Service Quality and Customer Retention in Hotel Industry in Lira City
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Date
2021
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Publisher
Lira University
Abstract
The hotel business is rapidly developing due to growing demands for such services as well as
the growing opportunities for travel. The aim of this article was to assess the effect of the
quality of hotel services on the retention of customers. This paper applied the SERVQUAL
model for the purpose of examining the effects of the dimensions of service quality on customer
retention in the hotel industry in Lira City and to investigate how the factors of reliability,
Responsiveness and Tangibility among the five dimensions affects customer retention in
hotels. Primary data was collected from the hotel customers using a 5-Likert type scale
questionnaire. Demographics data was analyzed by descriptive statistics while the effect of
service quality on customer retention was analyzed by using regression model. There were
significant effects of some Servqual dimensions constructs of (reliability, responsiveness, and
tangibility) and indicators of customer retention (customer trust, Word of Mouth, switching
barriers). Constructs of Reliability RI =Services promised was significant at 1% level, R2=
Service performed right first time was significant at 1% level with the p-values of 0.0050 and
0.0013 respectively, for responsiveness as a service quality was not significant but some
individual constructs of P2, P3 and P4 were significant at 1%, 5% and 10% respectively. For
tangibility, only T1 and T4 turned to be significant. T4 is significant at 1% level with P-Value
of 0.0055 and T1 is significant at 5% level with the p-value of 0.0163. The study thus
demonstrated need for a continuous operational research and quick improvements by the
proprietors of hotel industries given the stiff competitions and the dynamism of human
conditions. It unfolded the fact that needs and wants of humanity are complex but require a
resilient approach of adaptation and the forecasts for a better future of the business. Any laxity
on supervision or acquisition of the appropriate facilities might hit a big blow on the hotel
business.
Description
Keywords
Service, Quality, Customer Retention
Citation
Ayo, H., Kabunga, A. and Obote D. (2021). Service Quality and Customer Retention in Hotel Industry in Lira City