Determine factors influencing the loyalty of customers using 4 and 5-star hotel service in Ho Chi Minh City in a multidimensional approach in the service quality model; assessing the impact of customer loyalty factors on the use of 4 and 5-star hotels in Ho Chi Minh City based on a multidimensional approach in service quality model; propose some policy recommendations to increase the loyalty of customers using 4 and 5-star hotels in Ho Chi Minh City.
MINISTRY OF EDUCATION AND TRAINING HONG BANG INTERNATIONAL UNIVERSITY - PHAN THANH LONG FACTORS INFLUENCING LOYALTY OF CUSTOMERS FOR AND STAR HOTELS IN HO CHI MINH CITY Major: Business Administration Code: 62.34.01.02 Instructor:Assoc Prof PhD Đinh Phi Hổ PhD Student Phan Thanh Long Ho Chi Minh City, 2018 The work was completed at: Hong Bang International University Instructor: Assoc Prof PhD Đinh Phi Hổ Review 1: Assoc Prof PhD Nguyen Quyet Thang Review 2: Assoc Prof PhD Le Tan Buu Review 3: Assoc Prof PhD Doan Thi My Hanh The dissertation will be protected by the thesis review panel at Hong Bang International University at 09:00 on December 28, 2018 Can find thesis at: - The Library of Hong Bang International University 215 Dien Bien Phu Street, Ward 15, Binh Thanh District, Ho Chi Minh City - General Sciences Library of Ho Chi Minh City 69 Ly Tu Trong Street, Ben Thanh Ward, HCMC - National Library of Vietnam 31 Trang Thi Street, Hoan Kiem District, Hanoi LIST OF RESEARCH WORKS Phan Thanh Long (2018), Effects of service quality on customer satisfaction and customer loyalty: A case of four and five star hotels in Ho Chi Minh City, Vietnam, and Business Horizons (Scopus) Phan Thanh Long (2018), Factors influencing loyalty of customers for and star hotels in HCMC, Journal of Economics and Forecasting Phan Thanh Long (2018), The Impact of Service Quality on Satisfaction and Loyalty of Customers Using and 5-star Hotels in Ho Chi Minh City, Scientific Workshop (ISBN : 973604-73-5980-6) CHAPTER OVERVIEW OF RESEARCH PROJECT 1.1 BACKGROUND TO RESEARCHRESEARCH BACKGROUND After joining WTO, the government has determined that tourism is the key economic sector that needs to be invested in proportion Reality shows that Vietnam hasa lot of advantages in terms of tourism potential (many beautiful natural landscapes, long coastline along the country, variety of national parks are preserved and developed, etc.), besides, Vietnam is also a country with political economy which are currently being considered significantly stable by the international community It is now easily seen thatVietnam has become a focal point for attracting many domestic and foreign tourists In recent years, more and moreVietnamese tourists tend to return back to domestic tourism, the population of Vietnam is about 90 million people, together with improved living standards, this is a source of abundant tourists in the tourism industry Particularly for international visitors, there have been recently positive changes from the general department to attract the return of visitors However, the international and domestic tourism market in the short and medium term has not tended to be clear, the structure of hotel guests and resort guests is constantly changing Vietnamese travelers, as well as international visitors, have also changed somewhat from previous years They are more demanding, more interested in values and service, and more informed about the trends nowadays As a result, what hotel managers to solve this problem? There are many options to answer this question, but now most hotel managers not understand what visitors need and want? As the needs of the visitors have risen to modern living lifestyle? Therefore, how visitors continue to use the service at the hotel, managers need to find out the factors that affect the loyalty of the visitors, in other words, to find out the customers’ need? That is the most important thing for hotel managers The creation of loyalty will bring many benefits for tourism units in general and business units in particular 1.2 OBJECTIVES AND STUDY QUESTIONS The research objectives are: (i) determine factors influencing the loyalty of customers using and 5-star hotel service in Ho Chi Minh City in a multidimensional approach in the service quality model; (ii) assessing the impact of customer loyalty factors on the use of and 5-star hotels in Ho Chi Minh City based on a multidimensional approach in service quality model; (iii), propose some policy recommendations to increase the loyalty of customers using and 5-star hotels in Ho Chi Minh City About the research question: 1.3 OBJECT AND SCOPE OF THE STUDY 1.3.1 Research subjects Research subjects of the project: loyalty of customers using and 5-star hotels in Ho Chi Minh City About the subject of the survey: customers are using the service / products in 4, star hotels in Ho Chi Minh City 1.3.2 Research scope of the project On theoretical grounds: Firstly, the research focuses on customer loyalty in terms of their evaluation of service quality and satisfaction Secondly, customer loyalty can be approached in a variety of ways: (i) customer behaviors, (ii) customer attitudes, and (iii)the combination between the two that were mentioned Within the scope of the topic, the author approaches customer loyalty from an attitudinal perspective Spatial scope: The author conducted the survey in Ho Chi Minh City Time Range: Qualitative Research: 5/2015 to 01/2017; Preliminary quantitative study: 3/2017; Official study: 04/2017 to 7/2017 1.4 RESEARCH METHODS Methodology: Based on the cognitive system, the methodology used in this study is a mixed method by combining qualitative research (through expert interviews, focus group discussion with participants) and quantitative research (through direct interviews with survey participants) to conduct modeling and research hypotheses Methods and tools for processing information (Method / Tools): Secondary data collection method: Secondary data collected from VNAT Primary data collection method: Expert interviews: The author interviewed 10 experts who are scientists and managers; Group discussion: the focus group discussions were conducted with 10 respondents; Surveys: The author conducted the survey twice: (i) the first time: interviewed 100 respondents; (ii) the second interview: 400 respondents Information Processing Tool: Data is encrypted and cleaned using SPSS 20.0 software Analysis tool: Data are used to evaluate the scale using the Reliability Analysis tool through Cronbach's Alpha, EFA, CFA and SEM 1.5 NEW THEMES On the academic side: (i) the topic identifies factors influencing customer loyalty to the and 5star hotel system in HCMC; (ii), the topic of implementing a service-oriented approach to service quality in a multidimensional approach (direct and indirect combination) to consider the impact on customer loyalty Service at 4, star hotels in Ho Chi Minh City The research results of the project have demonstrated the loyalty of customers directly affected by customer satisfaction and 04 components of service quality (reliability, responsiveness, tangible means and assurance), and is indirectly affected by the overall service quality and its five components (reliability, responsiveness, tangible means, empathy and assurance); (iii), the topic of adjusting the scale of loyalty, satisfaction, quality of service and its components for 4, star hotel in Ho Chi Minh City to complement the ladder system measure theory Practically: (i), the theme is to help 4, star hotel managers, policymakers identify and measure the factors that influence customer loyalty , stars in Ho Chi Minh City; (ii), the topic also suggests some feasible implications for increasing visitor loyalty, enhancing the competitiveness of tourism destinations 1.6 STRUCTURE OF THESIS The research project consists of chapters presented in the following order: Chapter 1: Overview of research topics; Chapter 2: Theoretical Foundations and Research Models; Chapter 3: Research Design; Chapter 4: Research Results; and Chapter 5: Conclusions and Implications for Research CHAPTER THEORETICAL BASIS AND RESEARCH MODEL 2.1 THEORY OF THEORY 2.1.1 Loyalty Customer loyalty refers to the tendency of a customer to buy and use a brand's product or service in a various choices of brand that is widelymarketed and repeat this behavior (Chaudhuri and Holbrook , 2001); Expressing attitudes or behaviors attached to the customer's service provider(Oliver,1993) Customer loyalty can be approached under several perspectives: customer behavior (Backman and Crompton, 1991, Chaudhuri and Holbrook, 2001, Yoon and Uysal, 2005, Kabiraj and Shanmugan, 2011; (Backman and Crompton, 1991; Chaudhuri and Holbrook, 2001; Yoon and Uysal, 2005; Kabiraj and Shanmugan, 2011; Iordanova, 2016), and the angle of integration (Backman and Crompton , Yoon and Uysal, 2005; Iordanova,2016) Access to Customer Behavior: This approach considers customer loyalty through repetitive purchases, using a product / service frequently (Chaudhuri and Holbrook, 2001; Kabiraj and Shanmugan, 2011) In this approach, loyalty is a commitment of the customer to purchase or use the brand of a product / service in the future, although influenced by market situations and impacts can Abnormal customer behavior change (Oliver,1997) Reach from the perspective of the customer: This approach of loyalty is based on the attitudes of customers who want to emphasize the consumer's intention to consume the product / service (Kabiraj and Shanmugan, 2011) Thus, customer loyalty according to this view is expressed by their sympathetic attitude to the product / service and will use that product / service over time (Rossiter and Percy, 1987) The Indicate the intention to purchase the product / service as a primary choice (Oliver, 1997) Integrated approach: This approach examines customer loyalty based on a combination of customer attitudes and behaviors (Backman and Crompton, 1991, Yoon and Uysal, 2005, Iordanova, 2016 ) According to this approach, customers who buy and are loyal to a particular brand must have a positive attitude toward the brand (Yoon and Uysal, 2005) 2.1.2 Service quality Concept: Quality of service is seen as the distance between customer expectations and their perceptions when using service (Parasuraman et al., 1985), as is the ability of a service to include Reliability, accuracy, ease of use, ease of repair, and other valuable attributes to perform its function (Kotler et al., 2005) Quality of service model Model of Gronroos (1984): By Gronroos (1984), quality of service is measured by three components: technical quality, functional quality and image quality Model of Parasuraman et al (1985, 1988, 1991, 1994): Parasuraman et al (1985, 1988) suggest that service quality is measured by five components by SERVQUAL: reliability, responsiveness, assurance, tangible means and empathy Parasuraman et al (1991) assert that SERVQUAL is a complete scale of service quality, value and reliability, and can be applied to all types of service; In addition, the results of the study by Parasuraman et al (1991) also showed that the quality of service, including 05 components and 05 components, had the same effect on quality of service In 1994, Parasuraman et al (1994) argued that service quality was one of the three components that impacted customer satisfaction along with product quality and price Model of Dabholkar et al (2000): Dabholkar et al (2000) suggest that service quality is directly influenced by four factors: reliability, personal attention, benefits, characteristics of products / services; and quality of service will have an impact on customer satisfaction and hence influence the intended use of the product 2.2 OVERVIEW OF RELATED STUDIES Empirical studies of customer loyalty to the quality of service of local and foreign scientists are based mainly on the model of Parasuarman et al (1985, 1988), consisting of five components : reliability, tangible means, empathy, responsiveness and service (Lawrence and Lucy, 2016; Nguyen Hue Minh et al., 2015; Mai Ngoc Khuong et al., 2015; Nguyen ThiBich Dao and Nguyen Huu Tin, 2015; NhamPhong Tuan and Nguyen Thi Hai Linh, 2014; Hoang Sa Dang and Ying Fang Huang, 2014; Galib, 2013; Kofi et al., 2013; Xiangyu and Jarinto, 2012; Rousan et al., 2010 ) However, major studies conducted in developed countries differ in their level of economic and cultural development over Vietnam (Lawrence and Lucy, 2016; Galib, 2013; Kofi et al , Xiangyu and Jarinto, 2012; Rousan et al., 2010) or in Da Nang, Hanoi, KienGiang (Nguyen Hue Minh et al., 2015; NhamPhong Tuan and Nguyen Thi Hai Linh, 2014; Hoang Sa Dang and Ying Fang Huang, 2014) or the previous time in Ho Chi Minh City (Mai Ngoc Khuong et al., 2015) also differs from the and star hotels in Ho Chi Minh City the present time when the ASEAN Council took effect In addition, most studies of the impact of service quality on customer loyalty or customer satisfaction are ongoing research, which means that these components represent quality of service and when researching service quality affects satisfaction or loyalty, these components influence satisfaction or loyalty (Lawrence and Lucy, 2016; Nguyen Hue Minh et al., 2015; Mai Ngoc Khuong et al., 2015; Nguyen ThiBich Dao and Nguyen Huu Tin, 2015; NhamPhong Tuan and Nguyen Thi Hai Linh, 2014; Hoang Sa Dang and Ying Fang Huang, 2014; Galib, 2013; Kofi et al Xiangyu and Jarinto, 2012; Rousan et al., 2010); or indirect research ie study the components that affect service quality and service quality as a factor (measured by specific five-dimensional observational variables in addition to the components of service quality ) have an impact on service quality and satisfaction (Lee et al., 2000; Tsou and Liao, 2010) While the interaction effect between service quality components and overall service quality (Parasuraman et al., 1991) Therefore, an empirical study on the quality of and star hotels in Ho Chi Minh City is needed to examine the relationship between these components and the overall service quality Examines the impact relationship between service quality and its components with customer satisfaction and loyalty 2.3 MODELS AND PROBLEMS FOR RESEARCH PROPOSAL In this study, the authors used the model of Parasuraman et al (1985, 1988) to measure the quality of 4, star hotel services through the SERVQUAL scale because SERVQUAL is a complete scale of Quality of service, value and reliability (Parasuraman et al., 1991) Quality of service and its components Service quality is viewed as the distance between customer expectations and their perceptions when using service (Parasuraman et al., 1988); The extent to which the service responds to customer expectations (Lewis & Mitchell, 1990) As such, the quality of hotel services is reflected in the subjective perception of customers about the quality of services provided by the 4, star hotel system compared with their expectations At the same time, Parasuraman& Associates (1988) has released five components of quality of service including: Reliability: is considered through the ability of the supplier to respond accurately and reliably to the services they provide to clients (Parasuraman et al., 1988) Thus, the reliability of customers for the quality of and star hotels is reflected in the fact that the hotel system of 4, stars always perform what they promise to customers, always support Customer service is always stable and reliable, always notify customers when the service will be done Tangible means: assessed through facilities, equipment and staff (Parasuraman et al., 1988) Thus, the tangible means of the 4, star hotel system are understood as the facilities, and the staffs of the hotel are available to meet the expectations of customers as the facilities are packed Great, professional and beautiful staff Response: assessed through the ability to meet customer needs and provide services quickly (Parasuraman et al., 1988) Thus, the response of the hotel system 4, stars in the city of Ho Chi Minh City is reflected by the hotel always support customers when they require a quick and timely, always support customers when they order Assurance: assessed through employee knowledge and courtesy as well as their ability to create customer confidence (Parasuraman et al., 1988) As such, the assurance of the hotel expresses the ability of the staff of the hotel through communication and behavior of employees to customers who have been using the hotel services by answering the Inquiries of customers polite, courteous should give them peace of mind Empathy: assessed through care, customer service (Parasuraman et al., 1988) Thus, the sympathy of the hotel expressed through the attention, customer care of hotel staff to customers who have been using the company's services, always understand what the customer center Loyalty Customer loyalty refers to the tendency of a customer to buy and use a brand's product or service in a set of competing brands available on the market and repeat this behavior (Chaudhuri & Holbrook , 2001) Zeithaml& Associates (1996) argue that consumers value the service of a good company and they tend to promote that company, and more importantly, express their preference for the company They are more likely to buy, buy more, and accept higher prices without moving to other services of the same type that are available on the market, in other words, quality Service is considered as the factor to create customer loyalty As such, customer loyalty to hotel services is reflected in the attitude and behavior of customers in the continued use of the hotel services Quality of service is considered by many researchers as the determining factor for customer loyalty Monal& Girish (2012) The results of Tefera and Govender (2016), Mai Ngoc Khuong et al (2015), Galib (2013, Kofi et al (2013), Xiangyu and Jarinto (2012), Rousan et al (2010) Quality of service is a factor that influences customer loyalty when they use hotel services In addition, customer satisfaction and loyalty are closely related to customer loyalty The results of Kasiri et al (2017), Wu (2016), Tefera and Govender (2016), Mai Ngoc Khuong et al (2015), Orela and Karab (2014) , Xiangyu and Jarinto (2012) point out that when customers are satisfied with their travel services, the hotels they use will make them loyal to the service providers , the author hypothesized H1: Reliability Affecting loyalty (+) H2: Visible means affecting loyalty (+) H3: Responsiveness influencing loyalty (+) H4: affect loyalty (+); H5: Empathy affects loyalty (+); Q6: Overall service quality affects loyalty (+); Q7: Satisfaction influences loyalty (+) Satisfaction Customer satisfaction is considered the most emotional state with the product / service used (Spreng et al., 1996); as customer response to satisfying expectations (Oliver, 1997); to the extent that their needs are met (Castaneda et al., 2009) Quality of service and satisfaction are two different but closely related concepts in service research (Parasuraman et al., 1988) Quality of service is considered the cause of customer satisfaction (Cronin & Taylor, 1992; Parasuraman et al., 1994; Spreng&Mackoy, 1996; Dabholkar et al., 2000) In addition, the research results of Xiangyu and Jarinto (2012), Hoang Sa Dang and Ying-Fang Huang (2014), NhamPhong Tuan & Nguyen Thi Hai Linh (2014), Nguyen ThiBich Dao and Nguyen Hieu Tin 2015), Nguyen Hue Minh et al (2015), Tefera &Govender (2016), Lawrence and Lucy (2016), Ismail et al (2016), Kasiri et al (2017) in the field of hotel and tourism The quality of service is the factor that affects the satisfaction of customers Thus, the author hypothesizes H8: Reliability has an impact on customer satisfaction (+); H9: Tangible means affecting customer satisfaction (+); Q10: Responsiveness has an impact on customer satisfaction (+); H11: assurance of impact on customer satisfaction (+); H12: Empathy Affects Customer Satisfaction (+); Q13: Overall service quality has an impact on customer satisfaction (+) In addition, the results of Parasuraman et al (1991), Nguyen Van Si and Nguyen Viet Bang (2017) show that overall service quality is affected by five components: reliability, tangible means , responsiveness, assurance, and empathy Thus, the hypothesis H14: The reliability has the same effect on the quality of service (+); H15: tangible means have the same impact on quality of service (+); H16: The response has the same effect as the quality of service (+); H17: Assurances have the same impact on quality of service (+); H18: Empathy has the same impact on quality of service (+) Figure 2.5 Model and hypotheses of the author (Source: author's build) CHAPTER 3: RESEARCH DESIGN 3.1 RESEARCH PROCESS This study combines qualitative research and quantitative research Qualitative interviews were conducted through expert interviews and focus group discussions Next, the author conducted a preliminary quantitative study by interviewing 100 respondents to adjust the scale The formal study was conducted by interviewing 350 respondents to test the model and hypothesis 3.2 QUALITATIVE RESEARCH 3.2.1 Qualitative research design Talk about the same pair of experts Interview method: The interviews were conducted in the form of an exchange between the author and the experts on the topic: factors affecting the loyalty of customers using the services at the hotel , stars in the area of HCMC The entire interview process is recorded on paper Data Analysis: Collected data are used to identify factors affecting loyalty; Adjust the observable variables to measure research concepts For group discussion Interview method: Group discussions were conducted in the form of seminars on the topic: factors affecting the loyalty of customers using services at 4, star hotels in HCMC The entire discussion process is documented on paper Data Analysis: Collected data are intended to redefine the factors that affect loyalty; Adjust the observable variables to measure research concepts 3.2.2 Results of qualitative research 3.2.2.1 Discussion results with experts The results show that: (i) customer loyalty to the and 5-star hotel chain in HCMC is affected by satisfaction, quality of service and its components; (ii) thirty four observation variables used to measure loyalty, satisfaction, quality of service and its components were formed 3.2.2.2 Group discussion results with consumers The results show that: (i) customer loyalty to the and 5-star hotel chain in Ho Chi Minh City is also influenced by satisfaction, quality of service and its components; (ii) thirty four observation variables used to measure the concept of loyalty, satisfaction, quality of service and its components have been established Specifically: Loyalty scale: including 04 variables of observation: LO1: I always think of hotel services whenever needed, LO2: I will not use other hotel services if the hotel is willing to provide, LO3 : I will use back the hotel services, LO4: I will world hotel service to other users Satisfaction scale: SAT1: I am pleased to use the services at the hotel, SAT2: I am satisfied with the management and quality of service of the hotel, SAT3: I comedy Satisfying the hospitality and work of hotel staff, SAT4: I am satisfied with the management process and check in and check out procedures of the hotel Service quality scale: including 04 observation variables: OQS1: Quality of service provided by the hotel is higher than that of other hotels, OQS2: Quality of service provided by hotel OQS3: The quality of service provided by the hotel is of high standard, OQS4: Overall, the quality of the service meets the expectations of my quality of service Scale of tangible means: including 04 observation variables: TAN1: The hotel has modern equipment, TAN2: The hotel has spacious facilities, creating trust for customers, TAN3: Hotel staff have TAN4: The facilities of the hotel meet the needs of the hotel Reliability: including 05 observations: REL1: The hotel promised to something specific (like setting up customer service, after-sales service) then that would be done, REL2: When customers are in trouble, the hotel will always be solving problems timely, REL3: The hotel services are stable and reliable, REL4: The hotel provides the service at the right time, REL5: The hotel always informs customers when the service will be performed Response Level: includes 04 variables: RES1: Hotel staff always promptly respond to customer requests for service changes such as change of billing information, internet service, RES2: Hotel staff are always present when customers have trouble, RES3: Hotel staff never too busy to meet customer requirements, RES4: Business / customer Always receive service support from the hotel staff Scope of Assurance: including 04 observation variables: ASS1: Communication style, behavior of hotel staffs increasingly create trust for customers, ASS2: Business / customer feel secure When using hotel services, ASS3: Hotel staff are always courteous and courteous to customers, ASS4: Hotel staff have enough knowledge, expertise to answer as well as customer support Empirical Measurement:Including 05 observation variables: EMP1: Hotel staffs show interest to each customer, EMP2: Hotel staff are always interested in customers, EMP3: Hotel staff understands the special needs of guests EMP4: Hotel staff pay attention to the issues that customers most interested, EMP5: Hotel staff always have the convenient time to serve the needs of customers 3.3 PRINCIPAL QUESTIONNAIRE Preliminary qualitative research was conducted by direct interview with 100 respondents who were surveyed by convenient sampling method to screen and determine the scale structure Results showed that all 34 observational variables used to measure the eight study concepts met the criteria for Cronbach's Alpha coefficient analysis and EFA discovery factor analysis 3.3 RESEARCH About sampling and sampling methods: The author conducted a direct interview of 350 respondents (322 valid responses) using a convenient sampling method On Data Processing Techniques: Data collected were analyzed by means of reliability analysis, EFA analysis, CFA analysis and SEM linear modeling CHAPTER RESEARCH RESULTS 4.1 RESEARCH SAMPLES The author conducted a survey of 350 respondents (of which 322 answered correctly) Of the 322 valid responses, 187 respondents used the service at 28 five-star hotels (accounting for 58.1%) and 135 clients using the service at 47 four-star hotels in Ho Chi Minh City Accounting for 41.9%; 197 male customers (61.2%), 125 females (28.8%); 85 customers have Vietnamese nationality (26.4%), 273 foreigners (73.6%) 4.2 RESULTS OF RELIABILITY The results show that all scales meet the requirements for reliability analysis through the Cronbach's Alpha coefficient Specifically: Cronbach's Alpha coefficient of the LO scale is 0.871; SAT is 0.846; OQL is 0.868; REL is 0.866; RES is 0.840; ASS is 0.838; EMP is 0.833; and TAN is 0.802 4.3 RESULTS OF DISCUSSION ANALYSIS About EFA results for service quality components The EFA results show that 22 variable observations measuring service quality components after EFA analysis were cited for five elements corresponding to 05 concepts with a total deviation of 65.16% at Eigenvalue of 2.548 About EFA Quality of service Results The EFA results show that: variable observations measure the concept of service quality after EFA analysis, which is cited as one factor with a total variance of 71.705% at the Eigenvalue of 2.868 About EFA Customer satisfaction Results The EFA results show that four observed variables after EFA analysis were extracted with one factor corresponding to one concept with a total deviation of 68.650% at the Eigenvalue of 2.746 About EFA Loyalty Results The EFA results show that observed variables after EFA analysis were extracted with one factor corresponding to one concept with a total deviation of 72.139% at the Eigenvalue of 2.886 4.4 RESULT OF ANALYSING DECIDING FACTORS All 34 observational variables used to measure the study concepts met the conditions in the CFA analysis 4.5 RESULTS OF MODELING AND RESEARCH IMPLICATIONS Results of test model study: The results show that the model has Chi2 value = 684,754, df = 509; Cmin / df = 1,345 with p-value = 0.000 ( 0.90 (Hair et al., 2006), CFI> 0.95 (Hu &Bentler, 1999), RMSEA 0.05 (Hair et al., 2006) About the results of testing hypotheses Hypothesis testing results are accepted Results of hypothesis testing are presented in Table 4.15 Table 4.15 Test results hypothesis research OQL OQL OQL OQL OQL