Effect Of Service Quality On Customers Retention In Hotels In Afikpo North L.G.A Of Ebonyi State

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Effect Of Service Quality On Customers Retention In Hotels In Afikpo North L.G.A Of Ebonyi State

Abstract

This study was carried out on the effect of service quality on customers retention in hotels in Afikpo North L.G.A of Ebonyi State. The study involved 330 hotels in Afikpo North L.G.A of Ebonyi State. The study thus reached a total of 292 respondents, sampled on a stratified random sampling method, from the customers. Respondents were presented with descriptive statements in a 5-point and 4-point Likert scale on which they were required to rate by scoring the extent to which they perceived a particular statement as descriptive of the force in the corporations. The questionnaires were administered through drop and pick method to the respondents targeted. The questionnaires were coded and edited for completeness and consistency and entered into Statistical Package for Social Sciences (SPSS version 20). Analysis involved descriptive statistics and inferential analysis. Descriptive analysis technique gave simple summaries about the sample data in quantitative descriptions and included, mean, standard deviation, frequencies and percentages. The response rate was 292 respondents which is 87.95% of the respondents Majority of whom were male which represented 53.77% while 46.23% were female. The findings indicated that majority (37.3%) of the respondents was between 41 and 50 years implying that the respondents were old enough to provide valuable responses. The study concluded that the Hotels have good looking facilities, physical facilities are visually appealing, the findings also concluded that the hotels perform their services right the first time. The study recommended that the Hotels should have good looking facilities and visually appealing to the customers, also that employees should be neat appearing, that the materials associated with the services (such as pamphlets) should be visually appealing, that the hotels should always keep their promises.

Chapter One

Introduction

1.1 Background of the Study

Many organizations today work very hard to make sure that they meet their obligations. They put a lot of focus on service quality, time, cost and flexibility. Harrington (2000) defines quality as meeting or surpassing client’s desire. Quality of goods and services has continued to be of high significance and it’s extremely important in business today. Goods have an advantage over services as quality can be measured. Services in their intangible nature are complex.

A standout amongst the best apparatuses in administration industry achievement is administration quality. Juran (1988) characterizes quality as “fitness for use” while in Crosby (1979) quality is characterized as “conformance to necessities.

When organizations succeed in getting the service levels to a point that they are higher than the client desires or expectations, clients are astonished and excited. This success increases the probability of them buying from the organization again in the future increases. They are also more likely to recommend the organization to others as they are happy with their service experience. Consumer loyalty does not ensure client dedication, but rather it assumes a basic part in the process. It’s a prerequisite for customer retention.

Service quality is characterized as client’s view of how well a service quality meets or surpasses their desires (Parasuraman, Berry and Zeithmal 1985). Martin (1999) suggested that a service is characterized by certain attributes that make evaluation of the performance even harder. Services are intangible in nature, this means it’s extremely hard to quantify that on organization is offering to a customer. Some time especially for a first time client they may not see the value of the service. Service delivery is also complicated in nature as each employee delivers service in a unique way. Even for the same employee, the service experience may vary during different times of the day depending on other external factors.

Genuine understanding of customers perceptions based on the four dimensions is extremely important as it helps the manager understand the customers’ thoughts and consequently, how to satisfy their needs. When clients’ prerequisites are unmistakably distinguished and comprehended, managers are in a superior position to satisfy their clients’ needs and wants (Juwaheer& Ross, 2003).

Customer retention is achieved when a customer continues to believe that your product or service is the best. That is meets their needs or wants. It can be characterized in two particular ways. To start with, it is an attitude. A combination of feelings creates the overall commitment to this product or brand. When these feelings are measured, an individuals’ loyalty is determined. Loyalty can also be defined in a behavioral way. Examples include continuous purchase from one or few suppliers. Another example is increasing the amount of purchases or frequency of these purchases. It may also mean an improved relationship with the service provider (Yi, 1990).

Customer retention is acquired overtime, when the service provider goes out of the way to understand and address the customers need. (Teich, 1997). For this reason, its better and cheaper to keep the existing guests happy so that they do not leave for competitors’ products. Customer will keep buying from a service provider when they are content with the service level.

Service quality generally influences customer satisfaction. At the point when a customer is fulfilled, he or she will probably prescribe the brand to others. They are likewise more averse to change to other brands. This makes understanding of service quality, customer satisfaction and their influence on customer satisfaction extremely important.

Customers display switching behavior, they are generally curious to experience new products and they are demanding in relation to their needs. They are also well informed and the internet has become a good and convenient source of information. The present study is aimed at identifying service quality and customer satisfaction affects customer retention.

1.2 Statement of the Problem

Organizations endeavor to exceed expectations in business, by giving the customer more benefit. Quality service delivery is in this way a critical segment for companies in the hospitality business. Service quality significantly affects business execution, cost decrease, income execution, consumer loyalty and client loyalty. Clients are always shopping and they are besieged with boundless data particularly with the accessibility of data on the web. Guaranteeing that visitors are content is vital as it increases the possibility of getting repeat clients in the hotel. Dick and Basu (1994) recommended that a client’s belief on the level of service quality should influence the repeat business from this client. For the hotel business to accomplish its target of delivering quality service for its clients, they must focus on how to not only meet abut exceed this clients needs and wants (Doyle, 2000).

Parasuraman et al. (1988) highlighted the determinants of service quality after undertaking a research on a focus group. The determinants included; Reliability, responsiveness, assurance, empathy and tangibles. Customers will consider an organization to have service quality when they are reliable, that is deliver service on time. They also expect empathy when they have a complicated situation even if it’s not the hotel employers fault. In a study to evaluate service quality dimensions that impact customer satisfaction, Harr (2008) concluded that assurance, empathy and tangibles were taken into serious consideration by the customer while evaluating service quality. Krishna et al., (2010) in a similar study, in retailing in India concluded that customers considered security, promptness of service and accuracy to be very important.

Nigeria is a unique destination, offering a combination of city, bush and beach experience. The terrain, nature of wildlife in the game reserves and national parks make Nigeria unique. The client visits a hotel for two main reason, either leisure or business. Recent trends have shown that customers, who are satisfied in a hotel, will visit other hotels. The assumption has been that they are looking for variety, a desire for change or they may also be curious. The occurrence is mainly when there is a new hotel, and a lot of marketing effort from the new hotel. The customers have a desire to know how the other hotels operate and the best way of finding out is experiencing their service.
Manyi (2011) found out that all the five dimensions of service quality were affected customer satisfaction. The outcome of his research suggested that in order to satisfy customers, organizations need to improve dimensions of service quality. These results were consistent with the findings by Akoko (2012). The researcher, however, pointed out that his research work targeted only a few service sectors due to time and money constraint and therefore the study results could not be generalized to other sectors such as the hotel industry.

Akoko (2012) seeking to understand the relationship between service quality dimensions and customer satisfaction in Nigerian telecommunications industry, established that all five service quality dimensions had positive impact on customer satisfaction. However, reliability dimension was considered to be having the highest impact while tangibility was considered to have the least impact. Similarly, the research work was limited to the telecommunication industry and therefore the results could not be generalized to the hotel industry
Musyoka (2013) in his work, trying to establish existence of a relationship between service quality and library-user satisfaction among universities in Nigeria, found out that service quality accounted for 73.9% of user satisfaction and their loyalty. He noted further that reliability dimension contributes most towards user satisfaction, while empathy dimension contributes the least. The research was limited to libraries and therefore not all inclusive and the results could not be generalized to cover the hotel industry.

1.3 Objectives of the Study

This section will have two objectives; a general objective and a specific objective.
The objectives are highlighted below.

1.3.1 General Objective

This was to determine the effect of service quality on customers retention in the hospitality industry in Afikpo North L.G.A of Ebonyi State, Nigeria. To achieve this, the specific objectives are outlines in section 1.3.2

1.3.2 Specific Objectives
  1. To determine the relationship between service quality and customer satisfaction in hotels in Afikpo North L.G.A of Ebonyi State.
  2. To determine the relationship between customer satisfaction and customer retention in hotels in Afikpo North L.G.A of Ebonyi State.
  3. To determine the relationship between service quality and customer retention hotels in Afikpo North L.G.A of Ebonyi State.

1.4 Research questions

  1. What is the relationship between service quality and customer satisfaction in hotels in Afikpo North L.G.A of Ebonyi State?
  2. What is the relationship between customer satisfaction and customer retention in hotels in Afikpo North L.G.A of Ebonyi State?
  3. What is the relationship between service quality and customer retention hotels in Afikpo North L.G.A of Ebonyi State?

1.5 Significance of the Study

The exploration will try to build up the part that service quality plays in guaranteeing enhanced customer retention and customer fulfillment. The study will benefit the academic fraternity, the operations managers and entrepreneurs in the hospitality sector.

The information from the study will enable the understanding of customer perception of service quality. The study forms a basis for research on other sub-sectors of the services sector in Nigeria which can be replicated in other geographical regions. The study also contributes refreshing insights useful for relationship marketing.

This study provides valuable insight to managers regarding the customer service skills to equip their employees within their ongoing effort to improve customer communication, satisfaction and customer retention. Hence, the result of this research can be utilized as a foundation to build service strategy.

1.6 Scope of the Study

The study was carried out on the effect of service quality on customers retention in hotels in Afikpo North L.G.A of Ebonyi State. The scope of the study comprised of the guests in three to five star rated hotels in Afikpo North L.G.A of Ebonyi State, Nigeria.

1.7 Limitation of the Study

Although the sample size is representative, it’s not representative of all hotels in Afikpo North L.G.A of Ebonyi State and the study was limited to 3 – 5 star hotels only. Although this research provides some significant insights into effect of service quality on customers retention in the hospitality industry, there is still room further research in the difference star categories.

The current research can also be expanded to tourism sector, in which the hotels operate, in order to understand the needs of the customer.

1.8 Organization of the Study

This study is organized into five chapters. Chapter one included the background of the study, research problem, research objectives and questions as well as limitation of the study. Chapter two contains the literature review. Chapter three includes the methodology. Chapter Four contains the results and discussion of key findings of the study. Chapter Five finally looks at the summary, conclusions, and recommendations based on the findings.

Chapter Five

Summary, Conclusions and Recommendations

5.1 Introduction

The study looked to decide the service quality, customer satisfaction and customer dedication in three to five star inns in Afikpo North L.G.A of Ebonyi State. This section displays the outline of the discoveries, conclusions and recommendations of the study.

5.2 Summary of the Findings

The goal of the study was to set up the relationship between service quality, customer satisfaction and customer faithfulness in hotels in Afikpo North L.G.A of Ebonyi State. The result of the study uncovered that larger part (53.77%) of the respondents was male while the rest (46.23%) were female. Further, it uncovered that a large portion of the respondents was between the age of 41 and 50 years. Likewise the discoveries uncovered that the largest level of education was Bachelors’ degree.

Under service quality, the study revealed that there was a great relationship between service quality and customer retention with a mean score of 4.17. Customer satisfaction on the other hand had a strong relationship with customer retention. The mean score of 4.19 signifies that the relationship is very strong.

5.3 Conclusions

From the findings, the hotels had great service quality, even though they were not perfect. Some of the reason that they managed to score very well included: great physical offices, when the hotels promised to accomplish something by a specific time they would do so.

Most of their consumers were satisfied, because the staff empathized where a problem arose, services, service levels are consistent and the employees are generally helpful.

A great number of their clients are loyal. This is illustrated in the scores including, price is the last thing that they check when booking their accommodation, and that they only check other hotels when their hotel is fully booked, finally that they do not consider the competitions special offers.

Also the study concluded that even if the rates go up, the loyal customers will still come to the hotels and that they always book other hotels of the same brand in other destinations.

5.4 Recommendations

Hotel Management should pay attention to service processes and ensure that the employees are well trained. Competence would greatly improve the process and consequently improve customer perception. The hotel should be clean, organized and information should easy access.

Customer satisfaction surveys and guest feedback should also be taken very seriously. Areas recommended for improvement should be studied and implemented as and when the information is received. They hotel management should also invest in customer retention programs, which will help them in retaining their customers.

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