The hotel industry today
is also known as a global industry, with producers and consumers spreading
around the world.  Increasing customer
satisfaction is one of the main key aspects of increasing competitiveness in
the industry and in the same time allowing the business to continue operate

In a service perspective,
overall satisfaction is similar to overall estimations of service quality,
customers expectation, value for money and hotel image.  Understanding the consumer’s wants and needs
is important in order to be successful in the hospitality industry (Goeldner et
al.,2000). Customer satisfaction is defined as a customer’s overall appraisal
of the performance of an offering to date (Johnson and Fornell ,1991).
Satisfaction is understood to be predicted by service quality (Sudin ,2011) and
conclude that the hotel sector should focus especially on providing quality
service with respect of the factor of perceived quality that are the most important
to customer (Nasution and Mavondo, 2005). Beside it, customer expectation
should be concern since, customer expectation may influence the delivering of
the best services provided (Parasuraman et al.,1991).

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Service quality lead to
higher cost-effectiveness (Gundersen et al., 1996) and customer satisfaction
(Oliver, 1997).  Value for money is
compared between the benefit and customer satisfaction of perceived value.
Customers satisfaction is important for value for money and might be influence by
it. Hotel image has been argued that is a value added to identify the customers
satisfaction (Gro¨nroos, 2000) which include the hotel location, exterior and
interior design, reputation and atmosphere of a hotel (Bill et al., 2007;
Knutson, 1988).

There are challenges that
would be faced by a hotel which are the constantly growing volume and also the
pace of competition. Competition has had major implications for the customer,
such as increased choice of products and services, greater value for money for
the products and services produced as well as higher levels of services. Lam
and Zhang (1999) claimed that devastating customer demand for quality products
and services has in recent years become increasingly patent to professionals in
the tourism and hotel industry. Researches and marketers have begun to question
the actual return on the hotel’s investment specifically more on quality, services,
hotel image enhancements with the purpose of satisfying customers and meet
customer expectation. (Zaithaml, Berry and Parasuraman, 1996).


Research Objective:

1.      To
investigate how service quality can affect customer satisfaction among the
budget hotel.

2.      To
determine the relationship between customer expectation and customer

3.      To
investigate the relationship between value for money and customer satisfaction.

4.      To
understanding the relationship between hotel image and customer satisfaction.



1.      How
does service quality of a budget hotel affect customer satisfaction?

2.      What
are the customer expectation that can affect customer satisfaction?

3.      Does
value of money really affect customer satisfaction?

4.      How
a budget hotel image influences the customer satisfaction?

Problem Statement:

Studies show that guests
satisfaction may have indirect or direct impact to the hotel industries
business. Thus, enhancing customer satisfaction is an important part for the
hospitality industry to value their guests proposition (Siguaw a. Enz, 1999). Therefore,
millions of dollars per year were spend by the hoteliers to better impose guest’s
satisfaction and also find out the factors that will affect their satisfaction.
To increases guest’s satisfaction, an understanding of what is the factors that
will causes guests to stay and to return, is very important for the hoteliers.
We found that the top four factors that will affect guest’s satisfaction will
be “service quality, customer expectation, value for money and hotel image”.

The purpose of conduct
this study, is to understand the factor that will affecting guest’s
satisfaction among local tourisms in budget hotel at Kuala Lumpur (KL) area. This
research conducts a number of questions, which examine the relationship between
guest satisfaction and service quality, customer expectation, value for money
and hotel image in the hotel industries.

2. Literature Review

2.1 Customer Satisfaction


Nowadays, customer satisfaction has been a hot topic
in marketing practice and business research since Cardozo’s (1965) started study
of customer’s satisfaction and expectation. Even there is a lot of measures and
explanation for customer satisfaction, thus still does not have a general
agreement regarding its definition (Giese and Cote, 2000). Customer
satisfaction is generally defined as a summary evaluation of a customer’s
overall experience in an organization with concerning a specific product
(Gundersen, Heide and Olsson, 1996) or the services received (Cronin and
Taylor, 1992). In
short, customer satisfaction can be defined as fulfilling the customer response
(Yuksel, Philip, & Graham, 2008). Customer satisfaction is the result of an
appraising process that compare between repurchase expectations with
perceptions value and after the experience (Oliver, 1980).

Expectancy disconfirmation theory is the most accepted
conceptualization of the concept for customer’s satisfaction (Barsky, 1992; Oh
and Parks, 1997; McQuitty, Finn and Wiley, 2000). Oliver (1980) proposed and
created that customer’s satisfaction level is a result of the difference
between expected and perceived value. When the product or services are better
than expected, a satisfaction which called positive disconfirmation occurs. On
the other hand, negative disconfirmation of dissatisfaction occurs when the
performance worse than expected results.


2.2 Service Quality


Service quality play a fundamental role for a business
to success. It is very important for hotels management to understand and
conduct a proper consideration on what is the needs and wants of their guests. Service
quality measure how well a service is delivered, compared to customer
expectations (Parasuraman et al., 1988; Gronroos, 1982). It is a tangled,
tricky, emotional and abstract concept. For different people, it means different
things since their expectations are different.

Quality is a three-dimensional concept (Lehtinen and
Lehtinen, 1982) which name as corporate quality, interactive quality and
physical quality. Quality can also be defined as the integrality of the characteristics
of a product or services that carry on its ability to delight stated or involve
needs (Kotler et al., 2002). Likewise, Gronroos (1984) stated that service
quality represents of technical quality, functional quality and corporate

2.3 Customer
expectation (waimin ???????)

Customer expectations are
defined as the desires or wants of consumers, i.e.,what they feel a service
provider should offer rather than would offer (Parasuraman et al., 1988).
According to Parasuraman, Berry, and Zeithaml (1991), service providers must
recognize customer needs in order to fulfill expectations to achieve high customer
satisfaction during the service experience. Managing customer expectation is an
important subject to enable customer satisfaction (Hsieh et al., 2011; Kurtz
& Clow, 1992–93; Pitt & Jeantrout, 1994; Clow & Beisel, 1995; Coye,
2004). Expectations serve as a major determinant of a consumer’s service
quality evaluations and satisfaction (Grönroos, 1994; Parasuraman et al., 1985;
Parasuraman et al., 1988; O’Connor et al., 2000; Van Pham & Simpson, 2006).
At this point, the ”voice of the customer” should be taken into the design
process and after delivering the services, service providers should monitor how
well the customers’ expectations have been met (Pakdil & Ayd?n, 2007).           

2.4 Value for Money

Value for money can be defined the utility you get from each purchase or
expense. In the customer satisfaction, value for money not only depends on the
purchase price, but also on the efficiency and effectiveness on the service or
purchase for product. Many investigators have approved the mean of satisfaction
can explaining from the value (Bloemer
& Dekker, 2007). People can understand how much for value in products
or services through the response and satisfaction from customers.

Value for money also can define to spend the money in something that is
worth for them who is willingly to pay because its functions or effectiveness.
A mediator between services and profits is one function to value and value can
operate as a result of services (Sinclair
et al, 2002).

When satisfaction is reached, customers will seek the value of the
service or product, if this is hypothesis view, then suppose the perception of
a product, system, or market behavior is based on a simple test of the consumer
values to the extent that they reach” (Westbrook
& Reilly, 1983, p. 258). People can understand the value through
questionnaires, surveys or researches, so that they can predict what customer’s
wants in the hospitality industry.

Hotel image

Hotel image is public
preference of towards the hotel. Zeithmal 7 points out when purchasing,
customer behavior are based on their instinctive acknowledgement of value, this
is applied to hotel business which also means that the reputation of a hotel
and satisfaction of its customers lead to the behavior of purchase. Hotel image
is the sum of individuals’ beliefs, ideas, and impressions towards a hotel
(Baloglu and Brinberg, 1997). Despite the set in of impression in the definition
of image, such a concept appears to be short term-oriented compared to image,
that is long term-oriented (Andreassen and Lindestad, 1998). A person’s
impression of a hotel appears to be based on a reconnaissance of the
environment while hotel image goes beyond ordinary investigation to include all
accumulated information, whether based on firsthand experiences or
communication processes (Gartner, 1993).Sweat 12 thinks that measuring
implications of customers of customer’s purchase behavior includes: the
reputation of purchased products, the purchased amount and more. Countryman and
Jang (2006) used impression in the hotel setting to predict guests’ attitude
toward a hotel. By combining those researches, this brings out three
implications for the measurement of hotel image which is the reputation of the
satisfactions towards the hotel and loyalty of its customers.

The relationship between service quality and customer satisfaction

On the other hand, Parasuraman et al. (1985; 1988) developed the
SERVQUAL scale, which became the most popular instrument for measuring service
quality. They identified five key dimensions of service quality – reliability,
tangibles, responsiveness, assurance and empathy. According to this instrument,
service quality occures when perceived service meets or exceeds customer’s
the research, we summaries that value for money is psychological perspective
that is contain human behavior and they think it worth it and as known as
transaction value is price pay by customers (Gallarza and Saura, 2006; Rajaguru, 2016). The value for money can
be interpreted as functional relative to price pay (Jayanti and Ghosh, 1996). The functional of value for money is a
significant that can measure the transaction between price and usefulness (Kashyap and Bojanic, 2000). Value for
money is a notion that has both price and quality in one relationship in the
hospitality industry. The
concept that has combine price and quality in one compages is called value for
money in tourism and hospitality industry (Narayan
et al., 2009).  The value is
important in a tense economic environment; value for money within consideration
as a dimension of customer satisfaction in tourist literature for few writers (Narayan et al., 2009).  In hospitality, customers also need paid
foods and drinks, not only pay the room fees during accommodation (Walker, 2009). Then, both service and
product are include in one package will better in value for money when compare
with other packages that is include accommodation only (Turner & Troiano, 1987); and the best features and feel value
for money is one package that contain meals during accommodation. This is one
way to prepare other products or services that are low value can provide
together to our customers. This way can increase our revenue and image of our
business in the market.Value
can be delimited in relativistic, comparative, personal and situational
process. Zeithaml (1988) defines that
value is a price in physical needs that has quality for consumer who is willing
to pay to get what they want. Value for money can be also known as currency
valuation that is contrast advantage and sacrifice in transaction (Bolton and Drew, 1995). The empiric and
value is a mentality that can get from the satisfaction of customer. (Lee et al, 2007) Customers will be based
on their experience to evaluate the buying experience at value for money; the
customer satisfaction and purchase behavior will affect from the evaluation (Rajaguru, 2016). In hospitality
industry, customers will praise when they feel pleased and will also return
back to the particular hotel that they like. Therefore, we hypothesized that is
value for money affects customer satisfaction in hospitality industry. The
relationship between hotel image and customer satisfaction

The concept of hotel image has been determined as one of the most
significant factors and determinants in developing a marketing strategy for
hospitality business, whereas customer satisfaction is considered a major
success factor in sustaining and expanding hotel customer base. Satisfaction
means providing goods and services that create specific levels of perceived
value for the customer so that the customer remained engaged completely with
the organization (Wicks and Roethlein, 2009). Customer satisfaction can be
defined as the point to which a service or a product meets the customer`s
expectations. Therefore, customer satisfaction in general pertains to the
evaluation of a product or its features (Hunt, 1977). It specifies that the
hotel guests are happy with the services and products offered. Guests may be
satisfied with an experience, a service or a product, as well as with employee’s
` performance. On the other hand, others have perceived satisfaction to be an
originator for image and image together with satisfaction being factors
impacting loyalty (Helgesen and Nesset, 2007; Kandampully and Hu, 2007).
Furthermore, Brunner et al. (2008) noted that the impact of customer
satisfaction and image on loyalty varies with the nature of the
customer—experienced customers are loyal due to their image of a service while
new customers’ loyalty is motivated by their level of satisfaction. During a stay at a particular hotel,
guests express their experiences in terms of their satisfaction from the whole
hotel image dimension. This implies that guests` satisfaction is strongly
influenced by the physical environment of the hotel, the processes that followed, and their contact
with employees and the hotel`s products and services which includes quality,
variety and pricing. Guests evaluate the entire hotel by taking the dimensions
of quality, variety, and pricing into consideration in order to determine the
level of satisfaction. Guests` investment behavior toward a particular hotel is
determined by the image of that particular hotel whether the products, services
or employee’s performance meet their expectations. Some researchers have
cited image as an originator to customer satisfaction (Andreassen and
Lindestad, 1998; Bloemer and Ruyter, 1998; Clemes et al., 2009; Lai et al.,
2009; Milfelner and Korda, 2011; Prayag, 2008), with satisfaction having a
significant positive impact on loyalty. The more positive the image, the higher the satisfaction the guests
receives from the hotel. Therefore, we hypothesize that hotel image affects
guests` satisfaction.To complete this study, some modified
questionnaire will be done in order to collect the data. The purpose of this is
to identify and analyze the relationship between customer satisfaction and
service quality, customer expectation, value for money and also hotel image.
The modification will be make actually to suit the budget hotel situation and
for the study.3.1 Research MethodBased on our report, we will be
using two types of research methods for our report. Using this type of research
methods, it is because we need the data and information to prove our report and
we also will increased knowledge about our topic through research. Definition of research is job that
include learning something and refer some research that somebody is doing
before to gain new knowledge or prove your research. Research methods has two
type which is primary research and secondary research.Definition of primary research is first-hand
information collect by that person who was doing the part of research.
Researchers using many different methods to study the topic in order to gain
information. Advantage of using primary research is researcher can collect
actual information from the sources. Primary data can gather through surveys,
interviews and more. Secondary Research have using information collected by
others person through primary research. Advantages of secondary research is the
information already have and done by others person, it will easily and quick to
get the information. Information of secondary research can find from library,
and Internet.  3.2 Data Collection MethodBased on our data
collection methods, we decided to do conduct surveys. Surveys can be carried
out in many ways. We planned to do questionnaires and also internet survey on
our topic. A questionnaire is a research instrument that consist of a series of
questions for gathering information from respondents. A major advantage of
questionnaires is that a large number of people can be reached out easily and
economically. However, a standard questionnaire provides quantifiable answers
for a research topic and the answers are somehow relatively easy to analyze as
well. On the other hand, an internet survey is being conducted over the
internet and they have a number of advantages over other methods of interview.
Internet surveys now can also be done with mobile phones without any hassle.
They are convenient as they allow respondents to take on their own time and
their own pace to answer the given questions provided. Our topic is Factors
that are affecting customer satisfaction among local tourism in budget hotels
in Kuala Lumpur. In this case, we are going to provide questionnaires to our
respondents with a series of questions relating our topic and gather relevant
information from our respondents. The second way of collecting data is internet
survey as mentioned, and we are going to provide a series of questions on the
internet allowing our respondents to answer them accordingly and with no rush
just with their own pace. From that, we are able to collect data from our
respondents on our topic.3.3 Sampling PlanTo conduct our studies, we target local
tourisms which mean Malaysian who stayed in budget hotel at KL before to answer
our survey form. In addition, we also separate them into two group by age. Group
A will be people under age 21 to 30 years old, and age between 31 to 40 will be
under group B. The reason why we separate into two group is to identify and
understand the factors that affecting customer satisfaction in different ages.
The factors maybe the same or different in different age. Moreover, we target
those people under age 21 to 40 is because of their financial ability and preferences.3.4 Fieldwork PlanAfter submit this research report, we will
start to plan and design our questionnaire by using app that suggested by the
lecturer. A pilot test will be done to ensure the respondents understand and feel
comfortable to the questions asking. After that, a field test will be conduct
to collect the data through social media and face to face. A survey form will
be upload to the social media such as Facebook or Google drive to allow people who
is busy and shy to fill up. This method also allows us to collect more data between
people between age 31 to 40 because they usually busy in work. Beside using
social media, our teammates will also provide the survey form to the TARUC students
at the canteen 1,2 and 3. In the other hand, we will also provide the survey
form in the lecture class with the help of the lecturer. Since we target not
only college or university students, collect the data in the public area will
also be done to ensure the accuracy of our study. 3.5 Analysis Plan

In our research, we will analysis the plan
that can make us know what most in factor that affecting customer’s
satisfaction among local tourism in KL. The type of analysis for us to use that
is multivariate analysis. We will prepare the survey that is a series of
questions for gathering information from respondents. The questionnaire will be
separate into two parts, which is part A and B. The questions include in part A
will be the basic information of respondents such as name, gender, ages, race
and income in our survey form. In part B, open-ended questions such as what
type of hotel you prefer or when was your last trip to KL will be include. We
also can design questionnaires like what is you comment about the budget hotel
in KL. Then, we will provide measurement scale that is raking such as Likert’s
scale for them to mark. For example, 1 is strongly disagree, 2 is disagree, 3
is neither agree nor disagree, 4 is agree and 5 is strongly agree. A different
tabulation will be use to analysis the data collected. Beside it, we also
prepare a bar chart that is representing the data we collect to analysis the
data collected. For example, the length of rectangle is representing the
satisfaction; there are 4 categories such as quality of service, hotel image,
value for money and customer expectation. If the length of one bar in bar chart
is longer than other bars mean this bar is most in factor that affecting
customer’s satisfaction. 


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