FACTORS AFFECTING CUSTOMER SATISFACTION: IN CASE OF …
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FACTORS AFFECTING CUSTOMER SATISFACTION: IN CASE OF DEBRE BERHAN HOTELS, ETHIOPIA BY MEKONNEN DIBU GEBREMARIAM DEPARTMENT OF MANAGEMENT MBA PROGRAM COLLAGE OF BUSINESS AND ECONOMICES DEBRE BERHAN UNIVERSITY JUNE, 2019 DEBRE BERHAN, ETHIOPIA
Transcript of FACTORS AFFECTING CUSTOMER SATISFACTION: IN CASE OF …
FACTORS AFFECTING CUSTOMER SATISFACTION: IN CASE OF
DEBRE BERHAN HOTELS, ETHIOPIA
BY
MEKONNEN DIBU GEBREMARIAM
DEPARTMENT OF MANAGEMENT MBA PROGRAM
COLLAGE OF BUSINESS AND ECONOMICES
DEBRE BERHAN UNIVERSITY
JUNE, 2019
DEBRE BERHAN, ETHIOPIA
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APPROVAL OF THE THESIS
As members of Board examiners of the final MBA, Thesis open defense examination, we certify
that we have read and evaluated the thesis prepared by Mekonnen Dibu entitled “Factors
affecting customer satisfaction: in case of Debre Berhan hotels of Ethiopia” and examined
the candidate. We recommend that thesis be accepted as fulfilling the thesis requirement for the
degree of masters of business administration.
Board of Examiners
External Examiner ___________ signature ________________Date__________________
Internal Examiner _____________signature ________________Date__________________
Chairperson _________________ signature ________________Date___________________
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DECLARATION
I, the undersigned, declare that this thesis is my own original work and has not
been presented in any other university. All sources of materials used for this thesis
have been duly acknowledged.
Name: Mekonnen Dibu
Signature: ---------------------
Date: --------------------
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As Thesis Research advisor, I hereby certify that I have read and evaluated this thesis prepared,
under my guidance, by Mekonnen Dibu, entitled “FACTORS AFFECTING CUSTOMERS
SATISFACTION”: In case of Debre Brehan hotels of Ethiopia”. I recommended that it be
submitted as fulfilling the thesis requirement for the degree of ‘masters of business
administration.
Shifera Bekele (PhD) __________________ _____________________
Name Signature Date
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ACKNOWLEDGMENTS
First of all, I would like to express my heartfelt and sincere gratitude to God and also my
Advisor to Shifera Bekele (Ph.D.,) who has giving his kindly guiding and insightful advice in the
undertaking of this research and helped me for the future to read more about how to do
research.
I would like to say thank you for managers and employees of Getva, Ethio- Bernos, and Hiwot
hotels for giving their time and facilitating the customers for this research purpose specially the
reception staffs.
In addition, I would like to say thank you for customers of Getva, Ethio- Bernos, and Hiwot
hotels for giving fruit full data and ideas related to this research.
Finally, I would like to express my deepest gratitude to my honorable families and friends to
Shibre, Sosina, Hiwot,Stota, Adis, Haile , and R.S, I would like to say thank you for your endless
moral and financial support for the success of this thesis.
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TABLE OF CONTENTS
ACKNOWLEDGMENTS ............................................................................................................. iv
LIST OF TABLES ....................................................................................................................... viii
ACKRONOMY .......................................................................................................................... x
ABSTRACTS .................................................................................................................................. xi
CHAPTER ONE ............................................................................................................................. 1
1. INTRODUCTION ...................................................................................................................... 1
1.1 Back ground of the study ...................................................................................................... 1
1.1.1 Hotel industry in European and Asian countries ............................................................... 1
1.1.2 Hotel industry in African countries’ .................................................................................. 2
1.1.3 Hotel industry in Ethiopia .................................................................................................. 2
1.2 Statement of the Problem ...................................................................................................... 4
1.3 Objective of the Study .......................................................................................................... 6
1.3.1 General Objective ............................................................................................................... 6
1.4 Basic Research Questions ..................................................................................................... 7
1.5 Hypotheses of Study ............................................................................................................. 7
1.6 Significance of the Study ...................................................................................................... 8
1.7 Delimitation of the study ...................................................................................................... 8
1.8 Organization of the Study ..................................................................................................... 9
CHAPTER TWO .......................................................................................................................... 10
2. REVIEW OF RELATED LITERATURE ................................................................................ 10
2.1Theoretical Review of Literature ......................................................................................... 10
2.1.1 Concepts of Customer Satisfaction .................................................................................. 10
2.1.2 Measuring Customer Satisfaction .................................................................................... 11
2.2. Factors that Cause for Customer Satisfaction in Hotel Industry ........................................ 12
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2.2.1 Service Quality and Measuring Service Quality .............................................................. 12
2.3. Prices and Customer Satisfaction in Hotel Industry ........................................................ 16
2.4. Corporate Image and Customer Satisfaction in hotel industry .......................................... 18
2.5 Operational Definitions of Key Terms................................................................................ 21
2.6. Performance Only Model ................................................................................................... 22
2.7 Empirical Literature Findings ............................................................................................. 25
2.8 Research Gaps ..................................................................................................................... 32
2.9 Conceptual Framework ....................................................................................................... 33
CHAPTER THREE ...................................................................................................................... 35
3. RESEARCH METHODOLOGY .......................................................................................... 35
3.1 Research Design and Approach .......................................................................................... 35
3.1.1 Research Approach .......................................................................................................... 35
3.2 Description of the Study Area ............................................................................................. 36
3.3 Population and Sampling Size Determination .................................................................... 37
3.3.1 Sampling Methodology and Procedure ............................................................................ 38
3.4 Data Type and Sources ....................................................................................................... 39
3.4.1. Types of data ................................................................................................................... 39
3.4.2. Source of Data ................................................................................................................. 39
3.5 Data Collection Instruments and Procedure ....................................................................... 40
3.5.1 Questionnaires .................................................................................................................. 40
3.5.2 Interview........................................................................................................................... 40
3.6 Method of Data Analysis and Interpretation ....................................................................... 41
3.7 Econometrics Model and Specification .............................................................................. 41
3.8 Variables Description .......................................................................................................... 41
3.8.1 Dependent and Independent Variables ............................................................................. 41
3.9 Validity and Reliability Test Results ................................................................................ 42
3.10 Pilot Testing of the Quantitative Questionnaire ................................................................ 43
3.11 Ethical Consideration ........................................................................................................ 44
CHAPTER FOUR ........................................................................................................................ 45
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4. DISCUSSION AND DATA ANALYSIS ................................................................................ 45
4.1 DESCRIPTIVE STATICS .................................................................................................. 45
4.2 Data processing and analysis .............................................................................................. 45
4.3 Descriptive Statistics for service quality dimensions, price, corporate image and
…..customer satisfaction........................................................................................................... 49
4.4 Correlation of service quality, price, corporate image and customer satisfaction .............. 49
4.5 Test of assumptions ............................................................................................................. 51
4.6 Regression and correlation service quality dimensions on customer satisfaction ............ 53
4.7 Regression over all perceived service quality dimensions on customer satisfaction .......... 57
4.8 Regression Analysis of Perceived price on Customer satisfaction ..................................... 63
4.9 Regression result of perceived corporate image on customer satisfaction ......................... 64
4.10. Regression of service quality, price and corporate image on customer ........................... 67
……….Satisfaction ................................................................................................................... 67
4.11 Qualitative analysis of the interview Questions from the hotel mangers ......................... 69
CHAPTER FIVE .......................................................................................................................... 73
5. SUMMARY, CONCLUSTION, AND POLICY IMPLICATION .......................................... 73
5.1 Summary of findings ........................................................................................................... 73
5.2 Conclusion .......................................................................................................................... 75
5.3 Policy implication of the study base on the findings .......................................................... 76
5.3.1 Policy Implications ......................................................................................................... 76
5.3.2 Managerial Implications and Recommendations ............................................................. 76
5.4 Limitation of the study and suggestions for further research .............................................. 78
REFERENCES ......................................................................................................................... 79
Annex- A Questionnaires in English ........................................................................................ 87
Annex- B Questionnaires in Amharic ....................................................................................... 93
Annex- C Interview Questions Guideline ................................................................................. 99
Annex- D Descriptive statistics and Test of Normality .......................................................... 100
Annex – E Figures of hotels .................................................................................................... 101
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LIST OF TABLES
Table 2.1 Measurement items for the variables and the literature based …………………23
Table 3. 1 Proportional of samples for each individual hotel Distributed……………… …38
Table 3.2 Variables Measurement ……………………………………………………… ...42
Table 4. 1 Response Rate……………………………………………………………… …45
Table 4. 2 Demographic profiles of the respondents……………………………………….46
Table 4. 3 Crosstab Monthly income in birr………………………………………………48
Table 4. 4 Mean score of descriptive Statistics for service quality dimensions, price, corporate
image and customer satisfaction……………………………………………………...48
Table 4.5 Correlation between services perceived quality dimensions and customer ….….50
Table 4.6 Correlations between service quality, price, and corporate image and with customer
satisfaction……………………………………………………………………………...……..51
Table 4.7 Regression of tangibility on customer satisfaction ………………………………...53
Table 4.8 Regression of responsiveness and customer satisfaction ………………………….54
Table 4. 9 Regression of reliability and customer satisfaction ……………………………….55
Table 4. 10 Regression of assurance and customer satisfaction ……………………………...56
Table 4.11 Regression of empathy on customer satisfaction ………………………………....57
Table 4. 12 Regression of overall Service quality on customer satisfaction ………………....58
Table 4. 13 Regression of perceived service quality dimensions on customer satisfaction.….59
Table 4. 14 Regression of price on Customer satisfaction…………………………….…. ….63
Table 4.15 Regression of corporate image on Customer satisfaction……………….….……...63
Table 4.16. Regression of service quality, price and corporate image on customer
Satisfaction………………………………………………………… …………………67
Table 4.17 Summary of Hypothesis Testing Results ……………………………………...….71
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LIST OF FIGURES
Figure 2.1 Conceptual framework of the factors affecting customer satisfaction……..………33
Figure 3.1 Map of the Study Area………………………………………………………………37
Figure 4.1 Five service quality dimensions .................................................................................. 62
Figure 4.2 Price and customer satisfaction ................................................................................... 64
Figure 4.3 Corporate image .......................................................................................................... 66
Figure 4.4 Service quality, corporate image, and price ................................................................ 68
Figure 4.5 Service quality, corporate image, and price Normal p-plot ........................................ 69
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ACKRONOMY
ANRS - Amhara National Regional State
DB - Debre Berhan
DBCH - Debre Berhan City Hotel
DBCA- Debre Berhan City Administration
DV- Dependants variable
IV- Independents variables
Mgt - Management
SNNPRS – South Nations, Nationalities Peoples Regional State
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ABSTRACTS
The basic purpose of this study was to examine factors that affect customer satisfaction by using
variables of perceived service quality, price and corporate image in hotel industry of Debre
Berhan. Mixed research approach was employed to obtain the primary data from the
respondents (hotel customers and managers) by administering structured and semi – structured
questionnaire. SERVPERF approach which was adapted and modified to fit hotels by desk
review and preliminary interview with hotel supervisors and managers of the hotels. Pilot study
was carried out in three hotels and from 38 respondents (customers) to test the initial reliability
and validity of the instrument. To collect primary data, questionnaire was distributed to 385
respondents for three hotels by using convenience sampling method and 351 data were collected
with a response rate of 91% and used for the purpose of analysis. Descriptive statistics such as
mean and standard deviation and inferential statistics such as correlation and regression were
used to examined, analyzed and summarized the factors affecting customers’ satisfaction with
the support of SPSS version 24.0. The finding of this study were revealed that three different
independent variables (service quality, price and corporate image) variables significantly and
positively affect customers’ satisfaction at p value <0.005 levels and shows perceived service
quality has the highest significant and positive effects on customer satisfaction followed by price
and corporate image. From the service quality dimensions’ assurance has highest significant
and positive effects on customer satisfaction followed by responsiveness, reliability, tangibility
and empathy. Finally, it is recommended that to create customer satisfaction on the part of
customers, hotels need to provide better service, fair price and build corporate image.
Key words: Corporate image, Customer satisfaction, Price, Service quality, SERVPERF model,
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CHAPTER ONE
1. INTRODUCTION
1.1 Back ground of the study
As cited in Le Na (2009/2010) Sheela, (2007) hotel is the place where the tourist stops
being the traveler and become a guest and connected closely to the civilizations of
mankind. According to ESA (2014), hotel is a commercial establishment which provides
rooms in which people can stay, especially to travelers and sometimes to permanent
residents, and which provides food, lodging and other services for paying guests including
the general public.
According to Le Na, (2009/2010) the history of hotel has different views like it appeared
in the sixth century B.C when some couples provide large halls for travelers to drink and
others since early biblical times. The Greeks developed thermal baths in villages for rest
whereas the Romans built mansions to provide accommodation for the government
business. However, the real growth of modern hotel industry took place in the USA by the
opening of the city hotel in New York in the year 1794.
1.1.1 Hotel industry in European and Asian countries
As cited in Feven, e t al., (2016) in Vietnam, tourism business is a promising prospect to
the nation's development and nearly 7 million visitors visited in 2012. Even though hotel
service is recently regarded as one of core and the fastest growing industries in Vietnam
and Malaysia during the past decade, studies provided mixed results on the impacts of
different service quality dimensions on customer satisfaction in various regions including
Asian countries as to Association of Southeast Asian nations (2014). According to Yasir, e
t al., (2013) in Pakistan’s hotel industry, there is lack of studies which help them to
measure and improve service quality to gain better customer satisfaction, Muneeb and
Anika (2018) found that reception, food and beverage department, and price have
significant influence on the customer satisfaction. According to Devlina (2017) study 5
boutique hotels in Kolkata, West Bengal found that customer satisfaction mainly depends
on “reasonable and quality of food”, and “general requirements & Hospitality of the hotel”.
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1.1.2 Hotel industry in African countries’
According to Joleen(2016) high profile hotels in Rwanda face the problem of retaining
their customers due to the intense competition in the industry and there was a gap in
customer care, service providers couldn't care about their customers and this pushed the
government through the Rwandan Development Board (RDB) which is responsible of all
the involvement of the country’s development, to set up a customer care division to enable
workers in public and private sectors improve the quality of service they were offering to
their clients. They launched the customer care campaign “Na Yombi” (2012) in order to
sensitize service providers on the importance of delivering service with care. Customer care
in Rwanda hospitality industry still presents some challenges, failed to satisfy customers’
needs and which is similar in most of the cities in Ethiopia.
1.1.3 Hotel industry in Ethiopia
According to G/Egziabher, (2015) and Mitiku(2015) the expansion and demand in the
hotel industry in Ethiopia is linked to the growing number of both native and nonnative
tourists. The customers of hotels mostly originate from tourists worldwide and traveler
back to the 19th century when Menelik II was ruling; by instilling the idea of
modernization and bringing foreign technology and organizations. Etege Taitu Hotel which
was inaugurated in 1898 (E.C.) and Piazza was the first hotel in Ethiopia. According to
Feven, et al.,(2016) Ethiopia is endowed with the biggest amount of UNESCO World
Heritage Sites in Africa and which is dispersed throughout the country and strategically
regarded as an essential country in the horn of Africa and it is a place where most of the
international meetings, conventions and gatherings takes place, that gives it the advantage
of building up itself as a home for tourists and calls for hotels and will continue to grow in
the future because huge number of global companies have been establishing and expanding
their workforce in Ethiopia. Also Ethiopia is rated amongst the top 10 largest markets for
international hotel chain developments which creating a direct economic impact towards
countries through job for more than 8% Urban employment at the country level and 19.5%
in Amahara region (Ethiopia’s Tourism Sector: Strategic Paths to Competitiveness and Job
Creation Ministry of culture and tourism 2012) and the third leading country in which the
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hotels increased from 20 to 31 from 2017 to 2018 according to hotel chain development
pipelines in Africa 2018.
As Africa Business, (2015) over view in Ethiopia, hotel industry’s contribution to GDP was
4.2% in 2013 and it has rose by 4.5% in 2014 and this figure is predicted to rise by 5% in
2024. However, according to Kifle, (2012) and Carmen (2018) in Ethiopia, the quality of
service is the majority of the challenges to the hotels due to lack of trained manpower, very
limited accommodating capacity of international standards for leisure tourism, with
investment concentrated in main cities and business-type hotels and there is a great demand
gap between the demand and supply of international tourist standard hotel service. Also
pricing of hotel services depends considerably on the quality of service rendered and its
location as to (Profile on international tourist standard hotel 2006).
According to Mitiku, (2015), G/egziabher, (2015) and Shimekit, et al., (2016) Ethiopia
initially overlooked the hotel sector by not paying attention to the hospitality industry and
the hotels did not meet the standards those are expected in terms of service delivery, and
handling of customer and the employees throwing the food in front of the guest, insulting
,cheat the guests, chewing gum, pasting finger into the nose, touching hair and other bodies
, failure to keep their neatness while serving and poor quality of food , lack of complaint
handling, simply collecting money with no progress in service quality and mangers set
profits as primary and customer satisfaction is as secondary and have no idea about what
their customers want and how to find out. These have lead to customers complaining of
poor quality of service, loss of confidence and dissatisfaction. Similarly, according to
Debre Berhan city administration culture and tourism office 2010 E.C annual report, even
though the numbers of hotel customers increased in the city, the services of the hotels are
face many challenges and lack of customer satisfaction and it is a major problem from the
observation of the researcher in the past two years. So, what factors lead to high customer
satisfaction is the key question for hotel business and researchers.
Customer satisfaction affected by service quality, price and hotel image. From the factors,
according to Rust and Oliver, (1994) and Palmer (2001) Service quality has become as one
of the key driving forces for business sustainability and is vital for firms’ accomplishment
and a crucial source of distinctive competence and in sustaining competitive advantage in
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service industries. According to Farzad (1999) believe that superior and desirable food and
reasonable price of the meals offered positively affect customer satisfaction with the hotel
and/or destination area. According to Varki and Colgate (2001) price was the part that
required payment or sacrifice to obtain the products or services and purchase behavior of
customers depended on pricing factors. Also Anderson, & Fornell, (1994) price is a fatal
factor that directly impacted on consumer satisfaction, because whenever consumers
evaluate the value and purchases a product they think of the price whether it is cheap
enough or fit with the value of the product from that the customer will be satisfied or not
and concern of all firm and businessman.
According to Kumbhar, (2011) study shows corporate image has significant effects on
customer satisfaction and customers who satisfied with the brand name are going to
recommend that service to other people. According to Majid and Sahebeh (2016) Morghab
food industry in Boushehr (Iran) by structural equation modeling found corporate image
has a positive and meaningful impact on customer satisfaction.
So, understanding the factors that affect customers’ satisfaction in the hotels and improving
in continues manner is a key for the customers, the owner and for the society at large.
Therefore, the researcher examined the factors that affect customer satisfaction in Debre
Berhan city administration hotels.
1.2 Statement of the Problem
Hotel industry has become highly competitive and dynamic in global level, whereas
services delivery and satisfaction demanded by all peoples in all countries as consumer.
Enhancing customer satisfaction and investigating factors that affect customer satisfaction
in hotel industry, will help to avoid the problems, challenges of globalization and
competition. Even though factors affecting customer satisfaction can vary or similar with
relation to the variables services quality and other variables. According to Manhas &
Tukamushaba (2015) success of organization in hotel industry is deeply related with
customer satisfaction. However, according to culture and tourism office 2010 E.C annual
report and 2011 E.C semi-annual assessment and preliminary researcher interview and
observation, even though hotels perform and establish different facilities or system to
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satisfy their customers, the customers complain about the hotel services of DBCA, there
are lack of skilled/labour/, service quality’s and shortage of infrastructures, unfair price.
Due to this, the customer face satisfaction problem in Debre Berhan city the hotels.
Researchers were revealed that five service quality dimensions, empathy, responsiveness,
assurance, tangibility and reliability are factors which have effect on customer satisfaction
in different countries with different level of significance. According to Suzana and Sanja
(2013), tangibility and reliability are factors in Croatian hotels, whereas according to
Nquyen et al., (2015) in Vietnam hotels empathy, reliability, and responsiveness and
assurance are the major factors. According to Afroza et al (2014) tangibility,
responsiveness and assurance are significant factors for hotels in Bangladesh hotels.
According to Darini & khozaei (2016), Devlina e t al., (2017), Almohaimmeed (2017) and
Bader (2017), Muneeb (2018), price and service quality and price are more contributing
factor for the customer satisfaction. In Ethiopia, as to Feven et al., (2016), and Birhanu
(2017), revealed that assurance, tangibles, responsiveness, reliability and empathy had high
significant impact on customer satisfaction respectively.
According to Kim and Lee (2010), Rahman (2012), Eman e t al., (2013) Martínez &
Bosque, (2015), reveals that corporate image as organizations observation which is hold by
customers in their mind and enables the customers to perceive and evaluate the whole
operations of the organization and results a positive relationship between corporate image
and customer satisfaction.
From the above findings, researcher’s focused on service quality variable and appeared to
be different research results related to conceptualization, designed and services quality
dimensions and difficult to decide the factors accurately. On the other hand, customer
satisfaction is an attitudinal and hotel industry service was intangible, it changes with
different problems and times due to controllable and uncontrollable variables. So, it needs
periodical investigation about the factors that affect customer satisfaction. The above
studies were also conducted on the higher city, two and above star hotels and findings was
not be generalized to hotels in Debre Berhan. The above empirical related the corporate
image and price variables were more done in bank and a few on higher hotels and need to
be examined in medium level city hotels whether it works or not at Debre Berhan.
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Also there is limited known about the factors related to corporate image, prices and
customer satisfaction, inclusion of them with service quality will bring comprehensive
understanding. So, identifying factors affecting customer satisfaction continues to be one of
the most focusing areas of research and satisfying customers is challenging functions for
hotels business in marketing management in the 21st Century. So that this research,
examined the gaps in the service performances by stating the scope, methodology and
variables in Debre Berhan city to enhance the understanding and to identify the
performance of the hotel industry. Also currently, according to Debre Berhan culture and
tourism office report Debre Berhan city was became the destination of tourist because of
heritage, tourist site and investment of mega industries in the city.
As a result, from the above mentioned issues one can conclude there is remained basis to
carry out research and examine the factors to explain the effect of services quality, price,
and corporate image together on the customer satisfaction and this initiated the researcher
to make it the focal point for this study. Therefore, this study attempts to identify the
factors affecting customer satisfaction in the case of Debre Berhan city administration
hotels.
1.3 Objective of the Study
1.3.1 General Objective
The overall objective of the study is to examine the existing factors affecting customer
satisfaction prevailing in the selected hotel industry in Debre Berhan city administration.
1.3.2 Specific Objectives
The specific objectives of the study include:
To determine factors affecting customer satisfaction related to service quality, price and
corporate image in Debre Berhan City Administration.
To determine the relationship between perceived service quality, price, corporate image
and customer satisfaction of the hotels in Debre Berhan city administration.
To examine to what extent effects of perceived service quality, price and corporate image
affect customer satisfaction of the hotels in Debre Berhan city administration
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1.4 Basic Research Questions
In order to investigate the factors affecting customer satisfaction in hotel of Debre Berhan,
the study is designed to answer the following questions.
1. What is the effect of service quality, price and corporate image on customer?
satisfaction in hotel industry in Debre Berhan city from customers’ and hotel
managers’ point of view?
2. What is the relationship between perceived service quality, price, corporate image
and customer satisfaction of the hotels in Debre Berhan city administration?
3. What extent effects of perceived service quality, price and corporate image affect
customer satisfaction of the hotels, in Debre Berhan city administration?
1.5 Hypotheses of Study
After studying the various literatures on factors affecting customer satisfaction the
following hypotheses are developed.
: Service quality will have positive and significant effect on customer satisfaction
among hotels in DBCH.
: Tangibles will have positive relationship with the customer satisfaction among hotels
in DBCH.
: Reliability will have positive and significant effect on customer satisfaction among
hotels in DBCH
: Responsiveness will have positive and significant effect on customer satisfaction
among hotels in DBCH.
: Assurance will have positive and significant effect on customer satisfaction among
hotels in DBCH.
: Empathy will have positive and significant effect on customer satisfaction among
hotels in DBCH.
: Price will have positive and significant effect on customer satisfaction among hotels in
DBCH.
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: Corporate image will have positive and significant effect on customer satisfaction
among hotels in DBCH.
1.6 Significance of the Study
This study on factors affecting customer satisfaction in hotel industry is one important
aspect of development research. Thus, the importance of this research can be pointed out
from different beneficiary’s view:
The study will may assist or helpful to the management of the hotel in their policy
formulating and decision makers to give due emphasis to factors affecting customer
satisfaction and devise different mechanisms in order to scale up and continuously upgrade
customer satisfaction and to improve organizations performance. The study areas will use
as a guideline to address problems and improve their understanding in the factors affecting
customer satisfaction in hotel industry and other hotels which have similar problems can
also extrapolate its findings. So, having an idea about factors affecting customer
satisfaction hotel managers and owners which are the center of service quality make a
necessary adjustment in the delivery of hotel service which is eventually leads to
improvement is service quality and it provides solution for hotel industry service, price
problems and it may give an idea of where they are presently in terms of their performance
and what should do in the future.
Finally, it will serve as a reference for further researchers for those who have an interest in
relation to this area and it helps the researcher to acquire knowledge and skills and serve as
a spring board for other researchers who want to undertake studies in factors affecting
customer satisfaction in hotel industry in Debre Berhan city administration.
1.7 Delimitation of the study
The scope of the study is delimited to assess factors affecting customer satisfaction in hotel
industry to three hotels in Debre Berhan city which are fulfilled the standard of hotels.
Therefore, it cannot be considered as a representative of the whole hotels in Ethiopia rather
the generalization of study findings and conclusion drawn is limited to the select hotels
Getva, Ethio-Bernos and Hiwot hotels. The reason behind studying on the selected hotels is
that due to other hotels doesn’t full fill the criteria or the standard set by Amahara regional
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state culture and tourism bureau. Hence; the conclusion was reflecting the situation in
hotels in Debre Berhan city administration and major focus was given to these selected
factors and draw backs and challenges of the customer satisfaction.
1.8 Organization of the Study
The study was organized in five chapters. The first chapter introduces background,
statement the problem, objective and research question, significance, scope, limitation and
organization of the study.
The second chapter was included different reviews related literatures which consist of
theoretical back ground, important empirical findings and gaps presented to create depth
understanding towards the subject under study.
Chapter three is concerned with the methodological part that was applied in the study. The
analysis and discussions of major findings were indicated in the fourth chapter whereas;
conclusions and policy implication of the study were organized in chapter five. Lastly the
researcher attached the references and appendices sections.
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CHAPTER TWO
2. REVIEW OF RELATED LITERATURE
2.1Theoretical Review of Literature
2.1.1 Concepts of Customer Satisfaction
Customer satisfaction defined by different authors since the term have attention and key
strategy with them and every business. As cited in Athula (2014) (Handy, 1977;
Krippendorf, 1987; Engel, et al., 1990; Vavra, 1997; Cha, et al., 1995; Poon & Low, 2005
;), Customer satisfaction has been defined by researchers based on the interaction between
the customer’s pre-purchase expectations and the post-purchase evaluation of the products
and services that they have consumed. From definition of Customer satisfaction by authors,
the following are presented. According to Oliver, (1980) customer satisfaction is the
internal feelings of every individual which may be satisfaction or dissatisfaction resulting
from the assessment of services provided to an individual in context to customer’s
anticipation by an organization, and Rust and Oliver (1994) described that customer
satisfaction as a cognitive and effective reaction to a service incident.
Customer Satisfaction or dissatisfaction results from experiencing a service quality
encounter by comparing that encounter with what was expected. And Oliver, (1997), define
as means of the perception of a product in customer’s mind about your product where as
Spreng, et al., (1996) define that customer satisfaction is a basic concept of the marketing
which satisfies the needs and desires of consumers and Zeithamal and Bitner (1996)
customer satisfaction is the customers’ own perceptions about service quality. According to
Gundersen et al., (1996) Customer satisfaction is typically defined as a post consumption
evaluative judgment concerning a specific product or service.
According to Che-Ha &Hashim (2007) Customer satisfaction is defined as customers’
response to the perceived gap between prior expectations or experiences and actual
performance of products or services consumed and an affective state or feeling towards the
products or services. According to (Ho, 2009) customer satisfaction is conceptualized as an
attitude-like judgment or a pleasurable level of consumption related fulfillment resulting
from purchases or consumers’ interactions and show that consumers make the judgment
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based on the experiences attached to suppliers’ products or services, the sales processes,
and after-sale services. And also, customer satisfaction is viewed as personal experience
and mentality linked to personal expectation and service delivered. According to Salifu, et
al., (2010) also customer satisfaction described as the customers’ experiences associated
with the purchase and usage of a product or service.
According to Kotler, & Keller (2012) stated customer satisfaction creating satisfied and
loyal customers is a key concern of marketers and marking managers in now a days and it
will remain in the future, since customers’ satisfaction is both a goal and a marketing tool
for customer centered companies. Generally, customer satisfaction definition concerns
internal feelings of every individual the expectation and perceived values of performance
from product, service and other related.
2.1.2 Measuring Customer Satisfaction
Customer satisfaction the actual manifestation of the state and levels of satisfaction will
vary from person to person and product/service to product/service and it depends on
psychological and physical variables which correlate with satisfaction behaviors such as
return and recommend rate. According to David, (2010) the levels of satisfaction vary
depending on options and the customer may have other products against which the
customer can compare the company’s products. However, customer satisfaction almost
always reported at an aggregate level but measured at the individual level.
However, consumers receiving what appears to be the exact same service form a hotel may
evaluate the quality of the service differently some of may feel the service was good while
the others poor. Service quality is more difficult for the consumer to evaluate quality of a
good, and it is based on consumers’ perception of the outcome of the service and their
evaluation of the process by which the service was performed. So that, service quality
perceptions a comparison of what the consumer expected prior to the service and the
perceive level of service received. But evaluating the perceive level of service received is
one of the tool.
On the other hand, according to Singh (2006), customer satisfaction does have a positive
effect on an organization’s profitability and dissatisfied consumers can decide to
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discontinue purchasing the good or service, complain to a third party and for the company
and perhaps return the item, or engage in negative word-of-mouth communication.
According to Parasuraman, et al., (1988) and Gronoos, (1990); since quality of service and
customer satisfaction are critical factors for success of any business, measuring and
analyzing service quality and customers’ satisfaction is important for the business, society,
employees, and for academics.
2.2. Factors that Cause for Customer Satisfaction in Hotel Industry
2.2.1 Service Quality and Measuring Service Quality
According to Bitner and Hubbert (1994) proposed definition of service quality as “a
consumers’ overall impression of the relative inferiority/superiority of the hotel and its
facilities and services and also Bitner et al., (2004) described that accommodation service
quality as the responsiveness of the service personnel towards requests and complaints.
According to Zeithaml et al., (2006) service quality which is not like product quality which
is determined by its unique characteristics which are intangible, perishable, inseparable,
and heterogeneous. Moreover, according to Kotler (2012) p 356 a service is any act or
performance one party can offer to another that is essentially intangible its production may
or may not be tied to a physical product. Services can be defined as actions, procedures and
performance.
Services are products that are rendered but it is not correspondent to something which is
physical. According to Czepiel, (1990) Service quality is a customer perception of how
well a service meets or exceeds their expectations. According to Lam & Zhang, (1999);
Yen & Su, (2004), Geetika (2010), SamraShaham (2016) Customer requirements for
quality products and service and it is considered as a key factor for enhancing customer
satisfaction for other business and hotels in Antalya and Turkey. So that, according to Tam,
(2000), Poon & Low, (2005) Stringam et al., 2010; customer satisfaction could greatly
have affected by predicting customer post-purchase behavior, past experiences, expectation
and received online information. According to Hutchinson et al. (2009) when customers get
expected service quality, it leads to higher satisfaction. There is a close link between
service quality and overall customer satisfaction, which means, if the customers are
satisfied with the hotel services; they are more likely to return to the same hotel.
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There is difference between researchers over the antecedents of service quality dimensions
and satisfaction in while some believe service quality leads to satisfaction, others think
otherwise. The studies of many researchers suggest service quality leads to customer
satisfaction. According to Clemes (2008) revealed as service quality improves, the
probability of customer satisfaction increases. Quality was one of many dimensions on
which satisfaction was based and also one potential influence on future quality perceptions.
According to Mesay (2012) service quality considered as an antecedent of customer
satisfaction and to achieve a high level of customer satisfaction, service provider should
have delivered a high level of service quality. But, according to Gandolfo (2010) nowadays
one of the biggest challenges for managers in the hotel industry is to provide and sustain
customer satisfaction.
According to Lehtinen and Lehtinen (1982) defined, three dimensions of service quality,
namely, physical quality, interactive quality and corporate quality whereas according to
Grönroos (1984) argued that service quality comprises of technical quality, functional
quality and corporate image and also Gronroos (2000) service quality refers to three
dimensions of output technical quality, service performance quality, and an organization’s
mental picture. According to Fabnoun and Chaker (2003), measuring service quality is an
important task because it allows the service provider to appraise and compare what things
were like prior to changes set in and what they are after changes were made. According to
Dao and Tin (2015) examined the relationship between service quality in restaurants and
customer satisfaction, using the dimensions: Tangibles, food quality/reliability,
responsiveness and assurance/empathy. According to McKenna (1991) organizations in
order to provide appropriate products and services, to meet customer’s needs and achieve
satisfied customers; they emphasized on appropriate infrastructure and forget about market
reviews, advertising, and promotions. Therefore, as to Ranjbarian, et al., (2012) in order to
upgrade the perceived quality, regular assessment of customers’ needs, desires, tastes, and
interests is recommended. However, from these dimensions the researcher adapted
Parasuraman et al. (1988) identified variables: tangibles, reliability, responsiveness,
assurance and empathy.
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2.2.1.1 Tangibility and Customer Satisfaction
Tangibility defined according to Cronin and Taylor (1992), Johns and Howard (1998) as
the tangible service indicator consist of cleanliness of the dining area, employees wear neat
and clean dresses they must use disposable gloves and also wear hear nets and the seating
and parking facilities must be up-to date, and according to (Olu 2008) tangibility it includes
all the tangible things or physical facilities like personnel, equipment, building and
renovation etc. According to Panton (1999) food and beverages play a very vital role in the
hotel industry and Devlina e t al., (2017), the availability of multi-cuisines, tasty food in
reasonable price attract customer. For a hotel, food and beverage dimension is an indicator
of overall customers’ satisfaction. Customers are satisfied if food and beverage factor
meets their expectations. So the association between dimensions of service quality and
customer satisfaction was found a significant relationship between tangibility of services
on the satisfaction level of customers.
2.2.1 .2 Reliability and Customer Satisfaction
Reliability defined Cronin and Taylor, (1992) as Services delivered as a hotel promised to
customer with accurate charges and to fulfill promises on time and in a systematic way, and
according to Olu (2008) it describes the capabilities to fulfill promised service accurately
and dependably.
According to Ibanez et al. (2006) the association between dimensions of service quality and
customer satisfaction was found a significant relationship between reliability of services on
the satisfaction level of customers. The literature reveals an increased degree of positive
relationship between service quality, reliability customer satisfaction and performance
(both financial and non-financial) where face-to-face dealing between customer and
employee is the only focus.
2.2.1 .3 Responsiveness and customer satisfaction
Responsiveness, defined according to Cronin and Taylor, (1992) as employees are
available for prompt services, and according to Olu (2008), it describe the intentions of the
firm and its willingness towards customers’ help, mean that the employees always willing
to help the customers and they should have a time to respond to customers request. Tell the
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employs exact time about service deliveries. Responsiveness is being flexible with the
customer and trying to accommodate the customer's demands and performing the service
without delay, this leads to customer satisfaction and supported by Brihanu (2017).
2.2.1 .4 Assurance and Customer Satisfaction
Assurance defined according to Cronin and Taylor, (1992) as employees must be trust
worthy so that the customer feels safety in his financial transactions, and according to Olu
(2008) it involves the understandings and courtesy of employees, their capabilities to covey
confidence and trust. Assurance consists of courtesy, competence; security and credibility.
In the hotel a customer feels safe while consuming services and feel secure at his stay, so
that hotel employees have a sufficient skills and knowledge to perform polite and courteous
services. As Parasuraman et al. (1988) show that assurance has been identified as
significant dimension of service quality; Ndubisi &Wah,(2005); Ndubisi, (2006) the
dimensions significantly enhance customer satisfaction and believed that if the employees
of hotels display trustworthy behavior, the satisfaction level of customers can be enhanced
significantly and positively influence repurchase intension of customers.
2.2.1 .5 Empathy and Customer Satisfaction
Empathy defined according to Cronin and Taylor, (1992); and Johns and Howard, (1998)
as the location is easily findable and served food must be packed, and according to Olu
(2008) it consists of caring and customized responsiveness to customers. And empathy
includes communication, access and understanding the customer and hotel services must
have availability of tools or apparatuses etc.
According to Iglesias and Guillén (2004) study a positive and significant relationship is
found between empathy and customer satisfaction. In another research study, customer may
remain unsatisfied with service quality if a gap is left in empathy. Empathy creates an
emotional relationship with customer, providing customer a touch of importance for
business and it works as a moderator between quality and customer satisfaction and can
change the behaviour of customer ultimately.
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2.3. Prices and Customer Satisfaction in Hotel Industry
Price is one of the factors from several factors that affect customer satisfaction, and used as
an indicator of product quality, which results in better expectations from the product and
determines higher satisfaction. According to Fyall and Garrod, (2005) price is defined as
the amount of money charged to the buyer for acquiring as well as using a product or the
total amount of money remunerated by customers to purchase the product and it is the most
flexible element of the marketing mix, the only element which produces revenue and it can
be changed quickly and it consists of issues for example credit, list prices, discounts,
repayment term as well as conditions.
According to Herrmann et al. (2007) research shows that price perceptions directly
influence satisfaction judgments as well as indirectly through perceptions of price fairness.
In which, price reasonability and consumer satisfaction is significantly correlated with each
other. According to Ali et al. (2010) studied customers can switch to any other cellular
service provider who offers fair prices and the study shows, the consumers can be held for
a longer duration by offering them fair price and the customer satisfaction is caused by the
fairness of the price.
Hotel service charge or price of services is termed as the amount of payments that
requested by the firm of services. According to Uddin & Akhter (2012) term of service
charge as well as price is determined by few factors such as willingness of the buyer to pay,
willingness of the seller to accept, intensity of competition price substitute products and
etc. According to Gale, (1992) companies offering superior service levels are able to charge
a slightly higher price than their competitors are, the marginal difference is often modest
and requires better than average performance on service quality which then jeopardizes the
cost effectiveness. Price satisfaction consists of a most complex construct and few
dimensions, for example price fairness, price transparency, price reliability and more.
According to Matzler, et al., (2006) these essential dimensions constitute the determinants
of price satisfaction and consequently customer satisfaction. According to Rogerson
(2013), on a study in South Africa, price determines the amount of profits a company
makes and noted that price is the value attached to a product and it’s the lone element of
the marketing mix that makes profit for the organization. According to Lamb et al., (2012)
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studied on the broad perspective of the marketing mix and concluded that, price comprises
of more than simply the amount of money that the consumer pays when buying a product
which is the basic definition. It includes issues such credit deals, discounts available and
special offers.
2.3.1 Price Sensitivity
Price sensitivity on the individual adopter level appears to be equivalent to the concept of
price consciousness for a potential buyer of a product or service.
2.3.2 Price Acceptance
According to Monroe (1990) measurements of consumer price acceptance represent a direct
attempt to establish the potential buyers' willingness to purchase as a function of various
prices and the level of acceptance can thus be defined as the maximum price, which a buyer
is prepared to pay for the product. Several methods are suitable for determining the price
that the consumer subjectively presumes to be appropriate observations of the market,
experimentation with prices and surveys (either direct or indirect) of experts' or customers'
opinions.
As to Marshall (1980) indicates that the excess of price that a customer would be willing to
pay, rather than go without having a thing, over what he/she actually pays is the economic
measure of his/ her satisfaction surplus. It means that customers could have a greater price
acceptance for products or services providing greater satisfaction.
2.3.3 Price Perception
According to Kalyanaram and Winer, (1995) shows price perception has made important
contributions to understanding of consumer behavior. When a consumer plans to make a
purchase, the price perception process can be: if the selling price of the brand is greater
than the internal reference price, the selling price is perceived negatively by the consumer.
Although Nagle and Holden (2002) believe that price merely represents the monetary value
a buyer must give to a seller as part of a purchase agreement, customers’ price perception is
closely related on their perception of quality, value and other beliefs.
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2. 3.1 4 Price Fairness
According to Garbarino and Slonim (2003) propose that fair price will always be lower
than expected price because consumers, without knowledge of the firm’s actual profit
margins, and assume the firm is making a reasonable profit even at the lowest observed
price.
According to Spiteri & Dion, (2004) Customers or consumers are relatively price
concerned, thus customer value is a function of service charge and service quality that
provides a competitive advantage when a company takes an action of cost-cutting imitative
to ensure the customer value. According to Ralston (2003) real price competitiveness is an
essential determinant of customer value, thus price satisfaction increases the value of
customer perception and there is a direct relationship between price and value and price has
significant effect on customers’ buying behavior, value perception and customer
satisfaction. And also Abdul and Zainal (2016) investigated that the influence of five
dimensions (perceived value, emotional price, monetary price, behavioral price and
reputation) on customer satisfaction. The main finding of their study indicates their high
significant impact of emotional, monetary and behavioral prices on customer satisfaction.
So the researcher adapted as a factor to measure customer satisfaction in hotel industry in
Debre Brehan.
2.4. Corporate Image and Customer Satisfaction in hotel industry
Researchers have found image to be a very complicated concept because it is more than
just the summing up of all the factual attributes of an organization. Image is influenced by
the interactions among all factual and emotional elements of an organization in generating
consumer’s impression and suggesting a “gestalt” view of the firm’s image. Moreover;
many studies have reported that the organization’s ability to consistently offer superior
service and the resulting customer satisfaction has a strong positive influence on the firm’s
image. According to Barich and Kotler (1991) describe a corporate image as a set of ideas,
beliefs and theories of individuals about a company.
As cited Fikirte (2016), Kennedy, 1977, Dowling, 1988; Fombrun, 1996; Kazoleas et al.,
2001; Hatch et al., 2003; Bravo et al., 2009), corporate image can be defined as the
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“overall impression” left in the customers’ mind as a result of accumulative feelings, ideas,
attitudes and experiences with the organization, stored in memory, transformed into a
positive/negative meaning, retrieved to reconstruct image and recalled when the name of
the organization is heard or brought to ones’ mind.
According to Aydin & Ozer, (2005) corporate image can be supposed as a general
evaluation in individuals’ mind toward a company. According to Souiden, Kassim, &
Hong, (2006) corporate image is a mental image which customers have in mind toward the
company. It is a result of a process which is originated from all customer's attitudes,
emotions and experiences about the received services of a company. These attitudes,
feelings and experiences have been retrieved from consumer's memory and created a
corporate image toward company in individual. According to Ashraf et al., (2018)
corporate image is a perception that consumers hold in their minds which is related to the
organizations. However, according to Connor & Davidson, (1997) a corporate image varies
in different situation and media coverage and it is the observation of regulars toward the
specific brand and it required a considerable time and efforts to organization to build the
image in the people. Signaling theory provide a way to measure the relationship of
corporate image and loyalty. According to Kim & Lee, (2010) this theory view,
organizational communication builds organizational reputation and capability in the society
that create indicators.
According to Wu Liang (2009) brand image described as the mental impression the hotel
customer holds from different channels - advertisements, public relations, word-of-mouth,
personal experience in prior consumption, among others and stated that image has a role in
the cumulative effect on customer satisfaction. As to many authors studied, the company
image is one of the factors that affect customer satisfaction due to impression that the
public has for a company. According to Kennedy (1997) there are two principal
components of corporate image functional and emotional. The functional component is
related to those tangible characteristics that can easily be measured, such as the physical
environment offered by the hotel. According to Roberts & Dowling (2002) indicate that the
company brand image is a valuable intangible capital that is hard to imitate and it can help
an organization to achieve a sustainable and superior financial performance. According to
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Vranakis et al., (2012) reveals from the companies’ perspective, being reliable,
professional and innovative, having social contribution and valuing the customers are the
elements that form the company image.
According to Martensen et al., (2000) indicate that the image expected to have a positive
relationship and an important element in the customer satisfaction towards the customer
expectations, and satisfaction and loyalty of customers to the company. According to Gupta
(2002) found that, there is evidence between corporate reputation and competitive
advantage for the firms by successfully differentiating it from competitors. The advantages
are including, willing to purchase, willingness to pay a premium price, customer
satisfaction and customer loyalty. Meanwhile, the components of a company’s reputation
corporate ability and corporate social responsibility and the finding supports that when
customers are faced with parity in price and quality of a product, they would prefer to
choose products from the company that help to corporate social responsibility when
making the consumption related decision.
A favorable image is considered as a critical aspect of an organization’s ability to maintain
its market position as image has been related to core aspects of organizational success such
as customer patronage. According to Rita (2007) ravels that corporate image is based on
what people associate with the company or all the information (perceptions, inferences, and
beliefs) about it that people hold. Some researchers use image and reputation as substitutes.
They proposed that image and reputation could be used as substitutes, since it is likely that
the early studies on corporate image would have used the concept “reputation” had they
been done today.
According to Rafael et al., (2009) study shows organizations which portray a sound
corporate image in the industry would be able to attract more stakeholders, reduce the
rivals’ threats and boost higher profits which customers’ preference towards the
organizations is higher and the organizations are successful to gain high creditability.
Corporate image also affecting the new product or service purchase by prospecting
customers; increase the ranking of the corporate brand and products. According to
Kandampully & Suhartanto (2000) customers that have positive and desirable service
image are expected to have a greater tendency towards perceiving positive service and this
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adds to their higher levels of satisfaction. According to Kandampully and Hu (2007) stated
that corporate image consisted of two main components; the first is functional such as the
tangible characteristics that can be measured and evaluated easily. And also, the second is
emotional includes feelings, attitudes and beliefs the one have towards the organization.
According to Suhartanto (2011) the image-customer satisfaction relationship should be
further studies in literature in the context of hotel industry. So the researcher adapted
corporate image as a factor in the hotel industry of Debre Berhan to measure customers’
satisfaction.
2.5 Operational Definitions of Key Terms
The following definitions of terms used in this study are adapted from related literatures
and modified to suit the study.
Customers: are those who buy the goods or services provided by companies.
Customer satisfaction: refers to the consumer’s sense that consumption provides
outcomes against a standard of pleasure versus displeasure.
Service quality- service quality is described as a result of the comparison that
customers make between their expectations about a service and their perception of
the way the service has been performed.
Reliability: the ability to carry out the promised service dependably and accurately.
Responsiveness: the willingness to support and/help the customer and provide
prompt Service. It emphasizes special treatment and promptness in dealing with
customer query, Complaints and problems. It is communicated to customers
according to the length of time they have to stay in order to get support, answer
their questions, or special attention to their problems.
Tangibility: referring to the appearance of physical facilities, equipment and
appearance of personnel or staffs. It represents the physical image of the service
that the customer will use to evaluate service quality.
Assurance: referring to the knowledge and courteousness of the staff and their
ability to trust and confidence. Assurance is significant for services that customers
perceive as high risk or where they feel doubtful about their ability to measure
outcomes.
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Empathy: providing individualized attention provided to customers. The essence of
empathy is conveying, through personalized or customized or individualized
services that customers are unique and special and their needs are specified.
Corporate Image- Corporate image is the consumer’s response to the total offering
and is defined as the sum of beliefs, ideas, and impressions that a public has of an
organization.
Price- hotel service charge or price of services is termed as the amount of payment
that requested by the seller of services.
2.6. Performance Only Model
SERVPERF was developed by Cronin and Taylor (1992) in their empirical work which
involved the modification of SERVQUAL with respect to conceptualization and measures
service quality based solely on a performance based and argued that performance is the
measure that best explains customers’ perceptions of service quality, and expectations
should not be included in the service quality measurement instrument. “SERVPERF”
model means that, service quality is a form of consumer attitude. SERVPERF looks at the
attributes of the 5 dimensions, worded the same as SERVQUAL model but does not repeat
the set of statements as expectation items. According to Cronin and Taylor (1994, p.127),
the superiority of the SERVPERF approach pertains in some psychometric properties of
the measure, the fact remains- it is a better measure of service quality. According to
Thompson & Schofield (2007) and Meyer & Westerbarkey (1996), performance-only
approach is a more effective way of conceptualizing quality and/or satisfaction, more
typical of the cognitive process and pivotal the formation of quality / customer satisfaction.
And also, Francosis, et al., (2007), have done a meta-analysis to determine the validity of
SERVQUAL and SERVPERF taking 42 research done for 17 years and concluded that
both instruments are equally valid predictors of overall service quality. According to Tse &
Wilton, (1988), customers ‘evaluation of the service encounter based on their expectation
and actual performance and has been considered as the extent to which a product/service
experience meets customers ‘expectation from the same.
Therefore, the researcher adapted SERVPERF model to measure the influence of service
quality, price and corporate image on customer satisfaction among hotels in Debre Brehan
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Ethiopia by comprises a 30 items (Likert-type) with five service quality dimensions of
reliability, responsiveness, assurance, empathy and tangibles or service quality. And also 7
items for corporate image, 5 items price and 6 items on customer satisfaction. Statements
are then derived to measure the perceptions of customers towards the quality of services of
the hotels was assessed. Items of the details indicted below in table 2.1
Table 2.1 Measurement items for the variables and the literature based
Measurement items
Service quality dimensions:
Tangibility
The hotel uses modern state of art technology and equipment in their service delivery
The hotel’s physical facilities are visually appealing and satisfactory.
The hotel’s employees are well dressed and neat in appearance
The materials in the hotel like the beverage, food, and other materials are visually appealing.
The hotel ‘s rooms are clean and comfortable
Reliability
The hotel provides its services at the time it promises to do so.
When customers have a problem, the hotel shows sincere interest in solving it
The hotel delivers its services promptly at the time it promises to do.
The hotel has operating hours convenient to all its customers.
The hotel guarantees/ensures reliable reservation services.
The hotel billing and payment systems are free from error.
The hotel performs the service right the first time.
Responsiveness
The hotel’s employees give me prompt service.
The hotel employees are always willing to help me
The hotel employees are never too busy to respond to my requests
The hotel provided a safe environment.
The check-in and check-out services are quick and easy at the hotel.
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The hotel restaurant delivers prompt service to its customers.
The hotel staff are willing to provide prompt assistance to guests ‘requests and problems.
The hotel employees tell you exactly when services will be performed.
Assurance
The behavior of employees of the hotel installs confidence in customers
I am quite satisfied with the service received from the hotel ‘s staff
I feel safe in all my transactions at the hotel
In the hotel, employees are consistently courteous with me
Employees in the hotel have the knowledge to answer my questions
Hotel staff welcome guests that creates a comfortable feeling
Empathy
The employees of the hotel give customers individual /personal attention.
The employees understand customer’s specific needs.
The hotel staff provides service to meet guests’ best interest (as per the requirements).
The hotel has employees who are competent.
Price
I am properly informed about the price of services.
I feel the service charge that I have paid for food and beverage is fair.
The overall price of the hotels fair and meet my need.
Price information is clear, complete and understandable to customers
Bed prices are fair compared to other hotels.
Corporate /hotel/ image
The hotel’s product and services has a good reputation.
The hotel is conveniently located and has attractive layout.
The hotel in its service delivery is Persuasive and excellent.
The hotel has distinctive atmosphere and a better image than its competitors.
The hotel aims much effort to the benefits of the community.
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The performance of this hotel is superior to that of competitor’.
The hotel has attractive interior design and external appearance.
Customer Satisfaction
The hotel completely meets my expectations.
I feel absolutely delighted with the hotel’ services.
The information that is presented by this hotel is accurate.
This hotel is exactly what I need.
There is a guarantee of this hotel.
I am satisfied with the overall service quality offered by the hotel Customer compliant handling
procedure
Sources: SERVQUAL (Parasuraman, et al., 1988)), HOLSERV Mei et al., (1999), Keller,
(1993) Nelson and Hailin (2000); (Kurt, et al., 2006); Asad and Tim (2010), (Wong, 2011)
Jani and Han (2011); Edward and Sahadev (2011)
2.7 Empirical Literature Findings
There are several studies on factors affecting customer satisfaction and these empirical
reviews of related studies in the past and present, has contribution on the study to build the
current study and the methodologies used. According to Perran (1995), who studied hotel
service quality in Istanbul (Turkey) by adapting the SERVQUAL model, found courtesy
and staff competence, communication and transaction, tangibles, customer understanding,
accuracy and speedy service, and solution to problems and their accuracy as the major
factors affecting service quality. According to Halil and Kashif (2005a) assessed the
perception of customers on service quality in North Cyprus hotels by applying SERVPERF
model and identified only two dimensions (tangibles and intangibles) contributing to
determine service quality and customer satisfaction.
According to Akbaba and Atilla (2006) in the article "measuring service quality in the
hotel industry, a study in a business hotel in Turkey” design that five service quality
dimensions like tangibles, adequacy in service supply, understanding and caring,
assurance, and convenience found that business travelers had the highest expectations for
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the dimension of convenience followed by assurance, tangibles, adequacy in service
supply, and understanding and caring. According to Andaleeb and Conway (2006) in the
paper on customer satisfaction in the restaurant industry: an examination of the
transaction‐ specific model used regressions model analysis and found that, customer
satisfaction influenced mostly by responsiveness of the frontline employees’ price and food
quality. But physical design and appearance of the restaurant doesn’t have a significant
effect on customers’ satisfaction.
According to Nur- et al., (2013) the finding shows that, the service quality of the five star
hotels is highly dependent on the physical appearance, interior decoration, and food
quality, security system, and behavior of the employee’s customized services given to
individual customers. According to Ala`a & Ahmad (2012), the guests directly gain loyalty
from the service quality dimensions: ‘tangibles, reliability, responsiveness, assurance, and
empathy’ in food and beverage department. According Suzana and Sanja (2013) analysis
identified four dimensions of perceived service quality, namely reliability, empathy and
competence of staff, accessibility and tangibles in Croatia from 265 respondents with
multiple regression analysis showed that reliability, accessibility, tangibles, and service
quality had a significant and positive effect on overall customer satisfaction. However,
empathy and competence of staff positively but the impact was not statistically significant
when other dimensions were involved on hotel guests’ satisfaction. According to Afroza,
et al., (2014) study on the effect of customers’ satisfaction on the development of
hospitality and tourism industry in Bangladesh in city Khulna conclude that, tangible is the
most important satisfaction factor and flowed by responsiveness. Assurance has
statistically significant effect on overall satisfaction level restaurant services from room
service, marital status, income, and room booking system. And also, there is statistically
insignificant effect of overall customer’ satisfaction from restaurant service on the
development of hospitality and tourism industry in Bangladesh. So in this research, the
researcher wants to examine whether it works or not in Debre Berhan city hotels.
According to Charles (2014) studied to determine factors influencing customer satisfaction
and to examine the relationship between service quality and customer satisfaction from 358
sample size among hotels in Nairobi, Kenya raveled that, all the five service quality
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variables yielded positive relation with customer satisfaction and the higher the service
quality, will results higher customer satisfaction. And from the services quality dimension
reveals that reliability dimension contributes most towards customer satisfaction followed
by empathy, tangibles and responsiveness and assurance was seen to contribute the least.
The study also confirmed service quality has a statistically significant effect on customer
satisfaction with a coefficient of determination (R2) of 74.2% or service quality contributes
74.2% of customer satisfaction while the other factors contribute 25.8%. And also the
researchers recommended that future studies could look into the nature of these other
factors that contribute 25.8% of customer satisfaction.
So having this in mind, and since the researcher doesn’t used other independent variable,
examining the issues is important whether it works or not in Debre Berhan city. According
to Tewordos (2015) study results shows responsiveness, empathy, reliability and assurance
have significant impact for customer satisfaction in Ethiopia. According to Nguyen et al.,
(2015), empirically examine the relationship between service quality and customer
satisfaction in Vietnamese hotels, based on SERVQUAL model, from 432 guests of 33
three-star hotels, analysis results indicate that empathy, reliability, responsiveness, and
assurance to achieve high degree of significantly impact customer satisfaction which leads
to customer loyalty and business profit. Service quality plays crucial role for higher
customer satisfaction level in hotel service. According to Feven, et al., (2016) findings
from the analysis revealed that out of the five dimensions of the SERVQUAL three i.e.
assurance, responsiveness and tangibility had high significant impact on customer
satisfaction in hotel industry of Ethiopia from the Sample size 130 through Pearson’s
correlation.
According to Mohammad & Fatemeh (2016) the study of factors affecting customer’s
satisfaction with the three star hotels in Dubai by content analysis revealed that the main
factors affecting the tourists’ satisfaction were hotel location, food management,
cleanliness, facilities, and design and staff behaviors. In other study in three star hotels in
Dubai, according to Darini & khozaei (2016) the study used qualitative method reveals that
food and food quality is the main factors affecting the tourists’ satisfaction whereas hotel
location, food mgt, cleanliness, design and staff behaviors is a factor respectively.
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The study also suggests architects, hotel managers and all those who are involved in the
hotel industry must take into account these factors for insuring customers’ satisfaction and
hotel staff behaviors have been very important for the customers as well as the environment
of hotel. But the variable that used are part participle of the services quality dimensions and
the method was qualitative and it is not indicated how much affect.
According to Birhanu (2017) investigated SNNPRS hotel dominant the service expectation
of their customer perceptions and expectations using the SERVQUAL model the study
reveals that the service quality dimensions have relationship with customer satisfaction and
delivering high quality service is factors for customer satisfaction. Also the study reveals
that responsiveness dimensions of the hotels were better and assurance the least one from
390 sample size and the highest affecting factor for customer satisfaction. The result
revealed that hotels/restaurants in SNNPRS do not meet the service expectations of their
customers because there is a significant gap between the perceptions and expectations.
Among the Modified five dimensions of service quality, the highest negative gap score
belongs to assurance and tangibility. Furthermore, the study also found that the lowest
negative gap score is examined in responsiveness dimensions of service quality. According
to Devlina et al., (2017) study on factors affecting customer satisfaction and service quality
in the Boutique hotel industry of Kolkata, West Bengal found out that customer satisfaction
mainly depends on 2 broad dimensions, reasonable & quality food” and other is “general
requirements & hospitality of the hotel which means customers are preferring hotels
especially with reasonable & quality food. In their conclusions stated, all the stakeholders
have to make sure that the significant attributes tasty food, reasonable price and food
variety should be taken care properly as these play a very significant role towards customer
satisfaction, thereby customer loyalty.
According to Bader (2017) the study restaurant quality was measured using 11 dimensions
related to hall, food, hygiene, menu and atmospheric quality, as well as assurance,
accuracy, responsiveness, interior design, external environment and price in Saudi Arabia.
Even though the dimensions of restaurant quality selected, 11 hypotheses are supported,
hall quality is unquestionably influential as none of the restaurants serve prohibited foods.
However, other dimensions are also very important, particularly food quality (taste,
29
freshness of meals and amount of food), hygiene (clean dining area and clean staff),
responsiveness (prompt service) and menu (display, variety and knowledge of the items).
The results indicate that hall quality has the strongest effect on customer satisfaction,
followed by food quality, hygiene quality and hall quality has the greatest impact on
customer satisfaction, and followed by food quality, hygiene quality, responsiveness, menu,
atmospheric quality, price, interior design, accuracy and external environment. According
to Muneeb (2018) study, food and beverage and price factors that influence customer
satisfaction in Pakistan hotel industry using regression model from 2193 sample size. The
researcher used the variable to measure the customer satisfaction on the basis of the
reception department, food and beverages department and fair price and found that all of
the variables have significant influence on the customer satisfaction of the hotel Industry.
However, they did not indicate which factor is more influencing.
According to Simachew and Haile Mariam (2018) the major finding of the study indicates
that the hotel customers' perception with regard to five service quality dimensions is below
customer expectations. There is a performance gap of the hotels with regard to tangibility,
reliability, responsiveness, confidence and communication features respectively from the
sample size is 330. The overall satisfaction of customers in the hotel's service is found to be
above a moderate level (3.85) of satisfaction with the variables confidence and
communication by taking service quality as mediating factor and excluded empathy and
assurance from the five dimensions in five-star hotel. But the simple random sampling is
not proper method since the total numbers of the customers are not known since doesn’t
indicate the reason and the size of the sample small. And the nationality of the respondents,
90.6% of the customers is foreigners and the rest 9.4% are Ethiopian /local customers but
the researcher not indicate the total hotel industry of the Ethiopian and focus on foreigners.
In related to corporate image, Kandampully and Suhartanto (2000) in the article on
customer loyalty in the hotel industry from chain hotels in New Zealand, identified that
image and customer satisfactions are positively related to customer loyalty in the hotel
industry and image as a factor for customer satisfaction. In addition, the findings indicate
that hotel image and customer satisfaction with the performance of housekeeping;
reception, food and beverage, and price are positively correlated to customer loyalty.
30
According to Blanc and Nguyen (1996), in the article of an examination of the factors that
signal hotel image to travelers have found the five hotel factors that may signal a hotels
image to travelers and these are physical environment, corporate identity, service
personnel, quality of services and accessibility. According to Christina and Hailin (2008) in
the article of examining the structural relationships of destination image, tourist satisfaction
and destination loyalty, found that there is theoretical and empirical evidence on the causal
relationships among destination image, tourist attribute, overall satisfaction, and destination
loyalty.
From the study results, the proposed destination loyalty model, destination image directly
influenced attribute satisfaction band overall satisfaction and attribute satisfaction in turn
had direct and positive impact on destination loyalty. According to Abdullah & Hamdan
(2012) the empirical results showed partial mediation effects on the relationship between
brand image, trust, convenience, emotion and customer loyalty in respect of Malaysian
hotel customers. Whereas in Jordan hotels, satisfaction does not mediate the relationship
between trust and customer loyalty but partially mediate between emotion, brand image,
convenience and customer loyalty.
Regarding to price as factor, Russell et al., (2007) Customer’s involvement is also
important as when buyer considers the product important and invests time to seek
information which leads to accelerate the satisfaction level and this satisfaction may
influence the concerned company by repurchase and purchase of more products, positive
word of mouth and willingness of customers to pay more for the particular brand of the
product. According to Anderson, et al., (2004) any business is likely to lose market share,
customers and investors if it fails to satisfy customers as effectively and efficiently as its
competitors is doing. According to Roberts & Dowling (2002) the company brand image is
a valuable intangible capital that is hard to imitate and it can help an organization to
achieve a sustainable and superior financial performance and defined as the total
impression that the public has for a company.
According to Gupta (2002) found that there is empirical evidence between corporate and
reputation which helps competitive advantage for the firms by successfully differentiating
it from competitors and which help willing to purchase, willingness to pay a premium
31
price, and lead to customer satisfaction. On the other hand, pricing, and brand value have
insignificant influences on making customer satisfied at five percent level of significant at
multiple regression analysis.
According to Gronroos, (2000) made the argument that loyal customer not only pay the
premium price, but also saves the firm cost as firms do not need to invest more to them as
they are very familiar with the company. According to Athula (2014) the price
discrimination practice was used by the tourist hotels as a means of marketing strategy and
the hoteliers charge different prices from the different customer groups. The tourists
negatively commented about practices and have caused the dissatisfaction among the
tourists from the hotel. However, the hoteliers should practice price discrimination for the
supplementary services that can be visible rather discriminate the price based on color,
country, nationality, etc. According to Mingming (2016) service quality and price are the
major factors affecting customer satisfaction in China.
According to Abdul and Zainal (2016) investigated the influence of five dimensions
(perceived value, emotional price, monetary price, behavioural price and reputation) on
customer satisfaction. A main finding of their study was the high significant impact of
emotional, monetary and behavioural prices on customer satisfaction. And also by
employing the regression analysis, the study results show that it is found that Price have
significant influence on the customer satisfaction of the hotel Industry related to tourists’
hotel industry in Sri Lanka. The availability and adequacy of these factors have caused the
satisfaction among the tourists, while the non-availability and inadequacy have caused the
dissatisfaction among the tourists. And according to Nurminen (2007) discovered that cost
is not the main reason that causes dissatisfaction of customers. Basically, customer
dissatisfaction is mostly caused by offering low quality products and services to customers.
From these reviews, customer satisfactions directly influenced by the performance of the
company, service quality, workers or employees, price and corporate image and they have
very significant impacts for hotels to be more effective and competitive in comparison with
other hotels. But the results show different level impact of on factors affecting customer
satisfaction which means in some research tangibility is the major whereas in others
responsibility, assurance and empathy or other service quality dimensions has major factor
32
for customer satisfaction. So, this indicates what factors affecting customer satisfaction
more is debatable among researchers and adapted different dimensions. In addition, the
above studies have limitations related to the scope, the methods i.e. they performed in
higher hotels and with quantitative.
So that, this study examines factors affect customer satisfaction by using the variables
service quality, corporate image and price and examine whether is similar or not with
Debre Berhan city hotels.
2.8 Research Gaps
As mentioned above there are different researches conducted in the world including
Ethiopia on factors affecting to customer satisfaction in hotel industries. However, firstly,
these researches conducted on different hotels like three and above star of higher cities of
Ethiopia, tourist hotel industry in Sri Lanka, Vietnam, Kenya, Tanzania, Dubai and others
countries which indicate that the three is a scope in the studies. So, it is needed to assess
the problem related to the scope gaps. Secondly, the researches independent variables,
methods that are used and results from the researchers are not the same. Some study
indicates for quality of restaurants hall quality more influencing factor rather service
quality dimensions, and there is difference between the service quality dimensions’
variable results related to reliability, responsiveness, empathy, tangibility and assurance
and others they did not indicate which the major one is and not done by taking service
quality, price and corporate image together.
Thirdly, most of the studies the variables that used are more focused on service quality
dimensions, and doesn’t study by employing service quality, price and corporate image
together rather indirectly like location, design and etc. of the hotels. But, the researcher
was employed price and corporate image as variables’ directly for customer satisfaction in
hotel industry. Fourthly the studies research methods used quantitative and a qualitative
separately but the researcher was employed mixed method research approach rather
quantitative or qualitative separately. In addition, the model of the researchers more of
done by SERVQUAL model, but the researcher employed SERVPERF model. Generally,
the researcher identifies gaps related to scope, variables, methodology, model,
33
controversial between the variables like reliability, tangibility, responsiveness, assurance,
empathy and examine whether it works or not. By recognizing these research gaps the
study was aimed to assess factors affecting customer satisfaction in Debre Berhan city
administration hotel industries.
2.9 Conceptual Framework
Conceptual framework is diagrammatic presentation of the relationship between dependent
and independent variable. The dependent variable of this study is customer satisfaction and
expected to be influenced by explanatory variables which has expressed as service quality,
price and corporate image. To understand the concept of factors affecting customer
satisfaction the following conceptual framework will give clue to the study.
The conceptual frame work developed based on literature review is the following.
Figure 2.1 Conceptual framework of the factors affecting customer satisfaction
Source: Parasuraman et al., (1988) HOLSERV Mei et al., (1999), Keller, (1993) Nelson
and Hailin (2000); (Kurt, et al., 2006); Asad and Tim (2010), (Wong, 2011)
The linear regression model represented by this conceptual framework is
expressed mathematically as follows.
Service quality Dimensions
Tangibility
Reliability
Responsiveness
Assurance
Empathy
Corporate Image
Customer
Satisfaction
Price
34
That is
Where, Y is the dependent variable representing Customer Satisfaction whereas X1, X2,
and X3 are the independent variables, that is, Tangibles, Reliability, Responsiveness,
Assurance, Empathy under service quality dimension, Price and Corporate image
respectively. β0 is a constant (the intercept of the model) and β is regression coefficients of
Xi which indicates the amount of change in Y given a unit change in the xi variables while
є is the error term. And also it can be aggregated to three variables by Y = β0 + β1X1+
β2X2 + β3X3, service quality, Price and Corporate image respectively.
35
CHAPTER THREE
3. RESEARCH METHODOLOGY
3.1 Research Design and Approach
In this study the researcher was used explanatory and descriptive survey research design,
because the survey design is preferable to conduct research to employed large number of
people questioning about their attitudes and opinions towards the specific issue, events or
phenomena to address the stated objectives. The study used cross-sectional customer
survey data. The reasons for preferring cross-sectional study are due to the vast nature of
the customers and effective to manage and collected data and since the data were collected
at one point in time from the sample respondents to describe the total population.
Moreover, to undertake research from a large number of respondents, different educational
level, characteristics and opinions on specific issue survey study has preferable.
Triangulation was employed to increase the results reliability by comparing the obtaining
data from questionnaire source with interviews sources. The descriptive design was
adopted to measure and describe the level of perceived service quality, price, satisfaction
and corporate image. According to (Cronin, Bradley &Halt, 2000; Cooper &Schneider,
2008), explanatory research design was used to explain how and to what extent the above
stated constructs were related.
3.1.1 Research Approach
The study was employed mixed approaches. The quantitative analysis was done to find the
relationship to test. As to Creswell (2003) stated researcher was focused on natural
occurrences with in natural settings for a greater degree of wholeness and richness of data
collected and the weakness of quantitative method can be overcome by the qualitative
method and the weakness of qualitative approach also overcome by quantitative method.
This makes it a powerful tool to study process and according to Johnson & Onwuegbuzie
(2010) mixed method approach used to draw from the strengths and minimize the
weaknesses of the quantitative and qualitative research approaches relative to the context
and the manner in which researchers aspire to address the phenomenon under study.
36
Therefore, mixed method utilized by the researcher in order to the study has more reliable
through triangulation and cross checking’s the results was done.
3.2 Description of the Study Area
According to religious view Debre Berhan means a place of light and hope. As to Daniel
F, Jotte C, Colette D, (2005) it is founded by Emperor Zerea Yaekob in 1446. According to
the population projection estimate made by the mayor office for 2011 the town has a
population 46259 male and female 59617 total of 108876 within an area of 21,695
hectares. Debre Brhan is composed of Amhara, 91.9 %, Oromo, 4.2% Gurage 1.6%, Tigre
1.2%, Argoba 0.7% and 0.4% others people. The relative location of the town is in central
Ethiopia, 2750 meter above mean sea level. In absolute terms Debre Brehan is located at
9036' N latitude and 3930 10'E longitude 695 km far from Bahr Dar and130 km north of
Addis Ababa Capital City of Ethiopia in North Shewa Zone of Amhara regional state and
North East of Addis Ababa along Dessie road. As we the town has been serving as the seat
of Northern Shewa Zone Administration. The town administration is further sub divided
into nine kebele administrations. The climate of the town is dega and annual average
temperature ranges between 40°C in the coldest month (August) to 26°C in the hottest
month (April). Though the city was established long years ago, it was developed very
slowly, and only after the evacuation of the Italian (in 1941) started its expansion as it was
made administrative status in 1990/91, named as North Showa which is one out of 11 zonal
cities in ANRS (NUEP, 2006).
Topography and climate conditions of the city, characterized by rugged and flat terrains
type and most of the existing built up areas lies within an altitude of 2750m. The city is
characterized by lower temperature climate condition as compared to other urban centers in
the country. It ranges on average between 10 to 26 and most of the time the highest and the
lowest 12 temperatures is recorded in June and July respectively. It has also high rainfall on
average between 814 to 1080mm (DM GTP, 2018). Debre Berhan had received autonomy
of town administration by proclamation No 91/1996, Article 8.1 and established as one of
11 urban centers of Amhara National Regional State (ANRS) with 9 kebeles. In recent
years, business activities have been well expanding and investment flow is highly
increasing time to time dominated by service sector. The total population size of the town
37
is about 108,997 (51229 men and 57768 women) which make about 21799 total
households of urban community. Currently there are 15 hotels, and research target three
hotels which are found in kebele 05, 06 and fulfilled the standards.
A. Regional map of Ethiopia B. Zonal map of Amhara Region
Scale m to 17.5km Source; Google satellite map
Figure 3.2 Map of the Study Area
3.3 Population and Sampling Size Determination
Target Population of the study area 14142 customers’ average per month estimated from
the hotels sales. But this estimation varies due to different reasons. So in order to solve this,
the researcher used unknown population size determination. The study was also conducted
on three hotels industry of Debre Berhan city.
Keys Main Road Rural Areas Industry Mender Others
38
3.3.1 Sampling Methodology and Procedure
The study also used non-probability sampling techniques and convenience sampling is a
specific type of non-probability sampling method that relies on data collection from
population members who are conveniently available to participate in study. To achieve the
purpose of the study, the data sources and samples are managers and customers of the
hotels. The hotel managers were selected through purposeful because of their closeness to
execute the issues purposefully to collect our data using semi – structured questionnaire
with interview and the customers selected who are using the hotels services at lists food
and beverage.
Table 3. 1 Proportional of samples for each individual hotel Distributed
NO List of town hotel industries No of sample
customers
Percent
(%)
1 Gete-Wame and their family- Getva hotel 152 39
2 Ethio-Bernos hotel 112 29
3 Hiwotenesh and Kaleab –Hiwot hotel 121 32
Total of The three hotels 385 100
Source: Own survey (2019)
The researcher was selected 385 sample respondents from the total member of the
respondents using proportional methods.
3.3.1.1 Sample Size
The following sample size formula for infinite/unknown population is used to arrive at a
representative number of respondents (Godden, 2004; Daniel, 1999):
SS=
Where: SS = Sample size for the infinite population
Z = 1.96 for 95% confidence level of significance
P = population proportion 0.5 (50%) since this would provide the maximum sample size.
39
M = Margin of Error (allowable error) at 5% (0.05)
Deff = 2 (Design effect)
Therefore, the calculated sample size was derived by the following proportions probability
formula; Where; n =sample size
Z=parameter related to error risk (1.96 for 95% confidence level)
Sample size, n =
e = Margin of error (0.05)
=
=
= 384.16
So that, the sample size is 385 customers were generated and the respondents were used for
this study to gather the data. Since each hotel has different number of customers, to give
equal chance the researcher was employed proportional sampling based on the hotel
customers’ number until the required sample size full filled.
3.4 Data Type and Sources
3.4.1. Types of data
The study employed both qualitative and quantitative types of data. The quantitative data
used to gather information related to factors which affect customer satisfaction in hotels by
using pre-coded structured questionnaire and the qualitative data were collected through
interview to get reliable information about the perception of customer satisfaction.
3.4.2. Source of Data
In this study the researcher was employed primary and secondary data sources in order to
have more reliable findings’ and to give the findings broader base and depth.
3.4.2.1 Primary Sources of Data
The primary data for this study were collected using structured questionnaire and semi-
structured interview from the hotel industries in Debre Berhan city administration. The
respondents made choices from the closed ended questions and pre specifies answers.
40
3.4.2.2 Secondary Sources of Data
Secondary data was collected from relevant office annual reports; circulars and policy
papers, annual reports of the hotels and these data were seated on different themes of the
research. Also books and published/unpublished government documents, and articles were
reviewed to make the study fruitful.
3.5 Data Collection Instruments and Procedure
Multiple data gathering techniques was used to collect data from the study area. Thus, are
questionnaires and semi - structured interviews were employed.
3.5.1 Questionnaires
For primary data collection, questionnaire was taken as a preferable data-gathering tool for
this research because of two reasons. First, it allows the researcher to collect information
on facts and attitudes from a wide range of sources and second it is one of the most
important tools to guide the respondent it gives clear choices to check. Two types of
questionnaires (coded 1 & 2) were design in Amharic code 1 and English code 2 language.
The researcher was distributed 385 questionnaires among the customers sampling
techniques drawn from the selected hotels and guided the request them to filled by the
customers properly.
3.5.2 Interview
Even though questionnaires were considered as the major data gathering tool, semi-
structured interviewed with key informants’ top managers in depth during the working
hours to triangulate the data. To gather the data, 385 questionnaires were prepared and
administered to the sample study and this took two weeks to administer these
questionnaires. Since, Standardize and self-administrated questionnaire is the most
common method of primary data collection in marketing research due to simple,
manageable, and data consistency. So, primary data have been collected by means of
questionnaire from the three hotels customers, mangers staffs and secondary data was
collected from reports, and magazine.
41
3.6 Method of Data Analysis and Interpretation
Following the completion of data collection, data processing was conducted through
filtering inaccuracy, inconsistency; incompleteness and illegibility of the raw data to make
analysis easy. To solve such problems manually edited, coded, data entered, and
consistency checking was done. To analyze data quantitative techniques were employed.
The data collected from questionnaire was analyzed through statistical tools such as
percentages, standard deviation, mean, regression, correlation, and frequencies by using
SPSS version 24.0 and the data obtained through interviews and descriptive statistics were
applied to describe the different socio-economic characteristics of the study variables and
graphical and diagrammatical presentation of data followed by econometrics analysis.
Finally, the results were discussed and interpreted to draw important findings, conclusions,
and to forward recommendations.
3.7 Econometrics Model and Specification
The researcher was employed the correlation and linear regression between the factors
affecting customer satisfaction. Linear and multiple- model regression analyses were
conducted in order to see how much these variables affect customer satisfaction of the
hotels. Customer satisfaction decision is taken as dependent variable while services quality
dimensions, corporate image and price are taken independent variables.
3.8 Variables Description
3.8.1 Dependent and Independent Variables
For this sturdy, the dependent variable is customer satisfaction and the independent
variables are categorized to four parts (1) service quality includes reliability, tangibility,
responsiveness assurance and empathy (2) corporate image includes persuasive and
superior performances (3) price includes fair price.
42
Table 3.2 Variables Measurement
No Variables No. of Items Description
1 Customer
Satisfaction
The overall satisfaction of the guest/customers as he/she perceives.
2 Service
quality
It includes the service provided at the hotel and hotels willingness to provide
service.
3 Price It measures the fairness in the prices of the overall services along with the
customer satisfaction.
4 Corporate
image
It measures people associate with the company (perceptions, inferences, and
beliefs) about it that people hold.
Sources: Parasuraman, et al., 1988). Muneeb A & Anika S (2018)
3.9 Validity and Reliability Test Results
Since these two research measurement characters reliability and validity is indicators
of the quality of work in cooperating is important. According to Marshal (2006) the
research validity means that we are measuring what we want to measure and Zikmundetal
(2010) it measure the accuracy or the extent to which a score truthfully represents a
concept. To ensure the researcher questionnaire covered all area of each variables and
objectives of the study. According to Marshal (2006) refers the degree to which researcher
instrument yields consistent data results after repeated trials. And also as to Bryman Bell
(2007) reliability refers to consistency repeatability of the measurement the researcher uses
the questionnaires the data to be reliable.
According to Nunnaly 1978 it can be cheeked through Cronbach’s Alpha if it normal
ranges the coefficient alpha value between 0.0 and +1.0 and the higher values reflects a
high degree of internal consistency. The alpha readings near 0.9 represent highly consistent
scale and 0.3 reflect little. And according to Coakest and Stees (2007) reliability is
indicates the consistency of a set of measurements used to describe a test and reliability is
inversely related to a random error. So that internal consistency should be determined
before a test can be employed for research examination of purpose to ensure validity.
43
3.10 Pilot Testing of the Quantitative Questionnaire
Ensuring the reliability of the data collection instrument is decisive for the researchers.
Perceptions sought to find out factors affecting customer satisfaction. The respondents
were asked to hate the factors on a scale of 1 to 5 ranging as 1= strongly disagree 2=
disagree 3= neutral, 4= agree and 5 = strongly agree. So a five point likert scale was used to
interpret the respondent’s responses. So, that, the researcher conducted 10% a pilot test
before distributed all question to the respondents .in this research the three hotels are
selected and distributed to the hotel customers in the hotels those customers who have more
experience with the hotels services by arraigning with the hotels managers and employees.
In this a pilot test out thirty-eight questionnaires (38) being filled and were returned on time
and utilized for the pilot test in order to ensure the associated scale reliability. Based on this
some questionnaire were drop out and also the researcher sends the questionnaires to the
hotel and tourism employees who are currently working in the hotels industry as supervisor
and having their comments the questionnaire was arranged and distributed to customers of
the hotels.
From the pilot study revealed that the instrument was reliable to measure the constructs
under invitation with the overall Cronbach alpha of 0.886 which is above the acceptable
value of 0.70 (Churchill, 1979). In addition, all dimensions scored were above 0.70 as
Cronbach alpha coefficient. So that, it assumed to be reliable with their corresponding
items. Having this in mind, all the scale items in the final questionnaire retained guided.
Also the researcher found the average times takes to fill the questionnaire by the
respondents was nearly 12-15 minutes and some of the customers noted that feel
uncomfortable to be approached while they were in their rooms and before launch to
request to fill the questionnaire.
Therefore, based on the feedback of the pilot testing, the necessary correction was made in
the approach of data collected by giving the questionnaire at the front desk (reception when
the hotel customers come to pick their keys, when they used the services and stayed free
and also they were requested to return back to be facilities assigned by the research around
any place of in the hotels and the researcher selected, after meal, night and weakened time
44
more covenant based on the comments of the manager and customer pilot test. Finally, in
this research all the variables service quality, corporate image, price and customer
satisfaction were tested for their reliability detail result represent in annex.
3.11 Ethical Consideration
In the first place, the department were approved the thesis proposal. In addition, the
researcher followed logical procedures in every stage of data collection processes. Based
on this, the researcher introduced about the purpose of the study then informs consent from
the respondents and responsible officials of the departments covered by the study were
obtained to discuss with and interview them about the subject under study. Therefore, on
the basis of these ethical principles, efforts were made and confidentiality assured and kept
throughout the process of this research.
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CHAPTER FOUR
4. DISCUSSION AND DATA ANALYSIS
4.1 DESCRIPTIVE STATICS
In this chapter, the results obtained from the data presented and discussed. These include
back ground of the respondents’ statistics demographic part, statistical methods of analysis
which included descriptive, correlations, and regression analysis through SPSS version
24.0.
4.2 Data processing and analysis
Data are inserted in to SPSS version 24.0 and the inserted data cheeked in consistence and
analyzed. Based on the analysis the study is presented in text tables and figures in this
research. Correlation analysis is used to determine the relationship between dependants and
each of independent variables linear and multiple regression analysis are used to determine
the effect of independent variables (service quality, price and corporate image) on
dependant variables (Customer satisfaction).
Table 4. 1 Response Rate
No Item Response rate
No Percent
1 Sample size 385 100
2 Collected 351 91.2
3 Remain uncollected 34 8.8
(Sources: Own survey 2019)
Response Rate shows in Table 4.1 and it has out of 385 distributed question and 3
interviews, 351 (91.2%) where collected, while 34(8.8%) of the questionnaire remained
uncollected. So the analysis was made based on the responses obtained from the 351
questionnaires and three hotels managers were interview.
46
Table 4. 2 Demographic profiles of the respondents
NO
Variables
Frequency
N=351 Percent
1 Sex of the respondents
Male 197 56.1
Female 154 43.9
2 Age of the respondents
under 20 age 20 5.7
age b/n 21-30 142 40.5
age b/n 31-40 157 44.7
More than 40 32 9.1
3 Marital status of the
respondents
Single 163 46.4
Married 181 51.6
Divorced 7 2.0
4 Educational
background
secondary and below 23 6.6
Diploma 38 10.8
Bachelor degree 215 61.3
Master or higher 72 20.5
5 Job of respondents
Student 17 4.8
Employee 147 41.9
business owner 154 43.9
agriculture and related 15 4.3
Other 18 5.1
6 Experiences of in the
hotels
less than 1 year 86 24.5
1-4 years 132 37.6
47
4-7 years 77 21.9
above 7 years 56 16.0
7 Monthly income in birr
Less than 2, 000 Birr 4 1.1
2, 001-4, 000 Birr 69 19.7
4, 001- 7, 000 Birr 121 34.5
over 7, 000 Birr 157 44.7
8 Nationality of the
respondents
Ethiopian 319 90.88
Foreigner 32 9.11
(Sources: Own survey, 2019)
From the Table 4.2 above demographic profile, sex of the respondents was 56.1 % male
and 43.9% females and ages of the respondents, most of (44.7%) the customers who
participated in this study are in between age of 31-40 years. Moreover 40.5% are from 21-
30 years old. The remaining 9.1% and 5.7% are above 40 and under 20 age respectively.
Hence, this shows that the majority of customers’ age categories understand the
questionnaires. And the marital status of the respondents 51.6% are married and 46.4% are
single and the remaining 2 % are divorces. The job of respondents 41.9 % employee and
43.9% is business owner. The remaining 5.1%, 4.8% and 4.3 % are student, other and
agriculture (farmers) respectively and which implies the respondents’ opportunity to
provide better understanding the service quality, price and corporate image regarding the
hotels. Regarding the educational level of the respondents, 61.3%, 20.5%, 10.8% and 6.6%,
master or higher bachelor degree, diploma, secondary and below respectively. From this,
the respondents able to measure the level of customer satisfaction by the variable indicated
in the questionnaire.
The experience of the respondents in the hotels as indicated in Table 4.2, 37.6%, 24.5%,
21.9%, and 16%, 1-4, less than 1, 4-7, and above 7 years’ experiences in the hotels
respectively. It implies that, they have better knowledge about the hotels. The income of
the respondents 44.7% of the customers are above 7000 thousand and 34.5% from 4000 to
48
7000 thousand birr. The rest of 19.7 % and 1.1 % are 2, 001-4, 000 birr and less than 2, 000
birr respectively.
Finally, to the nationality of the respondents 90.88 % of the customers are Ethiopian and
the rest of 9.11% are foreigners. This indicates the hotels are targeted both the international
tourists and the local customers and due to the expansion of Mega industry and others
factors in city.
Table 4. 3 Crosstab Monthly income in birr
Nationality of the respondents Frequency Percent
Ethiopian Less than 2, 000 Birr 4 1.3
2, 001-4, 000 Birr 68 21.3
4, 001- 7, 000 Birr 108 33.9
over 7, 000 Birr 139 43.6
Total 319 100
Foreigner over 7, 000 Birr 32 100.0
Total 32 100.0
From the Table 4.3 above demographic profile Ethiopians nationality respondents 43.6%
of have monthly income over 7000 thousand birr, 33.9 % are 4000-7000 thousand birr and
others 22.6 % are under 4000 thousand birr whereas, 100% of the foreigner have monthly
income over 7, 000 Birr.
So that, from the above demographic profile conclude that, the respondents are understand
the questionnaire and measure the level of customer satisfaction and the analysis indicate
the real situation of the hotels which was recognized by Singh & Dewan, (2009) as
consumer satisfaction information is a main indicator of how different customers perceive
the quality of services offered by a hotel.
49
4.3 Descriptive Statistics for service quality dimensions, price, corporate image and
___customer satisfaction
Table 4. 4 Mean score of descriptive Statistics for service quality dimensions, price,
corporate image and customer satisfaction
Customer
satisfaction
Tangibility Reliability Responsiveness Assurance Empathy Service
quality
Price Corporate
image
Mean 3.3507 3.5305 3.3657 3.3591 3.3147 3.4010 3.3942 3.2644 3.5064
Std.
Deviation
0.58541 0.50862 0.57038 0.50405 0.55151 0.54706 0.41568 0.60215 0. 56690
Source: Own research (2019)
From Table 4.4, the mean value of the tangibility has the highest (3.5305) from the service
quality dimensions and flowed by empathy (3.4010). The mean value of assurance
reliability and responsiveness are (3.3147), (3.3657) and (3.3591) respectively. In addition,
3.3942, 3.2644 and 3.5064 are the mean value of overall service quality, price, and
corporate image respectively. Lastly, the customer satisfaction mean value was (3.3507).
4.4 Correlation of service quality, price, corporate image and customer satisfaction
To know the nature, direction and significance of the relationship of the variables,
Bivariate correlations procedure to compute Pearson’s correlation coefficient. For this
research purpose, Karl-Pearson ‘s correlation coefficient (r) was adopted, guided by the
nature of data (scale). The value varies between 0 (no relationship) and 1 (perfect linear
relationship) or -1 (perfect negative linear relationship). The significance level (p-value) is
the probability of obtaining results as extreme as the one observed. If the significance level
is small (e.g., p<0.05) then the correlation is assumed to be significant and linearly related.
Opposite will be true, if the significance level is relatively large (e.g., p>0.05).
According to Malhotra, (2004) the general guidelines for interpreting the correlation
values, the relationship would be very weak/negligible when “r” ranges 0-0.2, weak/low
for 0.2-0.4, moderate for 0.4 0.7, strong/high for 0.7-0.9, and very strong for 0.9-1.0 and
whereas Matkar (2012) ‗r ‘ranges 0-0.2, weak/low for 0.2-0.4, moderate for 0.6- 0.7,
strong/high for 0.7-0.8 good 0.8-0.9 very good, and excellent 0.9-1.0. So that, according to
Hair, et al., (2010) before attempting to regression analysis, and computation of correlation
50
coefficients between independent and dependant variables suggested considering the
problem of multi-collinearity, which exists when “r” is greater than 0.9 or several
associations (values) are greater than 0.7 in the correlation matrix.
Table 4.5 Correlation between services perceived quality dimensions and customer
satisfaction
Customer Tangibility Reliability Responsiveness Assurance Empathy
Customer 1.0000
Tangibility 0.6738 1.0000
Reliability 0.6861 0.4804 1.0000
Responsiveness 0.6913 0.5226 0.4775 1.0000
Assurance 0.7126 0.4740 0.5297 0.4699 1.0000
Empathy 0.6641 0.5199 0.4687 0.5210 0.5423 1.0000
Note**: Correlation is significant at the 0.01 level (2-tailed) and (Sources: own survey data
2019)
As indicated above table 4.5, the correlations between service quality dimensions, and
customer satisfaction, shows strongest correlation with value of assurance (r=0.713%),
and followed by responsiveness (r= 0. 691%). In addition, there is strong correlation
between reliability, tangibility, and empathy with the value of (r=0.686%, 0.674% and
0.664%, p<0.001) respectively. The result shows that there is a positive/significant
correlation between the variables service delivery, (IV) and customer satisfaction (DV).
Therefore, the influence of five service quality dimensions on customer satisfaction was
considered to be strongest and in line with the findings of other previous studies Ala`a &
Ahmad (2012), Feven et al (2016), and Birhanu (2017).
51
Table 4.6 Correlations between service quality, price, and corporate image and with
customer satisfaction
Constructed
dimensions
Customer
satisfaction
Service
quality
Price Corporat
e image
Service quality 0. 885**
Price 0. 626**
0.587**
Corporate image 0. 600**
0.581**
0.386**
(Sources: Own survey data 2019)
Note: ** correlation is significant at the 0.01 (2-tailed).
As indicted in the above Table 4.6 above, the correlations between service quality, price
and corporate image with customer satisfaction were strong. From the correlation, Service
quality has strongest correlation with customer satisfaction with value of (r=0. 8850%)
and followed by price and corporate image with the value of (r= 0. 626%, and 0. 600 %,
p<0.001) respectively.
4.5 Test of assumptions
Before performing regression among the variables, the researcher performed different
assumptions. These are multi-collnertiy, normality, Shapiro –Wilk, normal plot and
linearity, Skewness and Kurtosis. For instance, Skewness and Kurtosis values should not
exceed 1 and 2 the absolute values respectively. If the standard deviation doubles by two,
the absolute values are not exceeding the standard deviation.
According to Sergeesh, et al., (2014), before performing the regression analysis, as
suggested by assumptions and conditions of normal distribution, linear relationship
between the independent and dependent variables, error-free measurement, independence
of error, and multicollinearity were examined. According to Field, (2009), linearity denotes
that the mean values of the dependent variable for each increment of independent
variable(s) lie along a straight line and assumed to be a condition for standard regression to
correctly estimate the relationship between a dependent variable and predictor(s). Among
the basic assumptions of test mulita-collinearity is very important and need to be tested.
52
Multi-Collinearity problem arises while at least one of independent variables has a linear
association with others. As to Tay (2001) this can be checked through Variance Inflation
Factor (VIF) for continuous explanatory variables and contingency coefficients for dummy
variable. According to Damoder N Gujarati (2009) a Variance Inflation Factor (VIF) value
greater than 10 is used as an indicator for the strong Multi-collinearity. In case of
contingency coefficients if its value is 0.75 or above indicates there is a series problem of
mulita-collinearity.
According to Gujarati (2003) LPM, faces numbers of econometric problems like hetero-
scedasticity and others. In order to cheek the goodness of the F - statistics of the model,
simple regression to express the relationship between the dependent and independents
variables and simple correlation to express the degree of closeness the variable was done.
According to Nunnaily, (1978), for the assumption of error-free measurement of
regression, it was considered to be no concern in the context of this study, as the reliability
coefficients (Cronbach alphas) were above the threshold limit of 0.7. The tolerance value
below 0.1 and VIF statistics above 10 indicate multicollinearity amongst the independent
variables (Hair et al., 2009). As the computed values were above 0.1 for tolerance statistics,
and VIF ranging within 1 -10 (as indicated along the regression summary in the following
section), multiple regressions were assumed to be free from the problem of
multicollinearity. Although several tests of normality (1) histogram of residuals; (2) normal
probability plot (NPP), test. A histogram of residuals is a simple graphic device that is used
to learn something about the shape of the PDF of a random variable.
Normal Probability Plot; A comparatively simple graphical device to study the shape of the
probability density function (PDF) of a random variable is the normal probability plot
(NPP) which makes use of normal probability paper, a specially designed graph paper. On
the horizontal, or x, axis, we plot values of the variable of interest (say, OLS residuals, ˆ
ui), and on the vertical, or y, axis, we show the expected value of this variable if it were
normally distributed. Therefore, if the variable is in fact from the normal population, the
NPP will be approximately a straight line.
53
Regarding to test of normality, according to (Field, 2009) the central limit theorem, as
long as the sample size is 30 or more; the sampling distribution would tend to be normal
irrespective of the population distribution. Fundamentally, the large enough sample size
(385) used in this study satisfies the requirement of normality, however, in order to
examine the suitability of data for further analysis, two measures of normality- Kurtosis
and Skewness were computed.
From test results the study full fills the assumption of regression (See in the annex table).
4.6 Regression and correlation service quality dimensions on customer satisfaction
Table 4. 7 Regression of tangibility on customer satisfaction
model
R R Square Adjusted
R Square
Std. Error of
the Estimate
correlation customer satisfaction and
tangibility
0. 674a 0. 454 0. 452 0.43318
Customer satisfaction
Tangibility 0.674
Regression Coefficients
The regression results of the analysis indicated in model summery in Table 4.7, R, 0.674
indicate the correlation tangibility with customer satisfaction. The adjusted r2 value of
0.452% indicates that around 0.45% of the variation in customer satisfaction can be
explained by tangibility and a unit increase of tangibility will results increases by (B=
0.674%) in the customer satisfaction of the hotels.
Un-standardized Coefficients Standardized
Coefficients
Β
Sig Collinearity Statistics
Toleran
ce VIF Β Std, Error
(constant ) 0.613 0.162 0.000
Tangibility 0.776 0.046 0.674 0.000 1.000 1.000
54
Table 4. 8 Regression of responsiveness and customer satisfaction
model R R Square Adjusted R
Square
Std. Error of
the Estimate
correlation customer satisfaction
and responsiveness
0.691 0.478 0.476 0.42363 Customer
satisfaction
Responsiveness 0.691
Regression Coefficients
The regression results of the analysis indicated in model summery in Table 4.8, R, 0.691
indicate the correlation responsiveness with customer satisfaction. The adjusted r2 value of
0.476% indicates that around 0.48% of the variation in customer satisfaction can be
explained by responsiveness and a unit increase of responsiveness will result increases by
(B= 0.691%) in the customer satisfaction of the hotels.
Coefficient Un-standardized
Coefficients
Standardized
Coefficients
Β
Sig Collinearity Statistics
Tolerance VIF Β Std, Error
(constant ) 0.654 0.153 0.000
Responsiveness 0.803 0.045 0.691 0.000 1.000 1.000
55
Table 4. 9 Regression of reliability and customer satisfaction
model R R Square Adjusted R
Square
Std. Error of
the Estimate
correlation customer
satisfaction and reliability
0.686 0. 471 0. 469 0. 42644 Customer
satisfaction
Reliability
0.686
Regression Coefficients
The regression results of the analysis indicated in model summery in Table 4.9, R, 0.686
indicate the correlation reliability with customer satisfaction. The adjusted r2 value of
0.469% indicates that around 0.47% of the variation in customer satisfaction can be
explained by reliability and a unit increase of reliability will result increases by (B=
0.686%) in the customer satisfaction of the hotels.
Coefficient Un-standardized Coefficients Standardized
Coefficients
Β
Sig Collinearity Statistics
Tolerance VIF Β Std, Error
(constant ) 0.980 0.136 0.000
Reliability
0.704 0.040 0.686 0.000 1.000 1.000
56
Table 4. 10 Regression of assurance and customer satisfaction
model R R Square Adjusted R
Square
Std. Error of
the Estimate
correlation customer
satisfaction and assurance
Customer
satisfaction
0.713 0.508 0.506 0.41129 Assurance 0.713
Regression Coefficients
The regression results of the analysis indicated in model summery in Table 4.10, R, 0.713
indicate the correlation assurance with customer satisfaction. The adjusted r2 value of
0.506% indicates that around 0.51% of the variation in customer satisfaction can be
explained by tangibility and a unit increase of assurance will result increases by (B=
0.713%) in the customer satisfaction of the hotels.
Coefficient
Un-standardized Coefficients Standardized
Coefficients
Β
Sig Collinearity Statistics
Tolerance VIF Β Std, Error
(constant ) 0.843 0.134 0.000
Assurance 0.756 0.040 0.713 0.000 1.000 1.000
57
Table 4.11 Regression of empathy on customer satisfaction
model
R R Square Adjusted
R Square
Std. Error of
the Estimate
Correlation customer satisfaction and
empathy
0.664 0.441 0.439 0.43831
Customer
satisfaction
Empathy 0. 664a
Regression Coefficient
The regression results of the analysis indicated in model summery in Table 4.11, R, 0.664
indicate the correlation empathy with customer satisfaction. The adjusted r2 value of
0.439% indicates that around 0.44% of the variation in customer satisfaction can be
explained by tangibility and a unit increase of empathy will results increases by (B= 0.664
% ) in the customer satisfaction of the hotels.
4.7 Regression over all perceived service quality dimensions on customer satisfaction
To examine the influence of perceived service quality on, customer satisfaction, linear and
multiple regression models analysis, standard were computed to analyze the direct
relationships between effects of independents (predictors) variables on the dependent
variable.
Coefficient
Un standardized Coefficients Standardized
Coefficients
Β
Sig Collinearity Statistics
Tolerance VIF Β Std, Error
(constant ) 0.934 0.148 0.000
Empathy 0.711 0.043 0.664 0.000 1.000 1.000
58
Table 4. 12 Regression of overall Service quality on customer satisfaction
Model R
R
Square
Adjusted-
R Square
Std. Error of
the Estimate
R Square
Change Sig
1. 0.885 0.783 0.782 0.27325 0.783 0.000
Regression Coefficients
(Sources: Own survey data 2019)
The regression results of the analysis indicated in model summery in Table 4.12, R, 0.889
indicate the correlation over all service quality with customer satisfaction. The adjusted r2
value of 0.789% indicates that around 0.79% of the variation in customer satisfaction can
be explained by service quality. The coefficient indicates a unit service quality increases,
the result will increase with the value of 0.89% of Beta value in the customer satisfaction of
the hotels.
Un standardized
Coefficients
Standardized
Coefficients
Β
Sig Collinearity Statistics
Tolerance VIF Β Std, Error
(Constant) -.878 0.120 0.000
Over all Service
quality
1.246 0.035 0.885 0.000 1.000 1.000
59
Table 4. 13 Regression of perceived service quality dimensions on customer satisfaction
Model R R Square
Adjusted-R
Square Std. Error of the Estimate Sig
1. 0.887 0.787 0.784 0.27223 0.000
Regression Coefficients
(Sources: Own survey data 2019)
From the Table 4.13, the model summary indicates multiple R, (0.887), which service
quality dimensions have strong relationship with customer satisfaction and Adjusted-R
Square was Adjusted-R Square (0.784), in which the model cover around 78%. Whereas
R square R2 (0.787), R Square Change and the Standard error is 0. 27223. So the analysis
the five dimensions of service quality contributed 78% and the other factors contribute the
remaining 0.22% towards customer satisfaction.
As indicted in the Coefficient of determination number that indicates how the data fit
statistical model and measure how observed outcomes are replicated by the model.
From the dimension of assurance appeared to be the highest significant contributor with
coefficient value (β=0.298%), to determine customer satisfaction which is in line with
earlier researcher Feven et al, (2016) and Brihanu (2017) . Responsiveness is the second
higher significant (β=0.292%, p<0.000), which is in line with Afroza et al (2014) and
Simachew & Hailemariam (2018). And reliability (β=0.249%, p<0.000), tangibles
Un standardized
Coefficients
Standardized
Coefficients
Β
Sig Collinearity Statistics
Tolerance VIF Β Std, Error
(Constant) -.885 .121 0.000
Tangibility 0.243 0.037 0.211 0.000 0.597 1.674
Reliability 0.249 0.033 0.242 0.000 0.614 1.629
Responsiveness 0.292 0.037 0.251 0.000 0.599 1.668
Assurance 0.298 0.035 0.281 0.000 0.582 1.719
Empathy 0.169 0.035 0.158 0.000 0.568 1.760
60
(β=0.243%, p<0.000). Empathy (β=0.169%), at p<0.000) has the least impact compared to
the other variables which is supported by Afroza et al (2014) and Feven et al, (2016). So
the dimensions were appeared to be significant predictors of customer satisfaction (at 95%
confidence level), in the context of Debre Berhan hotel sector. From the this, a unit
increase in assurance, responsiveness, reliability, tangibles and empathy will increase the
customer satisfaction of the responding hotels’ customers by (β = value 0.28%, 0.25%, 0.
24%, 0.21% and 0.16 %) respectively. This, means installing confidence, providing safe
transactions, service delivery from the hotel ‘s staff, consistently courteous, knowledge to
answer questions, well coming guests are the major factors. In addition, staffs willing to
provide prompt service and assistance to guests ‘requests and problems, providing a safe
environment, check-in and check-out services and tell you exactly when services will be
performed are the factors for customer satisfaction.
Guided by this, tangibility, reliability, responsiveness, assurance and empathy have positive
and significant effect on customer satisfaction among hotels in DBCH and accepted the
hypothesis (H1a, H1b, H1c, H1d, and H1e) as: perceived tangibility, reliability,
responsiveness, assurance and empathy have positive and significant effect on customer
satisfaction DBHI.
Additionally, the customers’ forward comments like Ethio-Bernos hotel provides services
a friendly atmosphere to customers, cleaner and efficient when compared to competitors
whereas satisfactory for Hiwot hotel. But the overall services of the hotels Getva provides
better when compared to other competitor in the city. However, their problems in Ethio-
Bernos hotel service delivery like, employee doesn’t understand the individual interest
perfectly, and sometimes large amount of potato in meat tibus and the machine of chips is
not good, poorly darning shower that quickly over flow inconsistent access to water /sink,
shower toilets and fixture not securely attached and lack of sufficient parking. Whereas
Hiwot hotel service quality and quantity decreasing from time to time, like lack of variety
of food, quality of rooms, shower and bed, cleanness materials, poor handling customer
Customer satisfaction y -0.885+0.243(tangibility) + 0.249 (reliability) +0.292
(responsiveness,) +0.298 (assurance) + 0.169 (empathy) +E (error term)
61
satisfaction and focus on the customers who have wealth and the foreign, sound pollution
employees who working in food preparation and there is a problem in handling customer
satisfaction, few employees in number and fail to fast response. So that, according to
Mathews (2008), we can say they face difficulty the ability to continue satisfying their
customers while at the same time making huge profits.
Finally, in Getva hotel there is some problem like food quantity and quality specially
when there is ceremonial, lack of hot water in the shower and TV is not work in bed room.
To make more reliable, the researcher cheeked these problem from the city culture and
tourism office and they confirmed that these type of problem was happening sometimes in
the three hotels.
Therefore, the influence of service quality on customer satisfaction was considered to be
strong in line with the findings of other previous studies Francosis, et al., (2007), Simon
(2012), Tewodros (2015), Nguyen et al., (2015), Feven et al., (2016), and Birhanu (2017)
and Simachew and Haile Mariam (2018). Moreover, the result was found to be free from
the multicollinearity problem, as indicated by the statistics of Tolerance and VIF (see Table
4.13).
62
Figure 4.1 Five service quality dimensions
63
4.8 Regression Analysis of Perceived price on Customer satisfaction
Table 4. 14 Regression of price on Customer satisfaction
Model R R Square Adjusted R Square Std. Error Sig
1 0. 626 0.392 0.390 0.45704 0.000
Regression Coefficients
Model Un-standardized
Coefficients standardized
Coefficients
Beta T Sig.
Collinearity Statistics
B
Std.
Error Tolerance VIF
(Constant) 1.363 0.135 10.122 1.363
Price 0.609 0.041 0.626 15.007 0.609 1.000 1.000
(Sources: own survey data 2019)
Dependent Variable: customer satisfaction and independent variable price
The regression results of the analysis indicated in model summery in Table 4.14, adjusted
r2 value of 0.390% indicates that around 0.390% of the model variation in customer
satisfaction can be explained by price.
The coefficients indicate price on customer satisfaction positively and significantly affects
customer satisfaction and can be represented as: customer satisfaction y=1.363+0.609
(price). And every increase overall fair price will have increased the associated customer
satisfaction by 0.626% (B) times and accepted the second hypothesis as H2 perceived price
positively and significantly influence the customer satisfaction DBCH. However, regarding
the prices of all hotels there is controversial i.e., around 75 of the respondents say is not
fair price for all hotels and 11 of the respondents wrote some times change the bed price in
Hiwot hotel and in Getva hotel, 62 of the respondents wrote there is no variety of prices
and the payment system takes much times, whereas Ethio- Bernos has fair price.
Therefore, the influence of price on customer satisfaction was considered to be strong and
in line with Andaleeb and Conway (2006), Aurimas & Borisas (2009), Athula (2014),
Abdul and Zainal (2016) and Bader (2017).
64
Figure 4.2 Price and customer satisfaction
4.9 Regression result of perceived corporate image on customer satisfaction
Table 4.15 Regression of corporate image on customer satisfaction
Model R R
Square
Adjusted
R Square
Std. Error of the
Estimate
F Change Sig
1 0.600a 0.360 0.358 0.46910 196.069 0.000
Regression Coefficients
Model Un-standardized
Coefficients
Standardized
Coefficients
Collinearity
statistics
B Std.
Error Beta T
Tolerance VIF
1(Constant) 1.179 0.157 7.505
Corporate
image
0.619 0.044 0.600 14.002 1.000 1.000
Sources: Own survey data 2019)
65
Dependent Variable: customer satisfaction and independent variable corporate image
From the Table 4.15 model summary indicates R values is 0.600 % shows the relationship
of customer satisfaction and corporate image. Adjusted r2 value of 0.358 indicate that
around 36% the variation in customer satisfaction can be explained by corporate image, the
other factors contribute the remaining 64% towards customer satisfaction.
In the analysis of β coefficient value shows that, corporate image has positive and
significant effect on customer satisfaction. So the relationship between corporate image
(explanatory variable) and customer satisfaction (dependent variable) can be represented
as: customer satisfaction y = 1.179+0.619 (corporate image). And also, implied that a unit
increase overall corporate image will increase the associated customer satisfaction by 0.600
% (β) times.
Regarding the corporate image, the customers’ additionally forward comments, like Etho-
Bernos hotel, indicate the culture of the society, has better attractive internal and external
design compared to other hotels, whereas Getva named the hall by society village and
history like Minjar, Ankober, and Liche hall. For Hiwot hotel, the hotel has good location
and the internal and external design was good for Getva and Hiwot hotels. And Hiwot lack
of lift for disables persons. Finally, all of the hotels haven’t participations in the
community service in well organized manner.
Therefore, the influence of corporate image on customer satisfaction was considered to be
strong and in line with Kumbhar, (2011) and corporate image in bank industry work for
hotel industries and supported by Darini&khozaei (2016) that corporate image has positive
and significant relationship on customers’ satisfaction in hotel sector. Finally, accepted the
H3 hypothesis as perceived corporate image positively and significantly influence the
customer satisfaction DBHI.
66
Figure 4.3 Corporate image
67
4.10. Regression of service quality, price and corporate image on customer
Satisfaction
Table 4.16 Regression of service quality, price and corporate image
Model R
R
Square
Adjusted
R Square
Std. Error
of the
Estimate
R Square
Change F Change
1 0.90 0.809 0.808 0.25662 0.809 491.487
Regression Coefficients
Model Un-standardized
Coefficients
standardized
Coefficients
Tolerance VIF
B std error B T Sig
(Constant) -1.036 0.116 -8.946 0.000
Service
quality
1.021 0.046 0.725 22.046 0.000 0.508 1.969
Price 0.156 0.028 0.155 5.334 0.000 0.652 1.533
Corporate
image
0.123 0.030 0.119 4.122 0.000 0.659 1.517
(Sources: own survey data 2019) Dependent: customer Satisfaction, Predictors: (constant)
service quality, price and corporate image
From Table 4.16 above the value of R= 0.90% which indicates the relationship between the
IV and DV. The R square (R2) 0.809, Adjusted r2 value of 0.808% indicates that 0.81 % of
the variation in customer satisfaction can be explained by service quality, corporate image
and price. And R Square Change 0.809 and the Standard errors are 0.25662. The results of
the analysis indicated in coefficients value above table 18 that perceived, service quality,
price and corporate image influence positively and significantly (β =), p<0.05, the customer
satisfaction with the hotel provisions. So, the relationship between (explanatory variables)
and customer satisfaction (dependent variable) can be represented as:
Customer satisfaction y 1.036( ) +1.021 (service quality, ) +0.156 (price, )
+0.123 (corporate image, )
68
This implied that every increase of overall service quality, price and corporate image, it
will increase the associated customer satisfaction by 0.73 %, 0.16% and 0.12% (β) times
respectively and accepted the hypothesis H1, H2 and H3 positively and significantly affect
the customer satisfaction DBHI.
Therefore, the influence of service quality, corporate image and price on customer
satisfaction was considered to be strong and in line earlier researchers, Feven et al, (2016)
Birhanu (2017), related to service quality, Darini&khozaei (2016) related to corporate
image and Muneb (2018) related to price each variable separately.
Figure 4.4 Service quality, corporate image, and price
69
Figure 4.5 Service quality, corporate image, and price Normal p-plot
4.11 Qualitative analysis of the interview Questions from the hotel mangers
1. Have you ever received complains and comments from your customers’ interaction to the
quality of services offered by this hotel and from which area raise customers complain? A.
food and beverage B. corporate image C. price. D. Bed and others Can you explain the
reason behind?
Yes, we receive different comments and complain from our customers related to service
quality, price and others to be improving. Sometimes they inform to the employees weather
they satisfied or not in each service. Most of the time the customer raise compliances
related food, beverage, and bed accommodation like food quality, employees speed,
knowledge ,level of salt and fat and bed material . Most of the time complains raised by the
70
customers who experiences and the employees of the hotels are lacks academic knowledge
rather experience, and there is lack of training center in hotel industry.
2. Did the hotel management take any remedy action based on customers’ suggestions and
comment’s?
Yes, the supervisor supervise the customer while they are using the service and take
corrective action and if the customers have issues on the service , the manager of the hotel
checks immediately and takes different action based on the customer suggestion like
improving the service quality related issues food and materials and others.
3. How customers rate their satisfaction and what systems follow to deliver the services
would you explain it? Based on the customers comment, our hotel is rate the hotels some
of very good and others good position by service deliver, corporate image and price. This
indicates different issue to be improved. In order to provide better service, we follow
different procedures, standards and individuals interest.
4. Do you think the services quality that offered by the hotel is factor for customer
satisfaction?
Yes, service has to be delivered with reference to some standards and creating high
customer satisfaction can be difficult in the hotels industry due to different reasons like
service quality, location and performance of the hotel itself. However, providing service
quality is a factor for customer satisfaction. The relationships between owner and
employees management has impact on the customer satisfaction. Employees’ satisfaction
related better service deliver which in turn create customer satisfaction.
5. Do you think your prices set for all services are fair and price is factor for customer
satisfaction? Yes, it is fair enough. The price sated by the hotel sometimes factor for
customer satisfaction but the hotel provides fair price compared to our service delivery
standards and it created customer satisfaction. And currently the hotel working price
revising with reference to the quality, type and level of our services and facilities it is for
delivered.
71
6. Have you ever build corporate image about your hotel? Can you explain corporate
image of your hotel and corporate image is factor for customer satisfaction?
We are striving to build for corporate image. To build a better corporate image we have to
improve the quality of our services. Yes; some hotels have built their corporate image
through service quality that finally leads to customer satisfaction. Corporate image is a
factor for customer satisfaction if the customers assume the hotel internal and external
design is excellent he/she perceived satisfaction, if not they doesn’t satisfy and not used to
the hotel at all. Corporate image of the hotel is very good and it can be cause for customer
satisfaction. In hotels main factor for customer satisfaction products like food, beverage,
physical facilities, employees’ performance related issues which is categorized tangibility,
reliability responsiveness and empathy. So other service dimensions and variables are not
the main factors for customer satisfaction.
Therefore, from the interview of the manager and the data analysis, customer satisfaction
of the hotel depends on the variables service quality, price and corporate image and these
variables the factor affecting customer satisfaction and indicates there is no difference
between the interview and quantitative analysis.
Table 4.17 Summary of Hypothesis Testing Results
Code Test Result
1 Service quality will have positive and significant effect on customer
satisfaction among hotels in DBCH.
Accepted
2 H1a: Tangibles will have positive and significant effect on customer
satisfaction among hotels in DBCH.
Accepted
3 H1b: Reliability will have positive and significant effect on customer
satisfaction among hotels in DBCH.
Accepted
4 H1c: Responsiveness will have positive and significant effect on customer
satisfaction among hotels in DBCH.
Accepted
5 H1d: Assurance will have positive and significant effect on customer
satisfaction among hotels in DBCH.
Accepted
6 H1e: Empathy will have positive and significant effect on customer
satisfaction among hotels in DBCH.
Accepted
72
7 H2: Price will have positive and significant effect on customer satisfaction
among hotels in DBCH.
Accepted
8 H3: Corporate image will have positive and significant effect on customer
satisfaction among hotels in DBCH.
Accepted/positive
(Sources: Own survey data 2019)
73
CHAPTER FIVE
5. SUMMARY, CONCLUSTION, AND POLICY IMPLICATION
5.1 Summary of findings
In this study the demographic profile of the respondents’ were more than 50% are male
and 45% are females. In related to ages of the respondents, most of (85.2%) the customers
who participated in this study are in between age of 21-40 years old. The remaining 9.1%
and 5.7% are above 40 and under 20 age respectively. And 51.6% the marital status of the
respondents are married and 46.4% are single and the remaining 2 % are divorces. The job
of respondents’ 41.9 % employee and 43.9% are business owner and which covers 85.8 %
of the respondents. The remaining 5.1% 4.8% and 4.3 % are student, other, and agriculture
respectively.
Regarding the educational level of the respondents are 61.3%, master or higher, 20.5%
bachelor degree, and the reaming 10.8% and 6.6%, diploma, secondary and below
respectively. The experience of the respondents in the hotels 62.1 % of the respondents
have between 0-4 years and others 4 and above years’ experience in the hotels. Also, the
income of the respondents 44.7% are above 7000 thousand birr and 34.5% from 4000 to
7000 thousand birr. The rest of 19.7 % and 1.1 % are 2, 001-4, 000 and less than 2, 000 birr
respectively and implies 79.2 % of the respondents are more than 4000 birr. The
nationality of the respondents 90.88 % of the customers are Ethiopian and the rest of 9.11%
are foreigners.
Finally, this shows that the majority of customer’s demographic profile are understand the
designed questionnaires and measure the level of customer satisfaction in the hotels.
This study examined the effect of service quality dimensions, price and corporate image on
customer satisfaction in Debre Berhan by using three specific objectives which were
developed into alternative hypotheses and statistically tested using the Karl Pearson’s zero
order and regression using SPSS 24.0.
74
The first objective was to determine the effect of service quality, price and corporate image
on customer satisfaction and study result shows service quality, price and corporate image
significantly and positively affect customer satisfaction with values (R squared = 0.809)
being explained. The study results show five service quality dimensions of the assurance,
responsiveness, reliability, tangibility and empathy have positive and significant effect on
customer satisfaction and supported by earlier researchers. From the service quality
dimensions’ assurance has the highest attributes factors affecting the customer satisfaction
means that there is problem in related to employee’s behavior, consistently courteous,
delivering service and knowledge to answer questions to the customers in the hotels. Also
responsiveness has higher effect on customer satisfaction in means that, the hotels face
problem related to providing prompt service, and safe environment willing to help,
responding request and telling exact time the service will be perform. And reliability also
has effect on customer satisfaction means that providing services at the time it promises to
do, showing sincere interest in solving problems, convenient operating hours, hotel
guarantees, error free billing and payment system.
Tangibility and empathy have effect on customer satisfaction which indicates the hotels
face to provide satisfactory physical materials and equipment facilities, provide personal
attention and understand specific needs and to be competent.
The second objective was to determine the relationship of service quality, price and corporate
image with customer satisfaction of hotels in Debre Berehan and the study shows service
quality, price and corporate image have positive relationship with customer satisfaction with
values of (R = 0.90). The correlation analysis further revealed constructs have extensive
correlation with customer satisfaction with the value of 0.90% (service quality, corporate
image and price) together and 0.885%, 0.626% and 0.600% separately respectively and
considered as crucial determining for customer satisfaction.
The third objective was to determine to what extent effect of service quality, price and
corporate image affect customer satisfaction in Debre Berehan hotels. The study shows
service quality, price and corporate image affect customer satisfaction with 81% percent
and customer satisfaction (R squared = 0.809) being explained and this indicate service
quality, price and corporate image perceptions were strongly associated, correlate and
75
affect with service delivery to the hotel customers/guests, price and corporate image and
which indicate face problem to charging fair price for food, beverage and bed, and
providing clear, complete and understandable information, hotels product, location and
attractiveness of interior design and external appearance, and efforts to benefits of the
community.
The findings of this study support Debre Berhan city perceived service quality, price and
corporate image and were explaining 73%.16%, and 12% variations in the customer
satisfaction which are caused by service quality, price and corporate image performance
respectively and the study results in line consistent with earlier research Rahman et al.,
(2012), Martínez & Bosque, (2015), with corporate image Feven et al (2016) and Birhanu
(2017) related to service quality and Munneb (2018) related to price.
5.2 Conclusion
As indicated in the objective of the study, it is assess the factors that affect customer
satisfaction and the status of satisfaction customers receiving services quality, price and
corporate image at the hotel of at Debre Berhan city administration. The result shows the
customers satisfied with service quality, price and corporate image provided by the hotels
moderately. But, doesn’t mean that hotels shouldn’t strive further rather extend and widen
the opportunity so as to satisfy the customers’ needs and wants. So that, delivering quality
service, providing fair price and building corporate image is not an optional for hotel
industry at Debre Berhan rather a mandatory to be competitive and satisfy customers.
Customers’ satisfaction is a key in hotel sector because of special nature of the service and
it has intensive contact with infinite customers who have different needs and wants and
required customized solution around the world struggle to finds methods through which
they can improve the quality service since it leads to enhanced satisfaction. Having this in
mind, the data collected from surveys are used as a great tool of performance indicators for
hotels in Debre Berhan and enables the organization to realize quality of service, price and
corporate image which provided from the view point of customers and hotels managers.
Based on the findings of the research, the following conclusions are drawn:
76
Customer satisfaction of hotels industry of Debre Berhan city administration,
highest and significant impact receives by service quality, price and corporate
image respectively and providing highest service quality, fair price and corporate
image results customer satisfaction in hotels industry of Debre Berhan city
administration.
Among the service quality dimensions’ assurance has the highest effect on
customer satisfaction flowed by responsiveness, reliability, tangibility, and
empathy.
The overall satisfaction of customers in the hotels, service is found to be moderate
level and needed to improve by considering the existing situation of the city and
hotels.
The study revealed there is no difference with service quality dimensions between
the scopes of the hotels related to customer satisfaction in Ethiopian, but there is a
difference with other countries in Croatian, Bangladesh and Vietnam.
5.3 Policy implication of the study base on the findings
5.3.1 Policy Implications
The findings of this study results that, the most significant determinants of service quality
in the hotel sector include assurance, responsiveness, reliability tangibility and empathy.
Hence, in developing policies and strategies for the hotel sector, significant attention
should be paid to enhance service quality dimensions and to ensure customer satisfaction.
In addition, foreign guests / customers were found in hotels. This has important policy
implication; indicates, from international tourism perspectives, that our hotels provide
better/more hospitality to the international guests and hotel management should look into
possible causes of relatively lower perceptions observed by Ethiopian and foreign guests.
5.3.2 Managerial Implications and Recommendations
The important managerial implication greater care should be taken first to service quality
dimensions and closely follow-up their feedback on the service delivery/quality, and make
immediate corrections before they make a potentially destructive. Hotel management can
make more assessment and attempt to enhance more value for money and giving more
77
attention to their guests and put appropriate strategies in place to influence customers
‘satisfaction.
Service quality dimensions maintain significant influence on customer satisfaction this
implies that even if guests are satisfied, what makes them to come back is the Service
quality of service. Therefore, hotel managers should give substantial attention to provide
error free, dependable service and products as it makes the customers come back and
recommend their hotels. Management should take necessary steps to enhance service
quality by providing and establishing flawless operational process with qualified and
motivated employees (equipped with modern service equipments and machineries). Hence,
the hotel management should ensure smooth functioning of all the service components
(e.g., software, hardware and human ware) to meet service standards in a more reliable
manner.
Furthermore, on the employees should be trained and motivated to provide a
caring/friendly service to the customer satisfaction, and by giving personal attention to
their requests/queries with confidence and professionally. The management needs to pay
due attention to the quality of food and beverage by attracting qualified chef ‘s and cooks,
securing quality and reliable source for food preparation (raw) materials and continuously
up-dating the food and beverage products to meet customers ‘needs and tastes.
5.3.2.1 Recommendations
Generally, based the finding the following recommendations was drawn.
The hotels operators better to allocate resources to improve service quality
(assurance, responsiveness, reliability, tangibility and empathy) dimensions
respectively. Similarly, on the price and corporate image of the hotels, since it has
significant effect on the customer satisfaction.
The hotels better to recruit employees who fulfill the customers’ wants, interests
and provide different training options to the employees.
The hotels should improve their services delivery by establishing modern
management and customer handling system related to service quality, price and
corporate image.
78
Hotel managers’ better to review their service quality, corporate image and prices
regularly without any compromising in order to improve customers’ satisfaction,
and the hotels has to incorporate output of this study so as to create a more
enjoyable experience for their customers’ satisfaction.
Currently customers not only examined for basic services and facilities provided by
a hotel, but also are expecting a high standard of personal service. Hotels owners
better to ensure service quality by constantly, reviewing their customers’ needs and
wants, and strengthening customer service training programs for their employees at
least annually.
5.4 Limitation of the study and suggestions for further research
The study revealed service quality, price and corporate image dimensions improves hotel
customer satisfaction, but did not come up with any optimum point at which the hotel
should employ them. The study also relied at Debre Berhan city reported data from only.
Further research could use multiple cities to conduct their studies and this would enhance
the validity of the research findings. And since the data collection instrument is self-
administrated questionnaire, there may be very few response biases.
So, in further research, future study should expand the scope of this research in terms of
the number and type of hotels (not falling under any star category and star categories).
Besides, may deeply examine whether items used in this study are suitable to measure
customer satisfaction while making a comparison across service quality, price and
corporate image and also better to include the variables like communication, security and
Wi –Fi and other facilities in the service quality dimensions, and customer relation
management as a variable and investigate by comparison of the hotels.
79
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Annex- A Questionnaires in English
Debre Berhan University
College of Business and Economics Department of Management
Questionnaire for hotel industries customers
Dear Respondent,
My name is Mekonnen Dibu Gebremariam. I am student of Master of Business
Administration in Debre Berhan University. Now, I am on preparing my thesis. Therefore,
first I would like to thank you in advance for your willingness and cooperation in filling
this form. The purpose of this questionnaire is to gather primary data factors affecting to
customer satisfaction in hotel industry at the Debre Berhan city administration, as a partial
fulfillment of the graduate study in Master of Business Administration in Debre Berhan
University. In this regard, I kindly request you to provide me reliable information that is the
best of your knowledge so that the findings from the study would meet the intended
purpose. I strongly assure you that your response will be confidential.
Study Title “Factors affecting customer satisfaction in hotel industry: the case of Debre
Berhan
City administration, Ethiopia”
Procedure and duration
First of all, you were selected by lottery method. Researcher will be asking you using a
questionnaire to provide me with pertinent data about factors affecting customer
satisfaction that is helpful for the study. The questionnaire will take about 10-15 minutes,
so I kindly request you to spare me this time for the study.
Risks; The risks of being participating in this study are only taking few minutes from your
time.
Other than this the questionnaire will not cause any harm on you and the community.
Benefit
88
There would not be any direct payment for participating in this study. But the findings
from this research may reveal important information for the hotel customer.
Confidentiality
The information that you provide us will be confidential. There will be no information that
will identify you and your organization. The findings of the study will be general for the
study population and will not reflect anything particular of individual persons or housing.
The questioner will be coded to exclude showing names; no references will be made in oral
or written reports that could link participants to the research.
Rights
Participation in this study is fully voluntary. You have the right to declare for your
organization to participate in this study. You may refuse to answer any question at any
time. However, we hope you will answer the questions, which will benefit the services you
get.
Contact address If there are any questions or enquires any time about the study, please
contact and speak to principal investigator, Mr name is Mekonnen Dibu by phone number:
0910553918 and Email: [email protected].
Instruction for filling the questionnaire please read each statement carefully and encircle
your choice for the questions indicated in the table and wr0ite your opinion on the blank
space.
Instructions;
Do not write your name
Respond by making tick mark (✔), by circling or in writing wherever appropriate.
Try to write answers precisely for the open-ended questions One:
Part Demographic profile of the respondents.
89
Question Response
1.sex 1. Male 2. Female
2. Age 1. Less than 20 2. 21–30 3.31–0 4. More than 40
3 3 Marital status 1. Single 2. Married 3. Divorced
4.Educational level 1. Secondary school &below 2. Diploma 3. Bachelor degree
4. Master or higher
5.The type of jobs that respondents
participated
1. 1.Student 2. Employee 3. Business owner
4.Agriculture and related 5.Other
6. How long have you been customer of
this hotel?
1. 1 year 2.1 – 4 years 3.4 – 7 years 4 7 years
7. Could you indicate in which category
your monthly income belongs?
1.Less than 2, 000 Birr 2.2, 001–4, 000 Birr
3.Br. 4, 001– 7, 000 Birr 4.over 7, 000 Birr
8. Could you indicate your nationality 1. 1. Ethiopian 2. Foreigner
Part: II Assessment the degree of satisfaction of services offered by the hotel.
The following question aims to assess the degree of satisfaction of service offered by the
hotel.
Directions: -Please read carefully each item separately and indicate your level of agreement
by putting (✔) mark under each alternative using the scale below. (From 1 to 5 alternatives
in the Likert scale). Key: - SA= Strongly Agree (5), A= Agree (4), UD=Undecided (3),
DA=Disagree (2), SD= Strongly Disagree (1)
No Service quality SD(1) DA(2) UD(3) A(4) SA(5)
Tangibility
1 The hotel uses modern state of art technology and
equipment in their service delivery.
2 The hotel’s physical facilities are visually appealing and
satisfactory.
3 The hotel’s employees are well dressed and neat in
appearance.
4 The materials in the hotel like the beverage, food, and
other materials are visually appealing.
5 The hotel ‘s rooms are clean and comfortable.
Reliability
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6 The hotel provides its services at the time it promises to do
so.
7 When customers have a problem, the hotel
Shows sincere interest in solving it.
8 The hotel delivers its services promptly at the time it
promises to do.
9 The hotel has operating hours convenient to all its
customers.
10 The hotel guarantees/ensures reliable reservation services.
11 The hotel billing and payment systems are free from error.
12 The hotel performs the service right the first time.
Responsiveness
13 The hotel’s employees give me prompt service.
14 The hotel employees are always willing to help me.
15 The hotel employees are never too busy to respond to my
requests.
16 The hotel provided a safe environment.
17 The check-in and check-out services are quick and easy at
the hotel.
18 The hotel restaurant delivers prompt service to its
customers.
19 The hotel staff are willing to provide prompt assistance to
guests ‘requests and problems.
20 The hotel employees tell you exactly when services will be
performed.
Assurance
21 The behaviour of employees of the hotel installs
confidence in customers.
22 I am quite satisfied with the service received from the
hotel‘s staff.
23 I feel safe in all my transactions at the hotel.
24 In the hotel, employees are consistently courteous with
me.
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25 Employees in the hotel have the knowledge to answer my
questions.
26 Hotel staffs welcome guests that create a comfortable
feeling.
Empathy
27 The employees of the hotel give customers individual
/personal attention.
28 The employees understand customers’ specific needs.
29 The hotel staffs provide service to meet guests‘best
interest (as per the requirements).
30 The hotel has employees who are competent.
Corporate Image
1 The hotel’s product has reputation.
2 The hotel is conveniently located and has attractive
layout.
3 The hotel in its service delivery is Persuasive and
excellent.
4 The hotel has distinctive atmosphere and a better image
than its competitors.
5 The hotel aims much effort to the benefits of the
community
6 The performance of this hotel is superior to that of
competitor’.
7 The hotel has attractive interior design and external
appearance.
Price
1 I am properly informed about the price of services.
2 I feel the service charge that I have paid for food and
beverage is fair
3 Price information is clear, complete and understandable
to customers
4 Bed prices are fair compared to other hotels.
5 The overall price of the hotels fair and meet my need
Customer Satisfaction
1 The hotel completely meets my expectations.
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2 I feel absolutely delighted with the hotel’ services
3 The information that is presented by this hotel is
accurate
4 This hotel is exactly what I need.
5 There is a guarantee of this hotel.
6 I am satisfied with the overall service quality offered by
the hotel.
Write any ideas or comment about hotel that you feel regarding the customer service. ------
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Annex- B Questionnaires in Amharic
መጠይቅ
ደብረ ብረሃን ዩኒቨርሲቲ
ቢዝነስ እና ኢኮኖሚክስ ኮሌጅ ማኔጅመንት ዲፓርትመንት
ውድ የሆቴሉ ደንበኞች:
እኔ በአሁኑ ሰዓት በደብረ ብረሃን ዩኒቨርሲቲ የሁለተኛ ድግሪ ተማሪ ስሆን የመመረቂያ ጥናቴን
በደብረ ብረሃን ሆቴሎች ላይ በደንበኛው የአገልግሎት እርካታ ላይ ተፅዕኖ የሚያሳድሩ ሁኔታዎች
በሚል ርዕስ ጥናቴን እየሰራሁ እገኛለሁ፡፡የዚህ መጠይቅ አላማም ሆቴሉ በሚሰጠው አገልግሎት
የደንበኛውን እርካታ ተፅዕኖ የሚያሳድሩት ነገሮች ላይ በቂ መረጃ በመሰብሰብ ጥናቱን ውጤታማና
ተዓማኒነት ያለው ማድረግ ነው፡፡ ይህንንም አሳካ ዘንድ የእርስዎ ትብብር በጣም
ያስፈልገኛል፡፡ስለዚህ ለመጠይቁ መልስዎን በመስጠት እንድትተባበሩኝ በአክብሮት እጠይቃለሁ፡፡
ለመጠይቁ የሚሰጡት ምላሽ ለጥናቴ ብቻ የሚውል ሲሆን መልስዎትም በሚስጥር ይያዛል፡፡
በእርስዎ ላይም የሚፈጥረው ምንም አይነት ችግር የለም ፡፡
ማሳሰቢያ፡ -
ሰምዎትን መጥቀስ አያስፈልግም፡፡
ትክክል ነው ብለው ያሰቡትን መልስ ፉት ለፉት ባለው ሳጥን ውስጥ የራይት (✔) ምልክት ያድርጉ፡፡
ስለትብብርዎ አመሰግናለሁ!!
ክፍል አንድ: የግል ሁኔታ
ጥያቄዎች የተሰጠ ምላሽ
1. ፆታ 1.ወንድ 2. ሴት
2. እድሜ 1. ከ20 ዓመት በታች
2. 2. 21-30
3. 31-40
94
4. ከ40 ዓመት በላይ
3. የጋብቻ ሁኔታ 1. ያላገባ 2. ያገባ 3.አግብቶ የፈታ
4. የትምህርት ደረጃ 1. 2ኛ ደረጃና ከዚያ በታች
2. ዲፕሎማ
3. የመጀመሪያ ዲግሪ
4. 2ኛ ዲግሪና ከዚያ በላይ
5. የሚሰሩት የስራ ሁኔታ 1. ተማሪ 2. ሰራተኛ 3. የግል ድርጅት ባለቤት 4.
ግብርና ተያዠነት ያላቸው 5. ሌላ
6. ለምን ያህል ጊዜ የዚህ ሆቴል ደንበኛ ነዎት? 1. ከ1 ዓመት በታች
2. ከ1-4 ዓመት
3. ከ4-7 ዓመት
4. ከ7 ዓመት በላይ
7. እርስዎ የሚያገኙት የወር ገቢ በአማካኝ ስንት ይሆናል? 1. ከ 2, 000 ብር በታች
2.ከ2, 001-4, 000 ብር
3.ከ 4, 001- 7, 000 ብር
4.ከ7, 000 ብር በላይ
8. እርስዎ ዜግናትዎ ሁኔታ 1. ኢትዮጲያዊ 2. የዉጪ ሀገር
ክፍል ሁለት፡በሆቴል አገልግሎት የሚያገኙትን እርካታ ይዳስሳል፡፡
እባክዎን የእርስዎን ሀሳብ ከ1-5 የቀረቡትን ቁጥሮች ምልክት በማድረግ ያመልክቱ ፡፡
1 2 3 4 5
በጣም አልስማማም አልስማማም ሀሳብ የለኝም እስማማለሁ በጣም እስማማለሁ
የአገልግሎት አሰጣጥ ጥራት 1 2 3 4 5
ውጫዊ እይታ /Tangibility/
1 ሆቴሉ አገልግሎት ሲሰጥ ዘመናዊ መሳሪያና ቴክኖሎጂ
ይጠቀማል፡፡
95
2 የሆቴሉ ውጫዊ ገፅታ ለዓይን የሚስቡና የሚያረኩ ናቸው፡፡
3 የሆቴሉ ሠራተኞች ፅዱና የተስተካከለ አለባበስ አላቸው፡፡
4 የሆቴሉ መጠጥ ፡ ምግብ እና ሌሎች እቅረቦቶች አገልግሎት
ለዓይን የሚስቡ ናቸው፡፡
5 የሆቴሉ ክፍሎች ፅዱና ምቹ ናቸው፡፡
ታማኝነት //Reliability/
6 ሆቴሉ ቃል በገባው ጊዜ መሠረት ተገቢውን አገልግሎት
ይሰጣል፡፡
7 የሆቴሉ ደንበኞች ችግር በሚገጥማቸው ጊዜ ሆቴሉ ችግሩን
ለመፍታት ከልብ የመነጨ ፍላጎት ያሳያል፡፡
8 ሆቴሉ አገልግሎት ለመስጠት ቃል በገባበት ሰዓት አገልግሎቱን
ይሰጣል፡፡
9 ሆቴሉ የሚሰራበት ሰዓት ለሁሉም ደንበኞች ምቹ ነው፡፡
10 ሆቴሉ የቅድሜያ መያዝ አገልግሎት ከስህተት ነጻ የሆነ
ይሰጣል::
11 የሆቴሉ የክፍያ ሰነድና ሰርዓት ከስህተት ነጻ የሆነ ይሰጣል::
12 ከሆቴሉ ለመጀመርያ ጊዜ አገልግሎት ሙሉ በሙሉ በትክክል
ይሰራል ፡፡
ፈጣን ምላሽ /Responsiveness /
13 የሆቴሉ ሰራተኛ ቀልጣፊ የሆነ አገልግሎት ይሰጣሉ::
14 የሆቴሉ ሰራተኞች ደንበኞቻቸውን ለማገዝ ሁሌም ዝግጁ
ናቸው::
15 የሆቴሉ ሰራተኞች የደንበኛውን ጥያቄ መልስ ለመስጠት ጊዜ
አይወስዱም::
96
16 ሆቴሉ ምቹ የሆነ አካባቢ አለው፡፡
17 ሆቴሉ ስተገባና ስትወጣ የአገልግሎት አሰጣጡ ፈጣንና ቀላል
ነው፡፡
18 ሆቴሉ ለደንበኞቹ ፈጣን የሆና የምግብ አገልግሎት አሰጣጥ
አለው፡፡
19 የሆቴሉ ሰራተኞች ለደንበኞች ጥያቄና ችግር ፈጣን
የሆነ ደጋፍ ለመስጠት ከልብ የመነጨ ፍላጎት
አላቸው ፡፡
20 የሆቴሉ ሰራተኞች መቼ አገልግሎቱ እንደሚሰራ
ይናገራሉ፡፡
እርግጠኝነት /Assurance/
21 የሆቴሉ ሰራተኞች ፀባይ በሆቴሉ እምነት እንዲኖረኝ
አድርጓል፡፡
22 ከሆቴሉ ባገኘሁት አገልግሎት ሙሉ በሙሉ ረክቻል፡፡
23 ከሆቴሉ ጋር ባለኝ የሥራ ግንኙነት ስጋት የለኝም፡፡
24 የሆቴሉ ሰራተኞች ለደንበኞች ሁልጊዜም ትሁት ናቸው፡፡
25 የሆቴሉ ሰራተኞች ጥያቄዎችን ለመመለስ በቂ እውቀት
አላቸው፡፡
26 የሆቴሉ ሰራተኞች ደንበኞችን የሚቀበሉበት አግባብ መልካም
ስሜት እንዲሰማ ያደረጋል፤፤
ችግርን መርዳት /Emphathy/
27 የሆቴሉ ሰራተኞችን የደንበኞቻቸውን ፍላጎት ይረዳሉ፡፡
28 የሆቴሉ ሰራተኞች ለደንበኞች ተገቢውን ትኩረት ይሰጣሉ፡፡
29 የሆቴሉ ሰራተኞች ደንበኞቻቸውን እንደየፍላጎታቸው
ያስተናግዷቸዋል፡፡
30 ሆቴሉ ብቁ ሰራተኞች አለው፡፡
97
እርስዎ ለሆቴሉ የሚሰጡት ግምት /Corporate Image
1. ሆቴሉ አገልግሎት ጥሩ ዝና አለው፡፡
2. የሆቴሉ የቦታ አቀማመጥ አሳማኝና ሳቢነት አለው ፡፡
3. የሆቴል አገልግሎት አሰጣጥ አስተማማኝና እጅግ በጣም ጥሩ
ነው፡፡
4. የሆቴሉ አካባቢ ከሌሎች የሚላይና ከተወዳደሪዎች የተሻለ
ገፅታ አለው ፡፡
5. ሆቴሉ ለማህበረሰቡ ጥቅም ይጥራል፡፡
6. የዚህ ሆቴል አፈፃፀም ከሌሎች ሆቴሎች የተሻለ
ነው፡፡
7. የሆቴሉ ውስጣዊና ውጫዊ የአሰራር ቅርጽ ሳቢነት አለው፡፡
ዋጋን በተመለከተ /Price /
1 ከሆቴሉ ስለ እያንዳንዱ አገልግሎት ዋጋው እንዳውቅ በሚገባ
መረጃ አግኝቻለሁ ፡፡
2 ሆቴሉ ለምግብና መጠጥ ለአገልግሎት የሚያስከፍለው
ዋጋ ተመጣጣኝ ነው፡፡
3 ሆቴሉ ለአገልግሎቱ የሚያስከፍለው ዋጋ ለደንበኞቹ
ግልጽ፤የተማላ ና በቀላሉ ለመረዳት የሚያስችል ነው፡፡
4 ሆቴሉ ለአልጋ የሚያስከፍለው ዋጋ ከሌሎቹ ሆቴሎች ሲነጻጻር
ተመጣጣኝ ነው፡፡
5 የሆቴሉ አጠቃላይ ዋጋ ተመጣጣኝና የእኔን ፍላጎት
ያማላል ፡፡
የደንበኛው እርካታ/Customer satisfaction
1 ከሆቴሉ ሙሉ ለሙሉ የጠበቅሁትን አገልግሎት አግኝቻለሁ ፡፡
2 ከሆቴሉ ባገኘሁት አገልግሎት ሙሉ ለሙሉ
ረክቻለሁ፡፡
98
3 ከሆቴሉ ያገኘሁት መረጃ ሙሉ ለሙሉ ትክክለኞ ነው፡፡
4 ሆቴሉ ሙሉ ለሙሉ እንደምፈልገው ነው፡፡
5 ሆቴሉ ዋስትና አለው፡፡
6 ከሆቴሉ ባገኘሁት አጠቃላይ የአገልግሎት ጥራት ሙሉ በሙሉ
ረክቻልሁ፡፡
በመጨረሻም፡ ሆቴሉ ደንበኞቹ በሚሰጠው አገልግሎት የተሰማዎትን ሀሳብ እና አስተያየት ይፃፈ -
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Annex- C Interview Questions Guideline
Debre Berhan University
College of Business and Economics Department of Management
Introduction:-Dear respondents, my name is Mekonnen Dibu. I came from Debre Brehan
University College of Business and Economics Department of management. Now, I am
here to conduct interview with you. The following questions are designed to collect
information about factors affect customer satisfaction in Debre Berehan city
Administration hotel industry. The information shall be used as primary source for my
study which I am conducting as a partial fulfillment for completing my MA Degree under
the college of Business and Economics in Master of Business Administration. Therefore,
your genuine, honest and quick response is a valuable input for the quality and successful
completion of my thesis. I hearty appreciate your taking time to speak with me.
Interview Questions:
1. Have you ever received complains and comments from your customers’ interaction to
the quality of services offered by this hotel and from which area raise customers complain?
A. food and beverage B. corporate image C. Price D. bed and others, can you explain it the
reason behind?
2. Did the hotel management take any remedy action based on customers’ suggestions and
comment’s?
3. How customers rate their satisfaction and what systems follow to deliver the services
would you explain it?
4. Do you thing the services quality that offered by the hotel is factor for customer
satisfaction?
5. Do you think your prices set by for all services are fair the hotel and price is factor for
customer satisfaction?
6. Have you ever build corporate image about your hotel? Can you explain corporate
image of your hotel and corporate image is factor for customer satisfaction?
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Annex- D Descriptive statistics and Test of Normality
N Skewness Kurtosis Shapiro-Wilk
Statistic Statistic Std.
Error
Statistic Std.
Error
Statisti
c
Sig
Price 351 -0.035 0.130 -.590 0.260 0.980 0.000
Reliability 351 -0.468 0.130 .025 0.260 0.967 0.000
Corporate image 351 -0.381 0.130 -.175 0.260 0.972 0.000
Assurance 351 0.004 0.130 -.299 0.260 0.977 0.000
Tangibility 351 -0.287 0.130 -.391 0.260 0.967 0.000
Customer 351 -0.318 0.130 -.301 0.260 0.975 0.000
Empathy 351 -0.459 0.130 -.312 0.260 0.957 0.000
Responsiveness 351 -0.158 0.130 -.174 0.260 .987 0.004
Service quality -0.406 0.130 -.094 0.260 0.984 0.001
101
Annex – E Figures of hotels
Figure 5.1 Getva hotel
102
Figure 5.2 Hiwot hotel
103
Figure 5.3 Ehtio- Bernos hotel
