Consumer psychology in the hotel hospitality industry : the impact of price and service on customer satisfaction

Abstract

With the hotel hospitality industry being a major contributor to the world economy, hotel managers and marketers are pressured to achieve and maintain a competitive edge. In the current erratic economic climate, hotels and the hospitality industry are being forced to present results whilst keeping costs to the minimum. To achieve sustainability, hotels must react speedily to the consumer’s changing trends by continually improving on customer satisfaction, prices and services offered. In order to achieve this, hotels must understand how the consumer thinks, pre-empt what the consumer considers important and understand what triggers their purchasing decision. Information is at the core of ensuring that hotels are able to respond quickly to an ever-changing market. The main objective of the study is to ascertain whether the independent variables of price general, price premium and service have an impact on customer satisfaction. Respondents in this study include employees from a large international manufacturing organisation. These respondents work in a corporate environment; hence, it could be denoted that business travel takes place and hotel accommodation may be required. In addition, this sample of the population earns a monthly salary and is required to take compulsory leave each year, which offers an opportunity to stay at a hotel. Forming part of the secondary objectives, staying at a hotel for business and/or leisure purposes as well as gender and ethnic group were tested with the dependent and independent variables. The findings of this study indicate that service makes the strongest contribution to explain customer satisfaction, followed by price general. The significance levels of the study indicate that all the variables, with the exception of price premium, are significant to the study (p < 0.05). Insights from the results of this study will assist both hotel managers and marketing research academics to understand the dynamics that influence the variables of the study. As the results indicate service as the strongest influencer of customer satisfaction, hotel managers can spend additional time designing marketing and sales strategies around this variable.