The Impact of Service Quality on Customer Loyalty in the Sri Lankan Hotel Sector (With Special Reference to ABC Hotel in Sri Lanka)

Abstract

With the increase of tourist arrivals, the government of Sri Lanka are encouraging the hotels to enhance its star class in order to attract wealthy tourists. Therefore the existing hotels need to develop, maintain, and further enhance its quality. The exploratory research revealed that customer loyalty is important for enhancing sales. Thereby this research is based on the impact of service quality on customer loyalty with special reference to ABC hotel in Sri Lanka. The study is conducted on the basis of three objectives. Initially, the researcher is involved in identifying the key dimensions affecting service quality in the hotel sector. Secondly, the study is directed towards exploring the concept of customer loyalty. Finally, the relationship between service quality and customer loyalty is analysed. The hypothesis of the study is that there is positive relationship between service quality and customer loyalty. The mixed method was adopted as the research methodology to make better contradictions of the findings. The questionnaire was adapted for the quantitative analysis, where a sample of 100 customers was determined based on simple random sampling method. Additionally, the qualitative analysis was conducted through interviews. Based on the quantitative analysis, the hypothesis was tested positively. In addition, the quantitative analysis determined that responsiveness and reliability has a higher impact on service quality. Based on the qualitative analysis, service quality creates the ultimate customer experience that the customer expects from the hotel. The interviewees recognised the importance of responsiveness and reliability as most important dimensions of service quality. Overall, high service quality creates a positive mind set within the customer towards the hotel which will enhance consumer re-purchase behaviour and wiliness to spread the word of good mouth. Thus, increase in re-purchase behaviour and willingness to spread the word of good mouth increases the consumer’s loyalty towards the hotel.