Journal of Hospitality Marketing & Management

ISSN: 1936-8623 (Print) 1936-8631 (Online) Journal homepage: http://www.tandfonline.com/loi/whmm20

The Determinants of Loyalty in Hotels

Hugh Wilkins , Bill Merrilees & Carmel Herington
To cite this article: Hugh Wilkins , Bill Merrilees & Carmel Herington (2009) The Determinants
of Loyalty in Hotels, Journal of Hospitality Marketing & Management, 19:1, 1-21, DOI:
10.1080/19368620903327626
To link to this article: http://dx.doi.org/10.1080/19368620903327626

Published online: 04 Nov 2009.

Submit your article to this journal

Article views: 928

View related articles

Citing articles: 31 View citing articles

Full Terms & Conditions of access and use can be found at

http://www.tandfonline.com/action/journalInformation?journalCode=whmm20
Download by: [Sunway College], [Tee Jie Mi]

Date: 25 October 2016, At: 19:08

Journal of Hospitality Marketing & Management, 19:121, 2010

Copyright Taylor & Francis Group, LLC
ISSN: 1936-8623 print/1936-8631 online
DOI: 10.1080/19368620903327626

The Determinants of Loyalty in Hotels

1936-8631
1936-8623
WHMM
Journal
of Hospitality Marketing & Management,
Management Vol. 19, No. 1, Oct 2009: pp. 00

TheWilkins
H.
Determinants
et al. of Loyalty in Hotels

HUGH WILKINS

Department of Tourism, Hotel, Sport, and Leisure, Griffith Business School, Griffith University,
Gold Coast Campus, Queensland, Australia

BILL MERRILEES and CARMEL HERINGTON

Department of Marketing, Griffith Business School, Griffith University,
Gold Coast Campus, Queensland, Australia

The hotel industry is a large industry contributing substantially to

global economies and providing employment for many million
people worldwide. Given the size and economic significance of the
industry, it is important to understand the aspects of business
performance that persuade customers to become repeat purchasers,
and to exhibit behavioral loyalty. Despite the significance of the
industry, there has been little research to investigate the antecedents
of, and influences on, behavioral loyalty. The major global hotel
corporations place considerable emphasis on the brand for marketing but there has been little research found that has investigated
the role of the brand in determining behavioral loyalty in hotels.
This article provides an evaluation of the linkages between service
quality, perceived value, customer satisfaction and behavioral loyalty.
The impact of brand trust and brand attitude is added to the
model and provides new understanding on the interactions
between the constructs within a service sector context. Findings
indicate that service quality, mediated by customer satisfaction is
the largest determinant, but that brand trust, mediated by brand
attitude, is a significant moderator of behavioral loyalty.
KEYWORDS Loyalty, hotels, service quality, brand attitude,
brand trust

Address correspondence to Hugh Wilkins, Department of Tourism, Hotel, Sport, and

Leisure, Griffith Business School, Griffith University, Gold Coast Campus, Queensland 4222,
Australia. E-mail: h.wilkins@griffith.edu.au
1

H. Wilkins et al.

INTRODUCTION
The importance of repeat purchase behavior is recognized through its
impact on a number of facets of business performance including profitability
(Oliver, 1999; Reichheld & Sasser, 1990). Whilst there has been considerable
research on the antecedents to behavioral loyalty across a number of industries, there has been comparatively limited research within the hotel context.
Globally, the hotel industry comprises over 17 million bedrooms
(World Tourism Organization, 2005) and employs over 11 million staff in
over 300,000 hotels (Olsen, 1996). The higher-priced segments of the hotel
industry are highly competitive with low switching costs (Skogland &
Siguaw, 2004) and little opportunity to develop competitive advantage
through differentiation or cost leadership (Bowen & Shoemaker, 1998;
Kandampully & Suhartanto, 2000). It is important, therefore, to understand
the aspects of business performance that persuade customers to become
repeat purchasers, and to exhibit behavioral loyalty.
Although the major global hotel corporations place considerable
emphasis on the brand for marketing there has been little research found
that has investigated the role of the brand in determining behavioral loyalty
in hotels. This research will contribute an understanding of the relationships
between service quality, perceived value, customer satisfaction, brand trust,
brand attitude, and behavioral loyalty within the hotel and service industries.
Within a quality classification hotels have little or no tangible product differentiation (Bowen & Shoemaker, 1998; Kandampully & Suhartanto, 2000),
with trust and brand attitude providing the key to competitive advantage.
This article will continue by presenting a proposed model of the determinants of behavioral loyalty in hotels followed by review of the literature,
which supports the development of the model. The research design and data
collection approaches are then presented and analyzed results discussed.
Following this, the theoretical and practical implications of the research are
discussed.

LITERATURE REVIEW
Loyalty research has gained in importance over recent years, as the recognition of the benefits derived from loyal customers has become more widely
recognized (Disney, 1999). The focus of consumer research has moved from
satisfaction research to loyalty research (Geyer, Dotson, & King, 1991;
Oliver, 1999), with consumer loyalty becoming the dominant business
performance indicator (Heskett, Jones, Loveman, Sasser, & Schlesinger,
1994; Singh & Sirdeshmukh, 2000). This change in focus results from an
acceptance that loyal customers generate higher levels of profits (Reichheld &
Sasser, 1990) from higher levels of purchase, decreased price sensitivity,

The Determinants of Loyalty in Hotels

positive word of mouth, and lower likelihood to switch brands (Bowen &
Chen, 2001; Bowen & Shoemaker, 1998; Buttle, 1996).
The construct of loyalty comprises both behavioral and emotional aspects
(Dick & Basu, 1994; Gounaris & Stathakopoulos, 2004). In this research, loyalty
was defined from a behavioral perspective as an intention to repurchase the
same product or service at the next purchase occasion without undertaking
further search activities. Behavioral loyalty is seen as more important to an
organization as actual purchase behavior is more relevant than attitudinal
intentions (Neal, 2000). The context of loyalty is of particular importance for
service industries that are impacted by the service characteristics of inseparability of production and consumption, heterogeneity and intangibility.

PROPOSED MODEL
It is generally recognized that there are linkages between service quality,
customer satisfaction, and loyalty (Bloemer & Kasper, 1995; Buttle, 1996;
Caruana, 2002; Chiou, 2004; McDougall & Levesque, 2000; Oliver, 1980).
There have been a number of studies that have looked at the antecedents
of loyalty, including value (Bojanic, 1996; Chiou, 2004; Cronin, Brady, &
Hult, 2000), brand reputation (Delgado-Ballester & Munuera-Alemn, 2000),
trust (Chiou, 2004; Delgado-Ballester & Munuera-Alemn, 2000; Merrilees
& Fry, 2002; Taylor & Hunter, 2003), affect (Dick & Basu, 1994), and preference (Alreck & Settle, 1999). Javalgi and Moburg (1997) suggest that,
due to the intangibility and heterogeneity of services, there is an increased
likelihood of loyalty in a service context resulting from a risk reduction
strategy associated with selection of a new provider. Based on the literature it was anticipated the dimensions of service quality, customer satisfaction, perceived value, brand trust, and brand attitude would collectively
and individually influence the level of behavioral loyalty. A model was
developed to recognize these relationships and is shown in Figure 1.

Loyalty
There is considerable generic literature on consumer loyalty and some
researchers have defined loyalty in behavioral terms based on the volume
of purchase for a particular brand (Tranberg & Hansen, 1986). Others define
loyalty as attitudinal, with loyalty being described in terms of preferences or
intentions (Jacoby & Kyner, 1973). There is consensus that a distinction
exists between repeat purchase behaviors, even if derived from customer
satisfaction, and genuine loyalty. Neal (2000) suggests that behavioral
loyalty is more important to an organization as actual purchase behavior is
more relevant than attitudinal intentions. This reflects recognition that
behavioral loyalty derives from many sources, including attitudinal loyalty,

H. Wilkins et al.

Value

Service
Quality

Customer
Satisfaction

Brand
Trust

Behavioral
Loyalty

Brand
Attitude

FIGURE 1 Proposed model of determinants of hotel behavior loyalty.

as well as other reasons, such as convenience and lack of choice (Neal,

2000; Oliver, 1999).

Customer Satisfaction
Although the linkage between customer satisfaction and behavioral loyalty
has been well established (Bloemer & Kasper, 1995; Buttle, 1996; Caruana,
2002; Chiou, 2004; McDougall & Levesque, 2000; Oliver, 1980), some
researchers have found contradictory results (Skogland & Siguaw, 2004).
For example, Selnes (1993) found the relationship between satisfaction and
repeat purchase intentions is dependent on the ability of customers to evaluate the product or service. Others have found that satisfaction does not
generate loyalty in the insurance industry (Hellier, Geursen, Carr, & Rickard,
2003) or the hotel industry (Skogland & Siguaw, 2004). Skogland and
Siguaw (2004) suggest the weak linkage between satisfaction and loyalty
may be a result of the low switching costs associated with the hotel industry.
An alternative view is that a threshold effect operates, with satisfaction only
generating advances in loyalty when satisfaction exceeds a certain level
(Bowen & Chen, 2001; Oliva, Oliver, & MacMillan, 1992). Thus, the relationship between satisfaction and loyalty, although generally recognized, has
been found somewhat ambiguous in the hotel industry. In addition, it is

The Determinants of Loyalty in Hotels

generally accepted that service quality is antecedent to customer satisfaction

(Caruana, 2002; Cronin & Taylor, 1992; Parasuraman, Zeithaml, & Berry,
1994; Teas, 1994) and that customer satisfaction acts as a mediating variable
between service quality and loyalty (Caruana, 2002). Consumers see service
quality as a higher order composite dimension formed from antecedent
components (Wilkins, Merrilees, & Herington, 2007).

Value
The importance of value to the customer has been recognized particularly in
the relationship between price, quality, and value (Bojanic, 1996; Cronin et al.,
2000; Jayanti & Ghosh, 1996; Oh, 1999; Sweeney & Soutar, 2001; Zeithaml,
1988) and as a component of the customer evaluation of satisfaction (Bojanic,
1996; Cronin et al., 2000; Day, 2002; Oh, 1999; Zeithaml, 1988). Perceived value
reflects an extension of the customer satisfaction-service quality dimension, to
incorporate the relationship between the experience and the overall financial and nonfinancial sacrifices contributed (Bojanic, 1996; Cronin et al.,
2000; Jayanti & Ghosh, 1996; Oh, 1999; Rosen & Surprenant, 1998).
Although the relationship between customer satisfaction and value has
been previously researched, no finite evaluation of the relationship has
emerged. Some researchers suggest value is antecedent to customer satisfaction (Cronin et al., 2000; Day, 2002; Oh, 1999), whilst others suggest it acts
as a mediator between quality and purchase intentions (Babakus & Boller,
1992; Bojanic, 1996) or represents a higher order construct than price or
quality (Kashyap & Bojanic, 2000). Zeithaml (1988) proposed a model that
has been tested and adapted by subsequent researchers, whereby perceived
value is a mediator between quality and purchase intentions. In particular,
Bojanic (1996) adapted this model for application in the hotel industry, finding
support for Zeithamls (1988) findings.

Brand
A number of aspects of the relationship between brand and customer loyalty
have been reported. Artzt (1993) suggested brand loyalty is based on the
two core elements of performance and value, with quality being important,
but moderated by value. Selnes (1993) found that quality impacts on both
satisfaction and brand reputation, with satisfaction also influencing brand
reputation, and both satisfaction and brand reputation affecting loyalty for
some products. The research suggests brand reputation is a long-term and
overall perspective that exceeds satisfaction and has the benefit of being an
extrinsic cue when there is lack of knowledge of intrinsic detail, with customers using a brand or brands within a product class as a surrogate for
expectations in performance (Selnes, 1993). In contrast, Taylor and Hunter
(2003) found brand attitude, brand trust, and satisfaction were antecedent to

H. Wilkins et al.

loyalty whilst Merrilees and Fry (2002) found trust to be antecedent to attitude
which was antecedent to loyalty. In a similar fashion, Chiou (2004) found
perceived trust to be antecedent to value, satisfaction, and loyalty, whilst
value was also antecedent to both loyalty and satisfaction, and satisfaction
was antecedent to loyalty.
The role of trust in the relationship has been highlighted by a number
of researchers (Delgado-Ballester, Munuera-Alemn, & Yague-Guillen, 2003;
Hiscock, 2001; Merrilees & Fry, 2002; Morgan & Hunt, 1994) and is recognized
as central to the development of loyalty (Delgado-Ballester & MunueraAlemn, 2000). The inclusion of trust in the relationship between the brand
and the consumer implies the relationship extends beyond the characteristics
of the brand as a product, and, therefore, the relationship goes beyond the
functional performance of the product or service (Delgado-Ballester &
Munuera-Alemn, 2000).
In summary, although there has been considerable research that has
revolved around the interrelated concepts of service quality, perceived
value, customer satisfaction, behavioral loyalty and attitude, and trust associated with the brand, there has been limited research that integrates these
concepts. None of this research has been related to the hotel industry
although there have been a number of studies that have addressed the role
of loyalty programs in the hotel industry (Barsky & Nash, 2003; Bowen &
Shoemaker, 1998; Palmer, McMahon-Beattie, & Beggs, 2000; Skogland &
Siguaw, 2004).
Based on the literature and a conceptual understanding of the hotel
consumption experience it was anticipated the dimensions of service quality,
customer satisfaction, perceived value, brand trust, and brand attitude
would collectively and individually influence the level of behavioral loyalty.
The remainder of the article describes the research undertaken to examine
this series of theorized relationships. The hypothesized relationships are
presented in Table 1.

TABLE 1 Hypotheses
H1
H2
H3
H4
H5
H6
H7
H8
H9
H10

Perceived service quality will have a significant positive effect on customer

satisfaction.
Perceived service quality will have a significant positive effect on brand trust.
Perceived service quality will have a significant positive effect on brand attitude
Perceived value will act as a moderating variable between service quality and
customer satisfaction.
Customer satisfaction will have a significant positive effect on behavioral loyalty.
Customer satisfaction acts a moderator between perceived service quality and
behavioral loyalty.
Customer satisfaction will have a significant positive effect on brand trust.
Customer satisfaction will have a significant positive effect on brand attitude.
Brand trust will have a significant positive effect on brand attitude.
Brand attitude will have a significant positive effect on behavioral loyalty.

The Determinants of Loyalty in Hotels

METHOD
A mixed-method approach was adopted with qualitative data being collected
through focus groups. Four focus groups were held comprising consumers
with experience of first class and luxury hotels. These focus groups were
used to explore perceptions of hotel consumption with the resultant data
being analyzed and used for the development of scales for the quantitative
stage of the research. Themes were identified through content analysis that
related to aspects of hotel consumption and loyalty and these themes,
together with the literature, were used as the basis for a number of scales. A
rigorous scale development process was adopted as recommended by
Churchill (1979). The items derived from the qualitative research and the
literatures were initially subject to expert opinion to establish validity. The
scales were then subject to a pilot study with the data being subject to
exploratory factor analysis to establish to ensure item purity. Items that were
complex were amended to improve clarification.
Hotel guests in first class and luxury hotels in Queensland, Australia
were asked to complete the survey. The eight participating hotels distributed
the survey to the guests. A total of 664 completed usable responses were
received with an approximate equivalence between four-star (first class)
consumers and five-star (luxury) consumers. To gain equal representation
of both five-star (luxury) hotels and four-star (first class) hotels, an equal
number of hotels from each category were approached to participate in the
data collection process. The hotels were selected to provide a balanced
respondent sample, with the hotels overall providing a good balance of
business and leisure in each quality category. Slightly over half of the
responses were from leisure consumers, whilst business and convention
travelers comprised the majority of the rest.
Items for scales were drawn from the focus groups as well as from respective literatures. The scales were pilot tested to ensure item validity and reliability
before data collection commenced. Using the collected data, the structure of
each scale was assessed followed by assessment of the model and the relationships amongst the variables of interest. The constructs were tested for discriminant validity with discriminant validity being found between all dimensions. In
all cases the AVE was greater than the square of the intercorrelations, a measure
that indicates there is discriminant validity (Fornell & Larcker, 1981).

Service Quality
Derived from the qualitative data and the literature, 63 items relating to
hotel performance and service quality were included in the survey (Wilkins
et al., 2007). In service quality measurement there is general acceptance that
performance only measures are superior (Cronin & Taylor, 1994; Parasuraman
et al., 1994; Teas, 1994).

H. Wilkins et al.

In order to identify the naturally occurring dimensions of service quality,

all 63 items were placed into an exploratory principal components analysis.
This approach is recommended in the literature as a means of identifying
actual, rather than perceived, factor groupings (Rosen & Surprenant, 1998).
An oblique rotation was used as it was anticipated the factors would show a
high level of correlation. The principal components analysis was examined
for items that were complex or showed inadequate loadings on a dimension. Seven components with eigenvalues greater than one were identified
explaining a combined total of over 67% of the variance. An examination of
the scree plot confirmed the seven components as an appropriate solution.
The components were named in relation to the items contained. A confirmatory factor analysis of each of the dimensions supported the solution.
The facture structure, factor loadings, scale reliabilities and the confirmatory
analysis results are provided in Table 2.
Following the confirmatory analysis of the factor structures, composite
variables were created using partial disaggregation. Partial disaggregation
provides particular benefits of being able to assess a complex higher order
model whilst reducing random error bias, providing more stable estimates
from the reduction of paramental numbers and improving approximation of
normality distribution variables (Bentler & Wu, 1995; Dabholkar, Thorpe, &
Rentz, 1996). It involves the creation of two or more composite variables for
a construct. As recommended, the three composites were formed from the
previously identified sub dimensions (Bagozzi & Heatherton, 1994). Based
on the literature and conceptual understanding of hotel operations, a food
and beverage factor (called Quality Food and Beverage) was separated from
the other dimensions. It seemed intuitively valid that the three dimensions
related to the service element of the hotel operation form one broad factor.
These subdimensions had been named quality staff, personalization, and
speedy service and were grouped into a higher order factor named Service
Experience. On a similar basis, the subdimensions concerned with the tangible aspects of the hotel product were also grouped together. This factor
contained the dimensions of stylish comfort, room quality and added extras
and this higher order factor was named Physical Product.

Loyalty Antecedents
Based on the literature four variables in addition to service quality were
also thought to influence behavioral loyalty. These variables together with
behavioral loyalty were subjected to confirmatory factor analysis. The
measures representing each of the constructs were found to exhibit satisfactory fit, indicating suitability for testing the model and the relationships
within the model. The retained items for each variable the factor loadings
and the confirmatory factor analysis fit indices results are provided in
Table 3.

The Determinants of Loyalty in Hotels

TABLE 2 Service Quality Dimensions and Factor Loadings
Component 1: Stylish Comfort - Retained Items, Factor Loadings and CFA results
Item

Standardized
Factor Loading

CFA Results
2

The hotel atmosphere is stylish

The hotel is first class
The hotel lobby is grand
The artifacts and paintings added to
the image of the hotel
The ambience of the hotel is relaxing

0.870
0.860
0.764
0.750

c (DF)
P
Normed c2
AGFI

0.647

Cronbach a

0.883

CFI
RMSEA
SRMR

15.430(5)
.009
3.080
0.973
0.994
.055
.016

Component 2: Quality Staff - Retained Items, Factor Loadings and CFA results
Item

Standardized
Factor Loading

Respectful and polite staff

Staff who are quick to respond to requests
High quality staff who are well trained
People are nice to you at checkout
Unobtrusive staff

0.857
0.833
0.826
0.687
0.687

Cronbach a

0.886

CFA Results
c2 (DF)
P
Normed c2
AGFI
CFI
RMSEA
SRMR

10.670(5)
.058
2.130
0.981
0.997
.040
.012

Component 3: Personalization - Retained Items, Factor Loadings and CFA results

Item

Standardized
Factor Loading

VIP treatment, being the focus of attention

The staff remember your name
Being recognized in the lobby
Staff remembering your requirements

0.859
0.852
0.842
0.808

Cronbach a

0.902

CFA Results
2

c (DF)
P
Normed c2
AGFI
CFI
RMSEA
SRMR

1.840 (1)
0.175
1.840
0.987
1.000
.035
.005

Component 4: Room Quality - Retained Items, Factor Loadings and CFA results
Item

Standardized
Factor Loading

Range of toiletries available in the bathroom

Luxurious branded toiletries
Lots of large fluffy towels
Deluxe appliances

0.824
0.802
0.767
0.652

Cronbach a

0.842

CFA Results
2

c (DF)
P
Normed c2
AGFI
CFI
RMSEA
SRMR

3.360 (2)
0.187
1.680
0.988
0.999
.031
.010
(Continued)

10

H. Wilkins et al.

TABLE 2 (Continued)
Component 5: Speedy Service - Retained Items, Factor Loadings and CFA results
Item

Standardized
Factor Loading

CFA Results
2

Not being kept waiting for more

than a minute
Immediate service
Not having to queue for more than 1 minute
Every need is anticipated

0.923

2.850 (1)

0.923
0.879
0.707

Cronbach a

0.901

P
Normed c2
AGFI
CFI
RMSEA
SRMR

(DF)

.091
2.850
0.979
0.999
.052
.008

Component 6: Added Extras - Retained Items, Factor Loadings and CFA results
Item

Standardized
Factor Loading

CFA Results

Floor concierge
Timesaving services such as valet parking
Regular shuttle buses to the airport
Provision of gym and other recreational
facilities

0.834
0.694
0.524
0.473

c2 (DF)
P
Normed c2
AGFI

4.730(2)
.094
2.360
0.984

Cronbach a

0.724

CFI
RMSEA
SRMR

0.995
.044
.016

Component 7: Quality Food & Beverage - Retained Items, Factor Loadings and CFA results
Item

Standardized
Factor Loading

Exquisite food presentation

Provision of fine dining restaurant
Good range of bars to buy a drink
Provision of a sumptuous buffet breakfast

0.869
0.764
0.712
0.658

Cronbach a

0.835

CFA Results
c2 (DF)
P
Normed c2
AGFI
CFI
RMSEA
SRMR

5.790(2)
.055
2.900
0.979
0.997
.052
.013

Testing the Model

Testing the overall model revealed a satisfactory fit with all fit indices falling
within desired ranges (c2(df) = 2.84(91, p < .00, GFI = 0.953, AGFI = 0.93,
NFI = .973, CFI = 0.982, SRMR = .03, RMSEA = .052). However, an examination of the regression weights identified in the hypothesized model showed
paths that were not significant at the .01 level. The relationship between
value and customer satisfaction was not significant (p = .308) and therefore
this relationship was removed from the model. As the value construct had

11

The Determinants of Loyalty in Hotels

TABLE 3 Retained Items and Factor Scores
Perceived Value - Retained Items, Factor Loadings and CFA results
Item
I expect superb service because I am prepared to
pay more
The quality of the hotel is more important than the
price you pay
The hotel provides a discount on extra nights stay
The quality of the hotel is reflected in the price
you pay
I expect the hotel to provide free gym and
recreational facilities
Cronbach a

Standardized
Factor Loading

CFA Results
2

0.808

13.710(5)

0.730

0.648
0.646

Normed c2
AGFI

2.740
0.976

0.559

CFI

0.992

0.807

RMSEA
SRMR

(DF)

.018

.050
.020

Customer Satisfaction - Retained Items, Factor Loadings and CFA results

Item

Standardized
Factor Loading

I made the right decision to use this hotel

I am happy with the hotel
I am very satisfied with this hotel
This hotel satisfies my needs

0.904
0.902
0.893
0.891

Cronbach a

0.942

CFA Results
2

c (DF)
P
Normed c2
AGFI
CFI
RMSEA
SRMR

2.830(1)
.093
2.830
0.980
0.998
.002
.004

Brand Trust - Retained Items, Factor Loadings and CFA results

Item

Standardized
Factor Loading

You can trust this hotel

This hotel has credibility
This hotel is consistently good
This hotel meets its promises

0.932
0.924
0.838
0.808

Cronbach a

0.928

CFA Results
c2 (DF)
P
Normed c2
AGFI
CFI
RMSEA
SRMR

8.530(2)
.014
4.260
0.970
0.997
.034
.010

Brand Attitude - Retained Items, Factor Loadings and CFA results

Item

Standardized
Factor Loading

This hotel is exceptional

There is something special about this hotel
This hotel has a great reputation

0.911
0.883
0.877
0.919

Cronbach a

0.942

CFA Results
c2

(DF)

P
Normed c2
AGFI
CFI
RMSEA
SRMR

3.190(1)
.074
3.190
0.982
0.999
0.105
.005

(Continued)

12

H. Wilkins et al.

TABLE 3 (Continued)
Behavioral Loyalty - Retained Items, Factor Loadings and CFA results
Standardized
Factor Loading

Item

CFA Results
2

My intention is to re-book with this hotel in the

future
I am likely to come back to this hotel l
I am looking forward to returning to this hotel
It is convenient to return to this hotel

0.929

0.920
0.865
0.551

Cronbach a

0.885

P
Normed c2
AGFI
CFI
RMSEA
SRMR

13.110(2)

(DF)

.001
6.560
0.954
0.994
.090
.017

been hypothesized to act as a moderating variable between service quality

and customer satisfaction the nonsignificance of the pathway between value
and customer satisfaction necessitated removal of the construct. The pathway between customer satisfaction and brand attitude was also not significant (p = .058) and this path was removed. The remaining pathways were
all significant at the .01 level. As a result of these non significant pathways
hypotheses four and eight were found to be not supported.
A revised model was then assessed with the results provided as Figure 2.
The fit indices for the revised model reflect a high level of fit, which is more
satisfactory than the initial model. The absolute fit indices of the GFI
(0.960), the AGFI (0.938) and the RMSEA (.053) are all within the recommended tolerances and indicate a hypothesized model that fits the data. The

Product

0.92

Service

0.85

Service
Quality

0.63

Customer
Satisfaction

0.63

Behavioral
Loyalty

0.53
0.16
0.78

Food &
Beverage

0.74
0.22

Brand
Trust

0.39

Brand
Attitude

FIGURE 2 Model determinants of hotel behavior loyalty.

The Determinants of Loyalty in Hotels

13

incremental or comparative fit indices also indicate a hypothesized model

that reflects the data with the NFI having a value of 0.978 and the CFI a
value of 0.985 both above the recommended value of 0.90. The normed
chi-square (c2/df = 2.92) falls within the recommended range from one to
three and the SRMR (.038) is also within the recommended range of below .05
(Tabachnick & Fidell, 2001).
On the basis of these results all remaining hypotheses were supported.

DISCUSSION
This research provides a new evaluation of the linkages between service
quality, customer satisfaction, and behavioral loyalty. In particular, the
impact of brand trust and brand attitude, added to the model, provides new
understanding on the interactions between the constructs within a service
sector context. Four central themes are discussed in the context of the current
study:
1.
2.
3.
4.

The dominant direct determinant of loyalty is customer satisfaction;

Value is not a statistically significant determinant of loyalty;
Brand attitudes contribute to the explanation of loyalty;
When indirect effects are considered, the fundamental determinant of
loyalty is service quality.

Each of these themes is considered. Firstly, the linkage between customer satisfaction and behavioral loyalty has generally been well established (Bloemer & Kasper, 1995; Buttle, 1996; Caruana, 2002; Chiou, 2004;
McDougall & Levesque, 2000; Oliver, 1980), although some researchers
have found contradictory results (Skogland & Siguaw, 2004). For example,
Selnes (1993) found that the relationship between satisfaction and repeat
purchase intentions is dependent on the ability of customers to evaluate the
product or service whilst others have found that satisfaction does not generate
loyalty in the insurance industry (Hellier et al., 2003) or the hotel industry
(Skogland & Siguaw, 2004).
This research contradicts the findings of Skogland and Siguaw (2004),
who found only a weak connection between customer satisfaction and
loyalty within the hotel industry. However, the research by Skogland and
Siguaw (2004) is difficult to follow. It uses simple regressions and confounds satisfaction and service quality. Retrospective evaluation of satisfaction up to 12 months after the service may also not be an accurate way of
capturing satisfaction measures. Other considerations are that the hotels are
middle-level, with a high proportion of business users.
Secondly, previous research has also suggested perceived value will
impact on the relationship between service quality and customer satisfaction

14

H. Wilkins et al.

(Bojanic, 1996; Cronin et al., 2000; Day, 2002; Oh, 1999; Zeithaml, 1988). In
this research, however, although it was originally hypothesized that perceived value would be a moderating variable between the constructs this
was not supported. Although supporting the relationship between service
quality and perceived value, the relationship of perceived value and customer satisfaction was not statistically significant. The context of our study,
high quality hotel services, may be critical here.
Thirdly, the addition of brand trust and brand attitude extends the
understanding of the factors that affect behavioral loyalty. Although the
central pathway from service quality to behavioral loyalty through customer
satisfaction provides the strongest linkage, the moderating path through
brand trust and brand attitude also has a b coefficient of 0.22 thus indicating
that brand trust and brand attitude have a strong influence on behavioral
loyalty.
Although there has been considerable research on the consequences of
service quality and customer satisfaction (Buttle, 1996; Caruana, 2002; Cronin
et al., 2000; Oh, 1999; Parasuraman, Zeithaml, & Berry, 1985, 1988) most
research has focused on links to repeat purchase behavior or loyalty and little
research has investigated the linkages with aspects of the brand.
Selnes (1993) found that quality impacts on both satisfaction and brand
reputation, with satisfaction also influencing brand reputation, and both
satisfaction and brand reputation affecting loyalty for some products. Other
research (Merrilees & Fry, 2002; Taylor & Hunter, 2003) has found brand
attitude, brand trust and satisfaction antecedent to loyalty within the e-CRM
and e-retailing industries.
There are some considerable implications of this finding as no previous
research has been found that addresses the differential impacts of service
quality and customer satisfaction on brand trust and brand attitude. Firstly,
the results indicate that customer satisfaction has the greatest direct impact
on behavioral loyalty. The authors contend that the context of the study is
relevant. The presented model of loyalty applies to high quality hotel
services. Patrons of such hotel services do not seem to be obsessed with
getting value for money as such, but rather in having a satisfying experience, that meets their high-level needs. Their high-level needs include, for
example, being a focus of attention and rapidly served. A total (high quality)
hotel experience is being sought. Achieving these very high levels of service
is likely to satisfy rather than delight.
Moreover, it is not a case of choosing, say, the right mobile phone
package. That service, for example, includes options of camera or email.
The total hotel service has to be satisfying, not select parts of it. Value for
money may play a greater explanatory role in lower price or more flexible
services, such as banking or mobile services, or lower-rated hotels. This
would be supported by earlier work that indicated a differential expectation
of service standards across hotel quality standards (Knutson, 1992).

The Determinants of Loyalty in Hotels

15

The current study proposes that context of service may influence the
relative roles of value and customer satisfaction. High quality, high touch
services, such as first class hotels, emphasize customer satisfaction. Future
studies need to extend to related contexts, such prestige automobile
dealerships, luxury fashion retailers, and luxury watch retailers or jewelers
(such as Rolex or Tiffanys). In contrast, lower price or services that are
more flexible are likely to give relatively more emphasis to value, vis--vis
customer satisfaction.
A second significant implication is recognizing total service quality as
the ultimate source (indirect effects combined) of loyalty. The total effect of
service quality on behavioral loyalty was 0.577 comprising a direct effect
mediated by customer satisfaction (0.397) and an indirect effect through
brand trust and brand attitude (0.180). All measured effects on loyalty,
though mediated through customer satisfaction and brand attitudes, derive
from total service quality. Total service quality as measured here is a second
order construct. That is, the higher order total service quality construct configures into three lower order subaggregates, namely product presentation,
service and food and beverage. The second-order nature of the service
quality construct emphasizes the earlier point that it is the total, not the
separate components of, service sought by patrons of first class hotels. Such
patrons do not want first class product presentation and service, but only
average food and beverage. Everything offered by the hotel has to contribute
to a high-class offering.
Highlighting total service quality as the ultimate source of loyalty
facilitates management action. The three components of total service
quality measure customer perceptions, but actually reflect the hotel performances in each area. All components are controllable by management and benefit from appropriate investments by the hotel. The
second-order factor structure of the service quality construct both constrains and guides the service improvement process. It is insufficient to
focus on just one component of total service quality because any weakest link problems will prevail. Rather, hotel managers need to ensure
that all departments enhance service performance and contribute to the
total needs of patrons. Rigid department demarcation has to be overcome by higher-level managers and cooperation developed between
departments.
A third important implication is that brand attitudes do make a significant
direct contribution to behavioral loyalty. For a given level of customer satisfaction, greater levels of brand attitudes increase loyalty. The magnitude of
the direct brand effects on loyalty are of medium size. From the consumer
perspective, two sets of chain effects are set in motion. One chain of effects,
tracks from service quality to customer satisfaction to loyalty. The second
chain of effects moves from service quality to brand trust to brand attitudes
to loyalty.

16

H. Wilkins et al.

The implications for understanding services branding from a consumer

perspective are considerable. Consumers service brand attitudes are strongly
influenced by the trust they have in the brand. Brand trust in turn is rooted in
the experiences of consumers with the brand. Our finding is consistent with
Berrys (2000) proposal of the potential important role of consumers service
experiences shaping service brands. The current study quantifies the impact
of service experiences and adds the mediating role of brand trust.
Managers can take advantage of the greater understanding of the
sources of strong service brands. Although there is always some role for
clever brand communication using attention-grabbing slogans or images,
the substance of service brands matters the most. The substance of service
brands is rooted in the service experience. If hotels desire stronger service
brands they need to enhance the total service quality provided through better
delivery of hotel services.
A fourth important implication emphasizes the very strong influence
of service quality on brand. The impact of service quality on brand trust
and attitude is very strong with a total effect on brand attitude of 0.819.
This positions service quality as the main component of brand attitude
and managers must recognize that the key to maintaining a favorable
brand attitude in consumers is almost exclusively dependent on the organization providing a high quality service experience. The powerful relationship between service quality and the brand components may be a
characteristic of the hotel industry and perhaps other service-operation
orientated industries.
The lack of research on brand trust has been criticized as significant,
given the centrality of trust to the consumer-brand relationship (DelgadoBallester, Munuera-Alemn, & Yague-Guillen, 2003). This research provides
the first research that evaluates the impact of brand trust and brand attitude
on behavioral loyalty in hotels and demonstrates that these must be given
consideration by hotel managers. The research supports the previous work
of Merrilees and Fry (2002) in the e-retailing industry in finding that brand
trust is antecedent to brand attitude and has only an indirect effect on
behavioral loyalty.

CONCLUSION
The research reported in this article extends the understanding of the complex relationships between the antecedents of behavioral loyalty within a
particular service industry. There are a number of interesting and important
facets related to the findings that require testing in other service sectors.
Although the findings ostensibly relate to high-quality hotel services, it is
proposed that the findings may also apply to many other high-quality, high
touch service industries.

The Determinants of Loyalty in Hotels

17

Firstly, the nonsignificance of perceived value within the service quality

and customer satisfaction relationship contradicts previous research. For the
hotel industry at least, this means consumers see perceived value as a
component of satisfaction with the evaluation of value affecting the levels
of satisfaction or dissatisfaction. This finding further implies that customers
amalgamate the antecedents of satisfaction into a single dimension.
Secondly, the measurement of the relationships between service quality,
customer satisfaction, brand trust, and brand attitude as a holistic model
provide new insights into the interdependency evident between the constructs. Although the service quality-customer satisfaction relationship has
been effectively explored previously there has been little confirmation of
the impact of these dimensions on brand trust and brand attitude. The
strength of the relationship from service quality to both of these constructs
is particularly important and reinforces the need for service operators to
focus on core performance rather than being sidetracked into peripheral
aspects of the service experience.
Thirdly, the relationship between brand trust, brand attitude, and
behavioral loyalty shows a difference in relationship strength from previous
research in other industries. This is an important finding as it implies that
the importance of branding varies between industries. This may arise from
consumer familiarity with and understanding of the product. A first class or
luxury hotel is a known quantity; whilst there may be variances between
properties, the overall product is reasonably understood. Other more complex or innovative elements of the service sector, such as e-retailing, may be
seen to carry higher risk as the product is less familiar to the consumer and
thus a higher reliance on the brand is evident in this context.
The research model is of particular importance to the industry as it
provides empirical evaluation of the importance of individual loyalty antecedents. Managers in the industry should, based on this research, allocate
resources to better satisfying customers and in strengthening patron attitudes
to the brand. Satisfying customers is rooted in hotel service performance,
manifest in total service quality. Strengthening consumers hotel brand attitudes requires understanding that strong service brands derive from very
positive service experiences. Positive service experiences also are rooted in
hotel service performance. Thus, loyalty is potentially controllable by hotel
managers, providing they understand the chain of effects model and use the
conceptual model to improve service delivery.

LIMITATIONS AND FURTHER RESEARCH

There are a number of limitations recognized within this research. The
limitations principally relate to the data sample and the range of variables
contained within the research model.

18

H. Wilkins et al.

Although the research gained a substantial respondent sample, the data

were all gathered from Queensland, Australia. The data were gathered using
a survey approach that can produce respondent error including response
patterning and the provision of expected data.
The third area of limitations relates to the variables contained within the
research model. There are a number of possible other dimensions that could
also affect the relationships that flow between hotel performance and customer loyalty. The loyalty construct measured in this research reflects, in the
main, behavioral loyalty and the research model would benefit from extending
the loyalty construct to include fully the attitudinal component. Equally, the
value construct in this research has focused on the concept of value in relation
to price and other research (Bojanic, 1996; Cronin et al., 2000; Jayanti &
Ghosh, 1996; Oh, 1999; Rosen & Surprenant, 1998) has identified other dimensions of value that may influence the findings. There are also a number of
other dimensions that could have been contained within the model such as
product congruity, other dimensions of the brand such as brand image, preference, affect, or reputation and other possible antecedents of behavioral loyalty.
There are a number of additional opportunities for future research that
reflects the limitations recognized above. A replication of the research in
other geographic locations would provide confirmation of the research
findings. Extending this research into the European, Asian, and American
contexts would provide opportunity to address the impact of cultural background on the research model. Equally, the luxury and first class hotel sectors
are only a two of the recognized hotel standards and replication of this
research within the economy and mid-price sectors would be valuable. The
application of the final survey instrument in other countries would allow the
robustness of the developed scales to be ascertained.
In conclusion, this research extends understanding of behavioral loyalty
within the hotel industry. The results demonstrate the direct importance of
customer satisfaction and brand attitudes and the indirect and ultimately
powerful roles of service quality and brand trust.

REFERENCES
Alreck, P. L., & Settle, R. B. (1999). Strategies for building consumer brand preference.
Journal of Product and Brand Management, 8, 130144.
Artzt, E. L. (1993). Customers want performance, price and value. Transportation
and Distribution, 34(7), 3234.
Babakus, E., & Boller, G. W. (1992). An empirical assessment of the SERVQUAL
scale. Journal of Business Research, 24, 253268.
Bagozzi, R. P., & Heatherton, T. F. (1994). A general approach to representing
multifaceted personality constructs: Application to state self-esteem. Structural
Equation Modelling, 1(1), 3567.

The Determinants of Loyalty in Hotels

19

Barsky, J., & Nash, L. (2003). Customer satisfaction: Applying concepts to industry-wide
measures. Cornell Hotel and Restaurant Administration Quarterly, 44(5/6), 1728.
Bentler, P. M., & Wu, E. J. C. (1995). EQS for Windows users guide. Encino, CA:
Multivariate Software Inc.
Berry, L. (2000). Cultivating service brand equity. Journal of the Academy of Marketing,
28(1), 128137.
Bloemer, J. M. M., & Kasper, H. D. P. (1995). The complex relationship between
consumer satisfaction and brand loyalty. Journal of Economic Psychology, 16,
311329.
Bojanic, D. C. (1996). Consumer perceptions of price, value and satisfaction in the
hotel industry: An exploratory study. Journal of Hospitality and Leisure Marketing,
4(1), 522.
Bowen, J. T., & Chen, S.-L. (2001). The relationship between customer loyalty and
customer satisfaction. International Journal of Contemporary Hospitality
Management, 13(4), 213217.
Bowen, J. T., & Shoemaker, S. (1998). Loyalty: A strategic commitment. Cornell
Hotel and Restaurant Administration Quarterly, 39(1), 1225.
Buttle, F. (1996). SERVQUAL: Review, critique, research agenda. European Journal
of Marketing, 30(1), 835.
Caruana, A. (2002). Service loyalty: The effects of service quality and the mediating
role of customer satisfaction. European Journal of Marketing, 36, 811830.
Chiou, J. S. (2004). The antecedents of consumers loyalty toward Internet service
providers. Information & Management, 41, 685695.
Churchill, G. A. Jr. (1979). A paradigm for developing better measures of marketing
constructs. Journal of Marketing Research, 16(1), 6473.
Cronin, J. J., Brady, M. K., & Hult, G. T. M. (2000). Assessing the effects of quality,
value, and customer satisfaction on consumer behavioral intentions in service
environments. Journal of Retailing, 76, 193218.
Cronin, J. J., & Taylor, S. A. (1992). Measuring service quality: A reexamination and
extension. Journal of Marketing, 56(3), 5569.
Cronin, J. J., & Taylor, S. A. (1994). SERVPERF versus SERVQUAL: Reconciling
performance based and perceptions-minus-expectations measurement of service
quality. Journal of Marketing, 58(1), 125131.
Dabholkar, P. A., Thorpe, D. I., & Rentz, J. O. (1996). A measure of service quality
for retail stores: Scale development and validation. Journal of the Academy of
Marketing Science, 24(1), 317.
Day, E. (2002). The role of value in consumer satisfaction. Journal of Consumer
Satisfaction, Disssatisfaction and Complaining Behaviour, 15(1), 2532.
Delgado-Ballester, E., & Munuera-Alemn, J. (2000). Brand trust in the context of
consumer loyalty. European Journal of Marketing, 35, 12381258.
Delgado-Ballester, E., Munuera-Alemn, J., & Yague-Guillen, M. J. (2003). Development
and validation of a brand trust scale. International Journal of Market Research,
45(1), 3553.
Dick, A. S., & Basu, K. (1994). Customer loyalty: Toward an integrated conceptual
framework. Journal of the Academy of Marketing Science, 22(2), 99113.
Disney, J. (1999). Customer satisfaction and loyalty: The critical elements of service
quality. Total Quality Management, 10, 491498.

20

H. Wilkins et al.

Fornell, C., & Larcker, D. F. (1981). Evaluating structural equation models with
unobservable variables and measurement error. Journal of Marketing Research,
18(1), 3950.
Geyer, P. D., Dotson, M., & King, R. H. (1991). Predicting brand commitment: An
empirical test of Rusbults investment model. Mid-Atlantic Journal of Business,
27(2), 129138.
Gounaris, S., & Stathakopoulos, V. (2004). Antecedents and consequences of brand
loyalty: An empirical study. Journal of Brand Management, 11, 283306.
Hellier, P. K., Geursen, G. M., Carr, R. A., & Rickard, J. A. (2003). Customer repurchase
intention: A general structural equation model. European Journal of Marketing,
37, 17621800.
Heskett, J. L., Jones, T. O., Loveman, G. W., Sasser, W. E. Jr., & Schlesinger, L. A.
(1994). Putting the service-profit chain to work. Harvard Business Review,
72, 164170.
Hiscock, J. (2001, March 1). Most trusted brands. Marketing, 3233.
Jacoby, J., & Kyner, D. B. (1973). Brand loyalty vs. repeat purchasing behavior.
Journal of Marketing Research, 10(1), 110.
Javalgi, R. G., & Moberg, C. R. (1997). Service loyalty: Implications for service providers. The Journal of Services Marketing, 11, 165179.
Jayanti, R. K., & Ghosh, A. K. (1996). Service value determination: An integrative
perspective. Journal of Hospitality and Leisure Marketing, 3(4), 525.
Kandampully, J., & Suhartanto, D. (2000). Customer loyalty in the hotel industry: The
role of customer satisfaction and image. International Journal of Contemporary
Hospitality Management, 12, 346351.
Kashyap, R., & Bojanic, D. C. (2000). A structural analysis of value, quality and
price perceptions of business and leisure travelers. Journal of Travel Research,
39(1), 4551.
Knutson, B. (1992). Consumers expectations for service quality in economy, mid-price
and luxury hotels. Journal of Hospitality and Leisure Marketing, 1(2), 2743.
McDougall, G. H. G., & Levesque, T. (2000). Customer satisfaction with services: Putting
perceived value into the equation. Journal of Services Marketing, 14, 392410.
Merrilees, B., & Fry, M. L. (2002). Corporate branding: A framework for e-retailers.
Corporate Reputation Review, 5, 213225.
Morgan, R. M., & Hunt, S. D. (1994). The commitment-trust theory of relationship
marketing. Journal of Marketing, 58(3), 2039.
Neal, W. D. (2000, April 10). For most customers, loyalty isnt an attitude. Marketing
News, 34, 7.
Oh, H. (1999). Service quality, customer satisfaction, and customer value: A
holistic perspective. International Journal of Hospitality Management,
18(1), 6782.
Oliva, T. A., Oliver, R. L., & MacMillan, I. C. (1992). A catastrophe model for developing
service satisfaction strategies. Journal of Marketing, 56(3), 8396.
Oliver, R. L. (1980). A congitive model of the antecedents and consequences of
satisfaction decisions. Journal of Marketing Research, 17, 460470.
Oliver, R. L. (1999). Whence consumer loyalty? Journal of Marketing, 63(4), 3344.
Olsen, M. (1996). Into the new millennium. A white paper on the global hospitality
industry (Vol. 1). Geneva, Switzerland: International Hotel Association.

The Determinants of Loyalty in Hotels

21

Palmer, A., McMahon-Beattie, U., & Beggs, R. (2000). A structural analysis of hotel
sector loyalty programmes. International Journal of Contemporary Hospitality
Management, 12(1), 5460.
Parasuraman, A., Zeithaml, V., & Berry, L. L. (1985). A conceptual model of service
quality and its implications for future research. Journal of Marketing, 49(4),
4151.
Parasuraman, A., Zeithaml, V., & Berry, L. L. (1988). SERVQUAL: A Multiple item
scale for measuring consumer perceptions of service quality. Journal of Retailing,
6(1), 1240.
Parasuraman, A., Zeithaml, V., & Berry, L. L. (1994). Reassessment of expectations
as a comparison standard in measuring service quality: Implications for further
research. Journal of Marketing, 58(1), 111125.
Reichheld, F. F., & Sasser, W. E. Jr. (1990). Zero defects: Quality comes to services.
Harvard Business Review, 68(5), 105111.
Rosen, D. E., & Surprenant, C. (1998). Evaluating relationships: Are satisfaction and
quality enough? International Journal of Service Industry Management, 9(2),
103125.
Selnes, F. (1993). An examination of the effect of product performance on brand
reputation, satisfaction and loyalty. European Journal of Marketing, 27(9), 1935.
Singh, J., & Sirdeshmukh, D. (2000). Agency and trust mechanisms in consumer
satisfaction and loyalty judgments. Journal of the Academy of Marketing
Sciences, 28(1), 150167.
Skogland, I., & Siguaw, J. A. (2004). Are your satisfied customers loyal? Cornell
Hotel and Restaurant Administration Quarterly, 45(3), 221235.
Sweeney, J. C., & Soutar, G. N. (2001). Consumer perceived value: The development
of a multiple item scale. Journal of Retailing, 77, 203220.
Tabachnick, B. G., & Fidell, L. S. (2001). Using multivariate statistics (4th ed.). Boston:
Allyn and Bacon.
Taylor, S. A., & Hunter, G. (2003). An exploratory investigation into the antecedents
of satisfaction, brand attitude, and loyalty within the (B2B) eCRM Industry.
Journal of Consumer Satisfaction, Dissatisfaction and Complaining Behavior,
16(1), 1935.
Teas, R. K. (1994). Expectations as a comparison standard in measuring service quality:
An assessment of a reassessment. Journal of Marketing, 58(1), 132140.
Tranberg, H., & Hansen, F. (1986). Patterns of brand loyalty: Their determinants and
their role for leading brands. European Journal of Marketing, 20(3), 81109.
Wilkins, H., Merrilees, B., & Herington, C. (2007). Towards an understanding of total
service quality in hotels. International Journal of Hospitality Management, 26,
840853.
World Tourism Organization. (2005). Tourism market trends. Retrieved March 11,
2005, from http://www.world-tourism.org
Zeithaml, V. A. (1988). Consumer perceptions of price, quality, and value: A means-end
model and synthesis of evidence. Journal of Marketing, 52(3), 223.