Customer Satisfaction in the Singapore Hotel Industry

Introduction

Hotel is one of the most important organizations in the field of tourism industry in providing service. Therefore, they play a full role in improving and expanding the tourism industry and also in improving and developing economic circumstance.

Today, customer satisfaction is a specific requirement for the improvement of service organizations such as hotels, and increase profitability. Thereby maintaining the system of measurement and evaluation of customer satisfaction is one of the most important aspects of improving the quality, but the basic needs of the recent organization.

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On the other hand, by expanding the borders of the global village, the need for only standard regulations to assess the quality of certain products and services, is to measure the situation of the organizations in the international market competition, may be felt more than ever

Study background

Customer satisfaction is a business philosophy, is a measure of how products and services offered by a company meet or exceed customer expectations. It is considered an important indicator of performance in business and is part of four of the Balanced Scorecard. Customer satisfaction with a company’s products or service is often seen as the key to a company’s success and long term competitiveness (Klee, 1998).

Identify and forecast customer demands and to be able to meet them is important to achieve customer satisfaction. Due to the costs of attracting new customers costs more than retaining existing customers, to be successful managers must focus on retaining existing customers, effective implementation of policies Customer satisfaction and loyalty. This is especially true in the hotel industry.

Today, managers in the hotel industry is facing one of the most important challenge is to provide and maintain customer satisfaction. Consequently, quality of service has become a factor important in the overall tourism experience, and one which ultimately dictates the success of the tourism business (Kandampully, 2000). According to Lewis and Booms (1982), service quality is measure of how well the service delivered matches customer’ expectations.

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Positive relationships can make higher commitment of customers and increase their rate of return. Long-term relationships between customers and hotel is becoming more important as the positive correlation between overall satisfaction levels of visitors and their ability to return to the same hotel. Hotels are increasing their investments to improve service quality and perceived value for customers to achieve customer satisfaction and loyalty better of them, thus achieving a better relationship with customers.

Competition is increasing dramatically as variety of hotel industry; hence, the hotel management has always tried hard to provide the best service quality and the best satisfaction for customers in the hotel industry including hotels in Singapore.

Study area

This report covers of the main literature on customer satisfaction and retention in the hotel industry in Singapore. The hypothesis of the report will research based on the issues of the customer satisfaction and how a hotel management use effective policies to providing services and goods with a high quality to satisfy the customers and go through a lot of effort in maintaining their customer satisfaction, develop and make profits in their business focusing on Singapore area.

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Research structure

The report focus mainly on “Customer satisfaction” emphasize on the area of hotel industry in Singapore. First chapter introduces background of the Customer satisfaction and briefly summarized importance of relevant issues.

Second chapter identifies customer satisfaction in the hotel industry, purpose applying the best strategies to provide quality services to customer, reasons why need to maintain old customers and attract new customers. How to build customer’ loyalty, hotel attributes what services to customers and the legal regulations, strategic considerations will be explained.

And fourth chapter concludes the best methods to proposing improvements in customer satisfaction management in the hotel industry.

Research objectives

The aims and objectives of this research are:

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What is customer satisfaction and how to achieve it?

Hotels need to adopt effective strategies and create product attributes to customers to satisfy them.

How the service quality related to customer satisfaction?

Provide good service quality will gain customer satisfaction.

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Definition of customer loyalty and how to remain customer loyalty?

To gain customer loyalty, hotel needs to have a good relationship with customers.

What services quality is hotel need to provide to customer in order to get customer satisfaction, loyalty and repeat patronage?

Cleanliness, location, security, room rates, service quality and reputation or chain of hotels.

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CHAPTER 2 / LITERATURE REVIEW

2.0 Introduction of main issues

In today’s competitive market, the company provides services throughout the world effort to achieve a better position than its competitors through the only advantage to please their customer’s satisfaction and therefore retain their loyalty.

On the other hand, customers are always looking for suppliers of goods and services of better quality and meet their expectations. But most vendors are now providing quality products with relatively equal, so customers always have multiple choices

Therefore, in the hotel industry, considering the quality of service and customer satisfaction is very important, so it is necessary to adopt appropriate measures and procedures for recognition and improvement many services as possible to meet the hotel guests and customers.

Analyze Customer satisfaction in hotel industry

Customer satisfaction is an important topic for both researchers and managers, because of high levels of customer satisfaction leads to an increase in repeat patronage among current customers and aids customer recruitment by enhancing an organizations marker reputation. Being able to successfully judge customer’ satisfaction levels and to apply that knowledge are critical starting points to establishing and maintaining long term customer retention and long term competitiveness (Yuksel and Yuksel, 2002). Customer satisfaction brings many benefits, the satisfaction increases of customers retentions and customers retentions is dependent on the nature of the relationship between the parties which are also affected by the service delivered.

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Satisfaction is an overall customer attitude towards a service provider, or an emotional reaction to the difference between what customers anticipate and what they receive (Zineldin, 2000), regarding the fulfilment of some need, goal or desire. For most products, services and aspects of performance can be made to reflect objectively measured. Some customers may be taken to a house fit their criteria, but not suitable to the taste of individual customers to assess customer service as uncomfortable as they do not see a list of their choice.

Kano, Bentler and Li-tze (1984) developed a model to categorize the attributes of a product or service based on how well they are able to satisfy customer needs. Consideration of the Kano model, we can see how it might not be enough to just satisfy customers by meeting their needs and performance basis only. In a highly competitive marketplace, organizations need to adopt strategies and to create product attributes targeted specifically at exciting customers and over satisfying them (Tan & Pawitra, 2001).

In the real estate to please and satisfy customers, agents will need to have a comprehensive knowledge and extensive list of all the local area. In essence, it is the experience and attitudes of individual’s closest contact with customers that are likely to affect whether customers are satisfied and ready to go back to the company. It is also the people in direct contact with customers who determine who the retained and satisfied customers are, and their experience determines how they treat the customers (Hansemark & Albinsson, 2004) thus impacting on the service quality delivered

Advantages of providing good Service quality to customers

The concept of service quality as a whole building is large and diverse. The theory has been elaborated on by many researchers. Berry, Parasuraman and Zeithaml (1985) write service quality as perceived by consumer’s stems from a comparison of what they feel service firms should offer with their perception of the performance of the firm providing the services. . Quality of service received is considered as the degree and direction of the difference between the perceptions of consumers. For example in real estate, this is what customers expect from the agent compare to which is actually distributed by that agent.

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In real estate, that interaction occurs from the moment the client and agent speak either verbally or electronically. It is evident that research on goods quality is inadequate in the service field, which has three inherent characteristics: intangibility, heterogeneity and inseparability between production and consumption (Berry, Parasuraman and Zeithmal, 1985).

In this scenario, providing high quality services and improving customer satisfaction are widely recognized as fundamental factors boosting the performances of companies in the hotel and tourism industry (Barsky & Labagh, 1992; Le Blanc, 1992,; Le Blanc et al., 1996; Stevens et al., 1995, Opermann, 1998). Hotels with good service quality will ultimately improve their profitability (Oh & Parks, 1997). In a competitive hospitality industry which offers homogeneous services, individual hoteliers must be able to satisfy costumers better than their counterparts (Choi & Chou, 2001).

Strategies to maintain customer Loyalty

There are three ways to determine customer loyalty that are Behavioural measurements, attitudinal measurement, and Composite measurements

The measurements considered appropriate behaviour; buying behaviour is repeated as an indicator of loyalty. One problem with the approach to repeat purchase behaviour is not always the result of a psychological commitment to the brand. For example, a traveller can stay at the hotel because it is most convenient place. When a new hotel opens on the street, they switch because the new hotel offers better value. Therefore, repeat purchase does not always mean that commitment.

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Attitude measurement use attitudinal data to reflect the attitudes and psychological feelings associated inherent in loyalty. The attitudinal measurements are concerned with the sense of participation, loyalty and faithfulness. There are instances when a customer holding a favourable attitude for a hotel, but he or she does not stay at the hotel. One can appreciate a hotel, recommend the hotel to others, but feel the hotel for him too expensive to use on a regular basis. The above approaches measure loyalty uni – dimensionally.

Composite measurements of loyalty combine the first two dimensions and measure loyalty by customer’s product preferences, propensity of brand switching, frequency of purchase, regency of purchase and total amount of purchase.

The use of both attitude and behaviour in a loyalty definition substantially increases the predictive power of loyalty (Pritchard and Howard, 1997). Two-dimensional composite method has been applied and supported as a valuable tool for understanding customer loyalty in many fields, such as retail, entertainment, luxury hotels and airlines.

For this study, customer loyalty is customer attitude favourable to the company, committed to purchase products or services, and introduce products to them.

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According to a survey carried out by Barsky & Nash in 2006, regarding the main hotel chains worldwide, between 2002 and 2005, the importance of loyalty programs for guest’s decision on where to stay increased from 32% to 34%.

Although the search for new locations is certainly the most important factor for many tourists, several studies highlighted that there is a good portion of customers that chose to repeat their holidays’ destination, showing a certain degree of loyalty (Oppermann, 1998; Fyall et al., 2003).

According to the study of loyalty found that, there are five major factors affecting the repetition of trip to the same tourist place. They do not want to make wrong choice when choosing the other tourist destinations. They want to meet those familiar. The emotional affection to a specific place. The possibility to explore the place better, and want to recommend the place to others.

Customer satisfaction is the starting point to build customer loyalty, so a long term relationship. This creates a loyalty’s stock in enterprises to improve corporate image. Strengthening relationships with customers leads to repeat patronage. On the other hand, an unsatisfied customer may represent a danger to the enterprise. A research, conducted by Cherubini (1997), shows that only 4% of unsatisfied customers complains to the business explaining the reason of their unsatisfaction, and each client who doesn’t officially complain generates a negative WOM which can involve also 1000 people.

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Important role of Hotel attributes

Research into hotel selection criteria has focused on the relationship between customer satisfaction and service quality of services and facilities. Because of the intangibility, inseparability, variability, and perishables of service, consumers’ perception of satisfaction criteria may include contextual cues that they use to evaluate the service quality and to make decisions about future patronage, whether or not they experienced the hotel’s products and services before (Bitner, 1990; Parasuraman et al., 1985). Alpert (1971 and Kivela (1996) viewed consumer product and services as a bundle of attributes, or features, and benefits, and stated that those attributes that directly influence consumer choice are termed determinant attributes. These attributes, which may be different from competitors’ services, may be important factors in determinant consumer’s intention to purchase in the future.

Wuest et al. (1996) defined perceptions of hotel attributes as the degree to which travellers find various services and facilities important in promoting their satisfaction with hotel stays.

To get loyalty and value than other competitors, suppliers must be able to achieve a high level of customer satisfaction for services provided. There have been many studies on the needs and characteristics of tourists. Reviews of literature that most travellers would consider following hotel attributes when giving the hotel choice decision: cleanliness, location, security, room rates, service quality and reputation or chain of hotels. Atkinson (1988_ found that cleanliness of accommodation, followed by safety and security, accommodation value for money, and courtesy and helpfulness of staff were the top attributes for travellers in hotel choice selection.

Hoteliers need to fully acknowledge which service attributes are most likely to influence customers’ choice intentions (Richard & Sundaram, 1993). Customer satisfaction practices can help them to identify the crucial favorable word of mouth (WOM) publicity (Berkman & Gilson, 1986; Choi &Chu, 2001; Fornell, 1992; Halstead & Page, 1992; Knutson, 1988; Pizam, 1994). A satisfied guest promotes positive WOM at no cost for the enterprise and with effect and credibility that are superior to those of conventional advertising (Lee et al., 2006, Tarn, 2005, Villanueva et al., 2008). WOM effect is also amplified by the World Wide Web (Dominici, 2009; Trusov et al. 2009).

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CHAPTER 3 / CONCLUSION

3.0 Conclusions

Hence, both exploring the importance for customers of single attributes in hotel selection and to systematically survey their level of satisfaction are indispensable. Research on the topic of guests leads to negative evaluations of the hotel, thus restricting the chance of repeat patronage guest satisfaction, which translates into the consideration of whether or not customers will return to a hotel or advice 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.

CHAPTER 4 / REFERENCES