The Linear Relation of Service Quality and Customer Loyalty: The Case of Star-Rated Hotels in Addis Ababa
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Date
2022-06
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Addis Ababa University
Abstract
Ethiopia, notably Addis Ababa, is a well-known tourist destination and the headquarters of a number of international and intercontinental organizations. Tourism is an important part of the country's economy, a source of income for many people, and drive factor for investment. Hotels are an indispensable part of the tourism industry. The purpose of this study is to assess the linear relation of service quality and customer loyalty in the case of star-rated hotels in Addis Ababa. To this end, pertinent data were gathered through structured questionnaire from 384 customers of three, four and five-star hotels in Addis Ababa. The study used five dimensions of SERVQUAL model to test the effect of service quality (independent variable) on customer loyalty (dependent variable). Quantitative data gathered through structured questionnaire were processed via SPSS and analyze by using descriptive and inferential statistics (linear regression analysis). The findings of the study indicated that each of the five service quality dimensions (reliability, responsiveness, tangibles, empathy, and assurance) have a positive and significant effect on customer loyalty, with tangibles having the greatest impact. To sum up, hotels should pay attention to what their customers think about the service quality of the hotels, as this study discovered that service quality has a direct impact on customer loyalty.
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Keywords
Hotel, star classification, service quality, customer loyalty