Hyatt Hotel, Singapore: Service Quality and Customer Retention Study

This report presents a study on the impact of service quality on customer retention, with a specific focus on the Hyatt Hotel in Singapore. The research delves into the significance of the service industry, particularly within the hospitality sector, highlighting the importance of customer satisfaction and loyalty. The study examines the correlation between service quality, customer satisfaction, and customer retention, analyzing the role of various factors such as facilities, technology, training, and communication. It provides a literature review discussing relevant theories and models, including the gap theory of service quality and various customer satisfaction theories. The research also formulates research questions and hypotheses to investigate the relationship between service quality and customer retention. The report includes a major project proposal form outlining the rationale, objectives, and methodology of the study, along with a questionnaire designed to gather data on customer perceptions of Hyatt Hotel's services. The findings aim to provide insights into how Hyatt Hotel can improve its service quality to enhance customer satisfaction and retention, ultimately leading to increased customer loyalty and business success. The report is a valuable resource for students studying marketing and hospitality management, providing a comprehensive analysis of service quality and its impact on customer relationships.

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
2

Service Quality and Customer Retention
TOC
3

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
4

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
5

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
6

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
7

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
8

Service Quality and Customer Retention
retention. One of the following hypotheses also talked about the impact of customer satisfaction
on customer retention.
H0: Impact of Service Quality on Customer Retention
H1: Impact of Facilities on Customer Retention
H2: Impact of technology on Customer Retention
H3: Impact of Training on Customer Retention
H4: Impact of communication on Customer Retention
H5: Impact of customer satisfaction on customer retention
9

Service Quality and Customer Retention
Chapter 2: Literature Review 5000 w
2.1. Introduction
A review of literature is a study of academic sources that offers an analysis of a specific topic.
Literature reviews are a collection of the most relevant and important publications on this topic
to provide a comprehensive overview of what were said about the topic and by whom. As per the
study of Gold and others in 2012, literature review's basic components include: a description of
the publication; a summary of the main points of the publication; a discussion of research gaps
and an evaluation of the contribution of the publication to the topic. It is an overview of the
topic, an explanation of how publications differ from each other, and a review of how each
publication contributes to the topic's discussion and understanding (Gold et al., 2012). In this
study the literature of service quality, customer satisfaction and customer retention is analysed. It
also analysed various studies based on the customer relations of service industry and hospitality
sector. The study included various scholarly articles to review the factors affecting service
quality and their impact on retention of customers.
In this section of research study the articles written by scholars are discussed in depth to uncover
various concepts, theories and principles defining the role of service quality in the process of
customer management and retention in an organization. According to the study of Lumen in
2019, the more focus has been laid on analyzing those articles which take service sector as the
basis. The articles on hospitality industry are also taken as basis for analysing the impact of
customer satisfaction on maintain customer loyalty or attaining services of that organization for
the long time in the long run. Customer satisfaction is a psychological concept that involves the
feeling of well-being and pleasure that results from obtaining what one hopes for and expects
from an appealing product and/or service. Customer satisfaction is the internal feelings of every
10

Service Quality and Customer Retention
individual which may be satisfaction or dissatisfaction resulting from the assessment of services
provided to an individual in context to customer’s anticipation by an organization (Lumen,
2019). Hotels are continuously trying to improve the service just to satisfy their customer
because higher customer satisfaction will leads towards customer loyalty.
According to the study of McKinley and others in 2012, service quality in the hospitality
industry becomes one of the most important factors for gaining a sustainable competitive
advantage and customers’ confidence in the highly competitive marketplace, and therefore
service quality can give the hospitality industry a great chance to create competitive
differentiation for organizations. It is thus considered as a significant core concept and a critical
success factor in the hospitality industry. A successful hotel delivers excellent quality service to
customers, and service quality is considered the life of the hotel (McKinley, 2012). The focus of
these articles were mainly on considered factors of hypothesis of this study that also the
independent factors like facilities provided, technology used, type of training given to employees
and the communication network within the organization.
The independent variables of the study are identified with the help of articles and studies of the
scholars and further on the basis of that hypothesis are framed and links are established to get
analysed later on with the help of statistical tests and approaches. The literature review acts as
the basis of any research study, where the necessary secondary information is collected and
analysed. In this study the articles are listed and discussed in productive and efficient manner.
2.2. Dependent variable – Customer Retention
Customer retention refers to a business or product's ability to retain consumers over a specified
period of time. High retention of customers means that buyers of the product or company tend to
return to, continue to purchase or otherwise not defect to another product or service, or refuse to
11

Service Quality and Customer Retention
use it entirely. In general, sales companies try to reduce consumer defects. As per the study of
Shin and others in 2015, customer retention starts with the first contact a company has with a
customer and continues throughout a relationship's lifespan and successful retention efforts take
into account this entire lifecycle. The ability of a business to attract and retain new customers is
not only linked to its goods or services, but also to the way it treats its existing customers, the
interest that customers actually produce as a result of using the products, and the prestige it
generates in and across the marketplace (Shin & Thai, 2015).
Successful retention of clients requires more than offering what they want to the consumer.
Generating loyal brand advocates may mean meeting the expectations of consumers. As per
Yuen and Thai in 2015 in their study building customer loyalty puts customer satisfaction at the
heart of business strategy' rather than maximizing profits and shareholder value. Happy
customers are loyal customers. Not only is it important for organization to provide stellar service,
but awesome products as well. Make it a point to be on the fast track for keeping up with trends
that the customers may follow such as building personal assistance services for traveling
customers or making special concessions for avid repeat consumers. Be sure organization have
items on hand so when their customer needs organization and their products, everything’s
available. A customer who has to continuously waited for organization to do their part may grow
tired, no matter how loyal, and venture off to their competition. Keep customers loyal by
focusing on them at all times (Yuen & Thai, 2015).
According to the study of Wirtz and others 2013, in a competitive environment, the main
difference is often the delivery of a consistently high customer service level. The physical
perception imparted by their hospitality business is important in achieving customer satisfaction.
Organization’s restaurant or hotel need not spend lots of money to create an amicable
12