Mediating Role of Customer Satisfaction in the Mid-Market Hotels: An Empirical Analysis

Abstract

Objectives: The present study attempts to investigate the impact of quality-value proposition on loyalty outcomes (i.e. exclusivity, strength of preference, share of hospitality and willingness to recommend) mediated by customer satisfaction in mid-market hotel sector. Statistical Analysis: The survey instrument was first developed and pre-tested. The results of the pre-test were used to refine the instrument to improve its clarity and depth. A survey was conducted among customers of 24 mid-market hotels of Jharkhand, India. The perceptions of the respondents were measured using a Likert scale of 5 points. Data obtained from 372 respondents were analysed using Structural Equation Modelling (SEM) technique. Findings: The results of the study reveal that the impact of perceived value is more on customer satisfaction and customer loyalty outcomes than service quality in mid-market space, hence contradicting in toto the postulation prevalent in luxury hotel segment. In addition, the customer satisfaction has a positive significant effect on loyalty outcomes viz. exclusivity, customers’ strength of preference and customers’ willingness to recommend except share of hospitality in the mid-market hotel sector of Jharkhand. Moreover, customer satisfaction plays a strong and positive mediation role in the relationship between perceived value and customers’ strength of preference. It also mediates the relationship between service quality and exclusivity, service quality and willingness to recommend and as well as service quality and strength of preference in mid-market hotel sector. The outcomes of the study are significant, as it questions the presuppositions and enlightens new insights in the mid-market hotel sector. Application: Apart from emphasising on the service quality, the hospitality practitioners should pay further attention on creating and delivering more value to the customers to achieve greater level of customer satisfaction. This may lead to enhanced customer loyalty in the mid-market hotel sector. The business firms or entrepreneurs who seek to venture into mid-market hotel sector must design their marketing mix to deliver better value to the customers.