Abstract
Purpose
The study investigated the strategic contribution of COVID-19 preventive measures in building corporate reputation in the hospitality industry when mediated with ethical branding.
Design/methodology/approach
The hypothesized model was developed and tested using a cross-sectional research design among 404 customers of hospitality organizations (i.e. hotels and restaurants). The collected data were analyzed quantitatively using structural equation modeling.
Findings
The results showed that COVID-19 preventive measures are important drivers in building or rebuilding corporate reputation during and after the COVID-19 pandemic. The study also showed that ethical branding acts as a mediator between COVID-19 preventive measures and corporate reputation.
Research limitations/implications
The study used a nonprobability sampling technique, i.e. convenience sampling and a cross-sectional survey research design. It is therefore necessary to be careful when generalizing the findings.
Practical implications
The study recommends that managers in hospitality organizations should ensure proper and effective compliance with COVID-19 preventive measures during service delivery. Among others, the study highlighted areas for further study to include an investigation using a longitudinal approach to observe behavioral changes toward COVID-19 preventive measures and their consequences on the overall corporate reputation of the hospitality industry. This recommendation is based on the fact that, currently, new cases and mortality rates have decreased considerably. As a result, customers in the hospitality industry have started to have different opinions about complying with COVID-19 preventive measures.
Originality/value
The study is among new endeavors to investigate drivers that can rebuild and sustain the corporate reputation of hospitality organizations during a pandemic like COVID-19.
Keywords
Citation
Amani, D. (2024), "How do COVID-19 preventive measures build corporate reputation: focus on the hospitality industry in Tanzania", International Hospitality Review, Vol. 38 No. 1, pp. 182-200. https://doi.org/10.1108/IHR-05-2022-0027
Publisher
:Emerald Publishing Limited
Copyright © 2023, David Amani
License
Published in International Hospitality Review. Published by Emerald Publishing Limited. This article is published under the Creative Commons Attribution (CC BY 4.0) licence. Anyone may reproduce, distribute, translate and create derivative works of this article (for both commercial and non-commercial purposes), subject to full attribution to the original publication and authors. The full terms of this licence may be seen at http://creativecommons.org/licences/by/4.0/legalcode
Introduction
The outbreak and spread of the COVID-19 pandemic have had a detrimental effect on the corporate reputation of the hospitality industry around the globe (Bresciani et al., 2021; Victor, Chen, & Lee, 2021; Wei, Chen, & Lee, 2021). The pandemic is caused by the Severe Acute Respiratory Syndrome Coronavirus 2 (SARS-COV-2) virus, which was discovered at the end of 2019 in Wuhan, the capital of Hubei province in central China. The report by the World Health Organization (WHO) indicates that, as of March 2022, the world had recorded not less than 516,922,683 million cases and 6,259,945 million deaths (WHO, 2022). Through these news stories from broadcasting companies, hotels and restaurants were listed among the sources that accelerated the spread and transmission of the COVID-19 pandemic (Garrido-Moreno, García-Morales, & Martín-Rojas, 2021; Hakim, Zanetta, & da Cunha, 2021). Hospitality organizations were blacklisted, and customers were encouraged to abstain from visiting hotels and restaurants during the pandemic (Kim, Han, & Ariza-Montes, 2021; Kim, Kim, & Wang, 2021; Quan, Al-Ansi, & Ham, 2022). In this situation, all countries adopted measures such as social distancing, wearing facemasks, lockdown and closing down of trade and businesses to stop the pandemic from spreading (Mayr, Nuβbaumer-Streit, & Gartlehner, 2020; Min, Yang, & Kim, 2022).
COVID-19 preventive measures were important and necessary for protecting public health (Kim, Han, & Ariza-Montes, 2021; Kim, Kim, & Wang, 2021). However, compliance and adherence to some COVID-19 preventive measures affected various business and economic sectors that involve human-to-human interaction, such as the hospitality industry (Dube, Nhamo, & Chikodzi, 2020; Wei et al., 2021). The pandemic is spread very fast when there are human-to-human interactions, while the majority of COVID-19 preventive measures restrict human-to-human interactions to protect public health (Ltifi & Hichri, 2022; Victor et al., 2021). Hakim et al. (2021) argue that the COVID-19 pandemic attacked the DNA of the hospitality industry. The DNA of the hospitality industry defines the hospitality industry as highly interactive, which builds the moment of truth during service encounters, i.e. close interaction between customers and service providers (Hakim et al., 2021). Strict preventive measures during the COVID-19 pandemic were thought to accelerate more than 74% of the global drop in international tourist arrivals (UNWTO, 2021). The World Travel and Tourism Council (WTTC) reported that, in 2020, the hospitality industry was expected to lose more than 2.7 trillion US$ (WTTC, 2020). Due to the drop in international visitors, many hotels and restaurants had to close, putting hundreds of people out of work (WTTC, 2020).
Literature indicates that brand-related strategies could help hospitality organizations protect their favorable image and survive in turbulent situations in the hospitality industry (Victor et al., 2021; Wei et al., 2021). Garrido-Moreno et al. (2021), Kim, Han, and Ariza-Montes (2021) and Kim, Kim and Wang (2021) argue that branding approaches during and after COVID-19 should not be the same as approaches that have always been used before the pandemic. Customers’ consumption behavior during the COVID-19 pandemic was unprecedented (Kim, Han, & Ariza-Montes, 2021; Kim, Kim, & Wang, 2021); hence, marketing strategies to deal with the behavior should also be unprecedented (Amani & Ismail, 2022). However, the drivers of effective branding strategies during and after the COVID-19 pandemic have not been well documented in the crisis management domain (Garrido-Moreno et al., 2021). McMurrian and Washburn (2008) comment that branding is the process of building a “reputational asset” that embraces a set of values and attributes, resulting in a powerfully held set of beliefs by consumers and a range of other potential stakeholders. COVID-19 preventive measures include practices and actions of producers which can build brand trust (Victor et al., 2021) and enhance corporate brand legitimacy in the hospitality industry (Amani & Ismail, 2022).
Despite the negative effects of some COVID-19 preventive measures, recent literature has unveiled the cardinal role of some COVID-19 preventive measures in reviving the hospitality industry amid the COVID-19 pandemic (Prentice, Altinay, & Woodside, 2021). Victor et al. (2021) and Wei et al. (2021) suggest that COVID-19 preventive measures rebuild customer trust and, ultimately, their intention to revisit restaurants during the reopening period. Gupta and Sahu (2021) suggest that COVID-19 preventive measures revive the hospitality sector from the pandemic's aftermath. Kim, Han and Ariza-Montes (2021), Kim, Kim and Wang (2021) revealed that proper implementation of preventive measures such as preventive health behavior can enhance tourist intention to visit and revisit destinations during the pandemic. However, despite several scholarly attempts to examine the role of COVID-19 preventive measures in reviving the hospitality industry (Chua, Al-Ansi, Lee, & Han, 2020; Garrido-Moreno et al., 2021; Victor et al., 2021), little is known about the relationship between COVID-19 preventive measures and branding (Amani & Ismail, 2022; Wei et al., 2021).
The present study aims to fill this empirical and theoretical gap by examining the influence of COVID-19 preventive measures on corporate reputation while mediating with ethical branding. Previous studies suggest that COVID-19 preventive measures are the drivers of various attitudinal behaviors such as loyalty. This study theorized that COVID-19 preventive measures as ethical practices can lead to ethical branding and eventually a corporate reputation. According to Prentice et al. (2021), Victor et al. (2021) and Wei et al. (2021), customers of hotels and restaurants consider COVID-19 preventive measures as ethical issues that, once implemented, can represent a business firm that is socially accountable and responsible. This theoretical conceptualization has been developed from social contract theory, which states that a business should make decisions and structure its operations in ways that offer the maximum benefit to society to achieve a long-lasting competitive advantage.
Review of literature and development of hypotheses
COVID-19 preventive measures
COVID-19 preventive measures include actions and procedures that can be categorized into pharmaceutical and non-pharmaceutical categories and are suggested by WHO to combat the proliferation of the COVID-19 pandemic (Hakim et al., 2021). COVID-19 preventive measures cover compulsory public use of facemasks, frequent use of hand sanitizing and hand-washing, social distancing, restricting so-called unnecessary public assemblies and deletion of public events (Chua et al., 2020). The majority of COVID-19 preventive measures are more focused on protecting and promoting public health through providing health and safety standards emphasizing desirable practices amid the COVID-19 pandemic (Garrido-Moreno et al., 2021). Various business sectors were not exclusive to the miserable effects of the COVID-19 pandemic (Amani & Ismail, 2022). Hence, preventive measures were also crucial in business practices, particularly in the hospitality industry (Garrido-Moreno et al., 2021; Wei et al., 2021).
COVID-19 preventive measures have been accepted in research streams in crisis management as strategic weapons that can reduce the effect of the pandemic and regain performance in the hospitality industry (Amani & Ismail, 2022). Overall, most literature on crisis management suggests that COVID-19 preventive measures should be part of the corporate rebranding strategies of hotels and restaurants during the reopening of the industry (Garrido-Moreno et al., 2021; Victor et al., 2021; Wei et al., 2021). In the context of this study, corporate rebranding is a managerial process of creating and sustaining a new favorable image and, subsequently, a favorable reputation of the organization by communicating signals to all stakeholders such as consumers and investors, and through managing behavior, communication and symbolism to react to unprecedented changes (Tevi & Otubanjo, 2012).
Although it has not been well-tested empirically, the literature suggests that COVID-19 preventive measures are vital in the branding of the hospitality industry (Amani & Ismail, 2022). COVID-19 preventive measures are part of corporate rebranding strategies in the form of ethical practices, which represent ways in which service providers should interact with their customers amid a pandemic similar to COVID-19 (Amani & Ismail, 2022; Chua et al., 2020). Amani and Ismail (2022) and Payne, Blanco-González, Miotto and del-Castillo (2021) noted that during the COVID-19 pandemic, the public and customers preferred to participate in ethical purchases. Thus, hospitality organizations are expected to behave ethically by implementing preventive measures to maintain their corporate brand (Amani & Ismail, 2022; Payne et al., 2021). Payne et al. (2021) and Prentice et al. (2021) add that the public and customers were against brands that ignored public health. Therefore, proper implementation of COVID-19 preventive measures indicates that business firms put a priority on society's social welfare and well-being over their own business interests, i.e. profits (Quan et al., 2022; Yang, Kim, Min, & Hernandez-Calderon, 2021).
Mediation role of ethical branding
Social contract theory includes specific standards which include explicit obligations based on laws or implicit obligations, e.g. moral obligations based on what is considered to be appropriate or inappropriate behavior (McMurrian & Washburn, 2008; Tarnovskaya, 2015). Tarnovskaya (2015) argues that appropriate behavior can enhance outcomes such as brand trust, satisfaction and customer loyalty. In line with social contract theory, ethical branding covers the process of building a unique reputation through practicing and delivering business responsibility and its moral obligation to the public or society (Alwi, Ali, & Nguyen, 2017; Fan, 2005). Moral obligation encompasses business attributes such as honesty, integrity, responsibility and accountability, while focusing on protecting and promoting the public good (Papaluca et al., 2020). Amani and Ismail (2022) argue that COVID-19 preventive measures fall under aspects of responsibility and accountability, in which the firm is seen as a society with rights and responsibilities. Socially responsible and accountable behavior is part of a corporate strategy in business environments with highly demanding customers who prefer business firms that embrace ethical practices.
Garrido-Moreno et al. (2021) and Wei et al. (2021) argue that during the COVID-19 pandemic, customers of the hospitality industry believed that hotels and restaurants had a responsibility to protect public health through implementing preventive measures during service delivery. Amani and Ismail (2022) suggest that COVID-19 preventive measures are a prominent feature of business firms that are socially responsible and accountable. In this vein, an ethical brand is defined as the perception of a brand that echoes characteristics such as honesty, responsibility and accountability toward its customers and the public. Therefore, the present study theorized that by integrating ethical practices into strategic corporate marketing approaches, such as implementing COVID-19 preventive measures, hospitality organizations could enhance their ethical brand identity (Victor et al., 2021). Seminal work in ethical purchase suggests that purchase decisions are based on what is right or wrong in the minds of customers (Amani & Ismail, 2022).
Amid the COVID-19 pandemic, hospitality organizations' ethical practices as a driving force toward achieving a kind of positioning strategy that defines what the organization stands for, which can be right or wrong in the minds of customers and the essence of the organization, i.e. ethical brand identity (Zhang, Xie, & Morrison, 2021). Ethical approaches explain how an organization can potentially sustain its brand for a long-term competitive advantage (Zhang et al., 2020). Thus, for hospitality organizations to be ethical, they must integrate ethical standards into their practices, including the process of delivery of services (Hu, Yan, Casey, & Wu, 2021; Zhang et al., 2021). Research streams that examine the relationship between the COVID-19 pandemic and the hospitality industry suggest that customers and the public prefer brands that deliver ethical values and behave responsibly. The above explanation leads to the following hypotheses:
There is a positive and significant relationship between COVID-19 preventive measures and ethical branding
Corporate reputation
The intangible nature of services such as those in the hospitality industry creates challenges in differentiating and positioning offerings at the top of the customers’ list of choices (Cintamür & Yüksel, 2018). In this view, building corporate reputation has been the priority of marketers in the services industry, including the hospitality industry (Ahmed Mohamed, 2021; Stavrinoudis & Chrysanthopoulou, 2017). Musoga, Ngugi and Wanjau (2021) add that the success or failure of hospitality organizations is an outcome of their positive or negative reputation. González-Rodríguez, Díaz-Fernández, Shi and Okumus (2021) noted that a negative corporate reputation harms the level of customer loyalty. During the COVID-19 pandemic, public trust in the hospitality industry drops significantly, leading to poor customer loyalty and eventually poor performance of hospitality organizations (Wei et al., 2021). Social contract theory suggests that organizations have a relationship with customers in which ethical norms, upheld by organizations and shared by customers, lead to bonds of trust with customers and ultimately enhance the level of loyalty (Tarnovskaya, 2015).
Garrido-Moreno et al. (2021), Hu et al. (2021) and Zhang et al. (2020) suggested the importance of ethical practices in rebranding the hospitality industry amid the COVID-19 pandemic. During the COVID-19 pandemic, customers engaged in ethical purchases by supporting the only brands that consider social welfare and well-being or protect public health (Hakim et al., 2021). Alwi et al. (2017) argue that a corporate reputation is strengthened when customers feel secure when purchasing the products and services of given business firms. Corporate reputation is a customer’s evaluation of a business firm based on responses to its products, services and interactions with its representatives, i.e. employees, management or other customers (González-Rodríguez et al., 2021). It is the responses received by a business firm from its internal and external stakeholders about its credibility (Stavrinoudis & Chrysanthopoulou, 2017).
According to Cintamür and Yüksel (2018), business firms build credibility through financial performance and a financially strong company, customer orientation, customer trust and social and environmental responsibility. Financial performance and a financially strong company are subjective measures of how well a business firm uses its assets from its primary mode of operation to build a favorable image and maximize revenues. In addition, corporate reputation consists of customer orientation, which is a business strategy that prioritizes the interests and expectations of the customer over the interests and expectations of the business. Musoga et al. (2021) stated that customer-oriented businesses succeed by improving customer focus. Social and environmental responsibility builds a favorable image by representing a business firm's commitment to participate in sustainable economic development to improve the quality of life and the environment, which will benefit the business firm and its stakeholders. The term “customer trust” refers to a consumer's belief in a business and its practices. It implies trust in a business's commitment to keep its promises and do the right thing for its customers.
Musoga et al. (2021) comment that corporate reputation reduces customers' perceived risks and uncertainties when choosing a service provider. Alwi et al. (2017) ascertain that customers' responses to corporate reputation are the outcome of both individual products and business firm practices. Thus, corporate reputation is associated with the responsible behavior of business firms through offering exceptional products that are connected to ethical values and norms (Fan, 2005). An ethical brand is very powerful in building and rebuilding public trust in business firms (Wen & Song, 2017). In addition, the dramatic shift in customers toward ethical purchases indicates that ethical branding may determine the sustainability (i.e. financial sustainability) of business firms (Miotto & Youn, 2020; Sipilä, Alavi, Edinger‐Schons, Müller, & Habel, 2022). On the other hand, integrating ethical issues into the branding process may enhance the customer orientation process since it enhances the sense of self-identity or self-image (Alwi et al., 2017). Ethical branding is a strategic resource in positioning a business as socially and environmentally responsible. The above explanation leads to the following hypotheses:
There is a positive and significant relationship between ethical branding and financial performance and a financially strong company.
There is a positive and significant relationship between ethical branding and customer orientation.
There is a positive and significant relationship between ethical branding and social and environmental responsibility.
There is a positive and significant relationship between ethical branding and trust.
Ethical branding mediates the relationship between COVID-19 preventive measures and financial performance and a financially strong company.
Ethical branding mediates the relationship between COVID-19 preventive measures and customer orientation.
Ethical branding mediates the relationship between COVID-19 preventive measures and social and environmental responsibility.
Ethical branding mediates the relationship between COVID-19 preventive measures and trust.
Theoretical foundation and conceptual model
Figure 1 presents the proposed model of the study. The present study hypothesized a six-factor model which contains COVID-19 preventive measures as an endogenous variable, ethical branding as a mediator variable and four dimensions of corporate reputation (i.e. financial performance and financially strong company, customer orientation, social and environmental responsibility and trust) as endogenous variables. The study has its theoretical foundation in social contract theory, which theorizes that business firms exist and survive with the permission of a given society, so long as they act in ways that uphold specific social norms in that society (Tarnovskaya, 2015). It is believed that social contract theorists build arguments on the theoretical understanding that a business should make decisions and structure its operations in ways that offer the maximum benefit to society. The theory states that businesses have responsibilities to the communities where they do business by taking part in corporate philanthropy, corporate social responsibility and corporate governance (Donaldson, 1990).
Through the use of social contract theory (McMurrian & Washburn, 2008), they argue that the brand should be considered as a promise. Based on this theoretical understanding, customer-perceived value increases when businesses practice ethical behaviors that bridge the gap between businesses and customers and the public or communities (Bhargava & Bedi, 2021). Donaldson and Dunfee (1994) argue that customer-perceived value, created through brand-building efforts, leads to long-term profitability and competitive advantage. The conceptual model depicted in Figure 1 indicates that, amid the COVID-19 pandemic, society has the role of granting survival rights to hospitality organizations that operate in the hospitality industry.
Methodology
Study site and sample size
The study site was Tanzania, in three regions: Arusha, Kilimanjaro and Dar-es-Salaam. The regions are well known for their potential for natural and artificial tourist attractions and unrivaled hospitality services in Tanzania. It employed a cross-sectional survey research design, which enables data collection in a dispersed population with limited time and resources (Lavrakas, 2013; Moutinho, Hutcheson, & Moutinho, 2014). The sampling frame of this study consisted of individuals who lived in the selected regions. The sample size was determined using the convenience sampling technique, whereby respondents were selected based on convenience and accessibility during data collection (Zikmund, Babin, Carr, & Griffin, 2009; Zikmund, 2003). The study's final sample size was 404 customers from hotels and restaurants in the three regions: Arusha, Kilimanjaro and Dar-es-Salaam.
Pre-test of the instruments and data collection procedures
As stated in the previous section, the data collection instrument was designed and developed using the measurement items presented in Table 1. Considering customers of the hospitality industry in Tanzania are expected to be conversant with either English or Swahili, the English items were translated into Swahili and further polished in the context of the study to develop the questionnaire. This procedure was conducted by involving bilingual experts in both languages to ensure the validity and reliability of the instruments. Further measures were taken to pre-test the questionnaire before data collection. Before pre-testing, the instrument was sent to experts in hospitality services and branding to obtain their opinions about the developed instruments in areas such as wording, layout, and ease of understanding of the measurement items. All important feedback from experts was considered, and necessary modifications to items were considered based on their expert opinions. Then, the study carried out pre-testing of the revised questionnaire using a convenience sample of 50 customers of hospitality organizations in the study area. In addition, the reliability and validity of the instruments were assessed using Cronbach's alpha coefficient and standard factor loading, respectively. The results show good reliability and validity because the Cronbach's alpha coefficient for each latent variable was greater than 0.7 and standardized factor loadings for each item were greater than 0.5 (Anderson & Gerbing, 1988).
Following good reliability and validity of the instruments during pre-testing, data collection was conducted by administering the questionnaire to selected customers of hospitality organizations in selected regions. The survey was conducted from January 2022 to February 2022. The survey was conducted by visiting selected hospitality organizations (i.e. hotels and restaurants) located in selected regions. As part of ethical issues in research, the respondents were first asked whether they would like to participate in the survey. With affirmative responses, the field researcher would hand out the questionnaire and remain nearby until the respondents completed it. Wherever necessary, the field researchers provided clarification and responded to questions directed at the aim of the research and questions in the questionnaire. Overall, in this study, participants were free to participate or not participate, and their identification, for instance, names and contact information, was not requested to protect their privacy. Before leaving the respondents, the field researchers gathered filled questionnaires and concisely checked the completeness of the responses at the survey site. The field researcher distributed 450 questionnaires, and 404 (89.78%) were returned to the researchers as complete responses. Due to multiple responses to a single question, 46 (10.22%) questionnaires were dropped.
Questionnaire development and measures
The data collection instruments were developed by borrowing, adapting, and modifying already validated scales from previous studies on the COVID-19 pandemic and branding. All constructs and their corresponding measurement items have been presented in Table 2. COVID-19 preventive measures have five measurement items adapted and modified (Garrido-Moreno et al., 2021; Victor et al., 2021; Wei et al., 2021). All these measurement items have satisfactory qualities in terms of reliability and validity in the context of the hospitality industry. In addition, six measurements adopted from Alwi et al. (2017) were used to measure ethical branding. With theoretical and empirical support from previous studies on corporate reputation, the present study measures corporate reputation using four adapted items that capture financial performance and a financially strong company, customer orientation, social and environmental responsibility and trust. Measures for corporate reputation have been adopted (Cintamür & Yüksel, 2018; Walsh & Beatty, 2007). All the measurement items were measured on a five-point Likert-type scale, with 1 being “strongly disagree” and 5 indicating “strongly agree” (Likert, Roslow, & Murphy, 1934, 1993).
Data analysis and findings
Common method bias
The methods and procedures in data collection used in the present study raise the likelihood of the presence of common method bias during parameter estimation. The study checked for common method bias (CMB) using procedural and statistical remedies as suggested by Fuller, Simmering, Atinc, Atinc and Babin (2016). During the development of instruments and data collection exercises, the study used procedural remedies to deal with CMB. This was done by making sure that participants were anonymous and telling them that their answers would not be marked as correct or wrong. In the process of developing the data collection instrument, necessary precautions were taken to reduce or eliminate ambiguities and unclear measurement items. In the data collection exercise, respondents were free to choose either to participate or not to participate in the study. In addition, the aim of the study was clearly explained to respondents to ensure they made informed decisions regarding their participation in the study. Also, the study adopted Harman’s single-factor test as a statistical remedy to check the presence of CMB. Fuller et al. (2016) suggest that Harman’s single-factor test assesses the existence of CMB in a way that examines if there is a dominant factor among all factors in the study using exploratory factor analysis (EFA). Thus, the results of EFA of all measurement items using SPSS 23.0, the principal component factor analysis, did not show signs of a dominant factor. Overall, six factors accounted for 68.28% of the variance, with the first factor accounting for 32.79% of the variance. This indicates that in this study, CMB is not a major issue.
Measurement model validation
The fit statistics of the measurement model indicate that the model fits the data well. All model evaluation criteria were within the acceptable range as suggested by (Bollen, 1989; Hooper, Coughlan, & Mullen, 2008; Kline, 2015; Schermelleh-Engel, Moosbrugger, & Müller, 2003). The fit statistics for the measurement model (x2 = 734.630 (p < 0.001, df = 328), x2/df = 2.240; root mean square error of approximation (RMSEA) = 0.055, adjusted goodness of fit index (AGFI) = 0.9, incremental fit index (IFI) = 0.936; Tucker–Lewis index (TLI) = 0.926, comparative fit index (CFI) = 0.935, Parsimony normed fit index (PNFI) = 0.772 and Parsimony comparative fit index (PCFI) = 0.812). The psychometric properties of the measurement were also checked. To measure reliability, the study used Cronbach's alpha coefficients and composite construct reliability. Results presented in Table 2 indicate the value of Cronbach's alpha of the constructs is between 0.852 and 0.889, all exceeding the threshold of 0.7. Furthermore, the composite reliability coefficients of the constructs are between 0.845 and 0.890. With the support of Henseler et al. (2014), Said, Badru and Shahid (2011), Santos and Reynaldo (2013), Santos (1999) and Tavakol and Dennick (2011) this specific result of Cronbach's alpha coefficient and composite reliability coefficients reveals adequate internal consistency of the multiple items for measuring each construct.
Validity issues were examined using convergent validity and discriminant validity. Convergent validity was assessed using factor loadings and average variance extracted (AVE). The findings presented in Table 2 show the factor loadings for all items exceeded 0.651 and were significant at the 0.001 level (Anderson & Gerbing, 1988). Moreover, the value of the AVE of all constructs is between 0.530 and 0.670, greater than the threshold value of 0.5 (Fornell & Larcker, 1981; Hair, 1998). With support from Ab Hamid, Sami and Mohmad Sidek (2017), Floyd and Widaman (1995), Fornell and Larcker (1981), Gerbing and Anderson (1988) and Valentini, Damásio, Valentini and Damásio et al. (2016) these specific results of factor loadings and AVE, as presented in Tables 2 and 3, respectively, indicate sufficient convergent validity of the measurement items. Discriminant validity was assessed by comparing the square root of AVE with the inter-correlation coefficients between each pair of the constructs (Fornell & Larcker, 1981). Fornell and Larcker (1981) suggest that discriminant validity is satisfied if the square roots of AVEs are greater than the inter-construct correlations between any pair of constructs. Thus, based on the results presented in Table 2 and the support of Ab Hamid et al. (2017) and Fornell and Larcker (1981) the square roots of AVEs were greater than the inter-construct correlation coefficients, demonstrating adequate discriminant validity of the measurements.
Structural model test and hypotheses testing
The study borrowed the two-step approach proposed by Anderson and Gerbing (1988). A two-step approach suggests testing the structural model after measurement model testing. Thus, the present study tested the structural model goodness of fit before parameter estimation. The structural model fit indices (x2 = 809.670 (p < 0.001, df = 336); x2/df = 2.410; RMSEA = 0.059; AGFI = 0.9; IFI = 0.925; TLI = 0.915; CFI = 0.925; PNFI = 0.781; PCFI = 0.822) indicate that the model adequately fitted the data (Gerbing & Hamilton, 1996; Hair, Black, Babin, & Anderson, 2010; Hooper et al., 2008). This allowed further procedures or stages that aimed to test proposed hypotheses. Table 4 shows the results of the proposed hypotheses, indicating that all hypotheses were accepted. The study in H1 hypothesized that COVID-19 preventive measures influence ethical branding. The hypothesis was confirmed (β = 0.162; t > 1.96; p < 0.001). H2 and H3 predict that ethical branding has a significant positive influence on financial performance and financially strong company and customer orientation, respectively. The findings in Table 3 support these hypotheses (β = 0.562; t > 1.96; p < 0.001) and (β = 0.521; t > 1.96; p < 0.001) for financial performance and financially strong company and customer orientation, respectively. Finally, this study in H4 and H5 hypothesized that ethical branding has a significant positive influence on social and environmental responsibility and trust, respectively. These hypotheses were also confirmed (β = 0.649; t > 1.96; p < 0.001) and (β = 0.574; t > 1.96; p < 0.001) for social and environmental responsibility and trust, respectively.
Mediation effect testing
The study also tested the power of the mediator using the bootstrapping technique by extracting 2,000 bootstrap samples with 95% bias-corrected confidence intervals. The power of the mediator is confirmed if the bootstrapping at the 95% confidence interval (CI) of the indirect effect does not contain zero. The findings indicate that the hypothesized relationship between COPM→EBR (β = 0.249; 95% CI = 0.136 to 0.350). Additionally, EBR→FPF (β = 0.572; 95% CI = 0.444 to 0.692), EBR→CUO (β = 0.586; 95% CI = 0.463 to 0.687), EBR→SER (β = 0.669; 95% CI = 0.589 to 0.784) and EBR→TR (β = 0.493; 95% CI = 0.392 to 0.584). Indirect effect of COVID-19 preventive measures on financial performance and financially strong company via ethical branding (COPM→EBR→FPF) with (β = 0.142; 95% CI = 0.069 to 0.222), COVID-19 preventive measures on customer orientation via ethical branding (COPM→EBR→CUO) with (β = 0.146; 95% CI = 0.079 to 0.211). Furthermore, indirect effect of COVID-19 preventive measures on social and environmental responsibility via ethical branding (COPM→EBR→SER) with (β = 0.174; 95% CI = 0.094 to 0.250), and COVID-19 preventive measures on trust via ethical branding (COPM→EBR→TR) with (β = 0.123; 95% CI = 0.060 to 0.189). Based on the above findings, it can be confirmed that the bootstrapping at the 95% confidence interval (CI) of the indirect effect does not contain zero; therefore, ethical branding is a mediator on COVID-19 preventive measures and four dimensions of corporate reputation (i.e. financial performance and financially strong company, customer orientation, social and environmental responsibility and trust).
Discussion of results
The study developed and tested a conceptual model that investigates the relationship between COVID-19 preventive measures and corporate reputation with ethical branding as a mediator. The conceptual model consists of five hypotheses, and the results show that all five hypothesized relationships were supported. These results show that COVID-19 preventive measures are very important for building a company's reputation. In addition, the study confirms the mediating role of ethical branding. Thus, COVID-19 preventive measures are moral obligations that hospitality organizations should fulfill to their customers and the public. Moral obligations include dimensions such as honesty, integrity, respect, responsibility and accountability. Customers who prefer ethical purchases expect hospitality organizations to behave without harming the public good. Wei et al. (2021) suggest the importance of ethical practices such as protecting public health in delivering services to revive hospitality services. Thus, COVID-19 preventive measures such as wearing a face mask, using sanitizers, cleaning the surface, etc., are important drivers of ethical branding. The results further suggest that socially responsible and accountable firms put societal needs and expectations as a priority through emphasizing compliance and adherence to COVID-19 preventive measures.
The results of this study show that ethical branding can be realized when hospitality organizations put public health and safety over their own interests. Ethical branding is very crucial in building the corporate reputation of hospitality services. A corporate reputation is developed when customers feel secure and safe when visiting or revisiting certain service organizations. Victor et al. (2021) and Wei et al. (2021) confirm that ethical practices in the hospitality industry, including proper implementation of COVID-19 preventive measures, are crucial in rebuilding public confidence during the reopening. These findings highlight the significance of responsible behavior when providing excellent service to customers and the public. The results indicate that ethical branding increases the likelihood of achieving good financial performance, which indicates financial sustainability. Yang et al. (2021) argue in favor of these findings by insisting that legitimacy, which covers ethical practices, has a significant role to play in determining firm performance during the COVID-19 pandemic. Furthermore, the findings indicate that ethical branding is an effective tool for ensuring customer orientation. Ethical branding presents practices for branding business firms while considering customers as key actors in the process (Amani & Ismail, 2022).
Thus, ethical branding always considers customer orientation as a driver of ensuring competitive advantage through fulfilling moral obligations. This implies that corporate reputation based on customer orientation is the result of ethical branding embraced by hospitality organizations. Also, the findings indicate that ethical branding influences business firms to be more focused on social and environmental issues. Thus, ethical branding can help hospitality organizations rebuild their corporate reputation through demonstrating socially and environmentally responsible behavior. The study confirms that corporate reputation is defined by the trust that customers have in business firms. Thus, hospitality organizations that embrace ethical branding can enhance trust, which builds a competitive advantage. Wei et al. (2021) support the finding that brand trust is very crucial in determining customers' intention to revisit restaurants during the reopening of the hospitality industry. Therefore, these findings confirm the mediating role of ethical branding in the relationship between COVID-19 preventive measures and corporate reputation. This implies that when restaurants and hotels implement COVID-19 preventive measures, it leads to ethical branding which determines a corporate reputation.
Theoretical implication
As stated earlier, the present study is among the few endeavors that respond to the scholarly calls to fill gaps in knowledge regarding measures to rejuvenate the hospitality industry following the serious attack of the COVID-19 pandemic. Thus, theoretically, the study contributes to the crisis management literature by suggesting the importance of converting protection measures to appropriate behavior that governs service delivery during a crisis similar to the COVID-19 pandemic. The study extends the use of social contract theory in explaining the form or features of right or wrong behaviors or practices that customers expect from hospitality organizations during pandemics or crises similar to the COVID-19 pandemic (Amani & Ismail, 2022). In addition, the study extends the adaptability and applicability of social contract theory to explain the role of ethical norms upheld by organizations in determining ethical branding. Several studies have looked into ways to revitalize the hospitality industry, but scholars have not paid enough attention to COVID-19 preventive measures as a predictor of brand-related outcomes, i.e. corporate reputations.
In line with the social contract theory of an organization, which upholds ethical norms including appropriate behavior, such as customer protection, can lead to bonds of trust with customers, satisfaction and ultimately loyalty. Overall, the studies in the crisis management domain have examined different infectious diseases, such as Severe Acute Respiratory Syndrome (SARS), and their effects on the hospitality and tourism industries. However, the scope of these diseases was very limited in terms of their effects, and they were specific to the country. Literature indicates that the nature and effects of the COVID-19 pandemic were unprecedented, and therefore there is a missing theoretical gap regarding the management of global crises similar to COVID-19 in the context of the hospitality industry. Thus, to fill this theoretical gap, the study investigates COVID-19 preventive measures as a mechanism to protect customers and to revive the hospitality industry as it is expected to build corporate reputation. Overall, it has been confirmed that ethical branding plays a role as a mediator, and therefore, it fortifies the relationship between COVID-19 preventive measures and corporate reputation.
Practical implication
The findings and discussion of the study suggest various possible managerial implications. The recommendations are made in three strategic areas that make up the DNA of the hospitality industry. These areas are the strategic process of delivering service, the attitude and behavior of staff and the physical environment where service is delivered. The study recommends that integrating COVID-19 preventive measures with these three areas (i.e. process, people and physical evidence) during service delivery may help build and rebuild the corporate reputation of the hospitality industry. Despite the negative effects of some COVID-19 preventive measures, managers in hospitality services should consider measures that are suitable for reviving the hospitality industry. The study recommended the adoption of measures such as wearing facemasks, regular training on safety and health standards, use of sanitizers, hand washing procedures, etc. to control the effects of the COVID-19 pandemic. These are long-term measures that can be consistently adopted without negatively affecting the DNA of the hospitality industry, i.e. human-to-human interaction.
Managers in hospitality services should adopt COVID-19 preventive measures as an evolutionary approach to rebranding the hospitality industry during and after the COVID-19 pandemic. COVID-19 preventive measures should be part of the process of service delivery, transforming the attitude and behavior of staff and the physical environment in hospitality organizations, i.e. hotels and restaurants. In addition, the public and customers should be aware of the measures adopted by the hospitality industry to protect public health while ensuring a competitive edge. The use of social media and other mass communication tools is critical for raising public awareness of the measures taken to protect public health and rebrand the industry amid the COVID-19 pandemic. COVID-19 prevention measures should also be considered throughout the service delivery process. Employees and customers should be encouraged and empowered to adhere to COVID-19 protocols and rules to rebrand hospitality services in a time of crisis such as the COVID-19 pandemic. For instance, health and safety protocols such as wearing a facemask, hand washing, etc. should be taken as a crucial component of the service delivery process in the hospitality industry. Hospitality organizations may choose to digitalize service delivery as a way to revive and rebrand the industry.
Managers in hospitality services have to play a role in changing the attitudes and behaviors of staff amid the COVID-19 pandemic. Staff should behave in a manner that motivates customers to regain trust in hospitality services. During the COVID-19 pandemic, staff should focus on delivering services while doing the right thing, i.e. fulfilling moral obligations. The intangible nature of hospitality services indicates that staff has significant contributions to building the corporate reputation of hospitality organizations. Managers should create enabling environments for employees to fulfill their duties and responsibilities morally and ethically. Also, managers should empower staff through regular in-house training to ensure employees fulfill their duties and responsibilities morally and ethically. In-house training should equip employees with skills and knowledge to perform and fulfill their duties and responsibilities with due diligence. Furthermore, training and empowerment programs should focus on the importance of attitude and behavioral change amid the COVID-19 pandemic. Managers in hospitality organizations have to create conducive environments that consider health and safety standards during the COVID-19 pandemic. For instance, the arrangement of important facilities in hospitality organizations should consider social distancing. Also, the cleanliness of surfaces and other important areas can show how much restaurants and hotels care about social welfare and social well-being.
Limitations and future research direction
With all the contributions of the study in a theoretical and practical context, a few limitations can be observed which suggest potential future research directions. It is well documented in the literature that customers and the public in different social and cultural settings differ significantly when responding to COVID-19 preventive measures. Thus, it could be better to replicate the proposed model of this study across various social and cultural settings to observe similarities and differences and its strategic meaning in the hospitality industry. In addition, comparative studies could also be necessary to check if there are significant differences in terms of responses to the COVID-19 pandemic among customers of the hospitality industry across countries. In addition, a comparative study between females and males could also be potential since literature indicates that the perceived risk of the COVID-19 pandemic differs across these two social groups (Amani & Ismail, 2022). Furthermore, evidence indicates that as new cases and mortality rates decrease significantly, customers and the public do not comply with COVID-19 preventive measures. This suggests the importance of adopting a longitudinal approach to track down behavioral changes toward COVID-19 preventive measures and their consequences among customers of the hospitality industry over time. In future research, a mixed approach might be used, which would allow for qualitative feedback from customers in the hospitality industry about the subject under study.
Figures
Summary of literature review
| Author(s) | Topic | Country examined | Method | Main findings |
|---|---|---|---|---|
| Wei et al. (2021) | COVID-19 preventive measures and restaurants' customers' intention to dine out: the role of brand trust and perceived risk | The United States | Quantitative method | COVID-19 preventive measures enhanced customers' intention to dine out via brand trust |
| Quan et al. (2022) | Assessing customer financial risk perception and attitude in the hotel industry: Exploring the role of protective measures against COVID-19 | China | Quantitative method | Protective measures against COVID-19 had an influence on financial risk perception and customer attitude |
| Amani and Ismail (2022) | Investigating the predicting role of COVID-19 preventive measures on building brand legitimacy in the hospitality industry in Tanzania: mediation effect of perceived brand ethicality | Tanzania | Quantitative Method-Cross-sectional Design | COVID-19 preventive measures enhance brand legitimacy indirectly via perceived brand ethicality |
| Victor et al. (2021) | Factors influencing customers’ dine out intention during COVID-19 reopening period: The moderating role of country-of-origin effect | United States | Quantitative method | Dining involvement had a direct positive effect on customers’ intention to dine out. The positive COO effect moderated the relationship between the perceived importance of preventive measures and brand trust |
| Hakim et al. (2021) | Should I stay, or should I go? Consumers' perceived risk and intention to visit restaurants during the COVID-19 pandemic in Brazil | Brazil | Quantitative method | Consumers' trust in a restaurant and health surveillance trust predict the intention to visit a restaurant during the COVID-19 pandemic |
| The Current Study or this Study | How do COVID-19 Preventive Measures Build Corporate Reputation: Focus On The Hospitality Industry in Tanzania | Tanzania | Quantitative Method-Cross-sectional Design | COVID-19 prevention measures are critical in establishing or reestablishing corporate reputation during and after the COVID-19 pandemic. Also, ethical branding acts as a mediator between COVID-19 preventive measures and corporate reputation |
Results of measurement model validation
| Construct | Code | Measurement items | Loadings | CR | α |
|---|---|---|---|---|---|
| COVID-19 preventive measures | 0.880 | 0.857 | |||
| copm1 | This hospitality organization implements strict hand washing practices, including how and when to wash hands | 0.735 | |||
| copm2 | This hospitality organization makes hand sanitizer readily available to guests | 0.760 | |||
| copm3 | This hospitality organization is redesigning seating arrangements to ensure distancing between tables setups in dining areas | 0.845 | |||
| copm4 | This hospitality organization updates guests regularly about necessary precautions and measures | 0.786 | |||
| copm5 | This hospitality organization's employees wear face-covering every moment when are in the workplace | 0.729 | |||
| Ethical branding | 0.871 | 0.876 | |||
| ebr1 | I believe this hospitality organization always respects the laws and regulations of the country | 0.674 | |||
| ebr2 | I believe this hospitality organization will make a decision only after careful consideration of the potential positive or negative consequences for all those involved | 0.750 | |||
| ebr3 | I believe this hospitality organization respects moral norms | 0.700 | |||
| ebr4 | This hospitality organization is more beneficial for the welfare of the society | 0.766 | |||
| ebr5 | The way this hospitality organization behave is an example of how companies should be behaving in other countries in this situation | 0.800 | |||
| ebr6 | This hospitality organization always respects its customers and society in general | 0.669 | |||
| Financial performance and financially strong company | 0.845 | 0.889 | |||
| fpf1 | It seems to me that this hospitality organization is a long-established corporation | 0.705 | |||
| fpf2 | It seems to me that this hospitality organization is powerful in terms of economic condition | 0.742 | |||
| fpf3 | It seems to me that this hospitality organization is a highly profitable corporation | 0.794 | |||
| fpf4 | It seems to me that this hospitality organization is a corporation that will continue its existence in the future | 0.793 | |||
| Customer orientation | 0.857 | 0.853 | |||
| cuo1 | This hospitality organization makes an effort to produce solutions for customers’ problems | 0.766 | |||
| cuo2 | It seems to me that this hospitality organization is a corporation that cares about its customers’ views | 0.827 | |||
| cuo3 | It seems to me that this hospitality organization does anything to solve its customers’ problem | 0.845 | |||
| cuo4 | This hospitality organization informs me relating to what is done to my expectations | 0.651 | |||
| Social and environmental responsibility | 0.890 | 0.889 | |||
| ser1 | It seems to me that this hospitality organization supports a good cause | 0.774 | |||
| ser2 | It seems to me that this hospitality organization makes an effort to solve a societal problem | 0.795 | |||
| ser3 | It seems to me that this hospitality organization contributes to the development of the society’s standards using various social responsibility activities | 0.835 | |||
| ser4 | It seems to me that this hospitality makes an effort to contribute to the progress of the society | 0.866 | |||
| Trust | 0.863 | 0.852 | |||
| trt1 | It seems to me that this hospitality organization always behaves in a consistent manner | 0.681 | |||
| trt2 | Employees of this hospitality organization always answer the addressed questions of customers in an honest manner | 0.738 | |||
| trt3 | This organization does not act in a way to make me suffer | 0.806 | |||
| trt4 | It seems to me that this hospitality organization never lies to me | 0.747 | |||
| trt5 | I firmly believe that this hospitality organization will solve the problem without making me suffer when I encounter a problem | 0.759 | |||
Discriminant validity by Fornell–Larcker (1981) criterion
| AVE | MSV | MaxR(H) | 1 | 2 | 3 | 4 | 5 | 6 | |
|---|---|---|---|---|---|---|---|---|---|
| 1.TRT | 0.558 | 0.278 | 0.867 | 0.747 | |||||
| 2.COPM | 0.596 | 0.114 | 0.886 | 0.337 | 0.772 | ||||
| 3.EBR | 0.530 | 0.434 | 0.876 | 0.466 | 0.216 | 0.728 | |||
| 4.SER | 0.670 | 0.434 | 0.895 | 0.527 | 0.209 | 0.659 | 0.818 | ||
| 5.FPF | 0.577 | 0.294 | 0.849 | 0.428 | 0.324 | 0.520 | 0.542 | 0.759 | |
| 6.CUO | 0.602 | 0.308 | 0.872 | 0.292 | 0.134 | 0.555 | 0.541 | 0.496 | 0.776 |
Note(s): Italic diagonal represents the square root of AVE
Results of structural model
| Hypotheses | Hypothesized relationship | Standardized estimate | Standard error | t-statistics | p-value | Decision (YES/NO) |
|---|---|---|---|---|---|---|
| H1 | COPM→EBR | 0.162 | 0.037 | 4.252 | <0.001 | Yes |
| H2 | EBR→FPF | 0.562 | 0.067 | 8.349 | <0.001 | Yes |
| H3 | EBR→CUO | 0.521 | 0.058 | 9.012 | <0.001 | Yes |
| H4 | EBR→SER | 0.649 | 0.062 | 10.435 | <0.001 | Yes |
| H5 | EBR→TRT | 0.574 | 0.076 | 7.525 | <0.001 | Yes |
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