Does the brand of leisure hotel important when customers choose accommodation?

The aim of this dissertation is to propose a methodology which will help establish whether the brand of the leisure hotel is important when tourists are choosing accommodation.

Objectives

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• To find out the factors that will make customers choose one accommodation place over the other.
• To recommend practise that will enable hotels to establish a brand with which customers will be loyal to and consistent.

Introduction

Statement of problem

Competition within the hospitality industry is very high (Choi, 2003; Harvey, 2007) and as the customers seeks to get accommodation from favourite hotels; all hotel brands seek strategies that will enable each to gain a bigger market share. Satisfaction and quality of the service are of magnitude significance in hospitality and marketing studies (Nash, Thyne and Davies, 2006). Satisfaction entails the perceived fulfilment from the product or service given to the customer (Won & Moscardo, 2005).

A hotel in which customers perceive the services as satisfactory is likely to gain a competitive advantage over the rivals. However, it is still a matter of controversy as to whether it is customer satisfaction perceptions in any hotel or just the brand of the hotel that lead to increased customers and hence a bigger market share (Lee, & Heo, 2009).

Research questions

1. Does the brand of the hotel alone lead it to have many customers as the visitors seek for accommodation?
2. Are there other factors that come into play as visitors choose accommodation rather than the brand?
3. Could it be that the most visited brands of hotels be incorporating factors of customers’ satisfaction that attracts customers to the hotel?

Strategy for literature search and assessment of availability of secondary source material

A search will be done in digital libraries such as Elsevier, and Ebscohost for peer reviewed article that report on studies relevant to the study problem.

Secondary research is important as the researcher needs to compare the study to others for the purpose of appraising or criticizing other works in order to establish credibility of findings. Moreover, secondary research is recommended to enable the researcher to fill in the literature gaps rather than report on an already established study. Relevant studies on accommodation and customer preferences for certain accommodation places have been carried out. Kim and Kim Gon (2005) describes brand as an element of customers’ perception in the hospitality firms.

Other than the logo and the trademark, the brand symbolizes both tangible and intangible attributes that represent the business (Bates, 2003). A study by Nash, Thyne and Davies (2006: 529) report on tourists’ preferences to the Scottish Youth Hostels Association (SYHA) which reported the highest number of backpacker visitors as compared to Independent Hostels, Bed & Breakfast, With Family/friends, Self-catering Accommodation, Hotels, Tent or Caravan and Guest House. Read also about hotel reservation system

Self-reporting questionnaires revealed good pricing, location, membership, easy booking and satisfactory facilities (Ogle, 2009) as some of the major reasons for choosing the SYHA in Scotland. The SYHA carries is known to operate differently from other hotels in terms of identifying the customers’ segmentation bases (Inbakaran & Jackson, 2005) and working to meet the customers’ needs. Lee and Heo (2009) conducted a regression analysis to examine the mediating effect of customer satisfaction by comparing corporate social responsibility (CSR) activities and firm value for hotels and restaurants in US.

Findings revealed that customer satisfaction activities do not mediate between the CSR and firm value but positive CSR activities, for instance involvement in environmental issues improve the brand image and increased customer satisfaction (Mottiar, & Quinn, 2003) Kim, Ma and Kim (2006) study’s disapproves brand as the reason why customers will choose accommodation from a hotel. The study focused on the Chinese market; a rapid growing tourism market. Online consumer advertising has been able to reach several Asian consumers as they become more familiarized with internet marketing=.

Hotels that rely on internet consumer marketing, word of mouth (Chiemi & Pearce, 2007) and hotel guidebooks (Forrest, 2007) are likely to attract more customers than those who depend solely on just the brand image (Nash et al. , 2006). Kim and Kim Gon (2005) recognize the pressure that hotels-especially the luxurious and chain restaurants-have acquired in building and maintaining a brand image for the purpose of enhancing performance. Perceived quality, brand image and brand loyalty are highlighted as the factors that enable sustenance of the customer-based brand equity as well as performance of the firm (Budeanu, 2007).

The study of Dazinger, Israeli, Bekerman (2006) determined a behavioural process of customers’ likeability to choose certain hotels for accommodation. The following measures were equated:-brand name, price, rooms, star rating, location, and pool size. Most customers would use price and star rating to pick the destination hotels. Therefore pricing can be an effective tool for long term success, and this should be strategic as overpricing can lead to loss of market share, while low pricing can record low revenues and thus affect the profitability of the firm (Lee, 2005; Waddoups, 2002)

As much as customer satisfaction is an important aspect to be observed in the hospitality industry, employee satisfaction with the job is also a matter of significance (Chun-Min, 2007). Employees deal with customers and it is through them that the customers perceive the image of the company. Mok and Luk (1995) carried out a study on how and why hospitality firms carry out exit interviews on the employees. These interviews are important in helping to identify any challenges that the firm faces, but it is only some of the management that use the information for improving the business.

Some o the exit reasons include unavoidable circumstances, quality of supervision, nature of work and working conditions, and pay. With increased competitive practices in the hotel industry brand alone cannot be the major attractant to the customer’s choice of accommodation. Meidan and Chiu (1995) state that the reservation function is also very important in determining whether the customer will use the hotel’s services or not. The ease of booking a hotel can lead to high occupancy rates and thus increased sales. Hotels thus need to select appropriate methods for booking with an orientation towards customer satisfaction.

Hsieh, Chiu, & Hsu (2008) and Bansal and Elseit, (2004) advocate for customer, market, and competitor orientation activities for firms that need to gain a larger market share. As observed, there are varied views of brand image and its role in attracting customers from all regions to the hotel (Shoval, N. 2006). Some studies show that luxurious hotels strive to create a popular brand image through international affiliation activities, and participation in social and environmental matters (Dief &Font, 2010; Mundet, & Coenders, 2010).

This can pull customers to the brand (Kiessling, Balekjian, & Oehmichen, 2009), but sustaining then requires more than just the brand image (Uysal, & Jurowski, 1994). Providing customer value-added activities could have a higher chance of sustaining the customers, but again the customer segment is very varied (Hsieh, Chiu & Hsu, 2008). Facts can only be established if a study is carried out to determine the customers’ preferences while choosing accommodation (Harley, 1968; Kozak, & Rimmington, 2000; Sirakaya, Uyasal, & Yoshioka, 2003)

Hypothesis

The null hypothesis, “the brand of leisure hotel is not important when customers choose accommodation,” will be measured to determine its significance in the study.

Proposed research paradigm

A combination of both primary and secondary research will be carried out to determine whether the hotel brand matters when it comes to customers choosing a hotel for accommodation. Primary research will be conducted through a survey while secondary research will be conducted through a review of literatures.

Methods and techniques

A survey will be done to determine the factors that contribute to customers’ choice of hotel accommodation. Data will be collected through self-completed questionnaires. The questionnaire items will be subjected on a 5-point Likert-scale in which the respondents will state whether their level of agreement on the statements, in which 1 represents strongly disagree while 5 represents strongly agree.

Procedure

To aid in questionnaire formation, secondary research will be conducted in order to determine some of the reported factors that cause customers to choose certain hotels for accommodation.

Secondary research will be conducted in digital libraries in which peer-reviewed publications of the hospitality industry will be analyzed. The questionnaire items selected will be pilot tested to determine the credibility of the questionnaire. Motivations will be used to encourage the participants to file in the questionnaires in time. This will be issuing out of snacks for those who will have completed the questionnaires. Sampling The sample size will include frequent tourists in 3 major hotels that will be selected.

The criteria for choosing the hotels will be middle sized hotels in which a very popular brand, a fairly popular brand and a brand that is not popular but still records high occupancy rates will be studied. The study targets a sample size of 300 (100 per hotel) and convenience sampling will be used where the hotels staff will assist in handing over the questionnaires to the consistent customers, that is, those whose booking patterns can be predicted.

Proposed approaches for analysing data

The returned completed and returned questionnaires will be analyzed using the Statistical Package for Social Sciences (SPSS) software.

The mean of the overall sample, the standard deviations, and size of the sample for each item on the questionnaire will be checked for major discrepancies using descriptive statistics and factor analysis. A reliability analysis to deduce the Cronbach alpha value will be conducted on the questionnaire items.

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