An exploratory study of marketing, physical and people related performance criteria in hotels

Using data from online guest ratings, the purpose of this paper is to explore how the performance of hotels in terms of various criteria influences loyalty behavior of customers.

Ratings of 333 hotels in the UK were collected from the web site www.laterooms.com and statistical analysis performed.

The criterion related to marketing management (Value for money) was found to be the most important criterion influencing loyalty behavior of customers in UK hotels. Further, it was found that good performance of hotels in terms of physical‐product management can significantly influence the intentions of business guests to stay again, whereas leisure guests expect good performance both in terms of physical‐product management and people and process management. While guests of independent hotels value performance in terms of people and process management, guests of chain hotels value both physical‐product management and people and process management. Finally, it was found that the significance of criteria related to physical‐product management and people and process management generally varies across star ratings.

Expectations of guests have been found to be quite different across various categories – star classifications, chain and independent hotels, and leisure and business guests. This implies that a general solution may not satisfy guests belonging to all these categories. For example, business and leisure guests perceive facilities differently and hence hotel managers need to provide different kinds of services to satisfy them. Similarly, the finding that business guests attach higher importance to criteria related to physical‐property management, in deciding their intention to stay again in the UK hotels, compared to people and process management, has interesting practical implications. This indicates that good performance of hotels in maintaining room quality and cleanliness can significantly influence the intentions of business guests to stay again.

This is one of the first studies to statistically analyze online guest ratings. It extends the applicability of the frameworks developed in the earlier literature by employing them with the new data source (online ratings).