Impact of Market Globalization on the Hospitality Industry
Write about the Impacts of Service Quality on Customer Satisfaction.
Market globalization is the most recent development that has received much attention from all sectors. Its effect on business operations, processes, entities, and partners are vivid globally noticeable. It disputes traditional customs and conduct and necessitates the need for different approaches (Steger, 2010).
Globalization of markets comprises the increasing interdependency amongst global economies; investment activities, international sourcing, production and trading; the upsurge in overseas transactions and financing; and stiff competition at multinational levels. This scenario has been fostered by technological advances in transport and communication, the emergence of world economic and wealth development, the elimination of trade barriers, and the creation of regional trade blocs. The globalization of markets has also been promoted by the emergence of new technologies and the propagation of new products (Miu, 2016).
The hospitality industry, which is significantly impacted by the tourism sector, is amongst the sectors that have substantially been affected by globalization. The development in international and domestic tourism presents an excellent opportunity for Australia to increase its market share of the tourism sector and thus increase its GDP (Forsyth et al., 2014). However, in the research by Jensen and Petersen (2014) the authors observe that global demand for services and products have shifted with time and change of events and thus it doesn’t occur naturally but has to be initiated.
With the increasing significance of tourism regarding its significant contribution to a country’s foreign exchange, the Australian government and primary stakeholders have embarked on marketing Australia has the best tourist attraction nation of choice. The impact of travel and Tourism in the Australian economy is evidenced by the total contribution of 10.09% of the Gross Domestic Product (GDP) (Forsyth et al., 2014).
The research aims to ascertain the link between service quality and customer satisfaction a case study of Sydney hotels, Australia. The study outcomes will develop an improved comprehension of operations and quality dynamics that comprise the hotel industry in Sydney and finally increase customer satisfaction. The research findings are significant because they will act as a reference for additional research. Researchers will be able to ascertain other areas for research on service quality in Sydney hotels, and this will lead to the improvement of service provision and corporate performance. Scholars will as well make inferences and suppositions from the study findings and conclusions since it will contribute to the theoretical and conceptual framework in the area of service quality management.
The study outcomes will also be insightful to the hotel’s management in re-evaluating their services strategy growth primarily from the perspective of enhancing customer satisfaction and retention. Additionally, the research will offer to understand the aspects that should be enhanced, restructured or a complete overhaul of the strategies implemented in service delivery and corporate performance.
Competition in the hospitality industry in Australia is on the rise forcing hotels to offer excellent services to remain viable in the market. This study is essential to policymakers both in the private and government sectors of the hospitality industry because they will benefit from significant findings of this research. The information on service quality and customer satisfaction that this study will provide will help them to articulate policies that are relevant and effective to the hotel industry in Sydney.
Tourism Industry in Australia
The study scope is restricted to the research on the impacts of service quality on customer satisfaction. The study will discuss on the factors that determine service quality, the primary models for measuring service quality namely the SERVQUAL model, SERVPERF model (performance model), factors that affect customer satisfaction, and the association between service quality and customer satisfaction. Additionally, this study will only include the five, three and two rated star hotels in Sydney by involving the guests that have visited the hotels. The questionnaire will be designed according to the research objectives and will be left at the hotel’s reception, and customers will pick each and will then return them to the same place after filling in. The completed questionnaires will be edited for completeness and reliability, and then the data analyzed and interpreted based on the research objectives using SPSS.
Customer satisfaction assessment is a major aim for any company willing to attain sustainability in the highly competitive service industry (Torres and Kline, 2013; Subramanian et al., 2014). This supposition has been sustained by common performance excellence models such as the MalcomBalridge Model (Yator, 2012; Talib et al., 2010). Such models regard customers as central to business success. Therefore, ensuring that hotel guests are satisfied and pleased with the services provided is much more significant for the Sydney hospitality industry now that the sector is facing stiff competition from other Australian states. Limited studies have attempted to show the association between service quality and customer satisfaction in Australia (Chen, and Hu, 2010; Jhandir, 2012), with only a single study of Sydney (Presbury, 2009). However, none of these studies has considered service quality and customer satisfaction in hotels in the context of Sydney. The present research will attempt to fill this knowledge gap under the following objectives;
- To ascertain the factors influencing customer satisfaction
- To assess the relationship between service quality and customer satisfaction among hotels in Sydney, Australia.
A study by Le (2010) on service quality and customer satisfaction in the hotel sector was carried out on different hotel guests from various continents especially Europe and Asia, with the help of a structured questionnaire to collect data. The survey sought to provide insight into the significant factors that determine a customer’s choice of hotel services, to reveal any gender variation when it comes to hotel service evaluation and the role of culture in customer satisfaction in Europe and Asia. The findings showed that 79% of the guests select hotels based on the service quality and previous satisfaction, and the same percentage of guests inform others regarding the hotel. About 35 % of the guests from Asia chose the hotels of preference by word of mouth.
50% of the customers expected the providers of hotel services to respond promptly to issues raised by customers concerning details of services they offered. The Asians had higher customer expectations on the improvement of service quality than the Europeans. The study also found out that the Asian managers were more present to provide solutions to customers’ issues than those of Europe, whereas almost 26% of guests with problems about hotel services could not get assistance due to the hotel staff ignoring them (16%) or the customers (10%) being unable to connect to the hotel staffs.
Service Quality and Customer Satisfaction in Sydney Hotels
Lu et al. (2015) carried out qualitative research on service quality and customer satisfaction in luxury hotels by interviewing the administrators and customers of Taiwan five-star hotels. The objective of the study was to ascertain whether managers of luxury hotels and guests have a common insight of service quality and satisfaction. The responses of the hotel managers were summarised into three categories namely luxury, service quality and satisfaction. The findings did not reveal any statistical significance in the understanding of the managers and customers on the theme variables. However, the management and customers use different languages to explain luxury, service quality and satisfaction. The supervisors assessed satisfaction regarding services offered, but the clients understood quality and satisfaction from the standpoint of the value offered for lodging amount. The studies also found that the general understanding of satisfaction on the side of the managers did not vary significantly and the expectations of the guests were the same.
Shafiq et al. (2013) conducted a study on the impact of service quality on customer satisfaction with Hotels in Faisalabad, Pakistan as a case study. The objective of the paper was to assess service quality of hotels by the use of customer satisfaction. The authors used the SERVPERF model to measure service quality using the five dimensions namely physical appearance, truthfulness, empathy, willingness and assurance. A structured questionnaire was used to collect data from guests who had visited hotels in Faisalabad. The findings showed a formative statistical significant association between three aspects of quality namely responsiveness, reliability and assurance, and guest satisfaction. No association was found between tangible and empathy dimensions of quality and customer satisfaction. The application of the SERVPERF scale shows that the management should enhance their physical facilities, minimize delay and improve the present services. The authors recommend the use of the SERVPERF model as an effective tool in developing improved competitiveness because its application informs the management the dimension of quality that requires a change of enhancement.
Minh et al. (2015) used a case study of the hotel industry in Vietnam to evaluate the relationship between service quality and customer satisfaction, with the use of structured questionnaire. The paper used the five dimensions of SERVQUAL model (tangible, empathy, assurance, reliability and responsiveness) to measure customer satisfaction of guests of 3 –star hotels in Vietnam. The results show that all the five dimensions of service quality; truthfulness, assurance, eagerness, and empathy, have a substantial positive effect on customer satisfaction in Vietnam hotels. Empathy had the most statistical significance of customer satisfaction, followed by responsiveness, reliability, and assurance in that order.
The authors’ findings imply that the management should focus more on the four intangible quality dimensions to increase customer satisfaction. Also, the study results indicate that most of the quality dimensions observed show that they are dependent on the knowledge and attitude of the staff. Hence, the recommendations by the study that hoteliers in Vietnam should invest more in the training of the hotel staff in equipping them with job skills and knowledge to provide quality service, and improve customer satisfaction as a result. However, the research was only limited to customers of three-star hotels, thus making it difficult to generalize and apply the findings and conclusions to other hotels in different geographical location.
Key findings
Bucak (2014) researched hotels to determine the effects of service quality on customer satisfaction using structured questionnaire and face to face interview to collect data from tourists occupying five, four and three-star hotels in Kepez, Canakkale Centrum. The author used five aspects of quality service of the SERVPERF scale namely physical appearance, truthfulness, security, empathy, and willingness, to measure service quality and its impact on customer satisfaction. The findings demonstrate that all the 5 elements of service quality affect customer satisfaction but with different statistical significance. Empathy had the most significant influence of supposed service quality on the respondents. Then followed Truthfulness, security, physical assurance, and willingness. Most of the participants cited staff insincerity as the reason for not having the preference to the Genial hotel. Thus, the findings of the authors affirm that there is a definite impact of service quality on customer satisfaction and that the hotel staff has the most significant role in perceiving service quality.
References
Bucak, T., 2014. The effect of service quality on customer satisfaction: A research on hotel businesses. International Journal of Education and Research, 2(1), pp.1-12.
Chen, P.T. and Hu, H.H., 2010. How determinant attributes of service quality influence customer-perceived value: an empirical investigation of the Australian coffee outlet industry. International Journal of Contemporary Hospitality Management, 22(4), pp.535-551.
Forsyth, P., Dwyer, L., Spurr, R. and Pham, T., 2014. The impacts of Australia’s departure tax: Tourism versus the economy?. Tourism Management, 40, pp.126-136.
Jensen, P.D.Ø. and Petersen, B., 2014. Value creation logics and internationalization of service firms. International Marketing Review, 31(6), pp.557-575.
Jhandir, S.U., 2012. Customer satisfaction, perceived service quality and mediating role of perceived value. International Journal of Marketing Studies, 4(1), pp.68-76.
LE, N., 2010. Service quality and customer satisfaction in the hotel industry. Politesi.
Lu, C., Berchoux, C., Marek, M.W. and Chen, B., 2015. Service quality and customer satisfaction: qualitative research implications for luxury hotels. International Journal of Culture, Tourism and Hospitality Research, 9(2), pp.168-182.
Minh, N.H., Ha, N.T., Anh, P.C. and Matsui, Y., 2015. Service quality and customer satisfaction: A case study of hotel industry in Vietnam. Asian Social Science, 11(10), p.73.
Miu, P.T.A., 2016. Globalization and Technology. Icoana Credin?ei, p.84.
Torres, E. and Kline, S., 2013. From customer satisfaction to customer delight: Creating a new standard of service for the hotel industry. International Journal of Contemporary Hospitality Management, 25(5), pp.642-659.
Presbury, R., 2009. Service quality in Sydney hotels: a perspective from managers, staff and customers.
Shafiq, Y., Shafique, I., Din, M.S. and Cheema, K.U.R., 2013. Impact of Service quality on customer satisfaction: a study of hotel industry of Faisalabad, Pakistan.
Steger, M.B., 2010. Globalization. John Wiley & Sons, Ltd.
Subramanian, N., Gunasekaran, A., Yu, J., Cheng, J. and Ning, K., 2014. Customer satisfaction and competitiveness in the Chinese E-retailing: Structural equation modeling (SEM) approach to identify the role of quality factors. Expert Systems with Applications, 41(1), pp.69-80.
Talib, F., Rahman, Z. and Qureshi, M., 2010. The relationship between total quality management and quality performance in the service industry: a theoretical model.
Yator, L.J., 2012. The effect of service quality on customer satisfaction in the hospitality industry in Kenya-a case study of Lake Bogoria SPA resort. MBA Project.
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