A Model of Customer Satisfaction and Retention for Hotels

Abstract

ABSTRACT This study was designed to assess the antecedents and consequences of customer satisfaction and retention in the hotel industry. The relationship between customer satisfaction and customer retention has been researched for many years. This study extended that research to look at the antecedent effects of customer satisfaction as well as the effect of added value and gender on customer satisfaction and customer retention, and how they relate to the intent to switch. Customer retention was operationalized in terms of loyalty and intent to switch. Customer satisfaction was operationalized in terms of hotel ambience and hospitality. A survey among hotel customers in the San Francisco Bay Area was conducted. A LISREL structural equation model with confirmatory factor analysis was developed to analyze the data. Results indicated that the latent construct customer retention was dependent on the latent construct of customer satisfaction. Added value was found to have positive effects on customer satisfaction and customer retention. Managerial implications to develop strategies to improve customer satisfaction and enhance retention of hotel customers were discussed.