Importance of Customer Satisfaction in Hospitality Industry

This report discusses the importance of customer satisfaction in the growth and success of the hospitality industry. It focuses on the role of customer satisfaction in the context of the Holiday Inn Hotel Candem Town London. The report includes a literature review, research methodology, analysis and findings, and recommendations for improving customer satisfaction in the hospitality industry.

Research Project

Abstract
Customers play an important role in the success of business which means that they must
be highly satisfied by the company goods and services so that company sales can increase. It is
also important that the quality of services given to customers are continually improved so that
high customer value can be created which help in increasing profits of company. In this report
the role of customer satisfaction in the success and growth of hospitality industry is discussed.

Table of Contents
Abstract............................................................................................................................................2
Research Topic.................................................................................................................................4
Chapter 1-Introduction.....................................................................................................................4
Aims and objectives...............................................................................................................4
Research rationale..................................................................................................................5
Chapter 2-Literature Review............................................................................................................5
Chapter 3-Research Methodology...................................................................................................6
Chapter 4-Analysis and Findings...................................................................................................13
Chapter 5-Critical appraisal, Recommendations & Suggestions...................................................20
Chapter 6- Conclusion...................................................................................................................21
REFERENCES..............................................................................................................................22

Research Topic
“To determine the importance of customer satisfaction in the growth and success of
hospitality industry”. A study on Holiday Inn Hotel Candem Town London.
Chapter 1-Introduction
Hospitality industry basically deals in providing hospitable services to customers so that they can
feel welcomed and home like when they are away from their home. The industry include sub
sectors like lodging service, events, tourism and travel, food and beverages etc. so that high
customer satisfaction can be achieved through recreational activities that can support their well
being. Customer satisfaction is thus the core of hospitality industry and all the businesses
indulged in this industry must try to enhance the quality of their products and services so that
maximum customer satisfaction can be achieved (Collings, Mellahi and Cascio, 2017). In this
report Holiday Inn Hotel Candem Town London is taken so that a research can be done on the
importance of satisfying customers so as to grow and succeed in market. Holiday Inn is a British
owned American brand of hotels which were initially founded as a US motel chain. The
headquarters of this hotel chain is located in Buckinghamshire, UK. In this report small scale
research will be conducted and various research tools and techniques will be used so that
effective results can be found.
Aims and objectives
Research aim
“To determine the importance of customer satisfaction in the growth and success of
hospitality industry”. A study on Holiday Inn Hotel Candem Town London.
Research objectives
 To understand customer satisfaction in the context of business.
 To determine the importance of satisfying customers for Holiday Inn.
 To analyse the impact of customer satisfaction on the success and growth of Holiday Inn.
Research questions
 What do you understand by customer satisfaction?
 What is the importance of customer satisfaction for Holiday Inn?
 How does customer satisfaction impact on the success and growth of Holiday Inn?

Research rationale
The rationale behind conducting research on this topic is that it will help the researcher in
developing knowledge about customer satisfaction and its importance in hospitality industry.
This research can help the researcher in understanding about various aspects related to business
and how they achieve customer satisfaction for their sustainability (Tafti, Mahmoudsalehi and
Amiri, 2017). The research can help in the career development of researcher along with personal
and professional growth. The research will also develop a deep understanding about how the
results so obtained can be effectively applied in company which can help it in achieving its
objectives in an efficient manner.
Chapter 2-Literature Review
Concept of customer satisfaction
According to Sophia, 2019, customer satisfaction is a metric which help in measuring the
amount of happiness a customer receives by using the products and services offered by a
company. It can be measured by the way of surveys and feedbacks from the customers of
company so that they can answer certain structured questions which help businesses in knowing
about their capability of satisfying customers. More the customers are happy with the company
more their loyalty towards the company can increase (Kim and Johnson, 2016). It also help in
increasing number of potential customers for company by the way of referrals which are given
by already existing customers. It also help in spreading good word about the company which is
important in building its brand reputation which can help it in gaining a competitive advantage in
market. It also help the company in retaining its best performing employees who are efficient in
achieving high customer satisfaction by providing them with goods and services that they want.
By satisfying the customers in an efficient manner improvement in company products and
services can also be brought which help it in attracting a large number of customers thereby
increasing the sales and profits of business.
Importance of satisfying customers for hotels
As per the views of Lynda, 2019, the type and quality of service the customer receive in
hospitality industry plays an important role in building a positive image in the minds of customer
so that they can be attracted towards the same company again. This thus helps in retaining

customers and also in spreading a positive image about the company so that more number of
customers can be attracted. As hospitality is a service industry it is important that better customer
experience is created by the way of being proactive, addressing the demands of customers on
time and in a satisfactory manner, taking feedbacks from customers, improving the quality of
services and products offered, improving the behaviour of staff towards the customers etc. All
these can help in improving the quality of services which are given to customers which also help
in reducing the costs which are involved in regaining the trust of customers (Pucci and Zanni,
2019). Increase in loyalty of customers is also beneficial as it help in reducing the marketing cost
of company as the brand become renowned in market by the spread of good words about
company. Thus in hospitality industry customer satisfaction is important as it help the company
in building a strong customer base which is essential in increasing the competitiveness of
company.
Impact of customer satisfaction on the success of business
According to Sarah, 2019, customer satisfaction plays an important role in the success
and growth of business as it not just help in attracting more number of customers and increasing
its sales but also play an important role in increasing the employee retention and boosting up
their morale. With customer satisfaction as the core goal of a business it generally indulges in
ethical activities so that decisions that can help in maximising the interest of all its stakeholders
can be taken. Building customer relationships require that the business have a workforce which
is satisfied with their jobs so that their performance can be improved which can help in
effectively dealing with customer demands (Han and Hyun, 2015). This will help in increasing
the happiness of both the customers and employees and also in increasing sales of company.
Company can also achieve a competitive edge in market by the way of efficiently fulfilling the
needs and wants of customers so that a strong brand image can be built in market. With the
increase in competition in hospitality industry it is important that brand reputation of company
gets enhanced which can help in increasing the sales of company and help in its growth and
success.
Chapter 3-Research Methodology
Research methodology chosen by researcher directs the path and progress of research by
selecting the appropriate methods that can help in the completion of research n time so that
effective results can be achieved. The methodology chosen by researcher determines the way in

which data collection will be done along with its interpretation so that desired outcomes are
achieved. The researcher thus need to prudently choose the research methodology as the
complete direction and outcome of research depend on the choice made by researcher that will
help in gaining results on time and within a stipulated budget (Kandampully, Juwaheer and Hu,
2015).
Research philosophy:
It is a belief which is related with the collection of data from a source, its analysis and
using the results so obtained. The research philosophy chosen by researcher impacts the choice
of source for conducting research so that the data so collected can be interpreted to achieve a
specific result. There are four types of research philosophies which can be chosen by the
researcher which are positivism, realism, interpretivism and pragmatism. According to
positivism philosophy only the knowledge which can be proved based on facts and reasons can
be trustworthy. This philosophy evaluates and measures each phenomenon based on rationale
explanation so that it can be proved which can help in authenticating certain information.
Realism philosophy believes that there is an independence of human mind from reality.
Interpretivism philosophy believe that the research must himself collect data so that it can be
interpreted which can help in proving the theory or topic of research (Mohammed and bin
Rashid, 2015). Pragmatic philosophy only accepts a concept if it can be put into action which
means it believe on the practicality of a concept. In this report interpretivism philosophy will be
applied so that data can be collected from authentic and reliable sources which can then be
interpreted to reach to effective conclusions or results.
Research approach
It is approach of research which is chosen by researcher so that it can progress in a
specific direction which will help in its completion on time and in a specified manner. The two
types of approaches that can be chosen by researcher are deductive and inductive based on the
topic on which research is done. Deductive approach initiates from forming a hypothesis and
then accepting or rejecting it based on the results achieve after the completion of research.
Inductive approach on the other hand starts by the collection of data by researcher so that it can
be analysed and its pattern and impact can be studied so that a accepted theory can be formed. In

this report deductive approach is being used by researcher so that a hypothesis can be proved
after the completion of research.
Research strategy
Strategy of research determines the effectiveness with which research will be conducted
so that it can efficiently achieve its desired results on time and within the budget allocated. The
research strategy also affects the way in data will be collected and the sources so that they can be
interpreted in an efficient manner that will help in competing the research systematically.
Strategy is important to be determined so that all the team members can be directed in a certain
direction so that they can perform their roles and responsibilities effectively and help in
achieving results on time. Strategy also determines the authenticity and reliability of results
which are achieved at the end of research so that it can be applied by company that can help in
improving its performance. In this research the researcher will use questionnaire so as to obtain
primary data directly from the employees of company so that the quality of results can be
improved (Padilla-Meléndez and Garrido-Moreno, 2015).
Time horizon
It is important that while starting a research the time horizon is set so that all the activities
which need to be done while conducting research can be completed within the set deadline in an
efficient manner. It also gives motivation to researcher to continuously work towards completion
of research on time. Gantt chart is a research tool which can be efficiently applied by researcher
so that all the activities involved in research can be allocated certain time period horizontally so
that they can get completed within that time. This tool helps in making the research process and
managing time in an efficient manner so that the shortage of time can be efficiently managed.

Research methods
The method chosen by researcher determines the way in which they are willing to obtain
data from sources so that the desired outcomes can be achieved. There are two types of research
methods which are quantitative and qualitative which help in obtaining different types of
information from different sources. Quantitative method help in obtaining mathematical data
which can be represented on graphs, tables, pie charts etc. so that easy interpretation can be done.
Questionnaire, surveys etc. can be used in order to gain such information so that clear and factual
results can be drawn by the way of their interpretation. Qualitative method on the other hand
helps in collecting information which helps in gaining knowledge about their views and thoughts
regarding researched topic (Rai, 2016)(Sun and Kim, 2017). This method can help in developing
deep knowledge about the topic through various sources however, it cannot be depicted on
graphs, tables etc. As it cannot be interpreted efficiently it can affect the result of research.
Interviews, observations etc. are the ways through which such information can be gained. In this
research both quantitative and qualitative method will be used so that better results can be
achieved which can help in maximising the effectiveness of results so achieved.
Sources of data collection
These are the sources from, where data can be collected by researcher which can then be
interpreted to draw conclusions. There are two types of sources from where information can be
collected which are primary sources and secondary sources. Primary sources are those from
where researcher can collect fresh information by directly collecting the data required by the way
of questionnaires, interviews etc. As the researcher directly collects information from source it
can be said that the reliability, authenticity and relevance of information so collected is more.
Also as this information is collected for the first time it is free from manipulations and
misinterpretations. The researcher can use their own knowledge and skills in order to interpret
the collected information. Secondary sources on the other hand are the ones which already
contain data related to topic but they are presented through the view points of various authors
which means that the information can be outdated, biased or misinterpreted which can affect the
overall quality of research. The secondary sources are like newspapers, magazines, internet

articles etc. In this research primary sources will be considered to collect information which is
questionnaire so that authentic and reliable information can be gathered.
Research ethics
It is related with the conducting research ethically by taking ethical decisions so that
better results can be achieved and the quality of research can increase. It will also help in
acquiring the trusty, confidence and support of al the stakeholders which are important in
completing the research in a desired manner. Research ethics also help in collecting information
from reliable sources so that results drawn by their interpretation can help in maximisation of
interest of all the stakeholders. In this research the students must take permission from mentors
and their tutor so that they can conduct research ethically.
Instrument used
These are the instruments that help in collection of required data from various sources so
that they can then be interpreted in order to obtain the desired results that can help in accepting
or rejecting a hypothesis. In this research questionnaire is the instrument which is being used by
researcher so as to use it in collection of data which can then be analyse and interpretations can
be drawn (Huang, 2016).
Sample method
It means that from a large population having similar set of characteristics like people
working in a large organisation, only a few members are selected who are called as sample from
where required data can be collected. The results so achieved by the interpretation of data
collected can be applied to the complete population. It is important to select a sample size so that
the time of research can be saved and also the research efficiency can be increased. In this report
random sampling method is used by researcher wherein random employees of Holiday Inn hotel
will be given questionnaire so that data can be collected which can be applied to the complete
organisation thereby improving its efficiency and performance. The sample size which is chosen
by researcher is 30.
Questionnaire
It is an instrument that can help in collecting data by asking the sample population to
answer the structured questions which are given on the questionnaire. This will help in gaining
their views regarding the researched topic so taht relevant and effective interpretations can be
formed. Following is the questionnaire prepared for the employees of Holiday Inn hotel:

Questionnaire
Quantitative questions
Q1) Do you know what is customer satisfaction?
a) Yes
b) No
Q2) Is Holiday Inn effective in achieving customer satisfaction in an efficient manner?
a) Yes
b) No
Q3) Are the services given to customers in Holiday Inn as per the amount of money charged?
a) Agree
b) Disagree
Q4) What is customer satisfaction?
a) Happy customers
b) Customer retention
Q5) Why is customer satisfaction important for business?
a) Increase in sales
b) Customer retention
c) Brand recognition
Qualitative questions
Q6) How can customers be satisfied in hospitality industry?
a) Improved products and services
b) Proactive approach
c) Customer feedback
Q7) How does satisfying customers contribute towards company success?
a) Loyal customers
b) Increased sales
c) Brand image
Q8) How does customer satisfaction help employees of company?
a) Employee retention
b) Job satisfaction

c) Increase in morale
Q9) What can Holiday Inn do to increase satisfaction of its customers?
a) Increase their value of money
b) Improve quality of services
c) Offers and discounts
Q10) How can quality of services and products in Holiday Inn be improved?
a) Supplier relations
b) Continuous improvement
Chapter 4-Analysis and Findings
Q1) Do you know what is customer satisfaction? Frequency
Yes 20
No 10
This graph depicts that out of 30 respondents in Holiday Inn, 20 know about the concept
of customer satisfaction while the rest 10 do not have any idea. This means that the company
needs to spread the importance of customer satisfaction across all it department so that they can
all work towards achieving high customer satisfaction. This will also help in improving the
overall capability of hotel to improve the customer experience which will help in making their
customers happy which will also benefit the organisation in several ways.

Q2) Is Holiday Inn effective in achieving
customer satisfaction in an efficient manner?
Frequency
Yes 25
No 5
From this graph it can be said that out of the 30 employees of Holiday Inn, 25 say that
they are able to satisfy their customers effectively while the other 5 do not agree on the same. It
thus means that some employees disagree on the ability of Holiday Inn in satisfying its
customers in an effective manner. The company needs to implement certain strategies which can
help it in improving customer experience so that high value for their money can be created which
can make them happy.
Q3) Are the services given to customers in
Holiday Inn as per the amount of money charged?
Frequency
Agree 15
Disagree 15

From this graph it can be concluded that out of the 30 respondents, 15 say that Holiday
Inn is effective in generating high value for customer’s money spent while the other 15 do not
agree on the same. It thus means that the company can still improve its products and services so
that better customer satisfaction can be achieved. It will also help in using the company resources
to its fullest so that no wastage occur and they can be completely utilised in achieving customer
satisfaction. The company can also effectively earn better returns on its investments by the way
of improvement in quality of its products.
Q4) What is customer satisfaction? Frequency
Happy customers 15
Customer retention 15

From this graph it can be said that of the 30 people, 15 say that customer satisfaction is
related to happy customers while other 15 say that retaining customers means that the customers
of company are highly satisfied. In order to retain a large number of customers in company so
that their loyalty towards company can be increased it is important that their needs and wants are
met in an efficient manner. If the company is able to make its customers happy through their
products and services then the chances that they will again purchase for the same company
increases which help in increasing company sales. Thus both happy customers and high customer
retention indicates that company is able to satisfy its customers.
Q5) Why is customer satisfaction important for
business?
Frequency
Increase in sales 15
Customer retention 5
Brand recognition 10

This graph says that out of the 30 respondents of Holiday Inn, 15 say that satisfying
customers can help in increasing sales of company, other 5 say that it help in increasing
customers retention while the rest 10 say that it help in increasing the brand recognition of
company. Thus it can be said that customer satisfaction plays an important role in an
organisation and it must try on improving its products and services so that high customer
satisfaction can be achieved. It helps in increasing loyal customer base and also in brand
recognition. Thus the profits of company can be increased which can help it in achieving a
competitive edge.
Q6) How can customers be
satisfied in hospitality industry?
Explanation
Improved products and services Improving the quality of products and services offered to
customers can create more value for the money they spend.
This will help them in choosing the organisation which give
them more value in the same amount of money spent.
Proactive approach The hotel staff must apply a proactive approach so that
customers can be given the services and products that they
want promptly which will give them a positive idea about the
efficiency of company.
Customer feedback Customer feedbacks can help the company in knowing about
the areas where customers were not satisfied so that

appropriate improvements can be made so that the
complainants of customers can gradually decrease.
Q7) How does satisfying
customers contribute towards
company success?
Explanation
Loyal customers Satisfied customers can repetitively purchase goods and
services form the same company as they get desired value for
their money.
Increased sales As the company is able to satisfy its customers efficiently
then its sales can increase as more number of customers buy
its products and services to achieve high value for their
money.
Brand image Customer satisfaction play an important role in building
brand recognition of company in market as the satisfied
customers can help in spreading good words about the
company.
Q8) How does customer
satisfaction help employees of
company?
Explanation
Employee retention As the company is able to satisfy its customers, the job
satisfaction of employees increase and they feel valued for
the services which they give to the company. This help in
increasing their retention as they feel that the work done by
them help in making customers of company happy.
Job satisfaction With the increase in well being of customers and their
happiness with the services received the employees can
become satisfied with their jobs as they feel motivated to
improve their performance.
Increase in morale The morale and motivation of employees increase as they are

able to satisfy customers with their services which help in
boosting their confidence in their abilities and skills.
Q9) What can Holiday Inn do to
increase satisfaction of its
customers?
Explanation
Increase their value of money The company can continuously increase the value of money
of customers which can be done by giving them more than
what the customers expect so that they can feel that their
money was efficiently utilised.
Improve quality of services The company need to optimally utilise its resources so that
the quality of its products and services can be improved that
can help it in providing more value to its customers.
Offers and discounts Regular discounts and offers also play an important role in
attracting a large number of customers towards company and
satisfying them as they can get more value for the amount of
money spent by them.
Q10) How can quality of
services and products in Holiday
Inn be improved?
Explanation
Supplier relations It is important that Holiday Inn improve the relations with its
suppliers so that it can purchase high quality of raw materials
at reasonable prices which can help it in improving the
quality of its services at affordable prices.
Continuous improvement Continuous improvement principle must be applied by the
company in its operations so that all the business functions
can be completed with great efficiency and also they can be
improved continually.

Chapter 5-Critical appraisal, Recommendations & Suggestions
From this research it can be said that satisfying customers with company’s products and
services play an important role in the success and growth of company in market. It helps in
increasing their loyalty towards company so that repetitive business can take place. Also it helps
in creating a brand image of company in market so that more number of customers can be
attracted as it is able to produce more value for customers (Bresler and Stake, 2017). The
company must thus build a culture in company such that all the employees can be involved in
enhancing the customers satisfaction by improving their performance. Also by applying the
principle of continuous improvement, its service quality can be improved that can help in
increasing the satisfaction of customers.
Stakeholders: These are the people who directly or indirectly get affected by the functions and
operations of company and they must be satisfied so that their support and trust can be gained
which is important in effective performance of company. The stakeholders of Holiday Inn
include customers, suppliers, government etc. who are affected by the company operations and
must be highly satisfied by company for its sustainable existence.
Communication: After achieving the results of research they must be communicated to all the
company stakeholders so that they can know about the decisions being made in company.
Various channels can be used in order to communicate effectively like e-mails, messages etc. so
that they can all be directed towards improving customer satisfaction in company (Wiek and
Lang, 2016).
Recommendations:
There are certain recommendations which must be implemented by Holiday Inn so that it
can achieve its objectives in an efficient manner:
 Inclusive and participative culture must be built in company y which can help ion
increasing employee engagement which is important to improve the performance of
employees so that they can give best quality of services that can help in increasing their
satisfaction.
 Understanding the needs and wants of customers by the way of regular surveys and
feedbacks so that necessary improvement scan be made in the company.

 The company can use social media platforms to spread the awareness about its products
and services so that more customers can be attracted and brand recognition can increase
in market.
Chapter 6- Conclusion
From this report it can be concluded that in the competitive market it is important for
companies that they improve the satisfaction of customers which can help them in gaining a
competitive advantage in market and also in building a large and loyal base of customers.
Hospitality industry basically relates to giving highest quality of services to its customers so that
high value can be created for them that can help in increasing the sales of company. The success
and growth of hospitality industry thus depends largely on the ability of company in maximising
customer experience.

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