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International Journal of Industrial Engineering Research International Journal of Industrial Engineering Research and Development (IJIERD), ISSN 0976

6979(Print), ISSN 0976 6987(Online) Volume and Development (IJIERD), ISSN 09762,Issue 1, May - October (2011), IAEME 6979(Print) ISSN 0976 6987(Online) Volume 2 IAEME Issue 1, May October (2011), pp. 59-68 IAEME, http://www.iaeme.com/ijierd.html

IJIERD

ANALYSIS OF CUSTOMER SATISFACTION IN HOTEL SERVICE QUALITY USING ANALYTIC HIERARCHY PROCESS (AHP)
Parul Gupta1 , R.K. Srivastava2 Associate Professor, Moradabad Institute of Technology, Moradabad, 2 Professor, Motilal Nehru National Institute of Technology, Allahabad, E-mail: parulgupta197@gmail.com, E-mail: rksmed@gmail.com
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ABSTRACT The hotel industry is a new developing growing service with huge potential in India for next decade. So far, it has already been an industry of highly ripe development, and the orientation is served in hotel Industry. However, with the increase of the competition, hotel industry must offer good quality services to its customers It is commonly accepted that service industry is viewed as a gauge for market modernization. Many researches on service industry focus on the measurement of service quality. For hotel industry, one of general services industry, systematically theoretical research about the hotel service quality management is meaningful. This paper proposes a method to evaluate the hotel service quality in India. First, a questionnaire is designed after HSQ-CS Model. Moreover, AHP is employed to decide the weight of every variable in the questionnaire. With the survey data, a series of practical methods are utilized in the data analysis to measure the service quality based on customer satisfaction (CS).With the computation of Customer Satisfaction Degree (CSD), hotel service quality is measured. Therefore, this paper dedicates on evaluating the hotel service quality based on a survey of customer satisfaction. The case study of Taj Lake Palace hotel had taken which is located in Udaipur, India. Keywords: Service Industry, Hotel Service Quality, Customer Satisfaction, Survey 1. INTRODUCTION Service industry, viewed as a gauge for market modernization, has already seen fast expansion in India. Besides the large market of service industry, support from Indian government also guarantees the continuous and steady progress. In Indian Central Government Report of the Five-Year Development Plan on Economic and Social Development of 2010, the government clearly proposed that the big city should give priority to the development of service industry in order to form a service-centered industry structure. As a traditional service industry, hotel industry, profited by the flourishing tourism, is now booming from the macro perspective. However, this charming market attracts a great number of hotels in home and abroad which give rise to 59

International Journal of Industrial Engineering Research and Development (IJIERD), ISSN 0976 6979(Print), ISSN 0976 6987(Online) Volume 2, Issue 1, May - October (2011), IAEME

unprecedented competition pressure. [1] The key problem for these hotels to survive is how to attract and retain customers. Many scholars and business practitioners transfer it into the importance of customer satisfaction. Since profitability is generally believed to be brought by customer satisfaction (Barsky and Labagh, 1992[2]; Gundersen et al., 1996[3]; Lam et al., 1996[4]), many researchers have focused on how to measure the customer satisfaction. On the other hand, with more and more researches on service quality, many researchers related the service quality with the customer satisfaction. Some scholars, moreover, take the opinion that service quality is measured by customer satisfaction. A series of mathematic methods such as AHP, coefficient analysis and dicriminant analysis are used in the analysis of survey data. As a result, the key factors of the hotel service quality are distinguished. The rest of the paper is organized as follows. In section 2, the previous researches on service industry, including hotel industry, are reviewed. In section 3, a survey on customer satisfaction and its questionnaire are introduced. In section 4, the survey data are statistically analyzed from different viewpoints to dig out some insightful conclusions on customer satisfaction for hotel service quality. The section 5 summarizes the paper. 2. LITERATURE REVIEW In many developed countries, service industry has economically exceeded manufacturing industry. This also tends to happen in India. However, compared with research of product quality of manufacturing sector, the research of service quality lags much behind. The systematic research began from 1980s. In 1982, Christian Gronoroos [5] proposed the Customer Perceived Service Quality Model in which he first put forward the concept of perceived service quality. He posited that service quality was a perception evaluation which depended on the comparison between service expectation and service performance. A. Parasuraman, Valarie A. Zeithaml, & Leonard L. Berry (1985) achieved a significant progress by presenting a Five Gaps Service Quality Model. They furthered their research in 1988 by creating SERQUAL with 22 questions from five dimensions of Tangibles, Reliability, Responsiveness, Assurance and Empathy. Although some researchers argued that SERQUAL model was problematic, many researches referred to the application and modification of this model. Nelson Tsang, Hailin Qu (2000)[6] made a survey and assessed the perceptions of service quality in Chinas hotel industry, from the perspective both international tourists and hotel managers. This survey was based on the theory of Five Gaps Service Quality Model and its modification by Lewis (1987) [7] who increased two more gaps (Gap 6 and Gap 7) into the model. From the result of gap analysis, the researchers concluded that Delivery Gap and Internal Evaluation Gap were the main reasons contributing to the service quality shortfalls in the hotel industry in China. Thanika Devi Jowaheer and Darren Lee Ross (2003) [8] used a modified SERQUAL questionnaire with 39 questions to measure the hotel guests perceptions in Maurituius. The result showed that customers perceptions of service quality in the hotel industry for Mauritius fell short of their expectations, with the empathy dimension having the largest gap. The preceding review implies that the comparison of perceptions and expectations of consumers (Gap 5) is always taken as a critical facet to evaluate service quality. This 60

International Journal of Industrial Engineering Research and Development (IJIERD), ISSN 0976 6979(Print), ISSN 0976 6987(Online) Volume 2, Issue 1, May - October (2011), IAEME

comparison accords with the definition of Customer Satisfaction (CS) [9]. For the hotel industry, as its service has a high interaction with customers, CS is formed in the service process. Therefore, CS, as a direct reflection to the service quality from customers, is an effective gauge for customer perceived service quality. Actually, many scholars such as Raymond. P. Fisk (2000)[10][11] and Lawton (1991) conceived that service quality was better to be defined as customer perceived service quality. Hence, it is meaningful to assess the service quality by evaluating customer satisfaction. Since Cardozo (1965) began to study customer expectation and customer satisfaction, worldwide scholars have delved into it and picked up many measurement models. One of the most representative models is American CSI model (ACSI model) put forward by Fornell (Figure 1).

Perceived Quality

Customer Complains

Perceived Value

Customer Satisfaction (ACSI)

Customer Expectations

Customer loyalty

Figure 1 American Customer Satisfaction Index Model In the ACSI model, there are drivers of satisfaction on the left side (customer expectations, perceived quality, and perceived value), satisfaction (ACSI) in the center, and outcomes of satisfaction on the right side (customer complaints and customer loyalty, including customer retention and price tolerance). Combined ACSI model with the feature of hotel industry, a hotel service quality based on Customer Satisfaction model (HSQ-CS model) is built to acquire the customer perceived hotel service quality (Figure 2).

Perceived quality of tangible product

Perceived quality of reception hall service Perceived quality of room service Perceived quality of overall service

Customer Complaints

Customer Satisfaction

Perceived quality of intangible service

Perceived quality of restaurant service

Customer Loyalty

Figure 2 Hotel Service Quality based on Customer Satisfaction Model (HSQ-CS Model) 61

International Journal of Industrial Engineering Research and Development (IJIERD), ISSN 0976 6979(Print), ISSN 0976 6987(Online) Volume 2, Issue 1, May - October (2011), IAEME

Five hypotheses exist as premises for the HSQ-CS model. 1. The hotel service quality mostly depends on CS which is decided by the difference between perception and expectation. 2. Although it is true that perceived value (a measure of quality relative to price paid) impacts on CS, it is not an excuse for lower service quality. Consequently, perceived value is not taken into consideration for the evaluation of service quality. 3. The service quality of reservation hall, hotel rooms and restaurant all contribute to the hotel service quality. 4. There is no significant relation between the evaluations of three parts as shown above, so they can be evaluated independently to simplify the HSQ-CS Model. 5. The perceptions of service quality of three parts come from two dimensions: tangible product and intangible service. Customers are capable to score them respectively. This paper focuses on the analysis of CS survey to evaluate the level of service quality. The questionnaire based on HSQ-CS Model used in this survey will be introduced next. 3. STUDY METHODOLOTY AND SAMPLE INTRODUCTION 3.1 Questionnaire Introduction Based on HSQ-CS Model, four sets of questions corresponding to the overall hotel impression, the reception hall, the guestroom, and the restaurant are designed in the questionnaire and total 32 questions are included. The respondents were asked to rate their satisfaction level of every question on a 5-point Likert scale (1= very dissatisfied, 2=dissatisfied, 3= neutral, 4=satisfied, 5=very satisfied). Before answering the questions, respondents are required to provide demographic data such as gender, age, profession, education, and the purpose of visit. 3.2 Case Hotel Introduction The Case study of Taj Lake Palace hotel is taken which is located in Udaipur, India. It is a Five Star Tourism Hotel conferred by Taj group in 1971. Taj Lake Palace, Udaipur is an icon of Indian luxury, one that quickly comes to mind when thinking of the city of Udaiphur in Rajasthan. Defying the limits of land, it sits on rather than near the manmade Lake Pichola.The exquisite white marble palace hotel preserves the heritage and tradition of the erstwhile rulers of Udaipur and offers guests a glimpse of a privileged royal lifestyle. Originally built as a summer palace, Taj Lake Palace has recently been transformed to its former glory whose sole purpose is the pursuit of leisure. The experience begins with the arrival of guests by boat from the shore. Most of the rooms offer a view of the lake along with the City Palace, Aravali mountain ranges and the Jagmandir Palace, the neighbouring island palace. All the rooms are well equipped with the latest amenities. The spa offers the ultimate lavish relaxation in richly appointed treatment rooms. Lake Palace (formerly known as Jag Niwas) is a luxury Five Star hotel, of 83 rooms and suites featuring white marble walls, located on a natural foundation of 4 acres (16,000 m2) rock on the Jag Niwas island in Lake Pichola,Udaipur, India. The hotel operates a boat which transports guests to the hotel from a jetty at the City Palace. It has been voted as the most romantic hotel in India. In order to win a large market share, it is necessary for the hotel to comprehend the customers demands and improve the service

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International Journal of Industrial Engineering Research and Development (IJIERD), ISSN 0976 6979(Print), ISSN 0976 6987(Online) Volume 2, Issue 1, May - October (2011), IAEME

quality. Therefore, a survey was conducted in the Taj lake palace hotel in May to August, 2010. 3.3 Sample 250 Questionnaires were given out and 182 sheets were returned. In this paper, we used Cronbachs to examine the reliability of hotel quality evaluation system based on HSQ-CS Model. Table 1 shows that the design of the questionnaire is reliable with >0.9. (Indicators are explained in table 3.) Table 2 shows the demographic profiles and traveling data of the respondents. Table 1 Reliability analysis of questionnaire with Cronbachs Variable Quality of overall service Quality of reception hall service Quality of room service Quality of restaurant service Indicator All indicators B1-B9 C1-C12 D1-D10

0.973 0.913 0.956 0.964

Table 2 Demographic profiles and traveling data of the respondents Variable Gender Male Female Age 20-30 30-40 40-50 >50 Education University Education Above University Education Below University Education Profession Civil servant Enterprise staff and worker Institution staff and worker Trader/Proprietor Retired Other Purpose of Visit Travel Business Purpose Long Living Other Percentage (%) 54.95 45.05 18.35 37.80 32.35 11.50 50.25 17.45 32.30 19.25 20.25 15.20 10.55 9.25 25.50 20.25 35.50 8.35 35.90 63

International Journal of Industrial Engineering Research and Development (IJIERD), ISSN 0976 6979(Print), ISSN 0976 6987(Online) Volume 2, Issue 1, May - October (2011), IAEME

4. DATA ANALYSIS 4.1 Customer Satisfaction Degree (CSD) and Service Quality Evaluation
n

CSD = Wi X i
i =1

(n=1, 2,..32)

Where CSD Customer Satisfaction Degree; Wi weight of variable i; Xi Average score of variable i from customers evaluation. CSD is commonly calculated by the equation above. CSD equation demonstrates that the weights of variables are indispensable and critical. This paper employed Analytic Hierarchy Process (AHP) to value the weights of variables. With the endeavor of experts, weights of four categories and their 32 variables are lists in Table 3. Table 3 Weights of four categories and 32 variables by AHP Questionnaire questions Weight Hotel overall impression 0.3498 A1 Overall impression of the hotel 0.3399 Reception Hall 0.2844 B1 Overall impression of reception Hall 0.0831 B2 Courtesy of attendants 0.0471 B3 Technique of attendants 0.0079 B4 Speed for reception 0.0064 B5 Service initiative of attendants 0.0228 B6 Service flexibility of attendants 0.0219 B7 Personal demand met level 0.0161 B8 Environment and decoration of 0.0280 reception hall B9 Temperature of reception hall 0.0511 Guestroom 0.1813 C1 Overall impression of the room 0.0526 C2 Decoration of room 0.0026 C3 Safety of room 0.0217 C4 Room facility 0.0102 C5 Comfort of bed, sanitary ware and light 0.0040 C6 Room Cleanness 0.0130 C7 Courtesy of attendants 0.0306 C8 Techniques of attendants 0.0044 C9 Quick reaction of service 0.0031 C10 Service initiative 0.0135 C11 Service flexibility 0.0132 C12 Personnel demand met level 0.0104 Restaurant 0.1845 D1Overall impression of the restaurant 0.0489 D2 Environment of restaurant 0.0100 D3 Taste and variety of food 0.0177 64

International Journal of Industrial Engineering Research and Development (IJIERD), ISSN 0976 6979(Print), ISSN 0976 6987(Online) Volume 2, Issue 1, May - October (2011), IAEME

D4 Cleanness of restaurant and tableware D5 Courtesy of waiters/waitresses D6 Technique of waiters/waitresses D7 Quick reaction of waiters/waitresses D8 Service initiative of waiters/waitresses D9 Service flexibility of waiters/waitresses D10 Personnel demand met level
n i =1

0.0211 0.0280 0.0059 0.0044 0.0141 0.0130 0.0095

So, CSD = Wi X i = 4.06.It can be regarded as the evaluation of service quality of the case hotel. From the 5-point Likert scale, the value of CSD implies that customers are satisfied with the service quality. However, it is obviously not excellent enough to makes customers very satisfactory. Similarly, CSDs of reception hall, guestroom and restaurant are acquired. Reception Hall: CSDRH =3.91
Guestroom: Restaurant: CSDGR =3.85 CSDRE =4.21

Obviously, the CSD of guestroom is the lowest among the three CSDs. In other words, the service quality of guestroom is most unpleasant. Additionally, the weight of reception hall is notably bigger than the other two parts. So, it shows that in the opinion of experts, reception hall is most important for customer satisfaction. This opinion is proved to be correct by the data. Table 3 shows that overall impression of reception hall related to the overall impression of hotel most. This phenomenon accords with the conclusion of Marit G. Gundersen (1996)[12][13] and Zhu Hang (1999). It reflects that this is not a special conclusion for the case hotel but a universal rule. Therefore, it is clever to pay more attention on the service quality of reception hall. Table 4 Inter-Item Correlation Matrix A1 1 0.615 0.360 0.380 B1 1 0.392 0.354 C1 D1

A1 B1 C1 D1

1 0.364

4.2 Key Variables Detecting There are about 10 variables in each of the three parts. It will be difficult to make progress on all variables in a short time. However, for each part, there must be some variables that play the critical role in its overall impression. Therefore, it will be efficient to enhance customer satisfaction and service quality when improvement activities focus on these key variables. In this paper, discriminant analysis with stepwise method is applied into the detecting of key variables for reception hall, guestroom and restaurant. Discriminant analysis is a technique for classifying a set of data into predefined classes. 65

International Journal of Industrial Engineering Research and Development (IJIERD), ISSN 0976 6979(Print), ISSN 0976 6987(Online) Volume 2, Issue 1, May - October (2011), IAEME

It is suitable to be used in a set of observations of which classes are known. These observations are called training set on which the technique relies to construct a set of linear functions of the variables, known as discriminant functions. Stepwise method is one of the ways to pick up the variables to construct the discriminant function. Structure matrix is used to show the devotion of variables to the discriminant function. Variables with high values for functions can be regarded as the key variables. Taking data of this survey as an example, the overall impression of reception hall (B1) are taken as the class attribute. With the stepwise method, only variables that are most influential for B1 can be used in the discriminant analysis to construct discriminate function. Table 5 shows that three variables (B3, B5 and B8) are picked up as key variables for B1. Additionally, among these three key variables, B3 (Technique of attendants) is more important than B5 (Service initiative of attendants) and B8 (Environment and decoration of reception hall). With the discriminant function of three key variables, 81.3% observations are classified as predicted. Hence, the discriminant function can be accepted. So are the three key variables. Table 5 Structure matrix for reception hall Function 1 2 0.749 -0.654 0.744 0.469 0.546 0.406

B3 B5 B8

Similarly, key variables are detected for guestroom and restaurant. For guestroom, variables (C2, C3 and C7) are picked up as the key variables for C1. Moreover, C2 (Decoration of room) is more important than C3 (Safety of room) and C7 (Courtesy of attendants). For restaurant, variables (D3, D9 and D2) are picked up as the key variables for D1. D3 (Taste and variety of food) is more important than D9 (Service flexibility of waiters/waitresses) and D2 (Environment of restaurant). It happens often that customers differ in their demand of service quality. Hotel operators need to get command of the demands of different customer to improve the service quality rightly. On the other hand, as the competition becomes fiercer in hotel industry, many hotels face a problem of market segmentation to survive the competition. With the same method, the preference of different kinds of customers can be explored. 5. CONCLUSION AND DISCUSSION By discriminant analysis and correlation analysis, some insightful conclusions have reached, to name some, 1) Service quality of reception hall is most important for customer satisfaction compared with those of guestroom and restaurant. 2) Technique of attendants, Service initiative of attendants and Environment and decoration of reception hall are key variables for customer satisfaction of reception hall. 3) For guestroom, Decoration of room, Safety of room and Courtesy of attendants own most powerful influences. 4) For restaurant, key variables are Taste and variety of food, Service flexibility of waiters/waitresses and Environment of restaurant. The 66

International Journal of Industrial Engineering Research and Development (IJIERD), ISSN 0976 6979(Print), ISSN 0976 6987(Online) Volume 2, Issue 1, May - October (2011), IAEME

study took a hotel as an example and tried to provide a practical method for hotel operators to improve the hotel service quality. By measuring the CSD of the case hotel, hotel operators can assess the status quo of hotels in terms of whether the hotel meets guests needs and expectations. Moreover, the comparison of CSD in different time can become a new performance appraisal index. Survey questionnaire and data analysis used in this paper can become references for other hotels. Although 32 variables are listed related to customer perceived service quality, in fact, it is impossible for any hotel to meet customers needs and wants all at once. However, with the help of analysis of key variables, it is valuable for hotel operators to make efficient improvement strategy for service quality. Furthermore, the same method could be used to explore the preference of different kinds of customers. There are several opportunities to extend this study. The study finds out that the overall impression of reception hall related to the overall impression of hotel most. Some researches also show the same conclusion. However, it is necessary to mention that the case hotel is a five-star hotel which can be regarded as luxury hotel. It is doubtful that whether this conclusion can be applied to other kinds of hotels such as economic hotel. Further studies on hotel service quality can focus on the comparison of these different kinds of five-star hotels. Another factor that might have to be considered is the design of questionnaire. HSQ-CS Model is limited by five hypotheses and needs improving. Modifications related to the actual feature of hotel are always welcome. REFERENCES 1. Li Ling (2004), Analysis on competition of hotel industry in China and its solutions, Journal of Jiu Jiang Vocational & Technical College, Vol.3, pp. 61-63. 2. Barsky, J.D. and Labagh, R (1992), A strategy for customer satisfaction'', The Cornell Hotel and Restaurant Administration Quarterly, October, pp. 32-40. 3. Gundersen, M.G., Heide, M. and Olson, U.H (1996), Hotel guests' satisfaction among business travellers'', The Cornell Hotel and Restaurant Administration Quarterly, pp. 7281. 4. Lam, T., Mok, C. and Wong, L.(1996), Customer satisfaction v. customer retention, Asian Hotel and Catering Times, August, pp. 34-46. 5. Gronroos, Christian (1982), Strategic Management and Marketing in the Service Sector. Research Reports No.8, Swedish School of Economics and Business Administration, Helsinki. 6. Nelson Tsang and Hailin Qu(2000), Service quality in Chinas hotel industry: a perspective from tourists and hotel managers, International Journal of Contemporary Hospitality Management, Vol. 12, No. 5, pp. 316-326. 7. Lewis R.C.(1987), The measurement of gaps in the quality of hotel services, International Journal of Hospitality Management, Vol. 6 Issue. 2, pp. 83-88. 8. Thanika Devi Jowaheer and Darren Lee Ross (2003), A Study of Hotel Guest Perceptions in Mauritius, International Journal of Contemporary Hospitality Management, 15/2, pp. 105-115. 9. Hill, D.J.(1986), Satisfaction and consumer services, Advances in Consumer Research, Vol 13, pp. 311-315.

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International Journal of Industrial Engineering Research and Development (IJIERD), ISSN 0976 6979(Print), ISSN 0976 6987(Online) Volume 2, Issue 1, May - October (2011), IAEME

10. Raymond P. Fisk, Stephen J. Crove and Joby John (2000), Interactive Service Marketing, Hourghton Mifflin Company. 11. Lawton, Robin L. (1991), Creating a Customer-Centered Culture in Service Industries, Quality Progress, Vol. 24 No. 9, pp. 69-72. 12. Marit G. Gundersen, Morten Heide, and ULF H. Olsson (1996), Hotel Guest Satisfaction among Business Travelers, Cornell Hotel and Restaurant Administration Quarterly, Aprial, pp. 72-81. 13.Zhu Hang and Wang Chunxiao(1999), Analysis on Key Variables of Hotel Service Quality Management, Systems Engineering-Theory Methodology Applications, Vol. 8, No.1, pp. 60-66. 14. Min, H. and Min, H. (1997), Benchmarking the quality of hotel services: managerial perspectives, International Journal of Quality & Reliability Management, Vol. 14 No. 6, pp. 582-97.. 15 Zahedi, F. (1989), The analytic hierarchy process a survey of the method and its application, Interfaces , Vol. 16 No. 4, pp. 96-108. 16 Barsky, J.D. (1992), Customer satisfaction in the hotel industry: meaning and measurement, Hospitality Research Journal , Vol. 16 No. 1, pp. 51-73. 17. Jing-hua Shi,Qiang Su(2007), Evalution of hotel service quality based on customer satisfaction, IEEE xplore. 18 Kandampully, J. and Suhartanto, D. (2003), The role of customer satisfaction and image in gaining customer loyalty in the hotel industry, Journal of Hospitality and Leisure Marketing, Vol. 10 No. 1/2, pp. 3-25. 19 Min, H., Min, H. and Chung, K. (2002), Dynamic benchmarking of hotel service quality, Journal of Services Marketing , Vol. 16 No. 4, pp. 302-31. 20. Kandampully, J. and Suhartanto, D. (2000), Customer loyalty in the hotel industry: the role of customer satisfaction and image, International Journal of Hospitality Management , Vol. 12 No. 6, pp. 346-51. Biographical notes 1. Mr. Parul Gupta is presently working as Associate professor of Mechanical Engineering at Moradabad Institute of Technology, Moradabad, India since 2000. He received B.E in Mechanical Engineering from Bangalore Institute of Technology, Bangalore, and M.Tech. in Mechanical Engineering (Design) from MNNIT Allahabad and pursuing Ph.D. from MNNIT Allahabad. He teaches also Machine design, Value Engineering, Quality Management related courses in the B.Tech. and Total quality management in M.Tech. at MIT Moradabad. His current interests are Product Development, Quality Management System, Quality function Deployment. 2. Dr. R.K. Srivastava earned a bachelor of engineering in Mechanical engineering, a master in design of process machines from MNNIT Allahabad and a Ph.D. in Mechanical Engineering from IIT Delhi. He is author of over 40 research publications in international journals and conferences. He is presently working as Professor of Mechanical engineering at MNNIT Allahabad and actively involved in CAD and Product design activities in the department.

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