loyalty,

commitment, or allegiance in various aspects of their daily interactions. Loyalty also occurs in

consumption situations, and has received much attention in the marketing literature.