The impact of service recovery on customer satisfaction, loyalty and word-of-mouth - Literature review Example

This essay discusses that service quality in the hospitality industry and hotels specifically has been an area of great research interest. Research has shown importance of service quality. Parsuraman et al. indicated that service quality of hotels is both a significant differentiator and the most aggressive weapon possessed by them. Leading organizations in the hotel industry ensure to put up a high level of service quality over their competitors for over large durations of time. The relationship between service quality and customer loyalty has been of great interest.

Researchers have also investigated the relationship between customer loyalty and the complaints received from the customer. Heskett et al. define customer loyalty as repeated purchasing by the same customer and their willingness to recommend the product/service to other customers without any outright benefits. High customer loyalty is beneficial to the organization as it reduces the firms’ marketing costs and increases its market share. There can be various reasons of a customer being loyal to a hotel.

While some might be loyal because of lack of options, others might face the problem of high cost of switching. Wong and Sohal in their research found that there is a positive relationship between service quality and customer loyalty in the retail trade. Researchers have concluded that service quality is positively related to behavioural outcomes including word-of-mouth, complaints, recommendations and loyalty. Measurement of the service quality expectations of service organizations is primarily done by using the tool SERVQUAL or its variants.

Babakus & Boller (1992) and Carman (1990) found that amongst the hotel customers, the most important service quality dimensions are: assurance, reliability and tangibles. Many further studies (Saleh & Ryan, 1999; Fick & Ritchie, 1991) suggested the absence of any significant differences among the rankings of any of the five dimensions. The application of Servqual to two fine dining restaurants revealed the emergence of assurance, and reliability as importance expectations of the customers, and tangibles as the least important (Lee & Hing, 1995).

Gabbie and O’Neill (1997) in their research in the hotel sector found that reliability and assurance were the most important