Date of Award
Executive Doctorate in Business (EDB)
Dr. Danny Norton Bellenger
Dr. Debra Franklin Cannon
Dr. Wesley James Johnston
The hotel industry is a major area of the U.S. economy, contributing nearly $176 billion to Gross Domestic Product in 2014 (AHLA, 2017). For large hospitality brands (franchisors), quality and customer satisfaction are important in driving customer stays or occupancy. In this study, secondary data from a large hospitality company (with more than 3,600 hotels) with a portfolio of brands were used to explain the relationship between revenue, or RevPAR, and market share (Smith Travel Research [STR] Revenue per Available Room Index or known as RPI), customer satisfaction, and quality assurance moderated by brand signaling and loyalty. Looking through the lens of the Expectation Confirmation Theory (ECT), this study shows how expectations and satisfaction play a role in predicting revenue implications based on customer behavioral decisions. The model proves the relationship between the various aspects of the customer experience, including how quality assurance scores measure hotel delivery and execution, which standards are set by the brand, and the extent to which customers’ expectations are moderated by brand signaling and loyalty. Additionally, how resulting disconfirmation (or confirmation) measured by customer survey results of meeting or not meeting expectations, and satisfaction which are determinates of post-purchase adoption or repurchase (market share captured). This study proves that brand managers should spare no costs to ensure that quality assurance is a priority to protect the tangible and intangible aspects of their brands. The data support that on average, a 10-point increase in Quality Assurance results in up to a $1.05 increase in RevPAR; a 5- to 8-point increase in Customer Experience (Overall Experience and Problem Free Stays) results in up to a $1.05 increase in RevPAR; a 4- to 8-point increase in Customer Recommendation results up to a $1.05 in RevPAR; and a 2-point increase in Market Share (RPI) results in up to a $1.05 increase in RevPAR.
Morgan, Kevin, "An Empirical Study in the U.S. Hotel Industry: How Quality Assurance, Customer Satisfaction, Brand Signaling, and Guest Loyalty Impact Revenue." Dissertation, Georgia State University, 2018.