Service Quality and Customer Retention

A study on impact of service quality on customer retention
With special reference to Hyatt Hotel, Singapore
Student Details
12/31/2019

Service Quality and Customer Retention
Abstract
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Service Quality and Customer Retention
TOC
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Service Quality and Customer Retention
Chapter 1: Introduction 1500 words
1.1. Background
Service industry is indeed an industry composed of businesses that generate revenue mainly by
providing clients with intangible goods and services. Businesses in the service sector are engaged
in retail, transportation, allocation, food as well as other service-dominated corporations. The
services serve as the company's main element in service sector businesses. There has been one
massive industry in this field and that is the hospitality industry. Hospitality facility is the
amount of support that a hotel staff offers to promote the client's transaction. It also involves a
variety of efforts made by hotels to create an enjoyable customer experience for customers.
Excellent customer support in all industries is of vital importance. Each business needs to
maintain clients and visitors happy, but it is so essential to keep visitors involved in the
hospitality sector so that the company can grow as well as prosper (Albrecht, Breidahl, & Marty,
2016). In this study the correlation among services provided, customer retention and customer
satisfaction are analyzed.
The hospitality industry is a broad concept of service sector domains that includes
accommodation, food as well as drink service, event management, amusement parks,
accommodation, cruise line, rail, airline and specific tourism industry areas. This depends on the
recreational time and discretionary income that is available. A hospitality system such as a hotel,
restaurant, as well as amusement park consists of various types of factors such as maintenance
facilities and specific operations (Baharin & Hanafi, 2018).
In this study the main emphasis is laid on the customer services provided by Hyatt Hotel situated
in Singapore. These service providing employees of Hyatt Hotel can be servers, maids, porters,
kitchen staff, bartenders, strategic planning, marketing, as well as human capital etc. This is a
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Service Quality and Customer Retention
highly competitive business since there can be different kinds of products or services, like the
selection of food, eateries, driving through options, range of drinks, different styles of hotels, etc.
It is important for Hyatt Singapore to develop a good relationship with consumers so that they
can return for more (Cloutier, Felusiak, & Hill, 2015). While conducting hospitality business it
makes consumer service a critical point for Hyatt staff. Customer satisfaction processes how an
organization’s products as well as services meet or exceed the expectations of a customer. For
Hyatt Hotel, customer loyalty is essential because it offers a metric for advertisers and
entrepreneurs to handle and enhance their facilities. This can allow Hyatt Hotel of Singapore to
reduce the amount of consumer defections in their operations and behavior. It helps in long-term
customer retention and maintaining their commitment to the hospitality firms (Dalen, Henkens,
& Schippers, 2010).
1.2 Statement of the Problem
Hospitality industry focuses on the fulfillment of clients by creating quality services as well
as products that serve their needs. Same goes with Hyatt Hotel of Singapore as it helps
in generation of revenue for local economies directly when tourists spend money in hotels,
restaurants and entertainment venues of Hyatt. Hospitality industry encompasses the fact of
customer satisfaction which directly or indirectly relates to more employee engagement and
commitment. It also helps in creation of variety of jobs related to service factor of the Hyatt
Hotel. There are many ways through which management of Hyatt Hotel of Singapore try to
maintain healthy relations with its employee, however still they are lacking in some terms
(Dugguh & Ayaga, 2014).
The link among service quality, customer satisfaction and customer retention of Hyatt Hotel of
Singapore is important to identify and analyze. It helps the hotel in understanding the loyalty of
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Service Quality and Customer Retention
its customers and acting according to it, to maintain long term relations with them. Customer
satisfaction act as the main component of maintaining healthy relations of customer with the
hotel. It is not an easy task to maintain healthy relations, however with quality services and
continuous commitment of management towards the customer retention policies, Hyatt hotel can
achieve a productive link among service quality and customer retention in long run (Gold, Oire,
& Fabian, 2012).
With this view current study is aimed at identifying and establishing productive link among
service quality, customer satisfaction and customer retention of Hyatt Hotel of Singapore. In
order to do this an in-depth research study has been conducted.
1.3 Purpose of the Study
Customer satisfaction act as the main component of establishing the goodwill of a hotel in front
of its customers, hence with this view in this study the purpose is to identify and analyze the
correlation among service quality, customer satisfaction and customer retention of Hyatt Hotel of
Singapore. The negative impact can hamper the operations of Hyatt Hotel in diverse ways; hence
this study aims at identifying the intensity of impact and providing solutions for the same also.
The study also aims at identifying the impact of various factors of service quality on customer
satisfaction and retention of Hyatt hotel of Singapore (Jung & Yoon, 2011).
1.4 Significance of Study
In any research study it is important to first identify its importance for an individual or group of
individuals. Same goes with this research study in which the link among the service factors as
well as customer satisfaction is analyzed in order to understand the role of Hyatt hotel of
Singapore in establishing healthy relations with its customers and maintaining a high customer
loyalty rate in long term. For any service providing company it is important to satisfy their
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Service Quality and Customer Retention
customers by providing them high quality services before, at the time and after the transaction.
This is similar for Hyatt hotel of Singapore which is serving widely towards satisfying the needs
of their customers, hence this study aims at identifying the extent to which Hyatt provide
services to its customers and impact of it on customer retention rate in long run (Liu, et. al.,
2017).
1.5. Theoretical Frame work
The theoretical construction is the arrangement that can grip or support a hypothesis of
a research study. It introduces as well as describes the theory that predicts why
the research dilemma under reading exists. In this study the aim is to analyze the impact of
service quality on customer retention and satisfaction of Hyatt Hotel is analysed. In order to do
so this study collected the data from primary as well as secondary sources. The data collected
from primary sources is utilized for data analysis however secondary data is also used for
analysing the literature of the concerned research. The study analysed various empirical
researches, theories, models, frameworks based on the elements related to factors of service
quality, customer satisfaction and customer retention. The study discussed the gap theory of
service quality where various components described by author are analysed and discussed
(Manuti, et. al., 2015). The study also makes use of various customer satisfaction theories like
perceived value theory, model of Prof. N. Kano, Discrepancy theory, etc.
These theories, models and concepts provided a theoretical base to the study which helps the
researcher in identifying and presenting results in more discretional and authentically manner.
This further can help Hyatt Hotel of Singapore in analysing its service quality and maintain
according to the needs and wants of customers in productive manner. This makes important for
the researcher if this study to efficiently assess the theoretical framework of concerned literature
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Service Quality and Customer Retention
about customer satisfaction and service qualities offered by Hyatt Hotel of Singapore in effective
manner (McKinley, 2012).
1.6. Hypothesis or Research Question
In any research study it is important for a researcher to understand the essence of framing of
research question and research hypothesis. It can help researcher in modifying and directing
research in the right way as the researcher wants. In the case of current research where the
customer satisfaction and retention of Hyatt hotel is analysed the research question and
hypotheses are made by conducting productive analysis. Customer satisfaction and retention act
as the main components in the success of Hyatt Hotel of Singapore which is analysed in this
study with the help of a quantitative data analysis. For this purpose the research question and
hypothesis of this study are framed and displayed in following lines:
Research Question
The research question for this study is identified by analysing the available data and specified
research problem
“What is the correlation and impact of service quality factors on customer satisfaction and
retention of Hyatt Hotel of Singapore? “
Hypotheses of the Study
Hypothesis is the framework that helps a researcher in deciding from before only what the
probable results can be accomplished from the research. The researcher needs to from hypothesis
to provide direction to research and maintain effectiveness of the same. In current research study
on the basis of research question and objectives of the study, following null hypotheses are
formed. The hypotheses are based on the factors of service quality and their impact on customer
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