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The impact of customer value creation by budget hotel on customer satisfaction, customer loyalty and hotel profitability

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The purpose of this research is to study and analyze the impact of customer value creation on budget hotel towards customer satisfaction, customer loyalty and hotel profitability. The higher demand of budget hotel than 3, 4, 5 star hotels gives an idea that budget hotel probably has satisfied their customer and could create their loyalty customers who wants to do repeat purchases of their services. However, before reaching high customer satisfaction level and having loyalty customers, there are values that budget hotel should give to their customer. How customer value creation that budget hotel has done to their customer and how this value creation impacts their customer satisfaction and loyalty that ultimately will increase their demand level and how this customer value creation impacts to the hotel profitability that impact the supply level will be a purpose for this research. In this research, the customer value of budget hotel consists of service value, quality value and monetary value. This research found out that in overall, which analyzed by t-test, budget hotel?çös customer value creation has met its customer expectation that leads the customer satisfaction level of budget hotel is above the average. However, through gap analysis, which analyze whether or not of each value has met customer expectation, the author find out that monetary value has slightly negative gap which means the current room rate of budget hotel is still under the customer expectation. Due to the occupancy rate of budget hotel is quite good, currently they set their room rate is almost the same with 3 star hotel which offer more service than budget hotel. Even tough budget hotel set the similar room price to 3 star hotel which offer more facilities, the occupancy rate of budget hotel is still above the 3 star hotel. This condition means that budget hotel offer more important value to its customer that 3 star hotel does not. The main segment of budget hotel is business travelers, that according to the structural equations modeling analysis, the strategic location, which include to servicescape factor, is the dominating factor in influencing service value of budget hotel. In addition, according to the questionnaires result, strategic location is the second reason after affordable price, why respondent has chosen budget hotel as their accommodation service. The customer satisfaction of budget hotel will impact to the customer loyalty in terms of continue being a customer, recommend and promote. Ultimately high customer satisfaction and loyalty which caused by customer value creation will impact to a better financial performance or profitability level in terms of gop (gross operating profit) and nop (net operating profit). This study findings that even tough budget hotel only offered limited service, but by targeting the right segment and offering something that what really needed by this segment, this hotel could be more profitable than 4 and 5 star hotel.

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M00255

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Series Title

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Call Number

255

Publisher

: Swiss German University., 2013

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Language

English

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Subject(s)

MBA

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