Assessment of Service Quality as a Determinant of Customer Loyalty in Hotels within Kisumu City, Kenya

Abstract

Customer loyalty has been found to be a competitive tool for many hospitality industries. Service quality has proved to be a key determinant of customer loyalty in developed world. Even though previous studies identified service quality as a key determinant of customer loyalty, such studies is limited in developing countries, Kenya included. The main objective of this study was to assess service quality as a key determinant of customer loyalty in hotel industry within Kisumu City. Kisumu City was chosen because of the current wave of domestic tourism being promoted by the industry in Western circuit. The study adopted Hierarchical Service Quality Model which emphasized on interaction, outcome and physical environment quality dimensions as key variables for service quality. A cross sectional research design was adopted in which selfadministered questionnaires were used to collect quantitative data while key informant interviews were employed in the collection of qualitative data. The study population consisted of guests who stayed in the selected hotels within the two weeks data collection period. A sample of 151 guests was drawn using census population sampling technique from 11 hotels for quantitative survey while 17 managers were selected as key informants using exhaustive sampling. Quantitative data collected was analyzed using descriptive, Exploratory Factor Analysis (EFA) and Regression analysis in SPSS. Qualitative data gathered were subjected to content analysis. The results confirmed that hotels in Kisumu City can' use HSQM to measure service quality. The research findings indicate that cleanliness was the most significant determinant of customer loyalty with beta values of .734. Valence, waiting time, expertise, behavior, tangibles, ambient conditions, social factors, location, design and attitude also proved to predict customer loyalty with beta values of .570,.499, .456, .429, .398, .397, .388, .153, .144, .104 and .080 respectively. Regression tesults also showed that 80.4% of variation in customer loyalty was explained by service quality and 60.7% by customer satisfaction. The study further confirmed that customer satisfaction is not a mediator of customer loyalty as the results confirmed a negative test of mediation. The implication of this finding was that hotels should focus on cleanliness, valence, waiting time, expertise, behavior, tangibles, ambient conditions, social factors, location, design and attitude aspects of a hotel operation in the following order as they are equally important to the customer. Managers-should recognize the significance of each aspect in overall customer satisfaction and customer loyalty. Further studies should however be conducted in more geographical regions within Kenya to investigate the variations of evaluation of service quality and determinants of customer loyalty across cultures.