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Factors of Affecting Guests’ Satisfaction and Their Loyalty — A Study of

Luxury Hotels in Ho Chi Minh City, Vietnam

Article in International Journal of Innovation and Technology Management · January 2015

DOI: 10.7763/IJIMT.2015.V6.599

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 International Journal of Innovation, Management and Technology, Vol. 6, No. 3, June 2015

Factors of Affecting Guests’ Satisfaction and Their

Loyalty — A Study of Luxury Hotels in Ho Chi Minh
City, Vietnam
Mai Ngoc Khuong, Pham Le Hoang Ngan, and Nguyen Thi Minh Phuong

II. LITERATURE REVIEW

Abstract—This study aimed to analyze and test the effects of Service Quality: [3] defined service quality as a mixture
tangibility, assurance, reliability, responsiveness, empathy,
price, and hotel image on guests’ satisfaction and their loyalty of three elements: (1) the quality of the consumption
towards luxury hotels in Ho Chi Minh City. Quantitative progress itself; (2) the quality of outcomes of the process;
research approach was main method applied with 255 and (3) the image of the provider of the service. Service
questionnaires delivered directly to international tourists who quality was explained as the consumer’s rating for the
were staying at 3-5 star hotels. The empirical results showed overall excellence or the superiority of the service offered
that factors of empathy and assurance, tangibility, and hotel [4]. Moreover, [5] also identified service quality as an
image both directly and indirectly affected guest loyalty.
Satisfaction directly affected guest loyalty while price important indicator for customer satisfaction and business
negatively and indirectly affected guest loyalty. Reliability and performance measurement. In the hotel industry, [6] stated
responsiveness did not significantly affect guests’ loyalty. that "Quality means achievement of estimated standards and
their constant maintenance, that is, an ongoing process. High
Index Terms—Service quality, guest satisfaction, guest class hotels render the highest standards and highest
loyalty, luxury hotels, Ho Chi Minh City. quality products and service, with the most extensive
scope of expensive hotel service. Economy class hotels offer
products and service of lower quality, with a limited scope
I. INTRODUCTION
of less expensive service". Previously, [7] studied on
According to [1], Ho Chi Minh City with 2,095.6 sq. km dimensions of service quality (SERVQUAL) have provided
of squares, which is located in the core of the Mekong an extremely valuable insight into measurement of service
Delta, is the largest city in Viet Nam. “It is not only a quality. These five different dimensions are tangibility,
commercial center but also a scientific, technological, responsiveness, reliability, assurance, and empathy. This
industrial and tourist center”. In addition, Ho Chi Minh City study model was also adapted from SERVQUAL model like
is located in favorable commercial position and has previous studies such as [8]-[11] to analyze the effect of
available advantage of tourism (the national culture and service quality on guest loyalty in the hotels.
beautiful landscapes), so the development of tourism and Price: As the impact of increase in value is related to
hospitality industry is strong and is given priority from quality, price is an important determinant of satisfaction [12].
government policy. Especially, it was reported that the total Determining pricing strategies can be difficult, but it’s
number of international visitors coming to the Ho Chi Minh important for hoteliers to use the information available to
City during the first 7 months of 2014 was estimated at make critical decisions [13]. To create effective price, they
2.392.648 arrivals, increasing by 9.1% over the same period need to understand the guest response to change prices.
last year and reached 54.3% of the plan in 2014 (4.4 million Whether or not the guests are achieving the bookings, they
visits). Total revenue from city tourism (travel, hotel, also tell you if the price is reasonable or not [13].
restaurants) was estimated at 51.965 billion VND, up to Hotel image: [14] considered that store image is the
8.5% over the same period last year [2]. Most visitors are functional and emotional mixture; that is, the prior
businessmen and tourists and they choose to stay in the big experience of having contact with enterprises that include
hotels in the city center to facilitate the travel and enjoy the new information such as advertising, word-of-mouth effect,
best service. However, the quality of service in the 3-5 star and prediction to meet expectations for the future that has a
hotels are now not really meet the guest needs, making them directive positive influence on satisfaction of the guests.
feel dissatisfied and negatively affecting to their return Besides, building and sustaining a positive image is an
intention. Therefore, improving the quality of service at the important step in maintaining customer loyalty [15]. Using
hotel is very necessary to make a good impression on researches on service organizations, [16] found that service
tourists, promote the image of civilized city, and ensure the quality was the most important factor that influences
sustainable development of the tourism in Ho Chi Minh City customers’ minds in regard to the hotel image. Similarly,
in the future. [17], in their study on hotel brand loyalty in the free
independent traveler’s market, found that the hotel image
Manuscript received September 4, 2014; revised March 18, 2015. was an important factor, and maintained a relatively high
Mai Ngoc Khuong, Pham Le Hoang Ngan, and Nguyen Thi Minh score rating among loyal customers. Image could be
Phuong are with the School of Business, International University – VNU- positively associated with guest satisfaction and guest
HCMC, Vietnam (e-mail: [email protected],
[email protected], [email protected]). preference (a dimension of guest loyalty) in luxury hotels

DOI: 10.7763/IJIMT.2015.V6.599 186

 International Journal of Innovation, Management and Technology, Vol. 6, No. 3, June 2015

[18]. there was the correlation among these components. They

Guest satisfaction: According to [19] defined guest were renamed as EMNAS (empathy and assurance), TAN
satisfaction as a psychological concept involving the feeling (tangible), REL (reliability), PRICE (price), and HOTIMA
of well-being and pleasure that results from obtaining what (hotel image). Similarly, in group 2, KMO was also high
one hopes for and expects from an appealing product and/or at .907 and the significant level at .000. It means that this
service, or the visitor’s state of motion after they experience factor analysis was considered appropriate.
their tour [20], [21]. Moreover, the positive relationship Testing the eigenvalues > 1, five independent factors
between service quality and guest satisfaction have been (consisting of 33 items) accounted for 74.78% of the total
proved by [7], [22], [23]. variance and the Cronbach’s coefficients ranged from .895
Guest loyalty: [24] said that customer loyalty consists of to .956, which considered good scale of reliability. In
both an attitudinal commitment to the relationship (such as addition, two dependent factors (including 15 items)
price insensitivity), as well as, more-overt loyalty behavior explained for 68.15% of variability and the Cronbach’s
(such as positive word of mouth and repeat patronage). alpha coefficients were .916 and .941 for GUESATIS (guest
Therefore, loyal customers or loyal guests are guests who satisfaction) and GUESLOY (guest loyalty), respectively. It
hold favorable attitudes towards the hotel, commit to was high results of reliability.
repurchase the product/service, and recommend the hotel to
others [25]. From these concepts above, the hypotheses of TABLE II: SUMMARY OF DEPENDENT VARIABLES
this study are: Variable No of Item Cronbach’s
alpha
H1: Factors of tangibility, assurance, responsiveness, Guest Satisfaction (GUESATIS) 9 .916
reliability, empathy, hotel image and price positively and Guest Loyalty (GUESLOY) 6 .941
directly affect guest satisfaction.
H2: Factors of tangibility, assurance, responsiveness,
reliability, empathy, hotel image and price positively and IV. RESEARCH FINDINGS
directly affect guest loyalty.
H3: Guest satisfaction positively and directly affects guest A. Demographic Characteristics of Respondents
loyalty.
TABLE III: GUESTS PROFILE (N=255)
H4: Guest loyalty is indirectly affected by tangibility, Frequency Percentage
assurance, responsiveness, reliability, empathy, hotel image (%)
and price. Gender Male 164 64.3
Female 91 35.7
Total 255 100
Age group <18 0 0
III. METHODOLOGY 18-25 51 20.0
26-30 60 23.5
A. Research Design and Data Collection 31-40 58 22.7
41-60 57 22.4
This research purpose was examining guest loyalty in Ho >60 29 11.4
Chi Minh City, in which the sample size of 300 respondents. Total 255 100
Nationality Europe 101 39.6
The target participants were international guest who was USA/Canada 47 18.4
staying at 3-5 star hotels more than one day for business and Australia/NZ 21 8.2
leisure. Data was collected through questionnaires which Asia 79 31.0
Latin America 4 1.6
was used seven-point Likert scale ranging from 1 to 7 (1 is Other 3 1.2
“Entirely disagree”, and 7 is “Entirely agree”). Quantitative Total 255 100
approach was applied as the main method in this study. Education High school degree 21 8.2
Associate degree 59 23.1
B. Factor Analysis and Reliability Attending university 26 10.2
Bachelor degree 95 37.3
TABLE I: SUMMARY OF INDEPENDENT VARIABLES Master degree/higher 54 21.2
Total 255 100
Variable No of Item Cronbach’s
Purpose of Business 156 61.2
alpha
visit Leisure 47 18.4
Empathy and Assurance (EMNAS) 11 .956
Visiting friends/family 37 14.5
Tangibility (TAN) 6 .928
Other 15 5.9
Reliability (REL) 7 .940
Total 255 100
Price (PRICE) 5 .909
Hotel Image (HOTIMA) 4 .895
B. Relationships between Guest Loyalty, Guest
Factor analysis was loaded twice with rotation varimax to Satisfaction and the Independent Variables
rearrange the components of independent and dependent Pearson Correlation (r) was used to identify which factors
variables. It divided into 2 groups: one for five independent had relationship with guest loyalty. For this reason, Table IV
variables including 33 items (group 1) and one for two presented that there were positive correlations between the
dependent variables including 15 items (group 2). For group dependent variables GUESLOY and GUESATIS (r=.736,
1, the value of Kaiser-Meyer-Olkin Measure (KMO) p<.01), between GUESLOY and independent variables:
coefficient was 0.943 that satisfied the condition 0.5 ≤ KMO EMNAS (r=.696, p<.01), TAN (r=.663, p<.01), REL
≤ 1 [26], and Bartlett’s Test of Sphericity had significant Sig (r=.637, p<.01), PRICE (r=.515, p<.01), HOTIMA (r=.648,
= .000 (accepted the condition Sig < .05) [27]. It means that p<.01). This meant that the better EMNAS, TAN, REL,

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 International Journal of Innovation, Management and Technology, Vol. 6, No. 3, June 2015

PRICE, HOTIMA, and GUESATIS; the higher GUESLOY. effect of independent variables (EMNAS, TAN, HOTIMA,
and PRICE) together with GUESATIS on GUESLOY.
TABLE IV: CORRELATION BETWEEN VARIABLES Regarding to the total effect, GUESATIS factor had the
GUESLOY 1 2 3 4 5
strongest effect on GUESLOY with β = .736 and according
1. EMNAS .696* 1
2. TAN .663* .741* 1 to [27], this was considered as very strong effect. Next is
3. REL .637* .840* .764* 1 EMNAS factor with β = .706, which had a very strong effect
4. PRICE .515* .591* .516* .594* 1 on GUESLOY. The factor of TAN had a substantial effects
5. HOTIMA .648* .728* .661* .740* .553* 1
6. GUESATIS .736* .806* .706* .753* .455* .650* on the dependent factor GUESLOY with β = .511. Lastly,
Mean 5.46 5.31 5.35 5.26 5.18 5.40 HOTIMA factor had moderate effect on GUESLOY with
SD 1.054 1.062 1.077 .974 1.134 .891 β = .260. All of these factors including EMNAS, TAN,
Note: **. Correlation is significant at the .05 level
HOTIMA, and GUESATIS had positive effects on
GUESLOY while PRICE had negative effect with β = -.096.
C. Factors Directly Affect Guest Loyalty The total effect of these factors on guest loyalty was 2.117.
Using multiple regression analysis, standardized
TABLE V: DIRECT, INDIRECT AND TOTAL EFFECTS
coefficients Beta (β) identified which independent factor has
Causal effects
the strongest impact on guest loyalty. It could be concluded Variables Direct Indirect Total
that empathy and assurance has the highest value of Beta EMNAS .341 .365 .706
(β=.341, Sig. <.05) so it can be considered as the most TAN .276 .235 .511
HOTIMA .228 .032 .260
influential factor to guest loyalty. Next, the following are PRICE --- -.096 -.096
tangible and hotel image with (β=.276, Sig. <.05), (β=.228, GUESATIS .736 --- .736
Sig. <.05), respectively. Meanwhile, reliability and price Total 1.581 .536 2.117
have no effect on guest loyalty to all Sig. greater than .05.
Besides, simple linear regression was used to examine the
relationship between two dependent variables. The V. DISCUSSION AND RECOMMENDATION
correlation coefficient between GUESATIS and GUESLOY
A. Discussion of Findings
was equal to .736 at Sig. <.05, which concludes that they
were strongly associated with each other positively. It These results above showed that there were positive direct
proved that the more satisfaction of guests when they stayed relationships between empathy and assurance, tangible, and
in the hotel, the more they will prefer this hotel for the next hotel image to guest loyalty while price had negative
trip and consider being loyal to it. indirect effect on it. Firstly, this is consistent with the fact
that besides investing in upgrading infrastructure and
D. Indirectly Effects on Guest Loyalty qualified equipments, the hotel manager also needs to focus
According to Fig. 1, the result of multiple regression on training to improve skills for staff. Especially in the
analysis showed that guest loyalty was mainly affected by upscale hotels from 3 to 5 stars always requires from staff
three important factors: EMNAS (β = .341), TAN (β = .276), not only good expertise and deep understanding, but also
and HOTIMA (β = .228). It proved that when guests felt need to become elegant and subtle to always satisfy guests
satisfied to the elements such as empathy and assurance, from the smallest thing. By adapting and developing from
tangibility, and hotel image, they were more likely to be SERVQUAL model of [30], this study examined and
loyal to the hotel. These three factors directly affected the admitted the validity of it as other studies from [8]-[10] and
intervening variable of GUESATIS and then GUESATIS recently is [11].
directly caused an effect on GUESLOY (β = .736). Therefore, On the other hand, the guests can only evaluate these
through the intervening variable of GUESATIS, the factors things when they are staying at the hotel, so hotel image is
of empathy and assurance, tangibility, and hotel image also an important factor determining the level of reputation
created indirect effects on guest loyalty at (.365), (.235) and and attraction of luxury hotels. Many researchers have
(.032), respectively. shown the importance of images with customers'
impressions such as [31], [32]. Moreover, [33] argued that
image has a powerful effect on the way customers perceive
and react to things. Therefore, this factor may impact
directly (guest feedback after check-out from the hotel) on
the loyalty of customers, or indirectly (potential guests will
review online information of this hotel before decided to
book a room at here) as shown in this study.
Typically, at the hotel from 3 to 5 stars, when guest check
out and pay will include room charge and a 15% additional
cost (10% VAT and 5% service charge). Meanwhile, price
Note: All coefficients in the model were significant at the .05 level has a negative relation to guest loyalty indirectly through
Fig. 1. Path coefficients of GUESLOY model. guest satisfaction. To clarify what this means, the author
based on the actual situation of hotels from 3 to 5 stars in Ho
E. Total Causal Effects on Guest Loyalty Chi Minh City, and concluded that the disagreements about
the price (mainly belongs 5% service charge) and quality of
The total effect on GUESLOY of one variable could be
service is a reason annoying for guests. Specifically,
direct and indirect effects. The Table V summarized the

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 International Journal of Innovation, Management and Technology, Vol. 6, No. 3, June 2015

although classified in the same class but each hotel has and selection in accordance with their needs. On the other
variety standards for equipments and prices for the general hand, improving professional qualifications for the hotel
basic services; or even guest have to pay the service fees for staff (human resources) is also an important issue, because
luxury hotel (5 stars) while the actual quality level this hotel they directly serve and satisfy the guest needs. Thereby, the
achieved only as first class hotel (4 stars). [13] states that hotel can build trust and support from customers at home
“whether or not you are achieving the bookings you would and abroad, form the basis of their loyalty in the future. In
expect will help inform whether the customer reaction to a conclusion, a good home should have a solid foundation. A
price change is what was desired” to remind the manager hotel should build uniform standards more specifically and
should offer reasonable prices. Because it will direct impact well enough to create confidence for guests. When they
to guest satisfaction is proven by [10]. It also explains why believe, they will become loyal to that hotel.
the element reliability be completely removed in the final
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