Int. J. Services, Economics and Management, Vol. 4, No.

4, 2012 267

Service quality, image and loyalty towards Malaysian

hotels

Tat-Huei Cham*
Faculty of Accountancy Management,
Universiti Tunku Abdul Rahman,
Bandar Sungai Long, 43000 Kajang, Selangor, Malaysia
E-mail: jaysoncham@gmail.com
*Corresponding author

Yalini Easvaralingam
Faculty of Business, Communications and Law,
INTI International University,
71800 Putra Nilai, Negeri Sembilan, Malaysia
E-mail: yalini.easvaralingam@newinti.edu.my

Abstract: The rapid growth of the hotel industry in the first decade of the
21st century forced hotel operators to critically acknowledge the importance of
service improvement in order to gain competitive advantage. Therefore,
identifying the factors that influence the quality of services of hotels is critical
for the success of the hotels. Corporate image and customer loyalty should also
be emphasised to ensure the sustainability of the hotels in this competitive
industry. Hence, this study is conducted to discover the factors influencing
perceived service quality of Malaysian hotels, as well as exploring the
relationship between perceived service quality with customer loyalty and
corporate image. Additionally, this study is one of the few studies on quality
certification related to the demand perspective and also on the mediating role of
image on the relationship between service quality and loyalty in the hotel
industry.

Keywords: service quality; customer loyalty; corporate image; quality

certifications; International Organization for Standardization; ISO; cultural
differences; Malaysia.

Reference to this paper should be made as follows: Cham, T-H. and

Easvaralingam, Y. (2012) ‘Service quality, image and loyalty towards
Malaysian hotels’, Int. J. Services, Economics and Management, Vol. 4,
No. 4, pp.267–281.

Biographical notes: Tat-Huei Cham is currently a PhD candidate at the

Faculty of Accountancy and Management, Universiti Tunku Abdul Rahman
(UTAR), Malaysia. His research interests focus on service industry strategy
and operations, consumer behaviour, service marketing and organisational
behaviour.

Yalini Easvaralingam is a Senior Lecturer at the Faculty of Business,

Communications and Law, INTI International Laureate University, Malaysia.
Her research interests focus on marketing, higher education and statistics.

Copyright © 2012 Inderscience Enterprises Ltd.

268 T-H. Cham and Y. Easvaralingam

This paper is a revised and expanded version of a paper entitled ‘Perceptions

of service quality, corporate image, and customer loyalty in the hotel industry
of Malaysia’ presented at the Second International Research Symposium in
Service Management (IRSSM-2), Yogyakarta, Indonesia and 26–30 July 2011.

1 Introduction

The Malaysian hotel industry, a highly competitive industry, with 2,085 players in the
market (Malaysian Association of Hotels, 2010), compels its players to strive towards
excellence in delivery in order to remain at the forefront. Economic development and
advancement in technology bring forth an improved standard of living, intensifying
demands by the domestic and international markets (Atilgan et al., 2003). Thus, the quest
to stay ahead can only be achieved with first class delivery of services.
This has called upon many studies to be conducted on service quality in the
Malaysian hotel industry (e.g., Lau et al., 2005; Sidin et al., 2001). For this study, the
SERVQUAL model by Parasuraman et al. (1988) is utilised. This model consists of five
dimensions of service quality, which will be discussed later. The ratings on these
dimensions were examined in order to identify the problem areas and a comparison by
quality certification and cultural differences was conducted.
It is envisaged that the International Organization for Standardization (ISO) quality
certification on hotels is deemed to have an impact on the services provided by hotels.
Only few studies however, have incorporated the influence of quality certification on
perceived service quality (e.g., Caro and García, 2009; Claver et al., 2006; Quazi and
Padibjo, 1998). None of these studies have been conducted in the Malaysian context.
These studies too had focused only on the supply perspective, eliciting opinions only
from industry experts and managers and neglecting the demand aspect of customer
perspective. This is a major drawback as it is the consumers who will eventually decide
on the benefits of service quality in the respective hotels. Hence, this study has found it
pertinent to investigate the issue of ISO quality certification. This factor will be
investigated along with another important differentiating element in service quality which
is cultural differences.
As an Asian country, actively promoting tourism in the international arena, Malaysian
hotels are frequented by guests of myriad cultures. The popularity of Malaysia as a tourist
destination for people all over the world is evident with Malaysia being ranked the ninth
most travelled to destination in the world by the United Nations World Tourism
Organisation (UNWTO) (Malay Mail, 2010). The boom in the Malaysian tourism sector
brings forth an increase in tourism arrivals from 22,052,488 tourists in 2008 to
23,646,191 in 2010 (News Straits Times, 2011). The benefits of a booming tourism
sector to the hotel industry is also manifested in the form of increased lengths of stay
whereby the average length of stay of tourists increased from 6.4 nights in 2008 to
6.7 nights in 2010.
With the increase in tourism, comes an increase in tourists from both Asian and
non-Asian countries. Asian tourist arrivals increased by 10.5% with an increase of
12.3% of receipts from this region (News Straits Times, 2011). Singapore, Malaysia’s
nearest neighbour, is seen as the largest contributor to total receipts with a share of
 Service quality, image and loyalty towards Malaysian hotels 269

51.5%. All this indicates that hotels must be prepared to satisfy guests from
different cultural backgrounds. An increase in Asian guests may pose a challenge as it
was noted in studies such as Hsu and Kang (2003) and Tsang and Ap (2007) that
Asian tourists provide lower evaluations of service quality as compared to non-Asian
tourists. This study will examine the ratings for different dimensions of service quality of
Asians and non-Asians and if the conjecture on the differences in ratings is merited to be
true, recommendations will be provided on how Malaysian hotels can meet this
challenge.
The understanding of perceived service quality will be detailed further with an
exploration of its association with hotel image and customer loyalty. Kandampully and
Suhartanto (2000) and Nguyen and LeBlanc (1998) discuss the mediating role of hotel
(corporate) image on the relationship between service quality and loyalty. Understanding
this is important as loyalty helps hotels to increase their market share (Tepeci, 1999) and
profits (Kandampully and Suhartanto, 2000). Also, if the mediating role of image holds
true, a negative image caused by poor service quality would shift customer loyalties to
other hotels.
Thus, the present study attempts to deal with the paucity of research on some of the
above issues. Rating of SERVQUAL dimensions are evaluated and compared by ISO and
non-ISO hotels and also by Asian and non-Asian guests. The influence of perceived
service quality on image and loyalty is then determined together with the mediating role
of image in the relationship between quality and loyalty.

2 Literature review

2.1 Perceived service quality

Due to the rising importance of service quality, many scholars have tried to
develop frameworks and scales to measure the perception of service quality (Seth et al.,
2005; Ladhari, 2009). One of the most well-known models is the SERVQUAL model
(Parasuraman et al., 1988). It has been found by studies such as Shahin (2005) to be the
most reliable option of service quality measurement because the location of quality
related problems can be identified based on clear standards of service delivery. Hence,
the SERVQUAL model has been widely cited in both service quality and hotel literature
(e.g., Claver et al., 2006; Kandampully and Hu, 2007).
The SERVQUAL model constitutes five service quality dimensions which are
tangibles, reliability, responsiveness, assurance and empathy. Tangibles represent the
equipment, appearance of personnel and physical facilities. Reliability refers to the ability
of a firm to exercise the promised service dependably and accurately. Responsiveness is
defined as the willingness to assist participants and provide prompt attention. Assurance
represents courteous and knowledgeable employees and lastly, the empathy dimension
includes the caring and individual attention provided to users.
Service quality is further conceptualised and the definition utilised in hospitality
studies such as Asubonteng et al. (1996), as the difference between the customers’
perceptions and their expectations. However, due to the lack of reliability and validity of
the above measure, this study will use only perception scores as suggested by several
researchers such as Strandvik and Liljander (1994).
270 T-H. Cham and Y. Easvaralingam

2.2 Factors influencing perceived service quality

2.2.1 Quality certifications
Due to the importance of service quality in the hotel platform, a large number of hotels
have engaged in obtaining quality certification (Brown and van der Wiele, 1995). The
most popular quality certification is the award by the ISO 9000 and 14000 series which is
the main focus for all hospitality companies. The significant reason for obtaining
certification is to improve the quality image projected to the market (Claver et al., 2006).
Moreover, Quazi and Padibjo (1998) noted that ISO certified organisations in countries
such as Singapore gained various advantages and benefits such as increase in customer
preference and customer satisfaction and an enhancement of the firm’s image. Thus, it
can be hypothesised that:
H1 The perceived service quality of ISO-certified hotels is higher than the non-certified
hotels.

2.2.2 Cultural differences

Cultural differences play an important role in understanding differences between
customers and are at times perceived as one of the main factors affecting the preferences
and values of consumers in opting for products or services (Manrai and Manrai, 2009).
Studies such as Hsu and Kang (2003) and Tsang and Ap (2007) reveal that Asian tourists
have higher expectations and evaluated perceived service quality more unfavourably
compared to the non-Asian tourists. This is plausible since most of the Asian countries
are developing countries and the income per capita is relatively low (Hsu and Kang,
2003). Therefore, this issue will directly lead the Asian tourists to have a higher
expectation compared to the Western tourists. However, to what extent the cultural
differences influences can influence perceived service quality in Malaysian hotels is still
remained vague, therefore, it can be hypothesised that:
H2 Asian consumers tend to give more unfavourable ratings compared to non-Asian
consumers.

2.3 Service quality, corporate image and customer loyalty

Customer loyalty in this study will be conceptualised according to indicators developed
by Skogland and Siguaw (2004) which has partitioned loyalty into three dimensions
which are price insensitivity, repeat-patronage and positive word of mouth. A positive
relationship was found to exist between service quality and customer loyalty by studies
such as Kandampully and Suhartanto (2000) and Nguyen and LeBlanc (1998). It will be
determined in this study too whether service quality has an impact on customer loyalty.
Corporate image is defined as something that comes to the customers’ mind when
they hear the name of a business (Nguyen, 2006). Although there seems to be lack of
consensus in the literature on how to define and operationalise the image construct, this
study borrowed from the research of Kandampully and Suhartanto (2000) which is also
on the hotel industry. Based on Kandampully and Suhartanto’s (2000) study, image will
be partitioned into two dimensions which are image attributes and image holistic.
The impact of perceived service quality on loyalty is found to be enhanced with the
presence of corporate image. This is due to the fact that service quality is found to have a
 Service quality, image and loyalty towards Malaysian hotels 271

positive influence on the hotel image (Kadampully and Suhartanto, 2000; Nguyen and
LeBlanc, 1998) and image is then found to have an impact on loyalty. Image influences
loyalty as with a superior image a firm is likely to be noticeable in the marketplace
because it is able to attract both trial users and repeat customers (Andreassen and
Lindestad, 1998). Hence, we can infer that perceived service quality has a direct and
indirect influence on loyalty. The mediating influence of hotel image seems to be very
prominent as Nguyen and LeBlanc (1998) confirm in their findings on financial services.
They claimed that once a consumer is a member of a financial institution, their sense of
belonging to an institution that has a strong image will become the main factor
influencing loyalty, and the role of perceived service quality as an influencing factor on
loyalty will no longer exist. In this study, it will be determined whether the same scenario
applies to the hotel industry. The following hypotheses are thus developed:
H3 There is a positive relationship between perceived service quality and hotel image.
H4 There is a positive relationship between perceived service quality and customer
loyalty.
H5 There is a positive relationship between hotel image and customer loyalty.
H6 Image serves as a mediator in the relationship between perceived service quality
and customer loyalty.

Figure 1 Research model

3 Methodology

3.1 Sampling method

This survey was conducted in two areas in Malaysia which are Kuala Lumpur and
Penang. Kuala Lumpur, being the capital of Malaysia and Penang, being an island
frequented by tourists, are two areas that are deemed to have a wider spectrum of people
from different nationalities staying at hotels there. These areas too have a myriad of
hotels including a number of ISO status hotels. This will enable the study to capture the
aspect of cultural differences and quality certification in service quality ratings.
Questionnaires were administered outside a five-star ISO status hotel and non-ISO status
hotel for both areas. For all hotels, an attempt was made to obtain a sufficient number of
respondents of Asian and non-Asian origin.
A sample size of 200 was chosen to facilitate the ability to conduct statistical tests
such as factor analysis whereby Hair et al. (2010) advocated a ratio of respondent to
272 T-H. Cham and Y. Easvaralingam

variable of 10:1 to be favourable for conducting factor analysis. As the highest number of
items for a construct is 22, the sample size of 200 is deemed appropriate. Support for this
figure is also rendered judging from the results of the factor loadings which are all
reasonably high (refer to Table 1) (Tabachnick and Fidell, 2001). The sample size of 200
also helps to ensure an equal number of customers from ISO and non-ISO hotels. Of the
200 questionnaires distributed, 94 usable ones from the ISO hotels and an equal number
from non-ISO hotels were taken as samples. The non-Asian respondents for ISO hotels
were slightly higher (66%) compared to Asian respondents and for non-ISO hotels, the
Asian respondents were slightly higher (69%).

3.2 Measurement
The construct of perceived service quality for this study will be measured based on the
widely accepted SERVQUAL model which embodies 22 items, of which four items
were used to measure the tangible attribute, five items for reliability, four items for
responsiveness, four items for assurance and five items for empathy.
The image construct can be divided into six items for the hotel image attributes and
four items for the holistic attributes. The ten items are: “The hotel is conveniently
located”; “The hotel has up-to-date physical facilities”; “The hotel has attractive interior
design”; “The hotel is worth the price paid”; “The hotel provides excellent quality of
goods and services”; “The hotel has employees with excellent performance”; “The hotel
has distinctive atmosphere”; “The hotel has excellent reputation”; “The hotel has
attractive external appearance” and “The hotel has attractive layout”.
The customer loyalty construct contains a battery of seven items on price insensitivity
(two items), repeat-patronage intention (three items) and propensity to spread positive
word-of-mouth (two items). The items are: “I consider myself to be a loyal guest of the
hotel”; “If the hotel were to raise the price of my stay, I would still continue to be a guest
of the hotel”; “If a competing hotel were to offer a better rate or discount on their service
I would switch”; “In the near future, I intend to use this hotel more often”; “As long as I
travel to this area, I do not foresee myself switching to a different hotel”; “I would highly
recommend the hotel to my friends and family”; and “I am likely to make positive
comments about the hotel to my friends and relatives”.
All constructs were measured on a seven-point Likert scale with a higher value
indicating a higher rating towards quality, a stronger perception towards the image of the
hotel and a higher loyalty towards the hotel.

4 Results

4.1 Perceived service quality, cultural differences and quality certification

As mentioned earlier, the SERVQUAL model, constituting five service quality
dimensions is utilised in this study to measure perceived service quality. Factor analysis
was first administered to determine whether all the items of the service quality
dimensions fall into their respective dimensions. One item from the assurance dimension
and another from the empathy dimension were removed from the factor analysis due to
cross-loadings with other dimensions. The final results for the service quality dimensions
are shown in Table 1. The assumptions of factor analysis are all met with a significant
 Service quality, image and loyalty towards Malaysian hotels 273

Bartlett test, a cumulative percentage of variance extracted of 70.4%, an overall Kaiser-

Meyer-Olkin (KMO) measure of sampling adequacy of 0.717 and communalities of
above 0.5 for all items. The reliability of all dimensions, measured by Cronbach alpha, is
more than 0.7. These are all criteria stated as acceptable by Hair et al. (2010). With the
results of the factor analysis established, the scores for the items on each dimension are
then averaged to develop a scale for the dimensions.
Table 1 Factor loadings and descriptive statistics for service quality dimensions

Tangibles Reliability Responsiveness Assurance Empathy

Tangibles
The hotel has visually 0.884
appealing materials
The hotel has modern 0.883
equipment
The hotel has staff with 0.883
neat appearance
The hotel has visually 0.867
appealing facilities
Reliability
The hotel shows a 0.835
genuine interest in
solving guest problems
The hotel provides error 0.804
free services
The hotel provides its 0.778
services at the promised
time
The hotel performs the 0.698
service right the first time
The hotel keeps its 0.660
promise of doing things
on time
Responsiveness
The hotel staff are 0.876
willing to help guests
The hotel keeps 0.822
customers informed of
the performance of
services
Employees at the hotel 0.813
provide prompt service to
the guests
Even if busy, hotel staff 0.763
are available to meet
guests’ needs
274 T-H. Cham and Y. Easvaralingam

Table 1 Factor loadings and descriptive statistics for service quality dimensions (continued)

Tangibles Reliability Responsiveness Assurance Empathy

Assurance
The hotel staff are 0.792
consistently courteous
The hotel staff instil 0.728
confidence in guests
The hotel makes guests 0.647
feel safe in their
transaction
Empathy
The hotel provides guests 0.796
with individual attention
The hotel staff 0.766
understand the guests’
specific needs
The hotel has guests best 0.760
interest at heart
% of variance extracted 16.878 17.093 14.411 10.503 11.547
Reliability coefficient 0.906 0.867 0.838 0.702 0.766
(Cronbach alpha)
Mean 5.45 4.99 5.50 5.4 5.0
Standard deviation 0.78 0.95 0.75 0.76 0.89

Cluster analysis was then utilised to categorise respondents into clusters according to
their assessment of service quality dimensions. In order to obtain the most suitable
number of clusters, hierarchical cluster analysis, using the Ward method was performed
on the dimensions and also on the individual variables, which are the variables that load
the highest on each factor. Two to four clusters were explored for both methods as
indicated by the agglomeration schedules. Finally, the most interpretable was deemed to
be the two cluster solution derived from the cluster analysis conducted on the dimensions.
A further justification for the method used is that cluster analysis on the dimensions helps
to control for multi-collinearity (Hair et al., 2010). A justification for using the Ward
method is that near equal number of cases are obtained for each cluster when this method
is used and this facilitates comparison across groups. To validate the clusters, a similar
clustering method was performed on a random 50% of the sample and the classification
results of this sample compared to the full sample are 100% for cluster 1 and 87% for
cluster 2.
Table 2 delves into the description of the clusters according to service quality ratings.
Significant differences are only found for the dimensions of reliability, assurance and
empathy and not for tangibles and responsiveness. Although both clusters have given
quite a high rating for service quality, cluster 2’s ratings are much higher (average values
close to 6) compared to cluster 1’s rating (average values closer to 4 except for
assurance). Hence, the conclusion is to label cluster 2 as people with highly positive
ratings and cluster 1 as people with less positive ratings. This grouping will now enable
 Service quality, image and loyalty towards Malaysian hotels 275

the depiction of the clusters according to pertinent discriminating factors, which will be
explained in the next paragraph.
Table 2 Description of clusters according to the mean service quality ratings

Cluster 1 Cluster 2
F value
(less positive ratings) (highly positive ratings)
Tangibles 5.35 5.53 2.46n.s.
Reliability 4.17 5.59 230.752***
Responsiveness 5.41 5.57 2.12n.s.
Assurance 4.97 5.73 59.61***
Empathy 4.26 5.54 191.78***
n.s.
Notes: ***p-value < 0.001 and results are not significant
Results of Table 3 deals with H1 and H2 which posit that the service quality of
ISO-certified hotels is higher than non-certified hotels and Asians tend to give more
unfavourable ratings compared to non-Asians. The results seem to render support to these
hypotheses. There seems to be a strong relationship between hotel’s quality certification
and perceived service quality as shown by the Lambda value of 0.525. ISO hotels mainly
fall into cluster 2 (87.2%) and those of non-ISO hotels mainly fall into cluster 1 (72.3%).
Cultural differences in ratings is not as prominent but the Lambda value of close to 0.3
also indicates a moderate influence whereby a higher proportion of non-Asians fall into
cluster 2 (78%) and a higher proportion of Asians fall into cluster 1 (62%). As Table 2
shows that cluster 2 consists of respondents who had given a higher rating as compared to
cluster 1, we can infer that ISO certified hotels have a stronger possibility of meeting
service quality requirements and low quality ratings seem to be more an issue with Asian
customers compared to non-Asian customers.
Table 3 Proportion of respondents by clusters, culture differences and quality certification

Cluster 1 Cluster 2
Lambda test value
No. (%) No. (%)
Cultural differences
Asians 60 (61.9%) 37 (38.1%) 0.288***
Non-Asians 20 (22%) 71 (78%)
Quality certification
ISO 12 (12.8%) 82 (87.2%) 0.525***
Non-ISO 68 (72.3%) 26 (27.7%)
Note: ***p-value < 0.001
To validate the results of the cluster analysis, Kruskal Wallis tests were used to determine
the differences in ranking of the service quality dimensions by quality certification and
cultural differences. These results are however not displayed here. The results of these
tests mirror the results shown earlier whereby ISO hotels and non-Asians have higher
quality ratings. Parallel to the results of Table 2, insignificant differences are also found
for the dimensions of tangibles and responsibility.
276 T-H. Cham and Y. Easvaralingam

In summary, although all dimensions receive an above average rating of quality, the
ratings for ISO certified hotels and of non-Asians are much higher. ISO certification
demonstrates the strongest influence on service quality followed by cultural differences.
Finally, the consensus in the results of tests, validate the fact that the cluster solution
chosen and labelling of clusters are appropriate. Hence, this justifies its use in the next
section on the influence of quality on perceived image and loyalty whereby perceived
quality will be represented by cluster 2, the group with higher quality ratings, and
cluster 1, with lower quality ratings.

4.2 Image, loyalty and its relationship with perceived service quality, cultural
differences and quality certification

Factor analysis was performed on image and customer loyalty and the results
confirm that all the items for each of the constructs fall into one factor. For image,
no items were removed and the percentage of variance extracted was 61% (refer to
Table 5). For loyalty, one item was removed due to its low communality value
and the removal of this item increased the percentage of variance extracted from
64% to 68.5% (refer to Table 5). The image factor is hence not explained as well as
the loyalty factor but in social science studies, a value of above 60% is also
deemed acceptable (Hair et al., 2010). Furthermore, both factors have a high reliability
value.
Finally H3 to H6 on the influences of perceived quality on image and loyalty will be
addressed with the results in Tables 4 and 5. The ANOVA results in Table 4, model (1)
shows that cluster differences in mean rating of image exist. These results are validated
by a large effect size represented by a partial eta squared of more than 0.14 (Cohen, 1988
in Kinnear and Gray, 2011), a strong power of the study (more than 80%) and an adjusted
R2 of 0.449 which points to a moderately strong fit. Table 4, model (2) shows that mean
differences in perception of loyalty among the clusters also exist although the adjusted R2
indicates that this influence is not strong (0.288). Hence, H3 on the influence of service
quality on image is strongly supported and H4 on the influence of service quality on
loyalty is partially supported.
The ANCOVA results for model (3) are now incorporated into the explanation in
order to address H5 and H6. The inclusion of image to the model causes the cluster
differences in mean rating of loyalty to be insignificant. Image however remains
significant with a strong effect size and power of the study plus a moderately
high adjusted R2. This indicates that perceived service quality has a strong influence
on image but not loyalty and image in turn strongly influences loyalty. For
further description, Table 5 shows that the influence of service quality on image is
positive whereby cluster 2 (which are respondents who had given a higher service
quality rating), portrays significantly higher mean values for image compared to cluster 1.
The results are validated further with a much higher mean ratings for image and
loyalty for ISO hotels and non-Asians, which are also the categories with high
service quality ratings. Hence, we can infer that image is a full mediator in the influence
of perceived service quality on loyalty. H5 and H6 are thus supported. The results
of model (3) however now negate support for H4 on the direct influence of perceived
service quality on loyalty.
 Table 4
loyalty

Image (1) Loyalty (2) Loyalty (3)

Dependent variable
(model) Effect size Power of Effect size Power of Effect size Power of
F value F value F value
(partial eta squared) the study (partial eta squared) the study (partial eta squared) the study
Independent variable
Cluster 153.649*** 0.452 0.452 76.511*** 0.291 0.288 3.93n.s. 0.021 0.505
Covariate
Image 68.83*** 0.271 1.000
Adjusted R2 0.449 0.288 0.478
Notes: ***p-value < 0.001 and n.s.results are not significant
Service quality, image and loyalty towards Malaysian hotels

ANOVA and ANCOVA results of perceived service quality’s influence on image and
277
278 T-H. Cham and Y. Easvaralingam

Table 5 Mean image and loyalty by service quality clusters, cultural difference and quality
certification

Image Loyalty
Mean F Mean F
Clusters Cluster 1 (less positive ratings) 4.61 153.65*** 4.18 76.511***
Cluster 2 (highly positive ratings) 5.63 5.31
Cultural Asian 4.94 26.5*** 4.46 29.5***
differences
Non-Asian 5.46 5.23
Quality ISO 5.63 94.09*** 5.32 53.31***
certification
Non-ISO 4.76 4.34
Total 5.19 4.83
Results of factor analysis and reliability analysis
% of variance extracted 61% 68.5%
Reliability value (Cronbach alpha) 0.902 0.929
Note: ***p-value < 0.001

5 Conclusions and managerial implications

In conclusion, we deduce that guests generally have a positive view about hotels in
Malaysia based on the relatively high overall mean values for perceived service quality,
corporate image and customer loyalty. Despite this, managers should still strive to further
improve the quality to stay competitive. It is found that quality certifications and cultural
differences pose a significant influence on perceived service quality with quality
certifications demonstrating the strongest influence. Hotels with ISO quality certification
are portrayed to be of high quality. This is as expected as the standardisation of the
services layout and delivery of promised services by hotels, as required by quality
certificates, would most likely lead to greater customer satisfaction (Claver et al., 2006).
Hence, this research suggests a need for more hotels in Malaysia to adopt quality
certification.
The process of acquiring the ISO certification can be a daunting and costly process in
terms of the paperwork involved and the unprofitable regulations that have to be
complied with such as environmental and safety laws. Hence, management
and employees alike should be made aware of the long term benefits of ISO certification
that can be reaped in terms of a higher service quality, which translates to a
more reputable image and an increase in loyalty. Hotels without ISO certification
should plan strategically and be willing to initially invest on efforts such as reading the
manuals on ISO, taking an audit on the current status, providing ISO training for
management and employees alike, hiring a consultant to help achieve this and other
pertinent measures. The Malaysian government too, in its quest to promote tourism
should be willing to subsidise hotels in achieving quality parallel to international
standards in order to achieve international quality certification. A similar scenario
 Service quality, image and loyalty towards Malaysian hotels 279

to be aped would be when the Singapore government wanted to encourage its

companies to achieve ISO14001 and subsidised 70% of the cost of achieving it so that
more of their companies would be able to compete at international levels (Chan and
Wong, 2006).
Asian customers have given lower ratings compared to non-Asian customers. This
supports claims made by studies such as Hsu and Kang (2003) and Tsang and Ap (2007).
There can be a dual reasoning for this, either Asians are more concerned about
getting their money’s worth due to their lower levels of income or there is some
discrepancy in the perceptions of Asians and non-Asians in how the services are
delivered to them. Either way, the findings have highlighted that these two heterogeneous
segments exist. Further scrutiny of these differences depict that the low ratings by Asians
are mainly for the dimensions of Reliability and Empathy. It is therefore recommended
that hotels adopt a nuanced view about these differences. Customer feedback surveys
comparing the needs of these two groups should be conducted and strategies should be
implemented to cater to them. By identifying these requirements, hotels can deliver
services that matter most to the different groups and hence distribute their limited
resources wisely. Cultural training too as suggested by Reisinger and Turner (2003) can
be provided to ensure that employees communicate with guests of different cultural
background in a manner that is in accordance to their expectations. For instance, a
luxurious five star Mandarin Oriental Hotels in Kuala Lumpur has trained and formed a
team of employees to cater and handle the needs (e.g., language, food and beverages,
cultures, etc.) of Middle East tourists as they see this segment as one of their important
target customers.
Finally, although perceived service quality is extensively acknowledged as a
prerequisite to achieving customer loyalty, this study reveals that corporate image is a full
mediator in the relationship between service quality and loyalty. This shows that service
quality plays an important role in creating a positive image and this in turn can be
translated to create loyalty among guests. As service quality does not have a direct
influence on loyalty, high quality of services alone does not ensure loyalty. If other
factors exist to tarnish the image, loyalty may still not be established. Hence, as
suggested by Kandampully and Suhartanto (2000), other service marketing factors
that directly affect image such as product, place, price, promotion and others should
also be taken into consideration and ensured that they are in line with the image of the
hotel. Customers attracted to the hotels should be clear about the image projected by the
hotel and it should be ascertained that this image is orchestrated in all hotels of the same
chain.
In summary, the findings of this study contribute to the knowledge of service quality
of hotels especially in the Malaysian context. It is hoped that after realising the benefits
that can be reaped by obtaining quality certification, more hotels in Malaysia will strive
against all odds to achieve this and their efforts will be supported by the Malaysian
government in line with promoting tourism. Furthermore, the heterogeneous nature of the
Asian and non-Asian segments also highlights the importance of distinguishing these
segments when analysing customer feedback surveys and tailoring services according to
these needs. Finally, the mediating role of image emphasises that good service quality
should be coupled with other promotional factors to build a reputable image as only a
strong, consistent image, in line with the needs of the target consumers of the hotel, can
ensure continuous loyalty.
280 T-H. Cham and Y. Easvaralingam

References
Andreassen, T.W. and Lindestad, B. (1998) ‘Customer loyalty and complex services, the impact of
corporate image on quality, customer satisfaction and loyalty for customers with varying
degrees of service expertise’, International Journal of Service Industry Management, Vol. 9,
No. 1, pp.7–23.
Asubonteng, A., McCleary, K.J. and Swan, J.E. (1996) ‘SERVQUAL revisited: a critical review of
service quality’, The Journal of Services Marketing, Vol. 10, No. 6, pp.62–81.
Atilgan, E., Akinci, S. and Aksay, S. (2003) ‘Mapping service quality in the tourism industry’,
Managing Service Quality, Vol. 13, No. 5, pp.412–422.
Brown, A. and van der Wiele, T. (1995) ‘Industry experience with ISO 9000’, Asia Pacific Journal
of Quality Management, Vol. 4, No. 2, pp.8–17.
Caro, L.M. and García, J.A.M. (2009) ‘Does ISO 9000 certification affect consumer perceptions of
the service provider?’, Managing Service Quality, Vol. 19, No. 2, pp.140–161.
Chan, E.S.W. and Wong, S.C.K. (2006) ‘Motivations for ISO 14001 in the hotel industry’, Tourism
Management, Vol. 27, No. 3, pp.481–492.
Claver, E., Tari, J.J. and Pereira, J. (2006) ‘Does quality impact on hotel performance?’,
International Journal of Contemporary Hospitality Management, Vol. 18, No. 4, pp.350–358.
Hair, J.F., Black, W., Babin, B., Anderson, R. and Tatham, R. (2010) Multivariate Data Analysis:
A Global Perspective, Pearson Education Inc., New Jersey, USA.
Hsu, C.H.C. and Kang, S.K. (2003) ‘Profiling Asian and western family independent travelers
(FITs): an exploratory study’, Asia Pacific Journal of Tourism Research, Vol. 8, No. 1,
pp.58–71.
Kandampully, J. and Hu, H.H. (2007) ‘Do hoteliers need to manage image to retain loyal
customers?’, International Journal of Contemporary Hospitality Management, Vol. 19, No. 6,
pp.435–443.
Kandampully, J. and Suhartanto, D. (2000) ‘Customer loyalty in the hotel industry: the role of
customer satisfaction and image’, International Journal of Contemporary Hospitality, Vol. 12,
No. 6, pp.346–351.
Kinnear, P.R. and Gray, C. (2011) IBM SPSS Statistics18 Made Simple, Psychology Press, Hove
and New York.
Ladhari, R. (2009) ‘Service quality, emotional satisfaction and behaviour intentions: a study on
hotel industry’, Managing Service Quality, Vol. 19, No. 3, pp.308–331.
Lau, P.M., Akbar, AK. and Yong, G.F.D. (2005) ‘Service quality: a study of the luxury hotels in
Malaysia’, The Journal of American Academy of Business, Vol. 7, No. 2, pp.46–55,
Cambridge.
Malay Mail (2010) Malaysia is the 9th Most Travelled Destination, [online] http://www.mmail.
com.my/category/tags/tourism-minister-datuk-seri-dr-ng-yen-yen (accessed 14 February
2011).
Malaysian Association of Hotels (2010) Registers Hotels as at March 2011, [online]
http://www.hotels.org.my/home.asp?hdnMRef=57 (accessed 25 May 2011).
Manrai, L.A. and Manrai, A.K. (2009) ‘Analysis of tourist behaviors: a conceptual framework
based on Hofstede’s cultural dimensions’, Journal of Economics, Finance and Administration
Science, Vol. 16, No. 31, pp.23–48.
News Straits Times (2011) News: Tourism Facts and Figures, [online] http://www.nst.com.my/
nst/articles/News_Tourismfactsandfigures/Article/ (accessed 12 March 2011).
Nguyen, N. (2006) ‘The collective impact of service workers and servicescape on the corporate
image formation’, International Journal of Hospitality Management, Vol. 25, No. 2,
pp.227–244.
Nguyen, N. and LeBlanc, G. (1998) ‘The mediating role of corporate image on customers’
retention decisions: an investigation in financial services’, International Journal of Bank
Marketing, Vol. 16, No. 2, pp.52–65.
 Service quality, image and loyalty towards Malaysian hotels 281

Parasuraman, A., Zeithaml, V.A. and Berry, L.L. (1988) ‘SERVQUAL: a multiple-item scale for
measuring consumer perceptions of service quality’, Journal of Retailing, Vol. 64, No. 1,
pp.12–40.
Quazi, H.A. and Padibjo, S.R. (1998) ‘A journey toward total quality management through ISO
9000 certification – a study on small and medium-sized enterprises in Singapore’,
International Journal of Quality & Reliability Management, Vol. 15, No. 5, pp.489–508.
Reisinger, Y. and Turner, L. (2003) Cross-Cultural Behaviour in Tourism: Concepts and Analysis,
Elsevier/Butterworth-Heinemann, Oxford.
Seth, N., Deshmukh, S.G. and Vrat, P. (2005) ‘Service quality models: a review’, International
Journal of Quality & Reliability Management, Vol. 22, No. 9, pp.913–949.
Shahin, A. (2005) SERVQUAL and Model of Service Quality Gaps: A Framework for Determining
and Prioritizing Critical Factors in Delivering Quality Services, Department of Management,
University of Isfahan, Iran.
Sidin, S., Rashid, Md.Z.A. and Zainal, R.A.R.R. (2001) ‘Measuring customers’ perceived service
quality in hotel industry’, Pertanika Journal of Social Sciences and Humanities, Vol. 9, No. 2,
pp.71–85.
Skogland, I. and Siguaw, J.A. (2004) ‘Are your satisfied customers loyal?’, Cornell Hotel and
Restaurant Administration Quarterly, Vol. 45, No. 3, pp.221–234.
Strandvik, T. and Liljander, V. (1994) ‘A comparison of episode performance and relationship
performance for a discrete service’, in Kleinaltenkamp, M. (Eds.): Dienstleistungsmarketing –
Konzeptionen und Anwendungen, 3rd ed., Gabler Edition Wissenschaft, Berlin.
Tabachnick, B.G. and Fidell, L.S. (2001) Using Multivariate Statistics, 4th ed., Allyn & Bacon,
Needham Heights, MA.
Tepeci, M. (1999) ‘Increasing brand loyalty in the hospitality industry’, International Journal of
Contemporary Hospitality Management, Vol. 11, No. 5, pp.223–229.
Tsang, N.K. and Ap, J. (2007) ‘Tourists’ perceptions of relational quality service attributes: a
cross-cultural study’, Journal of Travel Research, Vol. 45, No. 3, pp.355–363.