Hospitality Management 20 (2001) 277297

Determinants of hotel guests satisfaction and repeat patronage in the Hong Kong hotel industry
Tat Y. Choia,*,1, Raymond Chub
a

Department of Hotel and Tourism Management, The Hong Kong Polytechnic University, Hung Hom, Kowloon, Hong Kong b Performance and Research Department, Cathay Pacic Airways Ltd., Hong Kong

Abstract This study examined the relative importance of hotel factors in relation to travelers overall satisfaction levels with their hotel stays in Hong Kong and the likelihood of returning to the same hotels in their subsequent trips. Using a factor analysis technique, the study identied seven hotel factors that were likely to inuence customers choice intentions: Sta Service Quality, Room Qualities, General Amenities, Business Services, Value, Security and IDD Facilities. Multiple regression analysis technique was then applied to examine the relative importance of each of these hotel factors in determining travelers overall satisfaction levels and their likelihood of returning to the same hotels. In order of importance, Sta Service Quality, Room Qualities and Value were the three most inuential factors in determining travelers overall satisfaction levels and their likelihood of returning to the same hotels. # 2001 Published by Elsevier Science Ltd.
Keywords: Determinants; Hotel attributes; Satisfaction; Repeat patronage

1. Introduction Research into customer satisfaction in the service industry has increased dramatically in recent years (Peterson and Wilson, 1992). The increase has been aggravated by the increasing growth of the service industries (Danaher and Haddrell, 1995). Providing high quality service and enhancing customer satisfaction are widely
*Corresponding author. Tel.:+852-2646-9061; fax: +852-2649-8728. E-mail address: mm2chung@powernethk.com (T.Y. Choi). 1 Tat Y. Choi is a visiting sta member at the Hong Kong Polytechnic University and is also the Director of Chois International Ltd. 0278-4319/01/$ - see front matter # 2001 Published by Elsevier Science Ltd. PII: S 0 2 7 8 - 4 3 1 9 ( 0 1 ) 0 0 0 0 6 - 8

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recognized as important factors leading to the success of companies in the hotel, catering and tourism industries (Barsky and Labagh, 1992; LeBlanc, 1992; Stevens et al., 1995; Legoherel, 1998). In order to be successful in the industry and to outweigh other competitors, hotel providers must provide customers with unmitigated service satisfaction. It is believed that customers, when experienced with the services they have had, are more likely to establish loyalty (Cronin and Taylor, 1992), resulting in repeat purchases (Fornell, 1992) and favorable word-of-mouth (Halstead and Page, 1992). The upshot is that the hotel with good service quality will ultimately improve the companys market share and protability (Oh and Parks, 1997). In a highly competitive hotel industry, which oers homogenous products and services, individual hoteliers must nd ways to make their products and services to stand out among the others. In this regard, what hoteliers need to do is to understand their customers needs, and to meet or exceed these needs. Using the Hong Kong hotel industry as a case study, the purpose of this research is to explore and identify the determinants that can be translated into customer satisfaction and repeat purchase. Undeniably, customer satisfaction with hotel properties has been identied as one of the factors leading to the success of a tourist destination (Shih, 1986; Yau and Chan, 1990; Stevens, 1992; Mok et al., 1995). To investigate how travelers had experienced with hotels in Hong Kong, this study in particular aims to 1. identify the underlying dimensions, or factors extracted from the original 33 hotel attributes, as perceived by travelers during their hotel stays in Hong Kong; 2. examine the relative importance of the derived hotel factors in relation to travelers overall satisfaction levels with their hotel stays in Hong Kong; and, 3. assess the relative importance of the derived hotel factors resulting in travelers likelihood of returning to the same hotels in their subsequent trips.

2. Literature review 2.1. Perceptions of hotel services and facilities Because of the intangibility, inseparability, variability, and perishability of services, consumers perceptions of satisfaction criteria may include contextual cues that they use to evaluate the service quality and to decide future patronage, whether or not they have experienced the hotels products and services before (Parasuraman et al., 1985). Customers are likely to view the services as a bundle of attributes, which may dier in their contributions from the product or service evaluation and choice (Kivela, 1996). Alpert (1971) states that those attributes directly inuencing choices are termed determinant attributes in that they may arouse consumers purchase intention and dierentiate from competitors oerings. Applying to the hospitality industry, Wuest et al. (1996) dene the perceptions of hotel attributes as the degree to which the travelers may nd various services and facilities important in promoting

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customer satisfaction for staying in a hotel. There have been numerous studies that examine the needs and desires of travelers. Reviews of literature for the hospitality industry suggest that hotel attributes such as cleanliness, location, room rate, security, service quality, and reputation of the hotel or chain are regarded as important by travelers for evaluating hotel quality of performance (Ananth et al., 1992; Atkinson, 1988; Barsky and Labagh, 1992; Cadotte and Turgeon, 1988; Knutson, 1988; LeBlanc and Nguyen, 1996; Lewis, 1984,1985; Lewis and Chambers, 1989; McCleary et al., 1993; Rivers et al., 1991; Wilensky and Buttle, 1988). Lewis (1984, 1985) analyzes 66 hotel attributes to determine how business and leisure travelers select hotels. The results suggest that location and price are the determinant attributes for hotel selection for both business and leisure travelers. Atkinson (1988) mentions that, in order of importance, cleanliness, security, value for money, courtesy and helpfulness of sta are found to be key attributes for travelers in hotel choice selection. Cadotte and Turgeon (1988) survey on 26 categories of compliments, nding attitude of employees, cleanliness and neatness, quality of service and employee knowledge of service are the most frequent factors mentioned by travelers. Knutsons study (1988) nds that cleanliness and comfort, convenience of location, promptness and courtesy of service, safety and security, and friendliness of employees are considered important by business and leisure travelers when selecting a hotel for the rst time or for repeat patronage. Wilensky and Buttle (1988) mention that travelers signicantly evaluate personal service, physical attractiveness, opportunities for relaxation, standard of services, appealing image, and value for money. Lewis and Chambers (1989) and McCleary et al. (1993) also nd that location is the most important factor inuencing hotel selection by all business travelers. Rivers et al. (1991) study the hotel selection factors of members and non-members of frequent guest programs. Their results reveal that convenience of location and overall services draw the highest attention from travelers. Ananth et al. (1992) survey 510 travelers, asking them to rate the importance of 57 hotel attributes in hotel choice decision. Price and quality are rated as the most important attributes, followed by attributes related to security and convenience of location. Barsky and Labagh (1992) state that employee attitude; location and rooms are the attributes that both business and leisure travelers consider important in hotel choice selection. LeBlanc and Nguyens study shows that physical environment, corporate identity, service personnel, quality of services and accessibility are likely to inuence travelers perceptions towards the hotel image. They suggest that marketing eorts should be directed to highlight the environmental cues in order to attract new customers (LeBlanc and Nguyen, 1996). 2.2. Customer satisfaction Customer satisfaction has long been an area of interest in academic research. Hunt (1975) considers satisfaction as an evaluation on which the customers have experienced with the services is at least as good as it is supposed to be. Oliver (1981) denes customer satisfaction as an emotional response to the use of

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a product or service. It is more conceivable, however, that customer satisfaction is a complex human process, which involves cognitive and aective processes, as well as other psychological and physiological inuences (Oh and Parks, 1997). A traditional denition of customer satisfaction follows a disconrmation paradigm of consumer satisfaction/dissatisfaction (CS/D), which suggests that CS/D may result in interaction between a consumers pre-purchase expectation and postpurchase evaluation (Engel et al., 1990). Thus, consumers are likely to compare expectations to perceived performance in order to make an evaluation (Gronroos, 1983). A consumer is considered satised when his weighted sum total of experiences shows a feeling of gratication when compared with his expectations. On the other hand, a consumer is considered dissatised when his actual experience shows a feeling of displeasure when compared with his expectation. Anton (1996) provides a more contemporary approach in dening satisfaction in that he denes customer satisfaction as a state of mind in which the customers needs, wants, and expectations throughout the product or service life have been met or exceeded, resulting in repurchase and loyalty. Although customer satisfaction has been dened in various ways, the underlying conceptualization is that satisfaction is a post-purchase evaluative judgment, leading to an overall feeling about a specic transaction (Fornell, 1992). Dierent researchers separated the components of satisfaction. Gronroos (1983) separates the components of satisfaction into two levels of quality: technical quality and functional quality; Reuland et al. (1985) suggest three elements of satisfaction, including product, behavior and environment; Czepiel et al. (1985) identify functional and performance-delivery elements in customer satisfaction; Davis and Stone (1985) mention direct and indirect services for satisfaction; Lovelock (1985) divides product and service attributes into core and secondary types; Lewis (1987) classies essential and subsidiary elements for the service encounter attributes. Even though the terminology is dierent, the fundamental concept is the same across various research studies. Applying into hospitality and tourism industries, the core product deals exactly with what product the customer receives from the purchase, i.e., the food and beverage in a restaurant; the accommodation in a hotel; and an air ticket from Hong Kong to the United States. On the other hand, the side elements deal with how the product the customer ! cor; convenience of location; receives from the purchase, i.e., the atmosphere; de availability; exibility; and interactions with service providers. Measuring customer satisfaction is an integral part of the eort that improves a products quality, resulting in a companys competitive advantage (Cravens et al., 1988; Garvin, 1991). The theory of consumer behavior, as discussed by Engel et al. (1990), points out that customers buying behaviors and levels of satisfaction are inuenced by the customers background, characteristics, and external stimuli. As customer satisfaction is inuenced by the availability of customer services, the provision of quality services has become a major concern of all businesses (Berry and Parasuraman, 1991). Recent studies, nevertheless, support the notion that customer satisfaction can be measured from the perspective of performance evaluations, making the inclusion of

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the disconrmation process unnecessary (Olshavsky and Miller, 1972; Churchill and Suprenant, 1982; Cronin and Taylor, 1992). Their studies of consumer behavior emphasize that customer satisfaction remains a concern in the post-purchase period (Westbrook and Oliver, 1991). In our study, we intend to measure customer satisfaction in relation to hotel performance evaluated by travelers actual experiences. 2.3. Repeat patronage Customer satisfaction and repurchase intention are regarded as qualitatively dierent constructs. Satisfaction may be merely a judgment with cognitive and aective dimensions, whereas repeat intentions consist of a behavioral component (Mittal et al., 1998). Providing a high-quality service has become an increasingly important issue to service providers. An excellent quality of service and facility oered to customers is perceived to be the means by which the service organization can achieve a competitive advantage, dierentiate itself from competitors, increase customer loyalty, enhance corporate image, increase business performance, retain existing customers, as well as attract new ones (Watson et al., 1992; Lewis, 1993; Smith, 1993). A favorable corporate image is also considered essential as the prime contributor to repeat patronage (Hunt, 1975). The outcome of satisfaction may reinforce a customers decision to use a particular brand of service on a given occasion (Oliver, 1980; Cronin and Taylor, 1992). The assessment of customer satisfaction is, perhaps, too subjective to be measured. However, an understanding of this concept is essential for every organization, especially for those who are trying to identify the critical elements aecting customers purchase experience as well as his or her post-purchase behavior such as subsequent purchase and favorable word-of-mouth publicity (Fornell, 1992; Halstead and Page, 1992; Legoherel, 1998). Hoteliers, therefore, must need to understand fully what hotel attributes are most likely to inuence customers choice intentions (Richard and Sundaram, 1993). Sirgy and Tyagi (1986) mentions that a customers repeat purchase and brand loyalty are closely associated with his or her satisfaction with an initial purchase. It is therefore essential to gain a better understanding of the desires and needs of customers that correspond to dierent kind of satisfaction (Pizam, 1994). The concept of customer satisfaction is of utmost importance because of its inuence on repeat purchases and wordof-mouth publicity (Berkman and Gilson, 1986). Knutson (1988) mentions that satisfaction of consumers aids to word-of-mouth advertising at no cost. Research into guest satisfaction, which translates into the more practical consideration of whether or not customers will return to an establishment or recommend it to other travelers, is crucial to the success of the hospitality business. Failure to pay attention to those hotel attributes considered most inuential in choice intention by customers may lead to negative evaluation of the hotel, eventually reducing the chance of repeat patronage by the customers to the same hotel. Therefore, exploring the relative importance of hotel attributes in hotel selection is considered essential.

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3. Methodology 3.1. The instrument In this study, a questionnaire instrument comprising 33 hotel attributes was designed to measure the travelers perceptions and satisfaction levels towards the services and facilities provided by hotels in Hong Kong. The 33 hotel attributes were believed to cover some relevant elements considered important to travelers in relation to hotel evaluation such as: room quality, service providerguest interaction, convenience of location, value for money, familiarity of a hotel, etc. (Parasuraman et al., 1985; Lewis, 1985; Cadotte and Turgeon, 1988; Knutson, 1988; Ananth et al., 1992; Marshall, 1993). To capture a broader data base in relation to the travelers nationalities, we translated the English questionnaire version into two other languages: Chinese, and Japanese. The questionnaire instrument consisted of three sections. The rst section was designed to extract travelers demographic and traveling characteristics. The second section measured travelers perceptions of hotel attributes for a hotel stay. Travelers were asked to rate their levels of agreement with the 33 attributes for the hotel where they stayed, on a seven-point Likert scale ranging from strongly agree}(7) to strongly disagree}(1). The third section were designed to ask travelers to rate their overall satisfaction levels towards the hotel stay on a seven-point Likert scale ranging from strongly satised}(7) to strongly dissatised}(1). Travelers were also asked to rate their likelihood of returning to the same hotel in subsequent trips on a sevenpoint Likert scale ranging from most likely}(7) to most unlikely}(1). The questionnaire was pre-tested by 63 travelers of various nationalities departing from the Hong Kong International Airport. On the basis of this prior test, several items in the questionnaire were redrafted to improve the presentation of the questions.

3.2. The sample The target populations for our study were those international travelers departing from the Hong Kong International Airport. Data were gathered, over a 9-day period in August 1996, from travelers in the departure hall of the Hong Kong International Airport by a self-administered questionnaire. A traveler is dened as any individual who is a temporary visitor, possessing a xed place of abode, traveling in the expectation of business or pleasure, staying overnight at a place other than his or her own, and involving an exchange of money (Ananth et al., 1992). Using a systematic sampling approach, every 15th traveler passing through the airports security checkpoint was approached for interview. With a daily sample size of 60 respondents, a total of 540 questionnaires were collected for this study. Of these 540 questionnaires, 402 were found usable, representing a 74.4 percent response rate.

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3.3. Data analysis A descriptive statistical method, such as distribution analysis, was used to analyze travelers demographic and traveling characteristics. Principal component analysis with varimax rotation was employed in the exploratory factor analysis to extract from the 33 hotel attributes into a set of simplied composite hotel factors that could be used to describe the original construct for the analysis. The factor analysis was used in the analysis because it can provide a better understanding of the underlying structure of the data on the one hand, and it also could subsequently provide a simplied regression procedures for further analysis (Pitt and Jeantrout, 1994). Factors were considered signicant and retained only if they had an eigenvalue equal to or greater than 1, and variable with factor loading equals to or greater than 0.50 (Hair et al., 1995). The sole purpose of the regression analysis adopted here is to examine the relative importance of the orthogonal hotel factors in relation to the travelers overall satisfaction levels with their hotel stays in Hong Kong and their likelihood of returning to the same hotel in subsequent trips. The two dependent variables, travelers overall satisfaction levels with hotel stay and the likelihood of repeat patronage, were regressed separately against the hotel factors derived from the factor analysis. The standardized factor scores created for the orthogonal hotel factors were used as independent variables in explaining travelers overall satisfaction levels towards hotel stay and their likelihood of repeat patronage. The factors with various degree of signicance in the regression analysis were then ranked by the beta coecients in order of importance. The two dependent variables, travelers overall satisfaction level with the hotels and the likelihood of repeat patronage, are measured on a seven-point Likert scale and are used as surrogate indicators of the travelers overall evaluation of the hotel stay experience (Table 1).

4. Results 4.1. Demographic and traveling characteristics of the respondents The majority of the respondents interviewed were male (64.9 percent) and the rest were female (35.1 percent). More than 80 percent of the respondents N 330 were aged between 21 and 50, and only 3.5 percent and 14.4 percent were aged under 21 and over 50, respectively. The country of residence is distributed with 19.7 percent European travelers, followed closely by mainland China (16.2 percent), South East Asia (14.7 percent), Taiwan (13.9 percent), North America (11.4 percent), and Australia (8.0 percent). Nearly 25 percent of the respondents had an annual income of less than US$10,000, 37.1 percent had an annual income between US$10,001 and US$50,000, 26.2 percent had an annual income between US$50,001 and US$90,000, and 12.9 percent had an annual income over US$90,001. With regard to the traveling characteristics, nearly 46 percent of the respondents had stayed at Medium-Tari hotels, 42 percent at High-Tari B hotels and 12.2

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Table 1 Demographic and traveling characteristics of travelers N Sex Male Female 261 141 % 64.9 35.1 Type of hotel stayed High-Tari A (5-Star) High-Tari B (4-Star) Medium-Tari (3-Star) Purpose of visit Business/meetings Visit friends/relatives Vacation En route Others N 49 169 184 % 12.2 42.0 45.8

Age 20 or below 2130 3140 4150 5160 61 or above Country of residence China Taiwan Japan South East Asia North America West Europe Australia/New Zealand Others

14 95 121 114 45 13

3.5 23.6 30.1 28.4 11.2 3.2

170 17 173 37 5

42.3 4.2 43.0 9.2 1.2

65 56 42 59 46 79 32 23

16.2 13.9 10.4 14.7 11.4 19.7 8.0 5.7

Annual income 4US$10,000 US$10,001$20,000 US$20,001$30,000 US$30,001$40,000 US$40,001$50,000 US$50,001$60,000 US$60,001$70,000 US$70,001$80,000 US$80,001$90,000 5US$90,001

96 26 48 41 34 27 30 24 24 52

23.9 6.5 11.9 10.2 8.5 6.7 7.5 6.0 6.0 12.9

percent at High-Tari A hotels. Almost all respondents came to Hong Kong for vacation (43 percent) or business/meetings (42.3 percent) purposes. Only 9.2 percent and 4.2 percent respondents interviewed were in transit or visiting friends/relatives, respectively. 4.2. Hotel factors The perceived importance of the 33 hotel attributes was factor-analyzed, using principal component analysis with orthogonal varimax rotation, to identify the underlying dimensions, or hotel factors. The exploratory factor analysis had produced a seven-factor solution, which captured 29 hotel attributes and appeared to explain 67.2 percent of the variance in the data. It produced a clear factor structure with relatively higher loading on the appropriate factors. The higher loading signal the correlation of the variables with the factors on which they were loaded. Table 2 shows the results of the factor analysis with (1) the factor names, (2) the retained items, (3) the factor loading, (4) the communalities, (5) the eigenvalues, (6) the variance and the cumulative variance explained by the factor solution, and (7) the Cronbachs a. The seven factors were: Sta Service Quality}F1, Room

T.Y. Choi, R. Chu / Hospitality Management 20 (2001) 277297 Table 2 Factor analysis results with varimax rotation of perceptions of hotel attribute scale Item statement n 29 Factor loading F1 Factor-1: Sta Service Quality Sta are polite and friendly Sta are helpful Sta understand your requests Sta provide ecient service Check-in/check out are ecient Sta have multi-lingual skills Sta have neat appearance Factor-2: Room Quality Bed/mattress/pillow are comfortable In-room temperature control is of high quality Room is clean Room is quiet Factor-3: General Amenities Valet/laundry service is ecient Room service is ecient Food & beverage facilities are of great variety Wake-up call is reliable Information desk is available Food & beverages are of high quality Mini-bar is available Factor-4: Business Services Business-related meeting rooms are available Business-related facilities are available Secretarial service is available Factor-5: Value Hotel food & beverages are value for money Room is value for money Hotel is part of a reputable chain Hotel provides comfortable ambiance Factor-6: Security Security personnel are responsible Loud re alarms are reliable Safe box is available Factor-7: IDD Facilities International direct dial is available Total scale reliability (a) Eigenvalue Variance (%) 0.94 13.1 39.7 2.4 7.3 1.7 5.2 1.6 4.8 1.3 3.9 1.1 3.3 1.0 3.0 0.78 0.77 0.73 0.63 0.61 0.58 0.55 F2 F3 F4 F5 F6 F7 0.77 0.81 0.79 0.76 0.68 0.80 0.67

285

Communality

0.75 0.74 0.68 0.63

0.69 0.64 0.65 0.53

0.72 0.66 0.57 0.56 0.54 0.54 0.54

0.68 0.66 0.73 0.46 0.54 0.68 0.67

0.86 0.83 0.82

0.84 0.79 0.79

0.76 0.75 0.59 0.58 0.72 0.71 0.64

0.73 0.77 0.62 0.67 0.72 0.68 0.54

0.78 0.73

(continued overleaf)

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Item statement n 29

Factor loading F1 F2 F3 F4 F5 F6 F7

Communality

Cumulative variance (%) Cronbachs a Number of items (total =29)

39.7 47.0 52.2 57.0 60.9 64.2 67.2 0.93 0.77 0.87 0.90 0.80 0.71 / 7 4 7 3 4 3 1

Qualities}F2, General Amenities}F3, Business Services}F4, Value}F5, Security}F6, and IDD Facilities}F7. Table 2 presents the results of the factor loading resulting from our factor analysis exercise. Following the last paragraphs discussion and justication, the analysis identied seven hotel factors with which the hotel attributes were associated. Except Factor-7 (IDD Facilities), which contained only one attribute, each of the other six factors contained three or more than three attributes. Table 2 describes the statistical results of the attributes associated with their own factors, and details their respective statistical signicance, i.e., the eigenvalue, variance, cumulative variance, and Cronbachs a. From the statistical point of view, our analysis is considered reliable and internally consistent as the a coecients, except Factor-7, had values of between 0.71 and 0.93. An a coecient of 0.50 is considered the minimum value for accepting reliability and internal consistency of a factor (Nunnally, 1967). 4.3. Correlation of the travelers perceptions of the 29 hotel attributes with their overall satisfaction levels and likelihood of returning Convergent validity was measured to assess the correlation of the mean ratings between the travelers perceptions, computed from the 29 hotel attributes, and the overall satisfaction level and their likelihood of returning to the same hotel, respectively. The convergent validity between the mean travelers perception score of the 29 hotel attributes and their mean satisfaction score was 0.71 (Pearson Correlation Coecient, signicant at P40:001), whereas the likelihood of returning was 0.61 (Pearson Correlation Coecient, signicant at P40:001). The results indicate that the two correlation coecients between travelers perceptions of the 29 hotel attributes and the overall satisfaction levels are fairly, as well as their perceptions of the hotel attributes with their likelihood of returning, were highly and positively correlated. The high correlation between the two measures indicates that convergent validity exists (Pitt et al., 1995). Therefore, the adoption of regression analysis on the 29 hotel attributes (independent variable) and the overall satisfaction level and likelihood of returning (dependent variables) was found appropriate. 4.4. Determinants of travelers overall satisfaction levels Having identied the seven factor-loading, we performed the multiple regression analysis to investigate whether and to what extent the independent variables (seven

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hotel factors) exert signicant inuence on the dependent variables (travelers overall satisfaction levels with hotel stays and their likelihood of returning to the same hotels). To investigate the relative impact of the hotel factors in inuencing travelers overall satisfaction levels, the seven orthogonal factors were used in a multiple regression analysis. Table 3 reports the results of the regression analysis. As shown by the coecient of determination R2 0:5617, the seven hotel factors gave more than an acceptable result in predicting the variance of the travelers overall satisfaction levels with hotels in Hong Kong; an R2 of between 0.50 and 0.60 is considered acceptable (Lewis, 1985). Moreover, the analysis also showed that travelers had positive and high overall satisfaction levels with the seven hotel factors as shown by the multiple correlation coecient (R) of 0.7495. The F -ratio, which has a value of 51.99619, suggests that the regression model we have adopted could have not occurred by chance. Each of the beta coecients (b1 b7 ) explained the relative importance of the seven hotel factors (independent variables) in contributing to the variance in the travelers overall satisfaction levels (dependent variable). The results revealed that all the seven factors remained signicant in the equation with a dierent value of the beta coecients, thus contributing dierent weights to the variance of travelers overall satisfaction levels. Of the seven hotel factors, Factor 1 (sta service quality, b1 0:4226) carried the heaviest weight in explaining travelers overall satisfaction,

Table 3 Regression results of travelers overall satisfaction levels based on factor scores Dependent variable Independent variables Goodness-of-t Multiple R 0:7495 R2=0.5617 Adjusted R2=0.5509 Standard error =0.9996 F ratio=51.99619 Signicance F=0.0000 Variable in the equation Independent variable Sta Service Quality (Factor 1) Room Qualities (Factor 2) Value (Factor 5) General Amenities (Factor 3) IDD Facilities (Factor 7) Business Services (Factor 4) Security (Factor 6) (Constant)
a b

Travelers overall satisfaction levels with hotel stay Seven orthogonal factors representing the components of perceived quality of services and facilities.

R2 explained 0.1786 0.1615 0.1053 0.0716 0.238 0.0133 0.0076

Beta, b 0.4226a 0.4019a 0.3245a 0.2675a 0.1543a 0.1152a 0.0873b

P40:01. P40:05.

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followed by Factor 2 (room qualities, b2 0:4015), Factor 5 (value, b5 0:3245), Factor 3 (general amenities, b3 0:2675), Factor 7 (IDD facilities, b7 0:1543), Factor 4 (business services, b4 0:1152) and Factor 6 (security, b6 0:0873).

4.5. Determinants of travelers likelihood of repeat patronage Following the same analysis as mentioned in the last section, we used the same regression model to investigate whether the seven hotel factors (independent variables) constituted a signicant inuence on the likelihood of a traveler returning to the same hotel in subsequent trips (dependent variable). Table 4 shows the results of the regression analysis in relation to travelers likelihood of repeat patronage. The regression results produced a multiple correlation coecient, R, 0.6127 suggesting that there was a high possibility of travelers returning to the same hotel in a subsequent trip. Second, the coecient of determination was 0.3754, suggesting that approximately 37.54 percent of the variation of intention to return was explained by the seven hotel factors. Lastly, the

Table 4 Regression results of travelers likelihood of returning based on factor scoresb Dependent variable Independent variables Goodness-of-t Multiple R=0.6127 R2=0.3755 Adjusted R2=0.3623 Standard error=1.4912 F ratio=28.54858 Signicance F=0.0000 Variable in the equation Independent Variable Sta Service Quality (Factor 1) Room Qualities (Factor 2) Value (Factor 5) Business Services (Factor 4) General Amenities (Factor 3) IDD Facilities (Factor 7) (Constant) Variable not in the equation Independent variable Security (Factor 6)
a b

Travelers likelihood of returning to the same hotel in next trip Seven orthogonal factors representing the components of perceived quality of services and facilities.

R2 explained 0.1172 0.0847 0.0684 0.533 0.352 0.167

Beta, b 0.3423a 0.2911a 0.2615a 0.2310a 0.1875a 0.1291a

Beta, b 0.0856

P40:01. P40:05.

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fairly high signicant F-ratio (28.54858), indicating that the results of the regression model could hardly have occurred by chance. As far as the relative importance among the seven hotel factors was concerned, Factor 1 (sta service quality, b1 0:3423) carried the heaviest weight for the travelers, followed by Factor 2 (room qualities, b2 0:2911), Factor 5 (value, b5 0:2615), Factor 4 (business services, b4 0:2310), Factor 3 (general amenities, b3 0:1875) and Factor 7 (IDD facilities, b7 0:1291). Factor 6, Security, however, appeared not to be statistically signicant in aecting the travelers likelihood of returning to the same hotel in a subsequent trip. The following section provides more discussions on each of the factors in our analysis.

5. Result discussions As hotel businesses are long-term investments, those hotels that can attract, maintain, satisfy and retain customers are more likely to survive. It is therefore essential for hotel managers to understand the relationship between travelers levels of satisfaction towards services and facilities oered by the hotels they had stayed with, and their intentions to repurchase. One of the ndings in this study shows that travelers overall satisfaction levels and their likelihood of returning are highly and positively correlated (Pearson correlation coecient=0.78, P value 40.001). Our ndings support the notion that customer satisfaction has a strong and consistent causal relationship with repurchase intention (Cronin and Taylor, 1992), brand loyalty (Sirgy, 1996) and word-of-mouth advertising (Fornell, 1992; Halstead and Page, 1992). Customer satisfaction acts as a reinforcement that leads to the prolonged maintenance of brand attitudes and intentions to use the brand again (Cronin and Taylor, 1992). The ndings reported here showed the relative impacts of the derived seven hotel factors in contributing travelers overall satisfaction levels and their likelihood of returning. The analysis provides hoteliers with valuable marketing and managerial clues. The regression results indicated that, from an empirical perspective, Sta Service Quality, Room Qualities, and Value, appeared to be the top three hotel factors that determined travelers overall satisfaction levels and their likelihood of returning to the same hotel as well. The following section provides some observations about the determinant hotel factors in relation to both travelers satisfaction levels and their likelihood of returning to the same hotels in their subsequent trips. 5.1. Sta service quality The nding clearly demonstrates that the service encounter or customeremployee interaction is a major determinant aecting travelers perceptions in relation to service quality, resulting in their overall satisfaction/dissatisfaction with hotels in Hong Kong, and their likelihood of returning to the same hotels. The factor appears to relate to the aspects of customeremployee interaction such as: eciency in

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check-in/out, helpfulness of sta , politeness/friendliness of sta , neat appearance of sta , eciency of sta , multi-lingual skills of sta and understandability of sta . Various research studies show that quality of service is considered to be one of the top priorities in evaluating service quality (Parasuraman et al., 1985; Cadotte and Turgeon, 1988; Knutson, 1988; Oberoi and Hales, 1990; Barsky and Labagh, 1992). Other studies also show that service quality is likely to lead to customer satisfaction and purchase intention. Bitner (1990) mentions that satisfaction may reinforce the quality perceptions, but only indirectly. She believes that quality perception is hypothesized as a dimension on which satisfaction is based, and that satisfaction is one potential inuence on future quality perception. Teas (1993) also reports that a strong relationship between perceived service quality and satisfaction, and concludes that the two concepts have the same meaning. Cronin and Taylor (1992) suggest that service quality is likely to have a signicant eect on purchase intention, but they also reported that customer satisfaction has a stronger and more consistent causal relationship with purchase intention than does service quality. From a managerial perspective, if the determinant factors that have a major impact on travelers overall satisfaction levels are identied, hotel managers should then address the particular resources related to these factors. As Sta Service Quality is the most inuential factor in determining travelers overall satisfaction with hotels in Hong Kong, hoteliers should therefore devote more eort to human resources training. For instance, in-house training programs could be arranged to improve employee courtesy, helpfulness, understandability, language skills, appearance, and check-in/out eciency. Furthermore, hoteliers should also ensure that all employees are required to become involved in setting quality standards, and employees should realize that maintaining service quality is part of their jobs (LeBlanc and Nguyen, 1996). 5.2. Room qualities The factor, Room Qualities, includes cleanliness of room, comfort of bed/ mattress/pillow, quality of in-room temperature control and quietness of room. Research studies report that room qualities such as cleanliness, quietness and facilities oered, are important considerations for travelers in lodging selection (Knutson, 1988; Barsky and Labagh, 1992; McCleary and Weaver, 1992; Gilbert and Morris, 1995; Heung et al., 1996). However, Lewis and Nightingale (1991) argue that while lack of cleanliness is a prime reason diverting travelers from a hotel, exceptional cleanliness does not really attract them. Ananth et al. (1992) also nd that room amenities such as in-room temperature-control mechanisms, soundproof rooms and rm mattresses are less important to travelers. Additional resources should, therefore, be directed to improving the quality of rooms including room setup, cleanliness, quietness, and room temperature control. In this regard, hoteliers need to ensure that their hotels reect their positioning statements well, and they should place emphasis on environmental cues when designing promotional activities. This will help them to attract new customers and gain market share (LeBlanc and Nguyen, 1996).

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5.3. Value The factor, Value, which is associated with the travelers perceptions about the value for money, has four items: room value for money, hotel food & beverage value for money, comfortable ambiance of the hotel and hotel being part of reputable chain. Customers are now becoming more practical and taking a cautious approach to discretionary spending (Sellers, 1991). They are cutting back and looking for ways to buy more for less, and are becoming more demanding in the purchase process. Power (1991) mentions that the marketing watchword for the 1990s is value as customers are demanding the right combination of product quality, fair prices, and good services. For example, Ananth et al. (1992) nd that leisure travelers express more concern with regard to a hotels reputation and name familiarity. In addition, since the hotel industry is highly competitive and homogenous in terms of services and facilities, the availability of alternatives to the travelers can be regarded as important attributes in a customers future purchase behavior (Knutson, 1988; Burton, 1990). As Hong Kong has been a place of high accessibility, hoteliers should pay more attention to enhance the value of their oerings to achieve a competitive advantage. A positive image is one tactic to achieve a competitive advantage (Porter, 1980) and a corporate image is an important determinant of service quality (Gronroos, 1982). 5.4. General amenities, business services and IDD Facilities The other three hotel factors, which exerted less signicance in inuencing travelers overall satisfaction levels and their likelihood of returning, are General Amenities, Business Services and IDD Facilities. The factor, General Amenities, includes the general services and facilities of hotels oered to travelers. They are availability of mini bar, variety of food and beverage facilities, quality of hotel food and beverage, reliability of wake-up call, eciency of valet/laundry service, eciency of room service and availability of information desk. The explanation is that many travelers may not consume or nd it valuable to have their meals in their hotels, hence pulling down the overall perception scores on General Amenities. Research studies rarely cite hotel-catering facilities as an important factor for lodging selection. Instead, Ananth et al. (1992) mention that hotel catering facilities appear to be one of the least important items in travelers hotel choice decisions. Lewis and Chambers (1989) also argue that a hotels catering facilities are a nice extra, but are not central factors to hotel choice. They believe that there are often numerous alternative dining choices convenient to the hotel location. The 1997 annual report of the Hong Kong Tourist Association (HKTA) reveals that travelers spent almost 30 percent of their total receipts on meals out (HKTA, 1998). Hong Kong, renowned as a Food Paradise, has long attracted travelers to spend a considerable sum on dining out. Business Services appears to be applicable only to business travelers. This factor consists of three business-related attributes, namely, availability of secretarial service, availability of business-related meeting rooms and availability of

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business-related facilities. Review of relevant literature, however, indicates that the provision of business services and facilities is not a prime factor for hotel selection, regardless of whether or not travelers are business-type or leisure-type travelers. Instead, cleanliness of room and hotel, location, room rates and employee attitude are rated as the important hotel attributes by both business and leisure travelers (Lewis, 1985; Knutson, 1988; McCleary and Weaver , 1991). IDD Facilities is arguable because it is a single-item factor. It is questionable to ask whether a single item can represent the whole factor. However, some past studies have included single-item factor (Yau and Chan, 1990; Oppermann, 1996). This factor reects that travelers, regardless of whether or not they are business-type or leisure-type, perceive the communication networks provided by hotels in Hong Kong to be eective and ecient services. As Hong Kong is an advanced nancial and business center with excellent communication facilities, IDD services should be provided by hotels in Hong Kong, as expected by most travelers.

5.5. Security The factor, Security, found to have little importance in inuencing travelers overall satisfaction levels and have no impact on travelers likelihood of repeat patronage, is composed of three items: responsibility of security personnel, reliability of loud re alarms and availability of safe box. Guest security in hotels includes those measures required to maintain a sense of well being, to protect life and property, and to minimize the risk of disasters or crime. For most travelers, safety and security can be regarded as the basis of a trip, including the airline, destination and accommodation. Our study did not suggest that the presence of this factor would lead to customer satisfaction. However, it is very likely that the absence of it may cause customer dissatisfaction, thus reducing the possibility of repeat patronage and spreading unfavorable word-of-mouth. Hong Kong is a safe place to travel, as denoted by a HKTAs report on visitor and tourism study. The ndings addressed that ease and safe travel is what travelers actually experienced in Hong Kong (HKTA, 1995). Therefore, travelers are likely to place emphasis on other aspects such as service quality, room quality and value for money, which may directly inuence their overall satisfaction levels and likelihood of returning to the same hotel instead. Most of the hotels in Hong Kong are equipped with sophisticated safety and security system, including electronic key cards, safe deposits, smoke detectors, re exits, 24-h security personnel, etc. Marshall (1993) mentions that safety and security system may dierentiate the property system from its competitors, hence becoming a winning device for a hotel to gain travelers condence and trust. It is important to note that even some of the hotel factors are less signicant in explaining travelers overall satisfaction levels and their likelihood of returning, hoteliers should still maintain high standards in relation to these factors in order to meet the basic needs of travelers. Each traveler has some basic levels of expectations regarding these factors, but if the travelers expectations are not met or exceeded, his

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or her perception about service quality and satisfaction could be aected (Oliver, 1981; LeBlanc, 1992).

6. Conclusion This study has identied the seven hotel factors, which are deemed important to travelers. The seven hotel factors are: Sta Service Quality, Room Qualities, General Amenities, Business Services, Value, Security and IDD Facilities. Out of these hotel factors, Sta Service Quality, Room Qualities and Value are considered to be the inuential factors in determining travelers overall satisfaction levels and their likelihood of returning to the same hotels. Our ndings are considered useful to the hotel industry as they provide a clear indication on how to improve their service provisions and delivery channels in the Hong Kong hotel industry. This study provides useful and eective ways for hotel managers to identify the potential problems that are likely to occur, and to understand why. Once the hotel attributes in relation to customers requirements are clearly identied and understood, hotel managers are more likely to be able to anticipate and cater for their customers desires and needs, rather than merely reacting to their dissatisfaction (Oberoi and Hales, 1990). Hong Kong hotels are competing ercely for a larger and more stable market share, the marketing focus for hoteliers is to increase the number of repeat customers and to prolong their length of stays by meeting their needs more eectively (Heung et al., 1996). A better understanding of the phenomenon of repeat purchase would help hoteliers to develop customer loyalty for their products and services. As Sta Service Quality has been identied as the most inuential component in determining customers overall satisfaction levels and their likelihood of returning, it appears that hotel customers nowadays are not only looking for basic services and facilities provided by a hotel, but also are expecting a high standard of personal service. Hoteliers should ensure the quality of hotel services by constantly reviewing their customers needs, and by strengthening customer service training programs for their employees. Internal marketing is also crucial to the quality of hotel services. That is, treating employees as internal customers would enhance the employees satisfaction, which is fundamental to the provision of good service to the hotel customers (Heung et al., 1996). Resources should also be spent on promoting the quality of room services as well as value for money. For example, room features (e.g., qualities of pillows, mattresses and sheets, in-room ventilation, room and bath furnishings) should be addressed in the promotional messages so as to make these features tangible and appeal to potential travelers. Appealing messages should also be addressed to emphasize special promotional packages such as a hotels familiarity of a reputable chain, convenience to business centers, shopping malls and tourist attractions. Other hotel factors such as General Amenities, Business Services, IDD Facilities and Security should not be ignored. Although our study nds that these hotel factors are found to be less important in inuencing travelers overall satisfaction levels and their likelihood of returning, hoteliers should maintain the

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standards of these services and facilities to meet the basic needs of the travelers. Hoteliers should be aware that even though these factors are not the central factors leading to customer satisfaction and repeat patronage, the absence or failure of these factors to meet travelers desires and expectations could result in customers dissatisfaction. As Pizam (1994) puts it: Having more of it will not satisfy anyone, but when it breaks down, suddenly everyone becomes dissatised. On the other hand, customer satisfaction in relation to anyone or a combination of the hotel factors (attributes) is likely to result in a favorable image for the hotel enterprise. And more importantly, a good image can mean winning business from the competition, and improve market performance (Park et al., 1986).

7. Limitations of the study Several limitations concerning this study need to be addressed. First, as the research was targeted at the Hong Kong hotel industry, this study did not investigate the impacts on the type of hotels (High-Tari A, High-Tari B and Medium-Tari hotels) of travelers in their hotel stays, their overall satisfaction levels and the likelihood of returning. Therefore, bias may exist due to the fact that travelers could have dierent perceptions towards the dierent categories of hotels. Second, the hotel attributes used in this study were limited to 33 identied attributes. There could be some other relevant attributes that may be perceived as important by travelers, but were unintentionally excluded from the instrument. For instance, the Security factor obtained from the factor analysis consisted of only three attributes in our study: Security personnel are responsible, loud re alarms are reliable and safe box is available. The mere fact is that these three attributes fell into a single factor that might not have made this factor representative of the dimension of security and safety. Other possible attributes, which we have not included, may also be relevant and could be associated with security and safety. The possible attributes are: electronic key cards, smoke detectors, re exits and all other measures required to maintain a sense of well-being, to protect life and property, and to minimize the risk of disasters or crime (Atkinson, 1988; HKTA, 1995; Marshall, 1993).

8. Uncited Reference McCleary et al., 1994.

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Tat Y. Choi is currently a teaching sta member of the Hong Kong Polytechnic University and Director of Chois International Ltd. Choi received his Ph.D. in 1995 from UCD, the National University of Ireland. Raymond Chu was previously a researcher with the Department of Hotel and Tourism Management at the Hong Kong Polytechnic University; and is now associated with the research and marketing department of the Cathay Pacic Airways.