Impact of Service Quality on Customer Retention in UK Hotel Industry

This dissertation investigates the influence of service quality on customer retention within the UK hotel industry, using Hyatt Hotels Corporation as a case study. It aims to understand the relationship between service quality and customer retention, explore the benefits of customer retention for business performance, and identify challenges faced in the absence of service quality. The research employs a literature review to establish a basic understanding of service quality and customer retention, evaluating their impact on Hyatt Hotels Corporation. It also examines the advantages of customer retention for the hotel's business performance and the challenges it faces without adequate service quality. The dissertation concludes by providing recommendations based on the findings, addressing the research questions related to service quality, customer retention strategies, and their effects on the hotel industry.

Dissertation
(Influence of service quality on Customer retention
in the Hotel Industry of United Kingdom)

Table of Contents
CHAPTER ONE- INTRODUCTION..............................................................................................3
1.Background to the Research................................................................................................3
2. Organisational Background................................................................................................3
3. Significance of the Problem...............................................................................................3
4. Statement of Purpose..........................................................................................................3
5. Statement of the Problem...................................................................................................4
6. Aim and Objectives............................................................................................................4
7. Research Questions............................................................................................................5
8. Dissertation structure (sign-posting)..................................................................................5
CHAPTER TWO- THE LITERATURE REVIEW.........................................................................7
To develop basic understanding about the service quality and customer retention in context
with the UK Hotel Industry....................................................................................................7
How service quality has influenced on customer retention within Hyatt Hotels Corporation?
................................................................................................................................................9
What are the advantages of customer retention for business performance of Hyatt Hotels
Corporation?.........................................................................................................................11
What are the major challenges that Hyatt Hotels Corporation would be faced in the absence of
service quality?.....................................................................................................................13
CHAPTER 3: RESEARCH METHODOLOGY...........................................................................15
CHAPTER 4: DISCUSSION.........................................................................................................19
CHAPTER FIVE: CONCLUSION AND RECOMMENDATIONS............................................24
Conclusion............................................................................................................................24
REFERENCES..............................................................................................................................28

CHAPTER ONE- INTRODUCTION
1.Background to the Research
Customer retention is related to keeping the customers engaged while buying the products and
availing the services of the company (Mahmoud, Hinson, R.E. and Adika, M.K., 2018). When
the customers are highly satisfied then the company will be able to perform much better and the
company comprise of various activities which are taken by it in order to keep the customers
satisfied. Majorly there are various techniques which are used to keep the customers retained. It
is also essential to map the customer journey which is not an easy task to do. That is why the
company to take preventive measures in order to keep the customers retained in the company.
2. Organisational Background
The company considered for the research is Hyatt Hotel Corporation which is one of the leading
hotels in the hospitality industry (Han and et.al.,2019). It is an American multinational
hospitality company which is situated in the Riverside Plaza area of Chicago. Moreover, the first
Hyatt house was started in the year of 1954 by Hyatt Robert von Dehn and Jack Dyer Crouch. It
is one of the oldest brands in the company and it tends to provide the best services to its
customers.
3. Significance of the Problem
The research will be served as a base for the understanding the influence of service quality on the
customer retention level in the chosen hotel in UK. As the services offered to the customers will
directly impact the operations of the hotel (Darzi and Bhat, 2018). And also, the level of trust,
satisfaction and loyalty of the customers towards company. The study will demonstrate the
information about the benefits of customer retention for business performance of the chosen
company. In relation to this there are various issues which are to be faced by the hotel while
keeping the customer’s content.
4. Statement of Purpose
The main goal of the research is to outline the impact of the customer retention and about the
service quality in the hotel industry (Hanaysha, 2018). The study will also highlight the influence
of service quality on customer retention within the chosen corporation. Moreover, the term
customer’s retention allows the companies to attract the customers for the longer period of time
in the company. It keeps the customers engaged in the company and the hotel industry also

targets on providing the customers what they want and fulfil their level of expectation. The
chosen hotel needs to enhance higher productivity in order to increase profitability and output.
The hotel attracts more guests as a result of its reputation and image being enhanced. These are
all important advantages of customer retention that support a hotel's general effectiveness and
performance and enhance its commercial performance for successfully achieving its goals. A
range of strategies, such as client retention, can help the hotel enhance its financial performance
in preparation for future expansion. It helps the hotel generate more revenue by bringing in more
customers to use its amenities. Keeping customers is a key idea for earning better profits and
have a good image in the market.
5. Statement of the Problem
The research problem is related to the customer retention as in any company they are to invest in
customers and it is one of the compulsory things to do in nay business. As per the market, it is
not easy to build a strong brand and manage the resources properly. But customer retention is
significant to boost the level of sales and that come direct from the customers. In order to
increase customer satisfaction and their expectations of the services and products, service quality
is essential in every business or organisation (Han, Jongsik and Hyun, 2020). there are poor
service standards at the hotel, this could lead to a number of problems and challenges for the
establishment. In the lack of quality services, hotels may experience serious problems with client
retention, satisfaction, loyalty, and trust, all of which have an impact on the hotel's overall
growth. In the lack of high-quality services, Hotel faces difficulties with both employee and
customer retention. The difficulties lead to a variety of problems at the hotel, which may have an
impact on profits. In addition to this, the performance and reputation of the hotel, which are its
principal faults, will suffer. The negative effects on the hotel as a whole and its operations are
that productivity and profitability will suffer. The hotel is unable to give guests enjoyable
experiences that would motivate them to stay at the Hyatt hotel without high-quality services. All
of these challenges could have a negative and considerable impact on the hotel, which would
harm both its overall growth and performance and profitability.
6. Aim and Objectives
Aim
To determine the influence of service quality on Customer retention in the Hotel Industry of
United Kingdom. A study of Hyatt Hotels Corporation.

Objectives
 To develop basic understanding about the service quality and customer retention in
context with the UK Hotel Industry
 To evaluate the influence of service quality on customer retention within Hyatt Hotels
Corporation
 To determine the benefits of customer retention for business performance of Hyatt Hotels
Corporation
 To examine the challenges that would be faced by Hyatt Hotels Corporation in the
absence of service quality
7. Research Questions
 What is the concept of service quality and customer retention in context with the UK
Hotel Industry?
 How service quality has influenced on customer retention within Hyatt Hotels
Corporation?
 What are the advantages of customer retention for business performance of Hyatt Hotels
Corporation?
 What are the major challenges that Hyatt Hotels Corporation would be faced in the
absence of service quality?
8. Dissertation structure (sign-posting)
The research must be presented systematically, and it may be effectively described as an
organised evaluation of the relevant field of study. The focus of current research often centres on
the specific traits that contribute to the appropriate path. The following is a list of the many
chapters that will be included in the dissertation:
Introduction
This section of the study is highlighted as being critical since it is crucial for examining the
numerous research ideas and for creating the context for the chosen topic. The main goals and
purposes of the inquiry are outlined in this particular chapter. The breadth and value of the
research, as well as its purpose, are often explained in the introduction chapter. This mostly
focused on how an investigator might advance via knowing about exploration issue (Kim,
2019).
Literature Review

The second portion of the study, the literature review, highlights the key findings and provides a
thorough explanation of the research problem. Examining and clarifying the research concerns
and effectively achieving all objectives are the key aims of the literature review. Secondary data
collection techniques, such as those from the internet, books, scholars, and journals, are more
advantageous for gathering the data and information for a literature review.
Research Methodology
The dissertation chapter titled "Research Methodology" explains how to do research properly
and methodically. It is a crucial component of the study since it includes a number of techniques
and tools that are thought to be helpful in gathering and accurately analysing the data.
Additionally, it aids in growing and bringing about beneficial results in relation to the particular
subject area. When choosing a technique, one tends to get a thorough analysis that helps steer a
particular study in the appropriate path. In order to address these issues, the research technique
chapter includes sections on the research philosophy, research approach, research strategy, data
collection method, sample, research limits, and ethical considerations (Adzoyi, Blomme and
Honyenuga,2021).
Data Presentation and Analysis
It is one of the most important components of the study because it is here that the information
most closely related to the objectives and questions is measured. In light of this, the approach of
data collecting for the research will be the creation is by the help qualitative research method.
And the main goal of this strategy, according to the timetable, is time and money savings.
Because of this, the data will be analysed using the thematic analysis method, which leads to the
development of themes and discussion of research objectives (Anwar and et.al.,2020).
Conclusion and Recommendations
One of the core parts of the investigation under which the conclusion is created in reference to
the research aim and objectives is said to be this chapter of the study. Due to the constraints of
the project's findings, this chapter will reflect on a summary of the entire undertaking in an effort
to address the problems. Based on the assessment, recommendations will be developed.

CHAPTER TWO- THE LITERATURE REVIEW
The definition of a literature review is a critical analysis of secondary sources on a particular
topic or issue. There are a few key sources of secondary data that the researcher will find useful
in gathering secondary data related to the subject of choice. The research draws on a wide range
of sources, including journals, books, articles, published studies, and many more. All are
important and worthwhile resources for conducting research in order to successfully complete
the dissertation's objectives. Additionally, the literature review's primary goal is to identify the
gaps in the previous research (Fam and et.al.,2021). The primary gap in the current search is the
presence of barriers, the necessity of offering solutions to improve client retention for the
company's economic growth, and the importance of these factors. It can also be claimed that
numerous data points about the subject of service quality and client retention are available from
earlier studies.
To develop basic understanding about the service quality and customer retention in context with
the UK Hotel Industry
As stated by Nusjirwan, Regen and Nardo, (2020), the businesses nowadays are getting
more competitive and that is why the companies are to take care of their customers by
maintaining the quality of the services. Under this the customers are taken care of by providing
best services and it is defined as the ability of the company in relation to retain more customers.
It is measured by the attracting new customers and in that process proper customer retention
management plays an essential role. The main target of that management is to maintain the
relations with the existing customers. Such retention will elevate the level of loyalty, confidence,
new customers and ROI. For that the hotels can make a roadmap for the purpose of enhancing
the future relationship. In relation to that companies ask for feedbacks from the customers in
order to bring better changes. As the hotel cannot improve its services without understanding
their customers that is why the company can ask for the feedback for the entire team and that
feedback should be used by the company with the aim of bringing future improvements. The
hotels must keep a check on the customer experience as it will build the level of trust among the
customers A company's ability to deliver both products and services that match customer
expectations is measured by the quality of its services (Adzoyi, Blomme and Honyenuga,2018).
As a result of helping to deliver the best services to customers, which can increase their

attraction to the hotel's services, service quality plays a vital part in customer retention within the
Hyatt Hotel Corporation. Customers are kept coming back by customer satisfaction, customer
trust, customer commitment, customer retention, customer loyalty, and a host of other benefits
that are connected to and contribute to service excellence. Service quality can impact customer
retention by providing clients with services that adhere to their needs and preferences. Offering
top-notch services will help Hyatt Hotel win over new customers.
According to Lee and et.al., (2020), in the hotel industry the customer’s retention which
allows the company to attract the customers for the longer period of time. The hotel industry
focusses on providing the customers what they want and fulfil their level of expectation. It can
also be seen that hotels are taking help of the customer relationship marketing strategy and
keeping the record of the past communication or any issues. When the company take cares of the
employees then the sales will rise whenever the customers made a purchase. Some companies ae
following up the customers after serving them and that is why they switch to other companies.
Such follow ups will directly increase the level of involvement of the customers and it also
increase the value of the current sales (Park and et.al.,2020). The ultimate goal of customer
retention strategies is to retain as many customers as possible. Almost all the companies are
focusing on the customer acquisition as it is one of the effective ways to enhance the level of
revenue faster. Along with it, customer retention is linked and related to keeping the customers
satisfied and engaged. During the process of buying the products and availing the services of the
chosen company. It is fact that when the customers are highly satisfied then the company will be
able to perform much better and the company comprise of various activities which are taken by it
in order to keep the customers satisfied. Majorly there are various techniques which are used to
keep the customers retained. It is also essential to map the customer journey which is not an easy
task to do. That is why the company to take preventive measures in order to keep the customers
retained in the company. The feedback from guests is what Hyatt hotels utilise to gauge their
performance. Customers want high-quality services since they can impact their positive reviews.
When products and services are delivered in accordance with customers' wants, both customer
happiness and expectations for the services can increase. Customer retention is one of the most
important ideas in any company or organisation, and it only depends on the services that the firm
provides to keep clients. The quality of the services may have an impact on customer retention
by drawing attention to the good comments and reviews of the hotel. Businesses can affect

customer retention by improving their output, general performance, and service quality. Effect of
service excellence.
Now a day’s customer or tourist opt for those hotel which provide best service as per their
expectation and the price they pay to avail the experience. It is observed that company whose
quality of service is best hold the customer for longer time period as well as also helps in
attracting new buyers for the hotel. Quality of service affect the hospitality industry in large
manner they not only help in customer retention but also aid in building the buyers trust and
loyalty. Customer trust has direct impact on the retention rate of the company as well as also
assist the company to acquire more quality service within the organisation. Thus, service quality
largely influences the rate of customer retention in hospitality industry.
How service quality has influenced on customer retention within Hyatt Hotels Corporation?
According to the point of view of Luiten (2020) services quality referring to the
measurement of how a company delivering their product & services as compared to customer
expectations. In relation to customer retention within Hyatt Hotel corporation, services quality
play a important role because services quality is helps to give the best services to the customers
which can increase the customer attraction towards the hotel's services. Services quality provide
many benefits to retaining the customers such as customer satisfaction, customer trust, customer
commitment, customer retention, customer loyalty and many more these all factors are related
with each other which is the part of services quality. Services quality can influence the customer
retention by providing the services according to their needs and wants. Hyatt Hotel can influence
their customers by providing the best services to the customers which is linked with the services
quality of hotel. Services quality of Hyatt Hotel helps to increase the number of customers within
the hotel. Customer retention in any industry or organisation only depended on the services
quality because a customer is attract towards the company only because of their service. Services
quality is the important term for the influencing the customer and their attention towards the
hotel that is helps in more profitability and productivity (Yoon, Kim, and Fu, 2020). services
quality of Hyatt hotel corporation helps to increase the customer experience and expectation as
well because the services of hotel is providing the best services to their customers and guest
where the hotel efforts to give the best services for their customer retention. The services of
Hyatt aims to protect their customer which increases the customer retention towards the hotel's
services. Services quality is one of the most important term to retaining the customers which

affects on their satisfaction, quality, trust and commitment. Customer retention can be improved
by giving the services what customers wants and build a goof relation with customers. It is
necessary for Hyatt hotel to improve their services quality to retain more customers which can be
attract by the high quality services. Services quality provide two factors to the customers such as
commitment and satisfaction that is helps in improved the customer retention within the Hyatt
hotels corporation. Services quality can influence the the customers by giving the services
according to their expectation and needs which helps in retaining the customers.
In the opinion to Park and Lehto (2021) services quality is the term that is giving to the
customer for improving their satisfaction, loyalty, retention towards the company or
organisation. It is defined as the term to measure that how the company or organisation is
delivering the services to their customers as comparing the customers expectation. In relation to
Hyatt hotel, their services quality influencing on the customer retention by providing the better
services comparison to other hotel's services, it can be influence by providing the good services
according to their customer's needs and wants. It can be influencing the customer retention by
increasing the productivity and performance of the hotel. It can be influencing the customer
retention by understand their needs and wants and provide the services according to them. It can
be influence by increasing the good services within the hotel such as using the digital
technologies, good food quality, hygiene services and many more. These factors can improve the
services quality to influence the customers. Hyatt hotel feedback is depending on the customer
which they can measure by the services of the hotel. Customers wants high level services which
impact on their positive feedback. Providing product & services according to the customers
needs can helps to increase their satisfaction and increase their expectation towards the services
(Wang, and Feng, 2022). Customer retention is one of the most important term in any company
or organisation which is only depend on the services which is produce by the company in order
to increase their retention. Services quality can influence the customer retention by showing the
good reviews and feedback of hotel. Services quality influence the customers retention by
improving their production and overall performance and increase their quality of services.
Services quality impact on the customers retention by increasing the hygiene services to the
customers. Services quality influence the customers by serving the best products and services.
Good quality services can easily retain a customers towards the hotel which will helps to

increase the profitability and production of the hotel. A good services quality increases the
customers satisfaction by providing the best services to the customers. A good service can
influence the customers by attracting them towards the hotel comparing to other. A good service
can influence the customers by improving the services comparing to other competitor's services.
It is influence on the customer’s retention by introduce the new services such as use of digital
technologies, smart rooms, online bookings, smart services, pre-booking services etc. It also
helps the company to gain competitive advantage as compared to the rivalry of the company.
Their customer base increases which helps them to gain more market share of the hotel in the
market. Thus, it is identified that service quality of the hotel positively influenced the customer
retention rate in hospitality sector.
What are the advantages of customer retention for business performance of Hyatt Hotels
Corporation?
As per the point of view of Bhattacharya and Gandhi (2020) services quality is the
important term that creates many advantages in customers retention within the Hyatt hotel
corporation in their business performance. By increasing the services quality within the Hyatt
hotel helps to improve the customers satisfaction because every customers and guest wants high
level services which is help in customer retention. There are many advantages of customers
retention for business performance of Hyatt Hotel which includes it is helps to increase the profit
and productivity of the hotel, it is improving the hotel's reputation and image as well, it is
improving the overall productivity of the hotel, it is helps to increase and attract more customers
towards the hotel, it is help to get the positive feedback from the customer. It is helps to increase
the quality of services that is the benefits for retaining more customers towards the hotel and its
services (Visser, 2020). it is also increasing the growth of the hotel, it is increasing the customers
loyalty and satisfaction towards the services. It is helps to improve the relation between
customers and hotel. It is help the hotel to understand the customer's and their needs and wants
and provide services according to them. It is helps to increase the higher productivity of the hotel
and as well as increasing the profitability. Customer retention is is important because it is
increasing the services demand comparing to other competitor's services. It is helps to increase
the overall business performance of the company which is the big advantages of the hotel.
Customer retention is helps in attracting new customers towards the hotel and its services by
influencing the customers by telling about the hotel's services. It is helping the hotel by

increasing the production and performance of the hotel which will help in future growth. It is
helps to increase the customer loyalty and satisfaction which is the most important part for the
hotel because customer satisfaction and loyalty is play a vital role to increasing the business
performance of any company or industry. Customer retention provide many factors to the hotel
to increasing their business performance which will helps to retain more customers towards the
hotel and its services. Customer retention affects on the marketing strategy which is help to
become the brand ambassadors.
According to the view of Uğurlu (2020) customer retention is referring to the activity of
organisations and company which they take to reduce the customer defection or dissatisfaction
form the company. It is the program which aims to retain more customer as possible for the
company. It is the program that helps to attain more customers towards the product and services.
In relation to Hyatt hotel corporation, there are many advantages of customer retention which is
help the hotel to increase their business performance for the future goals. Customer retention is
helps the hotel to increase more profit by increasing the number of customers towards the hotel.
It is also helps in increasing the revenue by increasing the customer acquisition. It is also helps to
increase the sale which is the advantage for the hotel. It is also helps to improve the services and
productivity of hotel which is the benefits for the future growth. It is build the good relation
between hotel and customers that is the benefits in understand the customers and their needs and
wants that is helps to increase the profit of the hotel. It is improving the higher productivity of
the hotel that is help in increasing the profitability and productivity of hotel (Decker, 2021). it is
increasing the hotel's reputation and image as well that is helps in attracting more customers
towards the hotel. These all importance and advantages of the customer retention that is helps to
improve the overall productivity and performance of the hotel and increase their business
performance for achieving the goals with effectiveness. Customer retention is provide many
factors to the hotel to improve their business performance for the future growth of the hotel. It is
helping the hotel to earn more profit by retaining the new customers towards the hotel and its
services. Customer retention is one of the important term for the Hyatt hotel which is provide
many advantages for business performance of Hyatt hotel corporation. One of the greatest
advantage that hotel received by providing service quality to the employee is gaining customer
loyalty. Having the loyal customer increase the reputation and goodwill of the company in the
market. The rate of return received by the company having the loyal customer is more as they do