Fesseha Gebreanania (PhD)Firanbontu Yilma2025-07-302025-07-302024-10https://etd.aau.edu.et/handle/123456789/5793This study investigates the effect of service quality on customer retention in the hotel industry, particularly in the Ethiopian Skylight Hotel. The SERVQUAL model was used to study how the five service quality dimensions (tangibility, reliability, responsiveness, assurance, and empathy) affect customer retention. A quantitative research approach was employed to acquire quantitative data from hotel customers through a standardized questionnaire. The study population comprised Ethiopian Skylight Hotel customers, and a stratified probability random sampling technique was applied to select a study sample using the Cochran large and unknown sample determination formula. The SERVQUAL model survey questionnaire was divided into three parts, with a total of thirty-three questions distributed to 384 respondents for a response rate of 325 (84.6%). The SPSS version 24 software was used to analyze the collected data by applying descriptive and inferential statistics of Pearson correlation and multiple regression. The analysis result demonstrates that reliability, tangibility, empathy, and responsiveness have significant effects on customer retention. However, assurance has no significance on customer retention. The study's findings provide useful information for Skylight Hotels on how to improve service quality and client retention. The study also makes an important contribution to future research in the study area. Keywords: Customer Retention, Service Quality, SERVQUL Model, Cochran formula, SPSSen-USThesis