The effect of service quality on the domestic tourist loyalty in the hotel industry (case study Shiraz hotels)

The purpose of this study was to examine domestic tourists' satisfaction with hotel services provided by hotels in Shiraz. From the literature, it was found that providing service quality, positively influence customer satisfaction, and build loyalty intentions among customers. Survey was used to find the level of domestic tourists' loyalty with the hotel services. A stratified random sample of 390 domestic tourists' responded to the survey. The results indicated that domestic tourists' were satisfied with the service quality at the hotel and loyal to the hotel. The results of the study create an awareness of domestic tourists' needs and offer useful feedback to hotel administrators and planners in their efforts to improve service quality in the hotel industry. Keyword: service quality, domestic tourism, Satisfaction, Loyalty *Corresponding author: yousef.k73@gmail.com Received Date: 25 August 2014 Accepted Date: 2 November 2014 Date of Print: Winter 2015 72 Journal of Tourism & Hospitality Research, Vol. 2, No 2, Autumn 2012 Introduction The service is considered to be primarily experimental as it is intangible, hence, difficult to measure. Rizal (2008) found the main differences between the product and service are the production and contact with the customers. Customers are looking for previous external and internal causes of services to decide on the future purchase. Domestic tourist' perceptions of the quality of their service experiences should be assessed. Each time a guest experiences some occurrence of hotel service, that service is judged based on his/her expectations (Parasuraman et al. 1988). The important factor which affects improving the customer satisfaction is service quality by which the customers stay with the company longer and continue their relationship (Rajinikanth et al., 2011). Unhappy customers are responsible for losing the market share while a happy customer give rise to greater profits (Amin et al., 2013). Moreover, loyal customers purchase more and assist the firm by repurchasing and providing positive recommendation (Skogland & Siguaw, 2004). There are several studies supporting the idea that satisfaction leads to loyalty (Heitmann et al., 2007; Zeithaml et al., 1996), however, in some studies there is the slight relationship between satisfaction and loyalty (Oliver, 1999; Olsen, 2007). Reichheld and Sasser (1990) argued that an increase of 2% of repeated purchase customers could assist an organization to diminish its expenses by 10% because 60% of new customers are attracted by word-of-mouth. In order to successfully achieve the quality of services, hotel managers must first determine a comprehensive understanding of domestic tourist' needs and expectations. Then they must formulate a distinctive service proposition, a proposal regarding how they will choose to serve guests, and finally implement it through a strategy of “customer-friendly” policies, practices, and procedures (Kotler & Fox, 1999). Although there have been numerous studies and continuous efforts on the part of many institutions to improve the quality of their services, much of this improvement using tangible quality measures. As a result, much of the focus on service quality measurement has been on The effect of service quality on . 73 technical quality inputs and occasionally on domestic tourists' outputs, rather than on their satisfaction. Therefore this survey endeavors to cover this gap in the literature by introducing how the service quality affects the domestic tourists' loyalty in the hotel, a topic that has not been investigated well. Review the literature Service quality is divided into two dimensions; hard-ware which contains the product and service quality and human-ware which covers the customer’s interactive components in service (Gronholdt et al., 2000). Gronroos (1984) classified service quality into two categories, namely the technical and functional quality. While the former emphasis what the customer usually receives from the service, the latter deals with the service delivery production. Parasuraman et al., (1985) found that the service has three important aspects, namely intangibility, heterogeneity, and inseparability. Consequently, evaluating the service is more difficult than evaluating the product. Therefore, the consumer’s expectation is an important factor which affects evaluating the service. Parasuraman et al. (1988) simplified the multiple item scales to five dimensions, including the tangibles, reliability, responsiveness, assurance, and empathy. Dimensions of the SERVQUAL include: _ Tangibles: the equipment, physical facilities, and appearance of personnel are defined as tangible dimensions _Reliability: the ability to perform an expected service, which is promised dependably and accurately _ Responsiveness: this dimension is defined as the “willingness to help the customers and provide a prompt service. ” _ Assurance: Employees with courtesy and knowledge who are able to inspire the confidence and trust (process) _ Empathy: the individualized attention and caring provided by a company to its customers. The concept of satisfaction is a feeling of a person with reference to the product or the service after he or she buys or uses it (Vesel & Zabkar, 2009). In other words, satisfaction is the change in the attitude, which is affected by the consumption experience (Wu & Liang, 2009). Brunner-Sperdin et al. (2012) specified that the emotional experience during the service consumption is an important 74 Journal of Tourism & Hospitality Research, Vol. 2, No 2, Autumn 2012 factor affecting the customer satisfaction in the hotels. Consistent with Oliver (1980) customer satisfaction is the consequence of the customer’s expectation and the customer’s perception of the service quality. The definition of service quality in the tertiary education sector is no less elusive than that in the business world. Service quality lies in the eyes of the beholder. In other words, it is person-dependent and has different meanings for different people (Kelso, 2008). One of the most familiar indices of customer satisfaction is the American customer satisfaction index (ACSI) which is inspired by the Swedish index. Several sets of casual relationships are involved in the ACSI from the antecedents such as the customer’s expectation and the perceived service value to the consequence such as loyalty and complaints. Therefore, the ACSI measures the relationship between these variables in different industries (Deng et al., 2013). Some scholars consider service quality to be a state of outcome of the service encounter and customer satisfaction to be a response to service quality. These researchers typically measure service quality using customer evaluations of tangibles, reliability, empathy, assurance, and responsiveness (Zeithaml, et. al., 1996). The Confirmation (Expectancy)-disconfirmation theory defines the satisfaction as a “post-purchase evaluative judgment concerning a specific buying decision. ” Based on this theory, the customers evaluate their satisfaction levels by comparing their expectations about the service or product with the actual experience. Therefore, three kinds of satisfactions may occur: 1Natural feeling: when the actual performance matches the standards. 2Satisfaction (confirmation): if the actual performance is better than the standards. 3Dissatisfaction (disconfirmation): when the actual performance is worse than the standards (Skogland & Siguaw, 2004). The importance of measuring domestic tourists' satisfaction with hotel services has evolved beyond theoretical discussion (Cooil et al., 2007). Domestic tourists encounter the hotel in a variety of ways, each time forming impressions about the service encountered. These encounters are what should be measured to gauge domestic tourists' The effect of service quality on . 75 perceptions. Since the delivery of an accommodation service occurs through many different service providers over many years, there are a number of decision points in which the tourist has the opportunity to remain with the current hotel or defect to another (Kelso, 2008). According to the literature, this study aims to investigate the relationship between service quality and domestic tourists' loyalty by the mediating role of satisfaction. Therefore, the following hypotheses were provided to test this linkage in the hotels in Shiraz. H1: service quality has significant effect on domestic tourists' satisfaction. H2: service quality has significant effect on domestic tourists' loyalty. H3: domestic tourists' satisfaction has significant effect on domestic tourists' loyalty. H4: domestic tourists' satisfaction plays the mediation role in the relationship between service quality and domestic tourists' loyalty. Methodology The survey method used in this study to examine the link between service quality and domestic tourists' satisfaction and loyalty in hotels in Shiraz. The population of this study is the domestic tourists' who stay at least one night in the hotels in Shiraz. The sample includes 390 domestic tourists, which was selected based on Cochran (1934) formula. The questionnaire is designed in this study to collect the data from the domestic tourists in hotels in Shiraz. The questionnaire was divided in three parts. In the first part, questions related to service quality. The dimensions of service quality was measured based on Parasuraman et al. (1988) include tangible (8 items), reliability (4 items), assurance (4 items), responsiveness (4 items), and empathy (4 items). In the second part of the questionnaire the domestic tourists' satisfaction (4 items) and loyalty (8 items) was evaluated by 12 questions. In the last part demographic questions were provided to check the domestic tourists' characteristics and demographic. Based on the literature and methodology the conceptual model was provided in figure 1. To test the model and the hypotheses, the structural equation m