How Do Customers Perceive the Guest Houses

Factors that contribute to customer satisfaction in guesthouses in Gauteng Province

Margarita Popova (809529820)

A dissertation submitted to the Faculty of Management, University of Johannesburg in fulfilment for a Masters of Technology in Business Administration

March 2006

Supervisor: Dr NC Bresler Co- supervisor: Prof. J Spowart

Acknowledgements

I wish to pay tribute to and acknowledge the contribution of the following people who made this thesis possible: • Friends and family who supported and inspired me. • Doctor NC Bresler and Professor J Spowart, my academic supervisors for guiding me and giving me invaluable advise. • Alison Chambers for proofreading my work. • Guest house owners and their customers who participated in the survey.

1 Title of the thesis: Factors that contribute to customer satisfaction in guest houses in Gauteng Province

Summary: Guest houses operate in a highly competitive arena and aim to satisfy the customer needs and to differentiate their product from the ones of competitors. In order for these establishments to provide a product which satisfies the patrons, guest house owners have to know everything they can about the customers – what they want, what they think, how they make decisions, what influences their decisions. To gain a better understanding of these influences on customers’ satisfaction, the study included information collected by primary and secondary data. The secondary data provided literature on the notion and significance of customer satisfaction, analysed the guest house product, customer behaviour and service quality. It also provided guidelines on the type of primary data that had to be acquired. The primary data was obtained in the form of questionnaires completed by 65 managers and 169 customers of guest houses in the province. The questionnaires were distributed during December 2004 and February to May 2005. The findings indicated that the factors that contribute to customers’ satisfaction in guest houses in Gauteng Province are: the warm and friendly hospitality of the host and staff; the friendly environment; the feeling of being home away from home; the neatness, comfort and hygiene; the great service; walking the extra mile to meet the customer needs; attention to detail; complete package; value for money and best security. In other words it is the personalised service offered at the guest houses that customers choose over other types of available accommodation.

2 Declaration

I, Margarita N. Popova, hereby declare that:

I understand that plagiarism means presenting the ideas and words of someone else as my own, without appropriate recognition of the source.

I confirm that the work that I submit for assessment is my own, except where I explicitly indicate otherwise.

I have fully acknowledged all words, ideas and results from other sources that I have used in this research study through a generally accepted style of quotes, references and bibliography.

I am aware that the University views plagiarism as a serious offence punishable by a disciplinary committee.

Margarita N. Popova

Table of Content

LIST OF FIGURES 8

LIST OF TABLES 9

LIST OF ABBREVIATIONS 11

1. INTRODUCTION, STATEMENT OF PROBLEM, OBJECTIVES AND ...... 12

1.1 Background to problem...... 12

1.2 Statement of problem ...... 14

1.3 Research objectives ...... 14

1.4 Review of related literature ...... 15

1.5 Limitations...... 18

1.6 Significance and contribution of the study...... 19

1.7 Research design and methodology...... 19

1.8 Outline of the proposed study ...... 20

1.9 Preview of the following chapters ...... 21

2. LITERATURE REVIEW – THE GUEST HOUSE PRODUCT ...... 23

2.1 Introduction ...... 23

2.2 International tourism ...... 24

2.3 Tourism in South Africa...... 27

2.4 The accommodation industry in South Africa...... 32

2.5 The guest house sector in South Africa...... 34 2.5.1 Historical background...... 35 2.5.2 Guest house management...... 36

2.6 The guest house product offering ...... 38 2.6.1 The guest house product offering characteristics...... 39 2.6.2 Differentiating the guest house offerings...... 42

4 2.6.3 Guest house grading schemes – method of differentiating ...... 43 guest houses...... 43 2.6.4 The guest house marketing mix ...... 44

2.7 Hospitality management...... 45 2.7.1 Objectives of managers ...... 45 2.7.2 Unique challenges in accommodation management...... 46

2.8 Summary...... 49

3. LITERATURE REVIEW – CUSTOMER BEHAVIOUR ...... 50

3.1 Introduction ...... 50

3.2 The customer as an individual...... 51 3.2.1 Customer needs and motivation ...... 51 3.2.2 Personality and self-concept ...... 54 3.2.3 Perception...... 55 3.2.4 Learning process ...... 57 3.2.5 Involvement theory...... 58 3.2.6 Attitudes...... 59 3.2.7 Customer expectations ...... 60 3.2.8 Customer satisfaction and loyalty ...... 62

3.3 Social and cultural dimensions of consumer behaviour...... 63 3.3.1 Reference groups ...... 63 3.3.2 Family influence ...... 64 3.3.3 Social class ...... 66 3.3.4 Culture ...... 66

3.4 Decision-making ...... 67 3.4.1 Need recognition...... 68 3.4.2 Information search ...... 68 3.4.3 Evaluation of service alternatives...... 69 3.4.4 Service purchase and consumption ...... 69 3.4.5 Post purchase evaluation...... 71

3.5 Summary...... 72

4 LITERATURE REVIEW – SERVICE QUALITY...... 73

4.1 Introduction to service quality ...... 73

4.2 Customer satisfaction and service quality ...... 73

4.3 Service quality dimensions...... 75

5 4.4 Measuring service quality ...... 77

4.5 Service quality gaps ...... 78

4.6 Summary...... 82

5. RESEARCH METHODOLOGY ...... 83

5.1 Introduction ...... 83

5.2 Statement of the problem...... 83

5.3 Research objectives ...... 83

5.4 Collection of data ...... 84

5.5 The sample ...... 85

5.6 Distribution and response rate ...... 86

5.7 Analysis method ...... 87

5.8 Problems experienced during the collection of data ...... 88

5.9 Reliability and validity of the research data...... 89

5.10 Significance and contribution of the study...... 90

5.11 Summary...... 90

6. REPORT ON DATA AND ANALYSIS...... 91

6.1 Introduction ...... 91

6.2 Management questionnaires...... 92 6.2.1 The guest houses ...... 92 6.2.2 Demand ...... 100 6.2.3 Target market...... 103 6.2.4 Services offered by the guest houses ...... 105 6.2.5 Meals ...... 107 6.2.6 Advertising ...... 108 6.2.7 Management comments...... 110

6.3 Customer questionnaires...... 112 6.3.1 How customers perceive the guest houses...... 112 6.3.2 Satisfaction with the overall experience ...... 118 6.3.3 Uniqueness of guest houses...... 120 6.3.4 Matters to be improved upon ...... 123

6 6.3.5 Nationality profile of customers ...... 126 6.3.6 Business versus leisure profile...... 135 6.3.7 How the customers evaluated the questionnaire ...... 144

6.4 Summary...... 145

7. SUMMARY OF FINDINGS, CONCLUSIONS AND RECOMMENDATIONS 146

7.1 Introduction ...... 146

7.2 Summary of findings from management questionnaires ...... 146

7.3 Summary of findings from customer questionnaires ...... 151 7.3.1 How customers perceive the guest houses...... 151 7.3.2 South African residents versus foreigners...... 155 7.3.3 Business versus leisure profile...... 157

7.4 Conclusion...... 158

7.4 Recommendations ...... 165

BIBLIOGRAPHY 168

ANNEXURE 1 178

MANAGEMENT QUESTIONNAIRE ...... 178

ANNEXURE 2 181

CUSTOMER QUESTIONNAIRE...... 181

ANNEXURE 3 184

LIST OF GUEST HOUSES THAT PARTICIPATED IN THE STUDY...... 184

7 List of Figures

Figure 6.1 Years of operation of guest houses 93 Figure 6.2 Number of staff employed by guest house 94 Figure 6.3 Staff turnover 95 Figure 6.4 Number of managers in a guest house 96 Figure 6.5 Profitability of guest houses 98 Figure 6.6 Months of high demand 101 Figure 6.7 Average weekly occupancy rates in high demand season 102 Figure 6.8 Average weekly occupancy rates in percentage during low demand season 102 Figure 6.9 Types of guests in the guest houses 103 Figure 6.10 Nationality of market targeted by guest house owners 105 Figure 6.11 Business services offered at guest houses 106 Figure 6.12 Meals offered at guest houses 107 Figure 6.13 Advertising media 109 Figure 6.14 Return rates of customers as perceived by management 110 Figure 6.15 Matters that managers/ owners feel are not covered in the questionnaire 111 Figure 6.16 Most important aspects/ characteristics of service 113 Figure 6.17 Most important aspects/ characteristics of the guest house 114 Figure 6.18 Most important aspects/ characteristics of atmosphere 115 Figure 6.19 Most important aspects/ characteristics of the room 117 Figure 6.20 How satisfied are customers with whole experience 118 Figure 6.21 Would customers come back to guest house? 119 Figure 6.22 Would customers recommend the guest house? 119 Figure 6.23 What impressed customers the most? 121 Figure 6.24 Matters to be improved in the guest house 124 Figure 6.25 Nationality of customers 126 Figure 6.26 Reasons for stay in the guest house 135 Figure 6.27 Customer comments 145

8 List of Tables

Table 6.1 Price categories of guest houses 93 Table 6.2 Years of operation versus number of staff employed 95 Table 6.3 Years of operation versus number of managers in a guest house 96 Table 6.4 Number of staff employed by guest house versus number of managers in a guest house 97 Table 6.5 Working in alliance with other guest houses versus profitability 97 Table 6.6 Years of operation versus profitability of guest houses 99 Table 6.7 Single room rates versus years of operation of guest house 100 Table 6.8 Years of operation versus types of guests in the guest houses 104 Table 6.9 Types of guests in the guest house versus business services offered at the guest houses 106 Table 6.10 How did customers’ experience meet with their expectations regarding the service? 113 Table 6.11 How did customers’ experience meet with their expectations regarding the guest house? 115 Table 6.12 How did customers’ experience meet with their expectations regarding the atmosphere? 116 Table 6.13 How did customers’ experience meet with their expectations regarding the room? 117 Table 6.14 Nationality of customers versus reason for stay in the guest house 127 Table 6.15 Nationality of customers versus first time stay in the guest house or not 127 Table 6.16 Number of times stayed in the guest house versus nationality of customers 128

9 Table 6.17 How customers heard of particular guest house versus nationality of customers 130 Table 6.18 Nationality of customers versus most important aspects/ characteristics of the service 131 Table 6.19 Nationality of customers versus most important aspects/ characteristics of the guest house 132 Table 6.20 Nationality of customers versus most important aspects/ characteristics of the atmosphere 133 Table 6.21 Nationality of customers versus most important aspects/ characteristics of the room 134 Table 6.22 Nationality of customers versus age group 134 Table 6.23 Reasons for stay in the guest house versus nationality of customers 136 Table 6.24 Years of operation of guest house versus reason for stay in the guest house 137 Table 6.25 How did customers hear about the guest house versus reason for stay at the guest house 139 Table 6.26 Reason for stay at the guest house versus most important aspects/ characteristics of the service 140 Table 6.27 Reason for stay at the guest house versus most important aspects/ characteristics of the guest house 141 Table 6.28 Reason for stay at the guest house versus most important aspects/ characteristics of the atmosphere 142 Table 6.29 Reason for stay at the guest house versus most important aspects/ characteristics of the room 143 Table 6.30 Reason for stay at the guest house versus age group 143

10 List of Abbreviations

AA Automobile Association ANC African National Congress B & B Bed and Breakfast establishment BEE Black Economic Empowerment CBD Central Business District DSTV Digital Satelite Television DVD Digital Video Disc Four Ps Product, Price, Promotion, Place GHASA Guest House Association of South Africa GP Gauteng Province GSA General Sales Agent Km Kilometres PC Personal Computer SA South African SAA South African Airways SADC Southern African Developing Countries SERVQUAL Service Quality model of Parasuraman, Zeithaml and Berry (1988) SQGs Service Quality Gaps TGCSA Tourism Grading Council of South Africa TV Television WTO World Tourism Organisation

1. INTRODUCTION, STATEMENT OF PROBLEM, OBJECTIVES AND

METHODOLOGY OF THE STUDY

1.1 Background to problem

The tourism industry in South Africa has been growing in the past few years (Henning & Willemse, 1999b: 11). Several well-known international hotel chains have established successful accommodation premises in the country and dominate the tourism markets. However, many tourists choose the services offered by small, privately run accommodation providers, rather than those offered by the recognised hotels. This led to the creation of the guest house sector of the Tourism Industry in South Africa, which has been growing since 1995 (Jordaan, 2001: 171).

The guest house business is considered a home business, as people generally start one in their homes by either restoring or altering the existing facilities to suit their needs, or alternatively building one from scratch. Beginning such an activity could be for the purpose of acquiring a primary income or a second income, when retiring and needing something to fill the quiet times. Guest houses are run by a family or a manager with a few staff members. The owners do not necessarily have any experience in the hospitality industry, and the success and survival depends on their good business sense, managerial skills and expertise (Henning & Willemse, 1999a: 4).

As mentioned by the Guest House Association South Africa (GHASA), a small number of guest houses are listed with their association while the majority of these establishments operate independently from GHASA. Only in recent years, guest houses were taken into consideration when statistical data, financial or trading reports were prepared for the hospitality industry.

12 The guest house concept originated in Europe. In South Africa it started as far back as 1991, but the real growth has taken place only since 1995 (Jordaan, 2001: 171). The guest house industry today is highly competitive (Henning & Willemse, 1999a: v) in terms of services and quality offered to its customers. The customers’ overall satisfaction with the service of the organisation is based on all their encounters/ experiences with that organisation (Sureshchandar, Rajendran & Anantharaman, 2002: 364). The continued and profitable existence of a guest house and any other business depends on how effectively it is marketed. Marketing a product or a service entails making sure that the potential customer has sufficient information to make an informed decision. It is necessary for guest house owners to appreciate the needs of their guests and direct their marketing efforts towards satisfying those needs, so that maximum customer satisfaction and service quality can be obtained.

Customer satisfaction is considered a prerequisite for customer retention and loyalty (Sureshchandar, Rajendran & Anantharaman, 2002: 364). Loyal customers help to promote the establishment; they provide strong word of mouth advertising and become a marketing force by recommending the guest house to other customers (Bowen & Chen, 2001: 213). Positive word of mouth is regarded to be the best advertising a company can get (Bowen & Chen, 2001: 213).

The criteria that count in evaluating service quality are defined by customers. Service quality is more difficult for customers to evaluate than goods quality. Therefore, the criteria customers use to evaluate service quality might be more difficult for the marketer, and especially for a guest house owner with no previous experience in the hospitality services, to comprehend (Zeithaml, Parasuraman & Berry, 1999: 16). It is therefore important for guest house owners to have a good knowledge of customers’ expectations and perceptions of the service offered at the establishments. From these a need is generated to determine what makes visitors stay at guest houses and to identify the specific elements that contribute to their satisfaction in order to provide them with the quality desired.

13 1.2 Statement of problem

The primary objective of service providers and marketers is to develop and provide products and services that satisfy customers’ needs and expectations, thereby ensuring their own economic survival. To achieve this objective, service providers need to understand how consumers choose and evaluate their service offering (Zeithaml & Bitner, 2003: 35). Owing to the fact that the guest house sector in South Africa only came into existence in the past decade there is a limited amount of literature published on customer satisfaction in guest houses. There are, except for generic SERVQUAL dimensions by Zeithaml, Parasuraman and Berry (1990), no clear criteria of what factors contribute to customer satisfaction in guest houses. Thus there is a need to establish:

• what are customers looking for when selecting a guest house in order to be satisfied; • the customers’ specific needs; and • the level of quality offered in guest houses in order to help managers/ owners of guest houses provide the quality of services that their customers expect.

1.3 Research objectives

In the past few years the guest house sector has grown rapidly, which can be associated with high demand for the services of such establishments (Henning & Willemse, 1999a: v). Many owners of guest houses are not equipped with the necessary skills and experience to adequately interpret customers’ expectations and perceptions in order to provide the quality of services required and to ensure that the customers will return to or promote their establishment. Therefore the research aims to:

14 • describe the notion and significance of customer satisfaction; • establish what attracts customers to guest houses; • establish the guest houses’ customers’ needs; • analyse the quality of services in the guest houses; • determine the rate of return of customers; • analyse occupancy reports of the individual guest houses; and • develop a framework of criteria that are associated with customers’ choices of guest house accommodation to ensure their satisfaction.

1.4 Review of related literature

The South African hotel industry is recognised as one of the most important sectors of the domestic economy, said Jordaan (2001: 151). It is characterised by the presence of many of the world’s most well-known brands including Holiday Inn, Sheraton, Hyatt, Hilton, Inter- Continental and Radison (Jordaan, 2001: 151). The author adds that home grown brands such as Southern Sun, Protea Hotels & Inns, City Lodge, Sun International and others offer a further glimpse of the diversity available in South Africa. While hotels have traditionally offered a full range of services to the travelling public, the industry now provides for all types of needs and expectations (Jordaan, 2001: 156).

The nature of accommodation supplied at a destination is mainly a function of demand – in other words, it is tourists who determine what type of accommodation will be established at the destination area. Some prefer the full- amenity type of accommodation, whilst others are content with the bare essentials (Jordaan, 2001: 36).

In the past decade a growing trend towards guest house type of accommodation has been noted, as it was mentioned in Paragraph 1.1. Many foreign guests prefer to stay in a guest house, because it gives them an opportunity to meet the local people and talk to them about various aspects, whereas in larger,

15 commercial operations they feel they do not get to know the country’s people, Jordaan (2001: 173) stated. The author added that travellers seek the homely environment, where they can walk on the grounds, or have a braai outside; because it is something they would have done if they were at home (Jordaan, 2001: 173).

Customer satisfaction has an important role in the hospitality industry. It has a direct influence on the existence, survival and success of the hospitality service providers, and on a larger scale, has an impact on the economy of a country. Customer satisfaction is the extent to which a firm fulfils a consumer’s needs, desires, and expectations. Customers find it satisfactory – and even desirable – to permit businesses to cater to them and even to stimulate wants (Perreault, Jr. & McCarthy, 1999: 640). Businesses exist at the discretion of the consumers – if the products and services offered satisfy the customers, then the firms will continue to operate.

Satisfied customers are those who have received an excellent service. Excellent service might seem like an intangible goal, because service can only be assessed to be good or bad according to the personal satisfaction of the guest. There are, however tangible means by which it can be achieved. People can see, taste and appreciate the effects of good service (Henning & Willemse, 1999b: 11). Excellent service pays off because it creates true customers – customers who are glad they selected a firm after the service they experienced; customers who will use the firm again and sing the firm’s praises to others (Zeithaml, Parasuraman & Berry, 1990: 9). Positive word of mouth increases the accommodation establishment’s reliability and decreases customer’s perceived risk (Bowen & Chen, 2001: 216). When a product is complex and difficult to evaluate, and there is risk involved in the decision to buy it – as is the case with many services – consumers most often look to others for advice on which provider to consider (Zeithaml & Bitner, 2003: 162). A small increase in customer satisfaction boosts customer loyalty dramatically, and in addition to benefiting

16 from the extremely satisfied customers’ repeat patronage, the hotel managers can save their marketing expenses, because of the extremely satisfied customers’ marketing power (Bowen & Chen, 2001: 215).

Establishing the level of customer satisfaction in the tourism industry is a challenging process. This is due to the classification of customers into several categories. A tourist can be, amongst others:

• a business person; • a holiday maker; • someone visiting friends and family; and • someone pursuing special interests.

All of the above could be domestic or international tourists, who travel for different purposes and have different expectations and behaviours. Consumer behaviour as defined by Wilkie (in Williams, 2002: 8) is, the mental, emotional and physical activities that people engage in when selecting, purchasing, using and disposing of products and services so as to satisfy needs and desires.

In order to determine what factors contribute to a customer’s satisfaction, it is necessary to examine the different needs, tastes, expectations and behaviours of customers. At the same time the quality of the services offered should be assessed, so that a clearer picture of what makes the customer select a specific tourist establishment can be formulated.

In assessing the services offered, management must consider that there could be service quality gaps, or discrepancies between the expectations of the guests and the actual services provided (Zeithaml & Bitner, 2003: 113). For that to be possible one would have to identify and relate those key elements that require systematic management attention (Candido & Morris, 2000: 464). The elements include: management perceptions of customer expectations; the vision, the

17 mission and the service strategy; the quality specifications and service design; the financial and human resources; the external communication system and the service delivery system, as stated by Candido and Morris (2000: 464).

The service quality approach starts with the assumption that the level of service quality experienced by customers is critically determined by the gap between their expectations of service and their perceptions of what they actually receive from a specific service provider (Donnelly & Shiu, 1999: 500). Their perceptions are based on dimensions, which are used to evaluate the service quality, and include:

• tangibles - the physical appearances; • reliability of the staff; • responsiveness of the staff; • assurance that the employees convey; and • the empathy that the company provides.

It is important for any business to be able to develop a quality service strategy that balances all the above elements and dimensions successfully. Formulation and implementation of such, requires understanding and elimination of the service quality gaps and commitment at all times to become a “customer-driven” or a “customer-centred organisation” (Massnick, 1997: 9).

1.5 Limitations

Acquiring of information about the topic has proven to be difficult due to the limited statistical data about guest houses. The research will be conducted amongst visitors to and managers of guest houses in Gauteng Province; therefore the findings will be relevant only to guest houses in the province.

1.6 Significance and contribution of the study

This research will provide a framework of criteria associated with the factors that contribute to customer satisfaction in guest houses in the Gauteng Province. Information will be distributed to guest house owners to assist them in understanding the expectations and perceptions of customers in order to provide the quality of services required.

1.7 Research design and methodology

The research design and methodology will be the following:

• The term guest houses in this research will represent guest houses and Bed and Breakfast establishments, due to the similarity of these two accommodation providers. Their alike characteristics are further discussed in Paragraph 2.5.

• Secondary research will include review of national and international literature and articles related to the topic. The review of literature will provide a guideline on what primary data should be collected.

• Collection of primary data will be in the form of a two-phased study. The first phase will be the pilot stage and will include interviews with five guest house owners and their customers, which will help to acquire useful information on which the questionnaires for the second phase will be based. A qualitative approach will be used to establish the right questions for the questionnaires and to create a perspective needed for interpreting the data. The second phase will be obtaining information through self-administered questionnaires from guest house owners and their customers. A quantitative approach will be

19 used with the purpose to quantify customer satisfaction, the extent of service quality gaps and the perception of value.

• This research will be an exploratory and descriptive study, which will not include correlation analysis. The analytical methods used will be cross- tabulations, bar charts, pie charts, intervals and descriptive measures like mode for most frequently occurring values, range for difference between the largest and smallest observations and mean for average values.

• The population (universe) in the study will include guest houses in Gauteng Province. The sampling unit is 65 guest houses and the respondents will be 65 owners/ managers of the guest houses and 325 guests if guest house owners allow and succeed to interest five of their guests to complete the questionnaires.

• The parameters of the research will cover guest houses located within a 70 kilometres (km) radius from the Johannesburg Central Business District (CBD).

• Guest houses serving different target markets will be included in the sample, such as those with different pricing categories.

1.8 Outline of the proposed study

The outline of the chapters is a generic one and details will unfold as the research progresses.

Chapter 1 Introduction Chapter 2 Literature review – The guest house product Chapter 3 Literature review – Consumer behaviour Chapter 4 Literature review – Service quality Chapter 5 Research methodology

20 Chapter 6 Report on data and analysis Chapter 7 Summary of findings, conclusion and recommendations

1.9 Preview of the following chapters

Chapter two, Literature review – The guest house product, presents a description of international tourism, a brief historic background of the development of South African tourism and some current tourism trends and developments. It then presents information about guest houses in the country and their product offering, followed by a section on hospitality management.

Chapter three, Literature review – Customer behaviour, presents why it is important for marketers to study and understand customer behaviour. It then describes characteristics of the behaviour of the customer as an individual, the social and cultural dimensions of consumer behaviour and the decision-making process that customers follow.

Chapter four, Literature review – Service quality, presents a brief overview of what is quality in the service industry and how it is related to customer satisfaction. It then explains what factors contribute to the evaluation of service quality, how the service quality could be measured and what discrepancies could arise between customers’ expectations and their perceptions of the service they receive from the service provider.

Chapter five, Research methodology, is a chapter that describes the steps taken during the execution of the research study.

Chapter six, Report on data and analysis, provides an analysis of the collected data from the questionnaires. The results are illustrated in the form of figures and tables and represent the answers of the owners/ managers of the guest houses in Gauteng Province and some of their guests.

21 Chapter seven, Summary of findings, conclusion and recommendations, provides a statement of the main points established in Chapter six. It then presents the final conclusion of the research, based on the literature reviewed and all the data collected during the study; and some recommendations for guest house owners.

22 2. LITERATURE REVIEW – THE GUEST HOUSE PRODUCT

2.1 Introduction

The guest house sector in South Africa is a relatively new one in the hospitality industry. It only became prominent in the nineties. Guest houses are privately run accommodation establishments and their exact contribution to the hospitality industry is difficult to assess. However, they are participants in the tourism industry and in order to portray a clearer picture of them, the following issues are discussed in this chapter: International tourism, tourism in South Africa, the accommodation industry in South Africa, the guest house sector in South Africa and hospitality management.

The discussion on international tourism presents an overview of tourism on a global scale. It includes reasons why people travel, role players in the tourism industry and the effect of globalisation on tourism.

The section on tourism in South Africa provides a brief history of the development of tourism in the country. It introduces current tourist trends and current developments in the domestic market.

The section on the accommodation industry in South Africa presents the various types of accommodation available to tourists. It also describes customer trends and statistical figures related to accommodation in recent years.

The section on the guest house sector in South Africa provides general information about guest houses. It also includes a detailed analysis of the guest house product. Further information about guest houses will be obtained through questionnaires and reported on at a later stage in the study.

23 The section on hospitality management defines the process of hospitality management and explains the role of managers in the industry.

2.2 International tourism

Tourism is the term given to the activity that occurs when tourists travel. This encompasses everything from the planning of the trip, the travelling to the place, and the stay itself, to the return, and the reminiscences afterwards. It includes the activities the traveller undertakes as part of the trip, the purchases made and the interactions that occur between guest and host. In summary, it is all the activities and impacts that occur when a visitor travels (Mill & Morrison, 1992: 9).

Tourism has grown enormously in the last half century and has become the world’s largest industry (Wahab & Cooper, 2001:70). This growth can be associated with the increase of the world’s population, the increase in individuals’ earnings, changes in society, emerging technologies and widely available information, changes in political and legal environments, the increase in international investments and the global economy. Globalisation has offered endless opportunities and at the same time has made the world a highly competitive arena. People are changing their life styles in order to survive or be successful in this competitive environment. They are becoming more aware of their limited time and are looking for both value for time and value for money (Wahab & Cooper, 2001:70). This indicates that the tourism demand is undergoing a transformation from holiday products, which were “mass, standardised and rigidly packaged”, at reasonable prices due to economies of scale, towards “independent or semi – independent trips” (Wahab & Cooper, 2001: 77; Keyser, 2002: 109-111). In other words, people are moving away from perceived mass tourism destinations.

Travellers are motivated by a wide range of desires. The World Tourism Organisation (WTO) recognises six main purposes for travelling (Keyser, 2002: 45):

• Leisure, recreation and holidays – these include sightseeing, shopping, attending sport events, recreational and cultural activities, cruises, gambling, relaxing and honeymooning.

• Visiting friends or relatives – such as visiting family and friends, weddings, funerals, care for invalids or ill members of the family.

• Business – includes meetings, sales for foreign enterprises, conferences, educational courses, giving lectures or concerts and government missions.

• Health – for example health treatments, spas, fitness and other medical treatments.

• Religion – involves attending religious events.

• Other – like transit activities or other unknown activities.

Tourism is about people: tourists interacting with other people, undergoing experiences that may influence their own or the host community’s attitudes, expectations, opinions and, ultimately, lifestyles. Tourism being such a diverse activity makes it difficult for individual tourist outlets to satisfy the needs and desires of all travellers. Wahab and Cooper (2001: 70) suggest that the 4S framework for urban tourism is shifting from “Sightseeing – Shopping – Shows – Short breaks” to “Segmentation – Specialisation – Sophistication – Satisfaction”. This framework guides tourism managers in the interpretation of the demand trends and in the development of products that will best satisfy the chosen segment of the market. The advantage of accommodation establishments, such as guest houses, is that the management and staff are in constant interaction with their customers. This interaction provides a better opportunity for guest house managers to acquire customer knowledge, than any researcher or

25 database could provide (Middleton & Clarke, 2001: 183). This also helps guest house owners to identify which segment of the market is most likely to be attracted to their product offering so that they can concentrate their marketing efforts on that specific market segment. Ultimately, these processes of segmenting the market and meeting customers needs through customised service, lead to satisfied customers.

The demand for tourism is met by the concentrated marketing efforts of a wide variety of tourist services. Together, these services form the world’s largest and fastest growing industry (Holloway, 1998: 67). The travel and tourism industry comprises of the tourist and the producers of the tourism product, which are the transport providers; the accommodation providers, such as hotels, guest houses, lodges and so forth; and attractions and support services. The producers could be from the private sector or the public sector, and the success of the industry depends on the close working partnership between the two sectors. Additionally, there are other factors that influence travel and tourism. The World Tourism Organisation has identified the most important ones as economic and political factors, the influence of technology, demographics, the effect of globalisation, localisation, growing socio-environmental awareness, living and working environment, a change from “service” to “experience” economy, advances in marketing and travel and personal safety (Lubbe, 2003: 64).

Globalisation of the media and easy access to information has contributed to the fact that people are becoming more educated and their interests are shifting to different destinations. They seek to experience more adventurous and enriching tourist products and also more personal service, such as the service that a guest house could offer them. The sophistication in their needs, leads to the necessity to develop sophisticated products, which are to be delivered at the appropriate time and price (Wahab & Cooper, 2001: 85). This requires a specialisation of the products and destinations. Tourism enterprises are in a situation where they have to identify their competitive advantage and market the products to the

26 consumers in the best possible way. Since tourists no longer have single, standardised and rigidly packaged wants, segmentation offers the opportunity to provide appealing tourism products to well-defined markets (Wahab & Cooper, 2001: 88). The powerful immediacy of customer contact in guest houses, provides a knowledge not only of what customers want and expect from the product offering, but also of what type of customers are looking for that offering. Appropriate segmentation ensures that the right type of consumer is attracted to the destination and ultimately it has an impact on the experience of the tourists and their perception of the product. The tourist experience is a complex amalgam of factors, which shape the tourist’s feelings and attitudes towards his or her visit (Page, 1995: 24; Bennett, Joste & Strydom, 2005: 91). If the consumers are satisfied with their experience it means that their needs and expectations were met. It also suggests that they will probably return to the destination and/ or will share their experience with friends and family. Then these friends and family may become potential customers, because the place was recommended by somebody that has been there. Word of mouth advertising is considered to be a very powerful marketing tool in the service industry, especially when dealing with international markets.

2.3 Tourism in South Africa

In South Africa, the historical background of the country has played an important part in the development of the tourism industry. In the 19th century, owing to its climate conditions, South Africa became famous as a health destination and it was marketed in Britain as the ”health resort of Europe”. Domestic tourism also occurred at this time as the farming community went on holidays by ox-wagon (Lubbe, 2003: 26). Many attractions were established and opened their doors to welcome the tourists.

During the First and Second World wars, South Africa experienced difficulties in promoting tourism to the country. In the late sixties, the World Bank established a Tourism Projects Department to help finance the development of tourism.

27 “However, in the seventies and eighties the apartheid regime slowed down the growth of tourism. South Africa became isolated from the rest of the world. Harsh economic and other sanctions were imposed, including measures to discourage citizens of foreign countries from visiting South Africa. South Africans were also denied the opportunity to visit some foreign countries. This resulted in major restrictions on the activities of the South African Tourism Board. Offices in some countries had to be closed, and South Africa was regarded as an undesirable and unmarketable destination. Some newspapers refused to accept advertisements that promoted South Africa. To counter this, the Tourism Board was obliged to expand on the use of direct marketing campaigns. Local tourism was also encouraged to help ensure the survival of the industry. Discriminatory legislation was gradually abolished and new markets and marketing opportunities opened up. However, South Africa remained isolated from the rest of the world” (Bresler, 2005: 120).

On 2 February 1990, President F.W. de Klerk announced the unbanning of the African National Congress (ANC) and other freedom organisations, and also the release of all political prisoners, amongst them the ANC leader, Mr Nelson Mandela (Bresler, 2005: 120). The sanctions were lifted and many opportunities opened up for South Africa. The country was positively marketed internationally as a tourist destination, more airlines started flying to South Africa and co- operation between the Southern African countries increased (Lubbe, 2003: 27). South Africa was exposed again to international markets. Overseas tourists were once again encouraged to visit South Africa, and South African citizens were free to visit overseas destinations that had previously been closed to them. The first democratic elections held in April 1994 also impacted profoundly on the tourist industry. Although many foreign tourists avoided the country at the time of the elections, thousands of international journalists and observers injected millions of rand into the local tourist industry (Bresler, 2005: 120).

28 After 1994 tourist activity increased considerably. The figures of total foreign visitors, as recorded by South African Tourism (2005b), prove the tourism growth experienced in the country and they are as follows:

Year – Total foreign visitors 1994 – 3 896 547 1995 – 4 684 064 1996 – 5 186 221 1997 – 5 170 096 1998 – 5 898 236 1999 – 6 026 086 2000 – 6 000 538 2001 – 5 908 024 2002 – 6 549 916 2003 – 6 504 890 2004 – 6 677 839

In the past eleven years tourism in South Africa has been expanding and working towards optimising its potential. Today, South Africa probably has the best accommodation facilities and transport infrastructure in all of Africa (Bresler, 2005: 117). The tourist arrival statistics for 2002 confirmed that South Africa is the fastest growing tourist destination in the world (South African Tourism, 2003) and that the country has a lot to offer in terms of genuine warmth and hospitality, diverse cultures and heritages, wildlife, scenic beauty and adventurous opportunities, conference facilities and eco-tourism.

Recently, a new tourist trend has become evident in the country. A company, Master Currency, undertook a survey, which established that 69 percent of airline passengers to Johannesburg are either returning emigrants or people coming to shop (South Africa Travel Guide Online 2004). Puk, chief executive officer of Sure Travel, stated in the South African Travel Guide Online that many people

29 that used to go to Dubai to shop in bulk quantities are now coming to South Africa instead. Shopping is the second most common reason amongst foreigners, after holiday reasons, for coming to Gauteng (South African Tourism, 2005c: 12). This has further contributed to increasing the popularity of the country. Another event that needs to be mentioned is South Africa winning the bid for the 2010 Soccer World Cup. This means that the tourism industry of the country will benefit enormously from all the opportunities that will arise from hosting such an event and South Africa stands a good chance of becoming an even more popular tourist destination.

Perceptions of high crime rates in South Africa and other Southern African countries have, however, significantly deterred international tourists from visiting (George, 2001: 44). Tourists could be particularly sensitive towards travelling to destinations that might put them at risk. That is why ensuring safety and security has become very important for all tourism service providers.

The domestic tourist market plays an important role in the South African economy. It was valued at R47 billion for the period 2002/3, as opposed to the international market value of R53.9 billion, and research indicates that there is opportunity for further growth (Department of Environmental Affairs and Tourism, 2004). In 2003 South Africans undertook over 49 million domestic trips, of which 64 percent was to visit friends and family, 16 percent for holiday, almost 11 percent for religious purposes, 6.2 percent for business and 16 percent for medical reasons (South African Tourism, 2004b: 1). Domestic tourism is driven by school holidays with the largest number of trips taken in December (summer holiday), then in July (winter holiday) and April (Easter holiday). In terms of provincial popularity, Kwazulu- Natal received the biggest share of domestic trips – 13,9 million trips, followed by Gauteng – 8.6 million, Eastern Cape – 7.5 million, Western Cape – 5.2 million, Limpopo – 4.6 million, Free State – 3.3 million, Northwest – 3 million, Mpumalanga – 2.5 million and Northern Cape – 0.8 million trips (South African Tourism, 2004b: 4).

30 Tourism in South Africa is currently undergoing transformation. A lot of emphasis is being placed on internal marketing. Internal marketing is promotion of the firm and its products to the firm’s employees. Through it the company’s staff become educated, aligned and motivated in achieving the company’s objectives, said Crick (2003: 161). The author added that on a larger scale, the successful implementation of a tourism programme depends on the internal marketing of tourism to the community. In other words, internal marketing of tourism is in fact development of domestic tourism. The government is putting programmes in place to assist the emerging entrepreneurs in the tourism sector. An emphasis is placed on educating and involving local communities and previously disadvantaged groups to participate in the tourism value chain. The transformation of the industry is also involved in encouraging local South Africans to travel more and see the country. Currently, only 30 percent (14 million) of the population of the country take trips for holiday purposes (Department of Environmental Affairs and Tourism, 2004) and the majority of domestic travellers stay with friends and family, rather than using the services of guest houses, hotels or other accommodation providers (South African Tourism, 2005d: 9).

High importance is placed on capturing a bigger share of the black market. Abrahamse in Ludski (2001) identified a need to develop an understanding of the needs of the local tourists in order to draw black South Africans into the market. It is critical that all people of a country support the tourism industry, because growth in the domestic market will increase the value of the market and will help combat issues of seasonality, geographic spread and limited trip expenditure. Further development of domestic tourism will lead to improvement in the quality of the products and services, will increase the confidence of international tourists about coming to South Africa, will secure stable occupancy levels and will create job opportunities (Department of Environmental Affairs and Tourism, 2004).

2.4 The accommodation industry in South Africa

Tourist accommodation includes all establishments offering overnight accommodation on a commercial basis. Accommodation is part of the tourism product that provides a support service for a wider motivation, which has brought a visitor to a specific destination (Bresler, 2005: 198). For business travellers, accommodation is a necessary facility that makes it possible, convenient and comfortable to engage in the primary reason for travel – i.e. business. For leisure travellers, accommodation is integrally related to the attractions of a destination and it is also a part of the facilities (Middleton & Clarke, 2001: 390). When selecting a holiday destination, the image and quality of the accommodation might have a strong influence on the choice.

In South Africa the list of types of accommodation that the travellers can choose from is considerably long. It includes: hotels, motels, B&Bs, guest houses, cottages, lodges, mountain huts, flats, rooms, rondavels, caravan parks, time share accommodation, accommodation for back packers, resorts and others. In Paragraph 1.4 it was established that the South African hotel industry is recognised as one of the most important sectors of the domestic economy. It is characterised by the presence of many of the world’s best-known brands including Holiday Inn, Sheraton, Hyatt, Hilton, Inter- Continental, Radison and home grown brands such as Southern Sun, Protea Hotels & Inns, City Lodge, Sun International and others (Jordaan, 2001: 151). While hotels have traditionally

32 offered a full range of services to the travelling public, the industry now provides for all types of needs and expectations (Jordaan, 2001: 156).

In 2000 and 2001, the accommodation industry of South Africa had relatively stable occupancy rates. In 2002 and 2003 the country received increased global exposure due to the United Nations World Summit (in 2002) and the Cricket World Cup (in 2003), which were held in South Africa. This resulted in a sharp increase of the occupancy rates for these two years (Koumelis, 2004). Foreign travellers perceived the country as a value-for-money destination, because in the past years the weaker rand made it possible for tourists to enjoy high-class holidays for less money, as compared to prices in other countries. Recently, however, South African hotels’ occupancy rates have been falling and Koumelis (2004) attributes it to the stronger South African currency that the country has been experiencing since the beginning of 2004. Today the stronger rand implies that foreigners will have to pay more, in terms of their home currency, in order to come to South Africa for a holiday. This resulted in a decline of over two million bed nights sold in 2004 as compared to 2003 (South African Tourism, 2005a: 62), and over six billion rand decline of Total Foreign Direct Spent in South Africa (South African Tourism, 2005b: cover page). There was a further decrease in bed nights sold in 2005, as the figures for the second quarter are 11.9 percent less than the first quarter (Statistics South Africa, 2005b: 2). Additionally, the most common length of stay of domestic tourists for the first quarter of 2005 was only two nights (South African Tourism, 2005d: 9) and for foreigners in 2004 was also only two nights (South African Tourism, 2005b: 83).

The country has also been experiencing airline capacity problems for the past few years. South African Airways (SAA) has been criticised by the government for not keeping pace with the growing tourism demand (Hicks, 2003). However, the Tourism Authorities are committed to increasing the air access to the country (Koumelis, 2004). This will help to bring more people to the country and through increased availability of flights to South Africa, the cost of travel to the country

33 could be decreased. This would contribute positively to restoring the value-for- money perception of tourists and would also favour tourism growth and accommodation providers.

The stronger rand creates an advantageous situation for small establishments like guest houses. In general guest houses are more cost effective for tourists as compared to hotels. The average cost of hotel accommodation tends to be around R400 a night, while an average guest house charges between R200 and R250 a night (Gillingham, 2004). The hotel charge may or may not include breakfast, while almost all guest houses include breakfast in their tariff. In other words, by using guest houses, organisations or travellers can cut their accommodation bills almost in half (Gillingham, 2004). However, guest house managers/ owners should take into consideration that the hotels generally have more financial resources available and could use tactical price cuts in the form of sales promotions in order to attract as many tourists as possible. Guest houses on the other hand, might not be in a financial position to reduce their prices, and this might lead to hotels and guest houses offering accommodation at similar prices. In such a situation of increased competition, it would be of great importance to guest houses and other small-scale operation establishments to know what their customers expect from the service provider. Having this knowledge, guest houses would be able to provide a satisfactory service offering to their customers and would be able to attract and retain customers.

2.5 The guest house sector in South Africa

A guest house, as defined by the Tourism Grading Council of South Africa (TGCSA, 2002), is either a converted house adapted to accommodate overnight guests or it may be a purpose-built facility. A guest house is run as a commercial operation and it is often owner-managed. It has public areas, which are for the exclusive use of the guests. The owner/ manager either lives off-site, or in a separate area on the property.

34 Guest houses generally compete for a share of the tourist market with all kinds of accommodation providers, however, they are in direct competition with Bed and Breakfast (B&B) establishments, which offer similar services. Owing to the similarity of the two, B&Bs will be included in the study and when the term guest house is used it would represent guest houses and B&B establishments. Bed and Breakfast accommodation, according to TGCSA, is usually provided in a family (private) home and the owner/ manager lives in the house or on the property. Breakfast is usually served. Bathroom facilities may or may not be en- suite and/ or private. In general, the guests share the public areas with the host family.

2.5.1 Historical background

In this section, the information provided on guest houses explains how they came about, what they are and what they offer to their guests.

In the past decade a growing trend towards guest and country house type of accommodation has emerged. The guest house concept originated in Europe. In South Africa the first guest houses became evident in 1991, but the real growth only took place since 1995 (Jordaan, 2001: 171). In Gauteng there are 115 registered guest houses and 203 registered B&B establishments and they provide 1774 rooms and 3648 beds for travellers (City of Johannesburg official website, 2005).

The guest house industry today is highly competitive, as it was previously discussed in Paragraph 1.1, and the different guest houses compete in terms of the services and quality offered to their customers. Initially guest houses started as a source of second income and in some instances as the only income. Until recently the guest house sector was regarded as dominated by white people, but today more and more black people are following the same example and are offering to their customers the experience of traditional customs and cuisine (South African Tourism, 2004a). Many foreign guests feel that in large

35 commercial operations they do not have enough contact with the country’s people, therefore they choose to stay in a guest house, where they are in a homely atmosphere and in close interaction with the guest house owners and their staff and where they can learn more about the traditions and the customs of the country (Paragraph 1.4). From the foreigners that make use of the services of guest houses, European tourists seem to be frequenting those establishments much more than their African, Indian and Australian counterparts (South African Tourism, 2005b: 91). However, South African Tourism (2005b: 14) established that the largest share of foreign tourists to South Africa is land-based travel from neighbouring Southern African Developing Countries (SADC). Short haul visitors to SA from SADC, Central and East Africa made up 69 percent of visitors to the country in 2004 and long haul visitors from overseas and North Africa made up 31 percent (South African Tourism, 2005b: 14). It was also established that tourists from these countries stay mostly at hotels or with friend and family. Therefore these customers represent an opportunity for a target market for guest houses.

2.5.2 Guest house management

The management of the guest houses is usually done by the owners or, alternatively, they employ a manager. The owners do not necessarily have any experience in the hospitality industry, but the success and survival of their establishments depend on their good business sense, managerial skills and expertise (Henning & Willemse, 1999a: 4). It is important to recognise that a distinct and significant range of management issues confront small hospitality firms (Morrison & Thomas, 1999: 149). Managers are challenged with balancing and satisfying needs of consumers, owners or operating companies and employees (Jayawardena & Haywood, 2003: 195). Marketing an establishment involves some kind of research into customer needs, a marketing plan and choosing the correct promotional methods in order to reach the target market. Advertising is also expensive for small companies (Misner, 1994: 37) and guest

36 houses might not have surplus funds to employ in order to reach their customers. Guest house owners, as mentioned in paragraph 2.2, have the advantage of being in contact with their guests, which allows them to detect customer needs, behaviour and satisfaction or complaints (Middleton & Clarke, 2001: 183). Their customer knowledge is better than hotel’s customer knowledge, because they receive customer feedback on a daily basis and this is why guest houses could satisfy customers better. This is also why guest house owners who have some management and marketing knowledge and know how to use the feedback from the customers would successfully reach their target market.

Quality management is also an issue by means of which, if addressed efficiently and effectively by the manager, a guest house could gain advantages over its competitors and achieve a more secure financial future. The owner/ manager should be able to promote a preventative system of quality control. Furthermore, the owner/ manager should be an entrepreneur. As Morrison and Thomas (1999: 153) state, many of the management challenges confronting small hospitality firms have the potential to be addressed through entrepreneurial practices.

“Because tourism is a relatively new industry, communications and access to information is the major obstacle to growth and development,” said Abrahamse in Koumelis (2003: 1). She also stated that many entrepreneurs recognise the opportunity to become involved in tourism, but are having difficulty in understanding what they need to have in place in order to be a player in the industry. Additionally, small, family-run accommodation establishments rarely take steps to acquire information and skills that do not have immediate application to the solution of a specific technical or managerial problem (Bresler, 2005: 200). This is why the study could provide useful guidelines on customer expectations, perceptions and behaviour, which would help guest house managers/ owners to satisfy customer needs and would contribute to successful operation of their business.

37 Some guest houses have started to work together and form their own guest house networks. They are also building relationships with other suppliers, like car rental companies, tour operators, travel agents and tourist information centres. Networking helps to reach a broader field of clients, to ensure more stable occupancy rates and also to save on marketing costs.

High crime figures in any country represent a threat to the hospitality industry. In South Africa tourists and travellers are encouraged to be aware and cautious when exploring the attractions offered at destinations. Hospitality services providers are also urged to ensure the safety of their patrons. Guest houses are small establishments, therefore it is easier to control the safety and security of their guests. It is more difficult for an intruder to walk unnoticed into a small establishment than a large one, where the front office staff is often busy (Callan & Fearon, 1997: 170).

2.6 The guest house product offering

The product offering of a guest house is part of its marketing mix. For an organisation to be successful with its marketing mix, it has to develop a differential advantage, which will distinguish the organisation’s product offering from that of the competitors (Cooper, Fletcher, Gilbert, Shepherd & Wanhill, 1998: 411). A differential advantage could only be achieved in certain areas of the hospitality product. What is the guest house product? A product, as defined by Kotler, Bowen and Makens (1996: 274), is anything that can be offered to a market for attention, use or consumption that might satisfy a want or a need. It includes physical objects, services, places, organisations and ideas. In terms of hospitality and tourism, the product is a combination of the core product, the facilitating product, the supporting product and the augmented product.

The core product is the basic need function served by the generic product (Seaton & Bennett, 1996: 121). For guest houses the core benefits offered are shelter and rest. The facilitating products are those services or goods that must

38 be present for the guest to use the core product (Kotler et al., 1996: 275). A guest house, for example, has a reception area where the guests can check in and out, telephones, a dining room where breakfast and dinner are served, and parking facilities as facilitating products. Core products require facilitating products, but do not always require supporting products. Supporting products are those that add extra value to the core product and help to differentiate it from the competition. Examples of supporting products in guest houses are: shampoo and shower gel in the bathroom or a bottle of mineral water in the room. An example of a supporting service is the opportunity for foreign guests to communicate in their home language with the owners. Many guest house owners speak German or French or Italian or languages other than English. This facilitates foreign travellers and provides added benefits to the product. The distinction between supporting and facilitating products is not always clear. Sometimes, depending on their personal needs, customers could see the supporting product as facilitating and vice versa. Seaton and Bennett (1996: 121) grouped the facilitating and supporting products in one and called them the tangible/formal products. The authors have further defined them as the specific features and benefits residing in the product itself – like styling, quality, brand name, design and others. The augmented products are the add-ons that are extrinsic to the product itself, but which may influence the decision to purchase. They include accessibility, atmosphere, customer interaction with the service organisation, customer participation and customers’ interaction with each other (Kotler et al., 1996:276). In other words the augmented service offering combines what is offered and how it is delivered.

2.6.1 The guest house product offering characteristics

Quality is an important contributor to a differential advantage of a guest house. A customer who receives quality for his money would leave the establishment satisfied and would talk to friends and family about his experience. He will promote the guest house to others by word of mouth, which is a powerful

39 marketing tool. A satisfied customer would bring repeat business for the guest house and would help to generate new customers. Word-of-mouth advertising could be more effective than any paid advertising the firm might use (Zeithaml & Bitner, 2003: 162).

Quality, as Fontaine stated (in Hall, 1990: viii), means each person doing his or her job correctly each and every time. Defining quality in the service industry is not straightforward and obvious owing to the fact that human interaction is more complex compared to the other industries, where the products are physical goods rather than services. In the manufacturing industry, the customers evaluate the quality provided by evaluating the goods purchased, on the basis of whether they work as effectively as advertised. The contact with the seller is limited to obtaining information about the product and then selecting to purchase it, or not. The quality is then evaluated on the properties of the actual goods. The service offering or the guest house offering in this case, however, has unique characteristics. They are:

• Intangibility Hospitality services cannot be seen, tasted, felt, heard or smelled before being bought – they are intangible. That means that customers are unsure of what exactly they are purchasing and an element of risk is present, because they cannot evaluate or test the service beforehand. That is why customers rely on word of mouth communication from people that have experienced the service offering (George, 2001: 20).

• Inseparability The guest house offering is sold first, then produced and consumed at the same time. Therefore the way that the offering is delivered is crucial and the service providers, the staff, become part of the offering. Additionally, other consumers also become part of the offering, as they can affect the overall experience in a positive or a negative way.

• Variability (Heterogeneity) Tourism offerings and experiences vary according to a given situation. The service providers are not all the same, they are human beings, and they deliver different levels of service. Similarly, no two consumers are precisely the same – they have different demands, expectations, tastes, moods, perceptions and emotions (George, 2001: 21).

• Perishability The guest house offering cannot be saved, stored, resold or returned – the product is perishable. If a hotel room is not sold, the revenue for that day is lost and cannot be recovered.

In the service industry the products are intangible and the evaluation of the quality is based on the continuous interaction of people with people. The quality of the interaction can rarely be standardised to ensure uniformity. The process starts from the point of acquiring information about a destination, then making a reservation, travelling, arriving, the actual stay and then getting back home. Throughout the process the customer forms subconscious expectations, which are compared with the actual experience. These are used as criteria when evaluating the quality of the performance received. The criteria to evaluate the performance are complex and depend on each individual’s perception and expectation. At the same time the performance varies from producer to producer, from customer to customer, from day to day and from situation to situation.

It is imperative that guest houses deliver to their customers the highest standard of quality desired. Guest house owners/ managers should learn how customers evaluate and what they expect from the service offering, so that they can ensure that their product will generate the ultimate customer satisfaction. They must also use this knowledge to attract similar customers to their establishment. Customers

41 with similar needs would have more in common and this would enhance their experience at the guest house.

2.6.2 Differentiating the guest house offerings

It is considered that in highly competitive markets, suppliers are unlikely to develop an advantage in the core benefit. That is because most guest houses offer the same rest capacity. Differentiation, however, could be achieved in the tangible/ formal product (otherwise known as facilitating and supporting products) and in the augmented product (Seaton & Bennett, 1996: 121). An easy accessibility to the guest house and a good location in relation to major routes is beneficial to many guests and it is not something that can be copied by competitors, except the ones that are situated in the same area. The atmosphere and the physical environment are also elements which are specific to each guest house. Each guest house owner has his/ her personal style of décor, colour scheme and design which create the unique atmosphere of the guest house. The individual style of décor and atmosphere compliment the core product and at the same time differentiate the particular guest house from others. The customer interaction with the service delivery system of the guest house is one of building relationship through close contact with the owner and staff. By allowing customers to participate in the delivery of services, guest houses provide a personalised offering to their guests. Serving breakfast and dinner on request is a standard offering for guest houses, but allowing the guests to choose their meals suggests that their individual needs are met. This contributes to the customer satisfaction and at the same time the owner eliminates leftovers and reduces costs. Additionally the guest house management also provides other services like organising transport facilities for their guests, suggesting places of interest in the area, organising tours, booking restaurants and others.

Guest houses are small establishments with fewer staff to attend to the guests’ needs. That gives them a good opportunity to build relationships with the guests

42 and to learn what they like and dislike. With the knowledge managers acquire, they can work towards providing an enhanced quality experience for tourists, which would lead to return patronage, referrals and ultimately increased profits. Profitability in the tourism industry is essential for the sustainability of the sector and for the private sector’s ability to spread benefits (Gauteng Tourism Development Authority, 2002: 2). Investing in developing long-term bonds with individual customers provides a sustainable competitive advantage to the firm, because the intangible aspects of a relationship are not easily duplicated by competitors (Roberts, Varski & Brodie, 2003: 169). Guest houses also have public areas on their premises where the guests could interact with one another. For example, the guests could meet at the breakfast table, at the braai area, at the pool or in the garden. The variety of public areas is another factor that would differentiate one guest house from another.

2.6.3 Guest house grading schemes – method of differentiating

guest houses

South African Tourism Authorities have developed a way of officially differentiating accommodation establishments. They have developed a grading scheme for the hospitality industry, which is administered by TGCSA. This is a voluntary scheme for accommodation establishments of the following categories: Self Catering, B&B, Guest House, Lodge, Country House and Hotel. Anyone from the mentioned categories can register and be graded, according to the TGCSA requirements, on a scale of one to five stars. If one uses the Automobile Association (AA) Guide (2001-2002), one would be able to classify accommodation establishments, including guest houses, into price categories starting from R100 to R2999 per person sharing. Further to the TGCSA and AA classifications, Portfolio South Africa have established in their Bed and Breakfast Collection 2003-2004 additional categories for B&Bs, guest houses and similar establishments. Their collection of homes is ranked in the categories of Luxury,

43 Great Comfort and Comfortable after annual assessments and visits to the establishments by the Portfolio team.

2.6.4 The guest house marketing mix

Guest houses provide a variety of services and products. That means that guest house owners are faced with making marketing decisions on the mix of products which they propose to offer to their customers (Holloway & Plant, 1992: 69). It is customary to accept that the marketing mix is within the control of management and refers to decisions made in relation to the four Ps (Cooper et al., 1998: 392). The four Ps are: Product, Price, Promotion and Place. The decisions about the marketing mix are focused around the target market, as it is the target market that dictates the different ways in which the mix is used.

The four Ps have been successfully applied by marketers in the manufacturing industries. In the service industries, however, it has been argued that the four Ps are not comprehensive enough (Cooper et al., 1998: 410), and an additional three Ps have been added. They are: People, Physical evidence and Process. People include personnel and personnel-related matters, like training, discretion, commitment, incentives, appearance, attitudes and behaviour. It also covers the customers, their degree of involvement, and their contact with other customers. In guest houses, interaction with people (staff, customers, management) helps management to identify what is needed to improve people’s experiences. The Physical evidence is the environment – the furnishings, colour, lay out, noise levels, facilitating goods and tangible clues, which enhance the experience. The Process covers the policies, procedures, mechanisation, employee discretion, customer involvement, customer direction and flow of activities. In a guest house the processes are more simple, as it is a small-scale operation establishment and does not have a large vertical structure. The processes are also more customised, as they are co-ordinated with customer needs.

44 2.7 Hospitality management

Management can refer to a set of roles that people perform, and it can refer to the functions pursued in those roles. The functions are often listed as a condensed set of four: planning, directing, organising (which includes co- ordinating) and controlling. Managers in guest houses must perform these functions and run a productive operation, within certain limitations. As mentioned earlier in paragraph 2.5.2, guest house owners or managers generally have little experience in the hospitality industry and limited managerial skills, however, through their abilities they have to be able to relate successfully to employees and customers.

2.7.1 Objectives of managers

Powers and Burrows (2003: 6) suggest that there are three kinds of objectives that managers make their concern:

• Make the guest feel welcome – it involves dealing with the customer in a friendly and professional way, and at the same time ensuring that the employees are motivated and treat the guests with the same friendly and professional approach.

• Make things work for the guest – this involves ensuring that the whole system of the hospitality organisation functions optimally and consistently and delivers quality on time.

• Make sure that the operations will continue to provide service while also making a profit – it involves the ability to recover operational costs, make enough additional income to pay back borrowed resources and provide a return to the investor.

45 Management is an indispensable component for the successful functioning of a hospitality organisation. It directs the resources of the organisation towards achieving the goals set, and attains or maintains the purpose of existence of the organisation.

In today’s world of global competition, managers are not only directing the operations of the organisation in order to stay in the market, but they are leading their staff in the path to achieve excellence in their services. Managers work with employees and through those employees, the objectives of the organisation are achieved. Therefore, keeping everyone motivated in the organisation is crucial for the success of the company. People, however, are different from each other and are motivated by different factors. That means that the manager should create a motivating environment that would satisfy different needs (Bresler, 2005: 181). People in service work need a vision in which they can believe, an achievement culture that challenges them to be the best they can be, a sense of team that nurtures and supports them, and role models that show them the way (Zeithaml, Parasuraman & Berry, 1990: 5). Through leadership, employees’ full voluntary co-operation is involved in establishing a direction for the organisation – a common vision for everyone, in aligning people and forming support for the direction chosen, and in keeping everybody motivated and inspired.

2.7.2 Unique challenges in accommodation management

Middleton and Clarke (2001: 391) have identified five characteristics of any accommodation business, which have an influence on the management and marketing of an establishment. They are:

• choice of location; • existence of peaks and troughs in demand; • influence of room sales on profits; • high fixed costs of operation; and

46 • focus on “bookers” (defined in the text below), not occupancy levels.

Location determines the customer mix a guest house can achieve and directs the marketing strategy that could be used to attract the customers. Owing to the fact that location is fixed, if there are any problems or difficulties that arise during the time of operation, related to the location, managers have to use marketing skills to overcome them.

Customer demand is not constant in the accommodation business. Guest houses and other accommodation establishments could have high occupancy during some days of the week or some months of the year, and during others they could have low occupancy. Marketing efforts could lessen the difference between high and low demand. This could be achieved by increasing sales through targeting a new segment of the market, or through developing a new product for the target market.

The profits of a guest house are directly related to rooms’ night sales or bed occupancy. The more customers stay at a guest house, more revenue will be generated to cover total costs of operations and to make a profit. Managers’ efforts have to be directed to achieving high bed occupancy and also ensuring the quality of the service provided.

Accommodation establishments usually have high fixed costs of operation. They have to pay, regardless of how many visitors they accommodate per month, expenses related to premises, rent, leases, rates and taxes, equipment, energy and water costs, insurances, wages and salaries of staff, management overheads, administrative costs and marketing costs. Once the fixed costs are covered, managers have to concentrate on making additional or marginal sales in order to generate more revenue at little cost.

47 Additionally, managers of accommodation establishments must target not only individual customers, but “bookers” as well. A “booker”, as defined by Middleton and Clarke (2001: 393), is a customer or an agent of the customer, who makes reservation for accommodation for one or more people. Therefore, managers must be able to market their establishment successfully to people who have not experienced the service offered and probably will not experience it, but will attract other people to experience it.

In today’s fast-changing environment, a growing number of competitors offer their products to the same consumer groups. Travellers also have a wider range of choices than ever before for matching an accommodation with their particular travel needs. These needs change according to the travel purpose. In order to ensure the survival of the guest house, management must understand these changing needs and deliver a quality product and services appropriately targeted to specific customers’ needs, wants and expectations (Bresler, 2005: 199). Managers must be able to differentiate and brand their products with particular identities that could be communicated to the target market (Middleton & Clarke, 2001: 397). They must also find ways to encourage and reward their regular or loyal customers, who will in return attract new customers to the establishment. Managers must engage in direct marketing of their establishments to agents, transport companies and anybody who could bring new customers to the business.

In the guest house sector it is important that nobody is exposed to or experiences poor quality. Quality gaps need to be identified and eliminated and that implies that consumer behaviour and consumer expectations are areas that require detailed analysis (Marx, 2003). For this purpose, this study will provide more insight on customer expectations, perceptions and behaviour, so that guest house managers can better understand their customers and provide them with the quality of service desired.

48 2.8 Summary

From this chapter it can be seen that tourism is a fast-changing industry, that consists of a whole range of individuals, businesses, organisations and places, which interact in some way to deliver a tourism experience. The accommodation sector is the one that provides a location where the tourists can rest and revive during their travel. There is great variety of accommodation facilities available and one of the types of accommodation is supplied by guest houses. The guest houses bring together a number of different operations with the common characteristics of offering accommodation, plus some food and beverage in a small, family-style environment. They operate in a highly competitive arena and aim to satisfy the customer needs and to differentiate their product from the ones of competitors. In order to satisfy consumers, it is the managers’ or guest house owners’ responsibility to understand the customers’ needs and to ensure that they are met. Managers must also train and maintain their employees’ motivation, and must ensure that the guest house is functioning successfully and that it is providing the quality desired by the patrons.

49 3. LITERATURE REVIEW – CUSTOMER BEHAVIOUR

3.1 Introduction

Customer satisfaction, according to the World Tourism Organisation, is a psychological concept that involves the feeling of well-being and pleasure that results from obtaining what one hopes for and expects from an appealing product and/ or service (Pizam & Ellis, 1999: 328). Satisfaction is the result of the customers’ assessment of a service based on a comparison of their perceptions of service delivery with their prior expectations (Johnson & Clark, 2001: 178). In order for marketers to persuade their customers to purchase and enjoy the products and services, they have to know everything they can about the customers – what they want, what they think, how they make decisions, what influences their decisions. In other words, marketers have to study the consumer behaviour in order to provide products and services that customers need, and to provide them at the highest level of quality so that customers are satisfied.

Consumer behaviour refers to the process of acquiring and organising information in the direction of a purchase decision and of using and evaluating products and services. This process includes the stages of searching for, purchasing, using, evaluating, and disposing of products and services (Schiffman & Kanuk: 2000: 5). Consumers are not alike and they prefer services and products that reflect their own special needs, personalities and lifestyles (Schiffman & Kanuk, 1991: 8). That is why, when studying consumer behaviour, marketers should consider the customer as an individual, the social and cultural dimensions of customer behaviour and the decision-making process. Organisations must deliver long-term customer value, if they are to survive and succeed in today’s competitive environment. This can be achieved if they retain customers by satisfying their needs, adopt the marketing concept, and become focused on the customer (Cant, Brink & Brijball, 2002: 5).

50 3.2 The customer as an individual

Understanding consumer behaviour involves looking at two distinct groups of influences – individual and group influences. The topic of the consumer as an individual discussed below covers the individual factors, which are determinants for the individual perspectives of consumers.

3.2.1 Customer needs and motivation

The process of buying a service begins with the recognition that a need or a want exists. Schiffman and Kanuk (2000: 64) classify needs in two categories: innate and acquired needs. The innate needs (also called physiological or biogenic) are needed to sustain biological life and are considered as primary needs or motives. These are food, water, air, shelter and clothing. The acquired needs, however, are generally psychological or psychogenic and are considered as secondary needs or motives. They result from the individual’s subjective psychological state, from relationships with others, from the culture or environment and include needs of esteem, prestige, affection, power and learning (Schiffman & Kanuk, 2000: 64).

Understanding customer needs is very important for the survival of any company. Businesses are supported by society because they serve society’s members by catering to their needs and so satisfying them (Cant, Brink & Brijball, 2002: 6). Many psychologists and others interested in human behaviour have developed lists of consumer needs and motives, which are often too long to be of practical use to marketers. For this reason, Maslow’s hierarchy of needs theory, by Schiffman and Kanuk (2000: 83) should be mentioned, as it is a widely accepted theory of human motivation. The theory includes five basic needs, which are ranked in order of importance from low- level to higher level needs. The hierarchical approach implies that one level must be attained first, before the next, higher level is activated.

51 • Level one – Physiological needs – they are biological needs like food, water and sleep. • Level two – Safety and security needs – such as needs for shelter, protection and security. • Level three – Social needs – for example affection, friendship, acceptance and belonging. • Level four – Ego needs – which may include needs for prestige, success, accomplishment and self-esteem. • Level five – Self-actualisation – such as for self-fulfilment and enriching experiences.

Maslow’s hierarchy is a useful tool for understanding consumer motivation and it is readily adaptable to a marketing strategy, because consumer products and services often satisfy each of the need levels (Schiffman & Kanuk, 2000: 84).

Most people have different needs, but individuals are not at all times aware of their specific needs, as they (the needs) could be dormant. The arousal of specific needs at a specific point in time may be caused by internal stimuli found in the individual’s psychological condition, emotional or cognitive processes, or by external stimuli in the outside environment (Schiffman & Kanuk, 2000: 75). Physiological arousal of needs implies that the stimulus that causes the recognition of a need comes from inside the customer. For example hunger would make the individual aware that he/ she wants to eat. Emotional arousal is related to stimulation of unconscious needs when people engage themselves in daydreaming, because they are bored or frustrated. This usually happens when people imagine themselves in all sorts of desirable situations. Cognitive arousal or awareness of needs could be triggered by random thoughts or a personal achievement. An individual who has been working on a tight schedule for several months might have random thoughts that it is time to take a holiday. An advertisement on the television about an exotic holiday destination might trigger the cognitive need of that individual to visit a similar destination. In the case of

52 environmental arousal, the needs activated at a specific time are often determined by specific cues in the environment, and without these cues, the needs would remain dormant (Schiffman & Kanuk, 2000: 75; Cant et al., 2002). For example, a tourist who is driving around while exploring Johannesburg sees from the street a bright wall with an inviting sign indicating that it is a guest house. The combination of the bright colour of the wall with the sign triggers his curiosity and urges him to go inside and have a look at the offering. Once inside he favours the homely environment and decides that he would like to be accommodated in that guest house.

Once individuals become aware of their need, they must also feel that they want to do something about it. When they want to satisfy a need they experience motivation. Motivation refers to a state of need, a condition that exerts a “push” on the individual towards certain types of action, that are seen as likely to bring satisfaction (Moutinho, 1987: 16). People feel an uncomfortable tension when there is a need that is not satisfied. This uncomfortable tension creates a driving force within the individual, which urges him/ her to take action, to behave in a way that will satisfy the need. All behaviour is goal oriented, because goals are the sought-after result of motivated behaviour (Schiffman & Kanuk, 1991: 70). The specific goals that customers select and the patterns of action they undertake to achieve their goals are a result of individual thinking and learning (Cant et al., 2002: 118).

For any need that an individual experiences, there are different goals. The goals that individuals choose depend on their personal experiences, physical capacities, cultural norms and values, the goals’ accessibility in the physical and social environment and also on the individuals’ own perception of himself/ herself (Schiffman & Kanuk, 2000: 65).

53 3.2.2 Personality and self-concept

Moutinho (1987: 9) defines personality as the configuration of a person’s characteristics and ways of behaving, which determine that person’s adjustment to the environment in a unique way. Generally people are all affected by economic, social and cultural influences, however, each person has a unique predisposition to react to these influences and to internalise them, which is a result of the influence of their family, upbringing, education and peers (Williams, 2002: 79). Therefore, each person has a unique set of characteristics, which influence him/ her to behave in a certain way, and identify his/ her particular personality. That is why there is a variety of accommodation establishments for different people from which to choose when travelling for leisure, business or other purposes.

The concept of self is seen as a component of personality and it is considered important to the understanding of hospitality consumption, because of its subjective nature (Williams, 2002: 79). The self-concept states (Williams, 2002: 81) that individuals have a concept of who they are (the actual self) and who they would like to be (the ideal self). Depending on the expectations that the consumers hold about themselves, they exhibit specific behaviour, make decisions accordingly and select destinations and hospitality services that match their self-image. For example, a tourist might see himself best accommodated during his holidays in South Africa in a traditional farm-style guest house, rather than any other type of accommodation. Moutinho (1987: 10) also suggests that there is another concept of self-image, which is the “other’s self-image”, which entails how an individual thinks others see him or her. This may lead to a trial of different destinations and hospitality services and in general may lead to a different behaviour than if he/ she is satisfying the needs of his/her actual or ideal self. The same tourist who, as mentioned earlier, would prefer to stay in a farm- style guest house, might actually book into a luxurious five star establishment, because his colleagues back home see him as a high status executive. In other

54 words, he would not do what he wants to, but would rather do what he perceives his peers would expect him to do.

3.2.3 Perception

People have the tendency to view the world in their unique way. Different people might interpret the same event in many different ways, because each perceives the same event in a different way from the other. Perception is the process by which an individual selects, organises and interprets stimuli in a meaningful and coherent way (Moutinho, 1987: 11).

Customers make decisions and take actions based on what they perceive to be reality. Therefore it is important for marketers to understand what customers think is reality, as opposed to what the actual reality is (Schiffman & Kanuk, 2000: 122). This study provides guest house owners with information on the perceptions of their customers. That will equip them with a more defined knowledge of what influences customers to buy and will make the process of providing products and services that satisfy consumers easier.

Perception is the result of two different kinds of inputs that interact to form the personal pictures – the perceptions – that each individual experiences (Schiffman & Kanuk, 2000: 131). The one type of input is physical stimuli from the outside environment, like odours, shapes, people, sounds, television/ radio advertisements and others. The other type of input is provided by the individuals in the form of a certain predisposition based on previous experiences, expectations, motives and learning. For example a customer might prefer to stay in a specific guest house over and over again, because he/ she perceives that the décor, the atmosphere and the approach by the staff are best suited for his/her needs.

55 Customers are bombarded with stimuli from everywhere in their lives. In order to cope with all the stimuli thrown at them, customers pay attention to some information and ignore others. That is why it is acknowledged that perception is selective – customers choose to notice a small number of stimuli; subjective – customers only notice stimuli that they want to notice, based on their personality, beliefs and needs; and perception could also be based on the individual’s frame of reference and personal experiences (Cant et al., 2002: 100). For example, when looking in a tourism guide to plan a holiday, a tourist would selectively read about the area of interest, in which he/ she would consider accommodation establishments within a specific price range. From previous experiences, the customer has concluded that he/ she would like to stay in a guest house, because these best suit his/ her needs and requirements. Therefore he/ she would further select a few guest houses, from which he/ she would ultimately choose one in which to stay.

When customers are thinking of purchasing products or services, they usually consider a number of specific brands or service providers, which are known as the evoked set. For example a traveller planning his stay in Johannesburg might consider staying at Courtyard, Don Apartments, Mercure Hotel or at Villa Domenico Bed and Breakfast/ Guest house. He/ she might not consider any other options of accommodation, because he/ she might perceive that the alternative options do not offer any particular advantage, or because he/ she is indifferent to them, or because other options are unacceptable. He/ she might also not consider other options, because he/ she does not know of any. Usually, the consumer’s evoked set tends to be quite small. On average it includes only three to five brands, with which he/ she is familiar, or remembers, or finds acceptable (Schiffman & Kanuk, 2000: 448). Then the consumer would choose one option from the few. Guest house owners should aim for their establishments to be in the customers’ evoked set of accommodation providers. To achieve this guest house owners have to be able to identify what their customers need, what they expect from the service offering and how they perceive the actual service.

56 With this knowledge they will be able to provide a service that meets customers’ expectations and customers will remember and possibly revisit or recommend the establishment. The evoked set is further elaborated on in Paragraph 3.4.3.

3.2.4 Learning process

All aspects of the individual – perception, needs, motives and attitudes – are either directly or indirectly determined and influenced by the ability of the customer to learn (Cant et al., 2002: 108). Learning is a change in a person’s thought process caused by a prior experience, or also refers to the establishment of new responses to the environment.

Consumers learn about a hospitality offering when they consume it. They also gain experience through a variety of other sources such as listening to others. If a guest house offers good quality service, the people that visit it will be satisfied and they will tell others about it. Consumers build up a mental inventory of offerings and good or bad experiences. This information is then stored and it is recalled and taken into account when future holiday or travel decisions need to be made (George, 2001: 133).

Communication plays an important role in the learning process of consumers. For example, when information is provided about a tourist destination (could be through an advertisement in a magazine, newspaper, television, radio or by word of mouth), that information allows the potential customer to acquire knowledge about the offering and to form an image about the destination. That might lead to the arousal of needs and wants, and the creation of interest towards the offering and might initiate an action to satisfy those needs. Consumers use information to evaluate alternatives when making a choice; to reinforce past choices; to resolve a conflict between buying and postponing; to remind when to buy and to acquire general knowledge (Moutinho, 1987: 15).

57 3.2.5 Involvement theory

Satisfying the needs implies that customers have to make a choice from the many alternative ways that are available to meet their needs. Williams (2002: 44) points out that the decision is in fact the end state of a complex dynamic process, and that the decision is the final definitive solution in a problem solving process. Depending on the complexity of the decision-making, the consumer’s involvement with the purchase and the frequency of purchase, three types of decision-making processes are identified (Williams, 2002: 45):

• Extensive problem solving – requires significant effort and involvement from the consumer, takes time and is complex. Consumers undertake extensive information searches. They need to understand the features and attributes of a particular hospitality offering, carefully compare the different alternatives and develop criteria for selection in order to select the offering that best satisfies their needs. Generally, the more involved the customer is in the specifics of the purchase, the more loyal he/ she becomes (Oliva, Richard & MacMillan, 1992: 85), provided that the customer has experienced satisfaction with the overall service purchased. Extensive problem solving is usually applied to a completely new or important need (Perreault & McCarthy, 1999: 171). For example, choosing an annual holiday may involve extensive problem solving, because the customer does not know the destination. Choosing a guest house to stay at during the holiday would also contribute to the complexity of the problem-solving, because the tourist has never been at the destination and does not know what accommodation is available there.

• Limited problem solving – is a process, where the consumer has some information about the offerings, but is unfamiliar with specific brands, styles, options or choices. Limited problem solving is typical when the consumer has some previous experience solving the problem, but is not certain which choice is best at the current time. His or her involvement is considerably less

58 here than in extensive problem solving. For example, a foreign tourist is planning to come to Johannesburg, where he has been once before. The previous time he stayed at a guest house in Rosebank, but this time he is not sure that he would like to stay at the same guest house. Therefore, he will have to acquire some information on other accommodation establishments in order to select a suitable one.

• Routine behaviour is the least complex form of decision-making. It is used by customers when they regularly select a particular way of satisfying a need when it occurs. It involves limited information searches and decisions are reached quickly. For example, a customer who regularly stays at a specific guest house would use routine decision-making every time he/ she chooses the services of that particular guest house.

3.2.6 Attitudes

In the context of tourism, attitudes are predispositions of feelings towards a vacation destination or service, based on multiple perceived product attributes (Moutinho, 1987: 19). In forming attitudes, the consumer’s cognitive system seems to be answering questions such as: What does this concept/ destination/ service have to do with me? Is it a good or a bad thing for me? Do I like it or dislike it? In summary, an attitude is a person’s overall evaluation of a concept (Peter & Olson, 1987: 191) or, in the context of tourism; it is the overall evaluation of a destination or a service.

Attitudes are learned because they are formed as a result of the following: a direct experience with the product or service, information acquired from others and exposure to mass media. Attitudes also tend to be consistent with the behaviour that they reflect even though they are not always permanent and can change (Cant et al., 2002: 136). Additionally, attitudes vary from situation to situation. For example a business traveller, who comes regularly to

59 Johannesburg on business, always stays in a specific guest house. He has developed a positive attitude towards the services offered at that guest house and he is satisfied with his choice of accommodation. The same traveller, when he brings his wife and children to Johannesburg for a weekend of leisure, chooses the services of self-catering apartments, which best satisfy the needs of his family members.

Learning about customers’ attitudes gives a good indication to hospitality service providers of what customers like and dislike about the service offerings. By knowing their customers’ attitudes, marketers can anticipate their values, life styles and outlooks more skilfully and can reflect these characteristics in the products and services.

3.2.7 Customer expectations

Customer expectations are beliefs about service delivery that function as standards or reference points against which performance is judged, as defined by Zeithaml and Bitner (2003: 60). The first and possibly the most critical step in delivering service quality is knowing what customers expect. Not knowing what they want, leads to losing business or giving it to the competitors or not surviving in the fiercely competitive market. In order to avoid that happening, this study provides information to help guest house owners to interpret customers’ expectations.

It has been suggested, that expectations exist somewhere on a range of a continuum, between ideal and intolerable and Zeithaml, Berry and Parasuraman (1993) defines the points on the continuum as follows:

• ideal – the best possible, ideal expectations or desires; • ideal feasible – what should happen given, for example, the price or the industry standards;

60 • desirable – the standard that the consumer wants to receive; • deserved – the level of performance that the consumer ought to receive given the perceived cost; • minimum tolerable – the minimum tolerable standards, those that must be achieved; and • intolerable – the standards the customers should not receive.

Services are heterogeneous and non-standardised and this indicates that the performances of different service providers vary. The extent to which customers recognise and are willing to accept these variations, is called by Zeithaml and Bitner (2003: 63) the zone of tolerance – which is the range between the adequate service (the minimum level of service considered acceptable) and the desired service. The zone of tolerance is the range in which customers do not particularly notice service performance. When the performance falls outside that range, meaning that it is either very low or very high, the customers notice the service performance in either a positive or negative way.

Customers are satisfied when their perception of the service and the experience as a whole, matches their expectations. If their perception of the service exceeds their expectations, then they will be more than satisfied, they will be delighted, and if their perceptions do not meet their expectations, they will be dissatisfied (Johnson & Clark, 2001: 78). Pizam and Ellis (1999: 329) note that both what is perceived (outcome) and what is expected are subjective and therefore are psychological phenomena – not reality. That means that both perception and expectations are susceptible to external influences and manipulation. Expectations of customers are influenced by many things (Johnston & Clark, 2001: 86) and some of these key influences are: price, alternative services available, marketing, word of mouth, previous experience, customer’s mood and attitude. As customers experience services continuously, their expectations continuously change. That is why it is important for guest house owners to study

61 what customers want and expect at all times and to provide them with the service quality desired.

Understanding the customers’ expectations, according to Johnson and Clark (2001: 78), leads to:

• specifying, designing and then delivering the appropriate service at the appropriate cost; • encouraging the marketers to try to influence customers prior expectations, so that they can be delivered; and • understanding how to manage, indeed manipulate, customer perceptions during the service, to achieve the desired level of satisfaction.

Ideally organisations should aim to exceed the customers’ expectations, so that they can delight their customers on a continuous basis. That implies that services should be continuously assessed, developed and improved. The benefits of such a process are that those organisations will be ahead of the competition and they will maintain loyal customers.

3.2.8 Customer satisfaction and loyalty

According to Bowen and Chen (2001: 213), it is commonly known that there is a positive relationship between customer loyalty and profitability. The increased profit from loyalty comes from reduced marketing costs, increased sales and reduced operating costs. Loyal customers help to promote one’s establishment, by providing strong word of mouth advertising and by creating business referrals and providing references. Therefore they save marketing expenses to the establishment and increase sales. Loyal customers also increase sales, as it has been established by Bowen and Shoemaker (1998), by purchasing a wider variety of hotel’s products and making more frequent purchases than first time customers or customers who have not experienced satisfaction with the service

62 offering. Loyal customers also cost less to serve, as they have a better knowledge of the products and require less information.

The results of the study that Bowen and Chen (2001: 214) undertook in the Lenox Hotel in Boston, with an aim of establishing the relationship between customer loyalty and customer satisfaction, indicated a non-linear and asymmetric relationship between the two components. They were also consistent with Oliva et al.’s (1992: 88) study and they verified that a minor change in satisfaction could lead to a substantial change in loyalty increment. These indicate that in order for hospitality service providers to benefit from their customers repeat patronage and marketing power, they should aim and work toward having not only satisfied customers, but extremely satisfied customers. This emphasises the great significance for guest house owners to know what factors contribute to customer satisfaction

3.3 Social and cultural dimensions of consumer behaviour

In paragraph 3.2 the individual influences of consumer behaviour were discussed. However, people live in societies, communities and groups and the pattern of social networks through which they develop, influence their tastes, habits and values (Seaton & Bennett, 1996: 59). For this reason it is important to look at group influences or the social and cultural dimensions of consumer behaviour. These are inter alia the influences exerted by reference groups, family members, the social class and the culture one belongs to.

3.3.1 Reference groups

A reference group is any person, real or imaginary, that serves as a point of reference for an individual and exerts a key influence on the individual’s beliefs, attitudes and choices (Moutinho, 1987: 8; Schiffman & Kanuk, 2000: 264). Reference groups influence an individual’s behaviour by providing information about destinations and hospitality services, by:

• giving an opportunity to compare one’s beliefs, attitudes and behaviour against those of the group, and • persuading the individual to conform to the norms of the group.

The tendency of people is that even when they take a decision without communicating with others, they tend to turn to group members or other individuals for more information on the attributes of the service offering. Reference groups influence consumers through word of mouth communication, which is the single most powerful influence on consumer behaviour (Assael, 1993: 279). For guest houses, word of mouth marketing plays an important role in the marketing of the establishments, as it is not only a powerful method of marketing, but it is also the least expensive one. Guest house owners have to ensure that their customers are satisfied with the service they receive, because those customers are the reference groups which will market the guest house to other potential customers.

3.3.2 Family influence

Relationships with other family members influence many aspects of consumer behaviour. Family members usually share values and attitudes, consider each other’s opinions and make joint decisions (Perreault & McCarthy, 1999: 165). For that reason the family is considered a customer unit. In the customer unit, the person that purchases a product or a service is not always the decision maker or the end user. Therefore, different members of the customer unit carry out different tasks in the buying process. For example, when a family decides on a guest house accommodation for their holiday, they firstly ensure that the guest house of their choice can accommodate all members of the family. If the children are small, it is likely that the parents would prefer adjoining rooms, so that they can be as close as possible to the children. They would also make sure that in the proximity of the guest house, there is an entertainment area for children.

Family life style commitments, including the allocation of time influences consumption patterns. Income, marital status, age, number and age of children and overall, the stage of the family cycle in which the consumer unit is, determine how people spend money. A family passes through the following stages in their life cycle (Cant et al., 2002: 195):

Stage 1: Bachelorhood – young single adult living apart from parents; Stage 2: Honeymooners – a young married couple; Stage 3: Parenthood – a married couple with at least one child living at home; Stage 4: Post-parenthood – an older married couple with no children living at Home; Stage 5: Dissolution – one surviving spouse.

Young single adults and young married couples in general have more disposable income than couples with children, as they have fewer members in the family and fewer responsibilities. They are more likely to experiment with new products, look for entertainment and travel more often. Once there are children in the family, the discretionary income decreases as necessities like food, education, medical-aid, security and others increase. When children leave the home and start supporting themselves, the parents are left with more free time, less expenditure and the opportunity to become regular travellers during their leisure time. In the later stages of the cycle – older married couples or widows and widowers – discretionary income decreases, as these individuals begin to live off fixed income pensions and annuities. Their expenditure increases for medications and medical services, hobby-related items, and leisure products (Assael, 1993: 282).

It is necessary to take into consideration that dynamic socio demographic changes in society have resulted in many non-traditional stages that a family might pass through, like childless couples, couples marrying later in life, single parents, unmarried couples or single-person households and so forth.

65 3.3.3 Social class

Social class plays an important influence on consumer behaviour. Social classes define broad consumer groupings according to their degree of prestige and power within a society (Assael, 1993: 275). The society is divided into classes (upper, middle and lower) and individuals in a given social class share similar values, lifestyles and behaviour standards. These shared elements act sometimes to provide or reinforce the motivation and sometimes as constraints upon purchase decisions (Middleton & Clarke, 2001: 77). Therefore one can speculate that individuals from the upper social class would prefer going to upmarket hospitality establishments, which would best satisfy the needs generated by their lifestyle. The middle and lower social class would be more price conscious and would prefer going to places which are affordable for them.

3.3.4 Culture

In the context of consumer behaviour, Moutinho (1987: 7) describes culture as the total of learned beliefs, values and customs, including the material elements, which serve to regulate the consumption patterns of members of a particular society. Those elements are transmitted from generation to generation and serve to shape common or similar patterns of behaviour.

Culture plays an important role in services marketing, because cultural belonging and heritage not only affect the way customers experience and interpret services/ goods supplied to them in tourism, but they are also likely to influence decisions regarding choices of vacations and destinations (Weiermair, 2000: 399). Manners and customs represent a cultural understanding of appropriate ways of behaving. It is important to monitor differences in manners and customs, because they can have a direct influence on the service encounter (Zeithaml & Bitner, 2003: 51). For example, friendliness in some countries is regarded as disrespect and formality is preferred in services. In other countries friendliness is

66 expected. Understanding cultures is pivotal to being evaluated as an effective service provider. Providing the same service experience offered in the home country may not be successful when a service is extended to other cultural groups (Winsted, 1997). Marketers must try and understand the customs and behaviours of consumers from different countries. Tourism offerings have to be adapted to suit their needs, especially in the current competitive global environment. This is particularly important for service levels, as many international tourists have higher expectations than the local tourists.

In the literature reviewed in this chapter, it can be seen that there are individual and group influences, which play a role in the consumer behaviour. In the paragraph below, the two sets of influences are integrated into a theory that explains how customers make tourism related decisions.

3.4 Decision-making

For companies to be effective in the highly competitive marketing environment that includes the contemporary hospitality industry, it is imperative that they understand contemporary consumers and consumer decision-making (Williams, 2002: 39). In order to achieve this, marketers have to understand how consumers choose and evaluate the service offerings. Consumers have a more difficult time evaluating and choosing services than goods, partly because services are intangible and non-standardised and partly because consumption is very closely intertwined with production (Zeithaml & Bitner, 2003:36). Zeithaml and Bitner (2003: 38) recognise that customers do not always make their decisions in a standard way, but the authors choose the traditional process of decision-making to discuss the consumer behaviour in services. The same process is applicable to guest houses, as they are accommodation establishments that offer services to their customers. The process includes five steps:

67 3.4.1 Need recognition

This is the state when the consumer recognises that he or she has a need/ a want that needs to be fulfilled.

3.4.2 Information search

This is the process of acquiring information in order to weigh up the available alternatives and select the most favourable way to satisfy their needs. Information about services and products can be obtained from personal sources (friends and experts) and from non-personal sources (mass or selective media). When selecting services, which are more complex than products, customers rely to a greater extent on personal sources, because they can communicate more information about experience qualities. When someone has done business with a service or product provider, that person will then recommend the professional to other customers with confidence. Misner (1994: 43) states that people want referrals, because referrals reduce the risk of the quality of service they will receive. There is some degree of perceived risk with all purchase transactions, but there appears to be more risk involved in the purchase of services than in the purchase of goods, because services are intangible, non-standardised, and usually are sold without guarantees or warranties.

In the case of non-personal sources of information about services, the sources can communicate little about experience qualities. They (the sources) might not be available at all, or they may disclose only a few attributes of the service offering, which will cause customers to feel a greater risk in selecting a little- known alternative (Zeithaml & Bitner, 2003: 40).

3.4.3 Evaluation of service alternatives

The group of services and products, which the consumer considers acceptable options to satisfy his/ her need, is known as the evoked set of alternatives (refer to paragraph 3.2.3). The evoked set of alternatives is likely to be smaller with services than with goods. Goods that consumers can purchase in a shop, can be selected from an extensive display of alternative brands and can be physically seen and evaluated. Services, being intangible and non- standardised, cannot be displayed on a shelf as products for the customer to evaluate. Consumers rely on collecting and evaluating experience qualities from referrals. That makes it difficult to obtain enough pre-purchase information about many alternatives and they often select the first acceptable solution.

3.4.4 Service purchase and consumption

Any service characterised by human interaction is strongly dependant on the moods and emotions of the service provider, the customer and other customers receiving the service at the same time (Zeithaml & Bitner, 2003: 44). Moods and emotions according to Zeithaml and Bitner (2003) enhance and amplify experiences, making them either more positive or more negative than they might seem in the absence of moods and emotions. They also affect the way information about services is absorbed and retrieved. Positive moods and emotions lead to positive evaluation of the service establishment. Additionally the physical setting (the scenery, the smell, movement, freshness, the use of space, the style, the décor and comfort, furnishings, cleanliness) and the service performance have to be in line with the expectations of customers, so that customers can evaluate the services positively.

Servicescape or the physical facilities of the service provider have a relatively consistent and strong effect on the length of time consumers desire to stay in the

69 leisure service setting and on their repatronage intentions (Wakefield & Blodgett, 1996: 49). Bitner (1992) identified three primary dimensions that influence customers’ perceptions of servicescape (i.e. perceived quality) and their subsequent internal (i.e. satisfaction with services) and external responses (i.e. approach/ avoidance, staying, repatronage). The dimensions are ambient conditions (weather, temperature, air quality, noise, music, odours); spatial layout and functionality (the way in which equipment and furnishings are arranged and the ability of those items to facilitate consumers’ enjoyment); and signs, symbols and artefacts (signage and décor used to communicate and enhance a certain image or mood, or to direct customers to desired destinations).

An effective layout provides easy entry and exit and greater accessibility to ancillary services, like rest rooms, souvenir stands and others. By making ancillary services more accessible, customers are able to spend more time enjoying the primary service offering. The facility aesthetics are a function of architectural design, interior design and décor (Wakefield & Blodgett, 1996: 48). Customers observe and evaluate the exterior and the interior of the facilities and these evaluations influence their attitude towards the place. The seating and sleeping comfort also play a role in the perceived quality of the servicescape. Electronic equipment and displays of signs, symbols and artefacts are used to enhance the leisure experience. Cleanliness is an important part of the servicescape and customers implicitly associate it with the quality of the servicescape.

Bitner (1992) suggests that positive responses (satisfaction) to overall perceptions of servicescapes (perceived quality) will result in approach behaviour, like attraction, stay/ explore, spend money and return. It is important how long consumers will desire to stay in the establishment once they enter and whether they will want to return in the future. If customers are not satisfied with the physical surroundings of the leisure setting they may not return (Wakefield &

70 Blodgett, 1996: 48), that is why management has to create and maintain a satisfying environment.

3.4.5 Post purchase evaluation

The quality of many services depends on the information the customer brings to the service encounter (Zeithaml & Bitner, 2003: 48). In the case of the hospitality industry the customers have to communicate their needs clearly. For example, the customer has to communicate that accommodation for a certain number of people is required, the desired dates, if there are any special requests and so forth. Consumers participate in the production process, therefore dissatisfaction with certain services cannot be blamed completely on the producer. On many occasions the consumers attribute some of their dissatisfaction to their own inability to specify or perform their part of the service (Zeithaml & Bitner, 2003: 48).

Unfortunately no service is perfect all the time and things can go wrong. Service failures can be due to unprompted employee actions (e.g. rudeness), failure to respond to specific customer needs or preferences, or core service failure, e.g. unavailable or unreasonably slow service (Bitner et al., 1990). The failures can vary in severity, but at the end the result is dissatisfied customers.

The overall evaluation of the customer will greatly depend on whether there were any service failures. If there were service failures, what would be important is whether the situation was recovered. If there were no service failures, what would contribute to the overall evaluation is whether the service encounter was everything that the customer expected it to be. Many companies have recognised that their customers are valuable assets and take steps to ensure that when service failures do occur, there are processes in place to respond. A good service recovery enhances customers’ perceptions of the firm’s competence, the services already purchased, and the value of the organisation’s other offerings

71 (Swanson & Kelley, 2001: 194). Guest houses are in an advantageous position in relation to service failures, because the owner could due to the close contact with customers, identify a failure and take a corrective measure immediately. In a hotel, for example, consumers usually would report a service failure to the reception staff. The reception staff has to report it to management and only then management takes action to recover the failure. In other words it takes some time before action is taken to correct the failure and this could further contribute to customer dissatisfaction.

A positive post purchase evaluation would ensure satisfied customers. Satisfied customers are likely to become long-term customers by repeating patronage. They are also likely to praise and recommend the services of the company, through word of mouth communication, to a wide range of potential future customers.

3.5 Summary

Organisations must deliver long-term customer value, if they are to survive and succeed in today’s competitive environment. This can be achieved if they retain customers by satisfying their needs. To learn what customers want, marketers must focus their attention on consumer behaviour. There are two main influences on consumer behaviour – the individual and the group influences. The individual influences give an indication of the consumer’s general state of mind towards a product or a service and provide some personal characteristics. They include the customer’s needs, motivation, perceptions, attitudes, personality, expectations and loyalty. The group influences on consumer behaviour are the social and cultural environments. They include a face-to-face influence by reference groups and family, and a broader influence by culture and the social class of the society in which the customer lives. The two influences (individual and group) integrate into the theory of consumer decision-making and explain how customers make decisions regarding what, where and when to purchase tourism products and services such as accommodation in a guest house.

72 4 LITERATURE REVIEW – SERVICE QUALITY

4.1 Introduction to service quality

In the service industry the production and consumption of services are in most cases inseparable and the quality in services occurs during service delivery. Therefore quality excellence requires that the behaviour be modified at every level of the organisation. Quality is a new way of looking at one’s self, one’s work and one’s fellow workers (Hall, 1990: 12). Quality is not a straightforward concept in the service industry; therefore various issues are discussed in this chapter with the aim to acquire a better understanding of the importance of quality.

The section on customer satisfaction and service quality compares the two constructs and describes the similarity and the inseparability of both. The section on service quality dimensions goes deeper in the service quality topic and gives an indication of what factors contribute to the evaluation of service quality. The section on measuring service quality indicates how quality can be measured by taking into consideration customers’ expectations and customers’ perceptions of the service. The section on service quality gaps introduces the concept of discrepancies in what customers expect and what they perceive of the service they have received. It also explains the various gaps that could be encountered in the quality of services.

4.2 Customer satisfaction and service quality

In today’s world of intense competition, the key to sustainable competitive advantage lies in delivering high quality service that will in turn result in satisfied customers (Sureshchandar, Rajendran & Anantharaman, 2002: 363). Satisfaction creates positive attitudes towards the brand or, in the services industry, towards the services provided by a specific service provider. Satisfied customers are more likely to repeat purchases and also to recommend the products and services to others. That means that customer satisfaction is one of

73 the most important criteria for determining the quality that is actually delivered to customers and it is also essential for corporate survival (Pizam & Ellis, 1999: 326).

Customer satisfaction and service quality are inarguably the two core concepts that are at the crux of marketing theory and practice (Spreng & Mackoy, 1996). Customer satisfaction is considered a prerequisite for customer retention and loyalty, and it obviously helps in realising economic goals like profitability, market share and return on investment (Sureshchandar et al., 2002: 364). Bitner and Hubbert (1994) define service quality as the consumers’ overall impression of the relative inferiority/ superiority of the organisation and its services. Other authors like Parasuraman et al. (1988) and Zeithaml (1988), describe service quality as a form of attitude – a long run overall evaluation, and the two constructs (service quality and attitude) are viewed as similar. Perceptions of service quality could occur at many levels in an organisation – e.g. with the core service, physical environment, or interaction with the service providers (Bitner & Hubbert, 1994; Zeithaml & Bitner, 2003). Customer perceived service quality portrays a general, overall appraisal of service, i.e. a global value judgement on the superiority of the overall service, (Sureshchandar et al., 2002: 363). Similar to service quality, customer satisfaction can occur at multiple levels of the organisation, and the overall satisfaction with the services of an organisation is based on all the encounters and experiences with that organisation (Sureshchandar et al., 2002: 364).

The two constructs are not only similar, but they are also closely related. If for example, a customer perceives that he/ she has received a higher service quality than usual, he/ she will be more satisfied than usual and vice versa (Sureshchandar et al., 2002: 363). Therefore, there is no doubt that the attainment of service quality and customer satisfaction are the ultimate goals of service providers.

74 4.3 Service quality dimensions

Zeithaml et al. (1990: 20) suggested key factors that influence customer expectation, and they are: word-of-mouth communications, personal needs, past experiences, and communications by the service provider to the user. They also identified general dimensions that represent the evaluation criteria customers use to assess service quality. The service quality dimensions were first mentioned in the SERVQUAL model of Parasuraman, Zeithaml and Berry (1988) and are as follows:

• reliability – that is the ability to perform the promised service dependably and accurately; • responsiveness – the willingness to help customers and provide prompt service; • assurance – refers to employees’ knowledge and courtesy and their ability to inspire trust and confidence; • empathy – encapsulates caring, individualised attention given to customers; and • tangibles – includes appearance of physical facilities, equipment, personnel, and written materials.

Zeithaml and Bitner (2003: 93) point out that the above dimensions are relevant and applicable for a wide range of service industries. They also explain that sometimes the customers will use all of the dimensions to determine service quality perceptions and at other times, depending on the actual service, not all five will be used.

The SERVQUAL model forms the foundation on which other literature of service quality is based. It has a 22-item scale, which measures service quality, and the items are considered to be reasonably good predictors of service quality in its wholeness (Sureshchandar et al., 2002: 364). The model has, however,

75 undergone a lot of criticism (Buttle, 1996). A careful scrutiny of the 22 items reveals that the items at large deal with the element of human interaction/ intervention in the service delivery and the rest on the tangible factors of service such as the effect of atmospherics, design and décor elements, appearance of equipment, and employees’ appearance, said Sureshchandar et al., 2002: 364. However, the authors state that the SERVQUAL instrument has overlooked important factors of service quality. In order to conceptualise service quality they identified five factors of service quality as being critical from the customers’ point of view. The authors have taken into account aspects of customer perceived service quality, which have been already addressed in existing instruments and have also included aspects that have not been mentioned previously. The five factors are:

• Core service or service product – that is the “content” of a service, which portrays the “what” of a service. In other words, the service product is whatever features are offered in a service.

• Human element of service delivery – it refers to all aspects that will fall under the domain of the human element in the service delivery. Those elements may be reliability, responsiveness, assurance, empathy, moments of truth, critical incident and recovery.

• Systematisation of service delivery (non-human element) – it includes the processes, procedures, systems and technology that would make a service a seamless one. Customers would always like and expect the service delivery process to be standardised, streamlined and simplified so that they can receive the service without problems or undesired/ inordinate questioning by the service providers.

76 • Tangibles of service (servicescapes) – it covers the tangible facets of the service facility (equipment, machinery, signage, employee appearance) or the man-made physical environment, popularly known as “servicescapes”. The servicescape has already been discussed in paragraph 3.4.4. The factor of tangibles of service is not a new one. Sureshchandar et al. (2002) have adopted it from the SERVQUAL model (see beginning of paragraph 4.3).

• Social responsibility - social responsibility helps the organisation to lead as a corporate citizen in encouraging ethical behaviour in everything it does. These subtle, but nevertheless forceful, elements send strong signals towards improving the organisation’s image and goodwill and consequently influence the customers’ overall evaluation of service quality and their loyalty to the organisation.

4.4 Measuring service quality

As mentioned earlier (paragraph 4.1), quality must be the concern of all employees in the organisation. That means that management must have quality standards in place, which are communicated to all the staff. Then quality could be assessed by doing visual inspections against the set standards and consistency, by management walking about, by quality control feedback and by inspection of competitors’ offers and assessment of own company’s offer (Cooper et al, 1998: 361). In order to do that, establishments must define their concept of quality. Quality should not be based on an internal organisational understanding of quality (Cooper et al., 1998: 359). It should rather be based on how satisfied the customers are with the quality of the service they receive.

Sureshchandar et al. (2002) point out that customer satisfaction cannot be assessed by simply asking for the customer’s overall feelings towards the service provider. Customer satisfaction reflects customers’ feelings about the many encounters and experiences with the service provider. Every interaction between the firm and the customer is a service encounter. Every service encounter

77 provides an opportunity to distinguish the firm from its competitors – either by providing a superior service or by providing a poorer service than the competitors (Oliva et al., 1992: 91).

Customers’ expressions of what they want are revealed by their expectations and their perceptions of what they think they are getting from the service provider (Pitt & Watson, 1995:176). Parasuraman and his colleagues (Parasuraman et al., 1985, 1988, 1991; Zeithaml et al., 1990) suggest that service quality can be assessed by measuring customers’ expectations and perceptions of performance levels for a range of service attributes. Then the difference between expectations and perceptions of actual performance can be calculated and averaged across attributes. As a result, the gap between expectations and perceptions can be measured and management can conclude what changes in the quality of services need to be implemented.

4.5 Service quality gaps

The competitive nature of tourism has contributed to tourists looking for higher standards of comfort, reliability and quality. Developing a definition or concept of quality is difficult because of the intangible nature of services as products, which are purchased and consumed (Page, 1995: 234). When a destination is marketed with a certain image, the customers who are at the stage of planning their trip create an expectation about the place on the basis of the information they have obtained. Their evaluation of the quality of the services and products provided is a function of the difference (gap) between the expected and perceived service (Parasuraman et al., 1985). In order to eliminate the gap between the expected and perceived services, management should focus their attention on the already identified service quality gaps (SQGs) and on understanding customers’ expectations and perceptions. Many authors have written about concepts of service quality gaps. In 1988, Parasuraman, Zeithaml and Berry, published the SERVQUAL model, which was to measure the

78 perceived quality of a service situation (Carman, 1990: 33). It included five service quality gaps (Cooper et al., 1998: 365). They are the gaps between:

• consumer expectations and management perceptions; • management perceptions and service quality specifications; • service quality specifications and service delivery; • service delivery and external communications; and • perceived service and delivered service.

The model has made a valuable contribution to the area of perceived service quality measurement; however, it has been critically argued that the model may not be the most valid approach to defining the quality of service concept (Fick & Ritchie, 1991). For the purpose of this research, the model of Candido and Morris (2000) on service quality gaps will be discussed, owing to the fact that it covers gaps that have not been considered previously. The following gaps provide information on matters, which have an impact on customer satisfaction:

• Gap 1: Management perceptions – the gap defines the managements’ lack of understanding of customers’ expectations and perceptions of the service. The lack of understanding is motivated by lack of initiative to listen to customers, by a lack of correct understanding when these initiatives are taken, and lack of understanding external information.

• Gap 2: Service quality strategy – this includes a failure to forge and communicate a coherent service quality strategy, which states the organisation’s competitive scope and its concept of quality and provides orientation in the company.

• Gap 3: Service design and service quality specifications in terms of customers’ expectations – it is a gap that defines a lack of analysis, design and definition of service quality specifications. Alternatively, it defines that

79 when specifications exist, there is an inconsistency between those specifications and the strategy content or, there is an inconsistency between the specifications and the perceptions management holds of customers’ expectations.

• Gap 4: Quality supportive financial function – it includes the fact that financial management has been seen mainly as a constraint and an obstacle to other functions. It is not considered that it contributes to strategic planning, costing systems, personnel motivation, quality control, continued solvency, and keeping outsiders’ confidence in management.

• Gap 5: Internal communications – it involves communicating the service strategy repeatedly to everyone in the organisation. It involves managers listening to the employees and their perceptions of the organisation’s performance, managers exchanging knowledge and experience with other managers, doing appraisals and maintaining a horizontal and vertical communication at all times. Failure in the internal communications could lead to poor quality of services.

• Gap 6: Integration/ co-ordination – states that the entity must function as a whole in order to achieve quality in the service it offers. An organisation is divided into different sectors, which perform functions and jobs that are different from one another. A gap arises when the different sectors cannot integrate themselves due to the differentiation in the tasks performed and that ultimately leads to delivery of poor quality to customers.

• Gap 7: Co-ordination of other people and/ or organisations in the value system – it involves a lack of external co-ordination with groups or sectors normally regarded as separate, but which are part of the system. This could result in poor customers’ perceptions.

80 • Gap 8: Selection, training and adequate levels of autonomy, power and rewards to personnel – these are important management functions. Poorly performed Human Resources Management leads to demotivated employees, poorly performed services and unsatisfied customers. Inability or unwillingness to manage personnel coherently constitutes a significant SQG.

• Gap 9: Service delivery – the gap implies an inconsistency between service design/ service quality specifications and the service quality actually delivered by the service delivery system. The inconsistency may be related to technical quality and/ or process quality.

• Gap 10: External communication - It is an inconsistency between what is promised or communicated to the customers and what is actually delivered.

• Gap 11: Contact personnel’s perceptions of customers’ expectations – it is a discrepancy between the contact personnel perceptions of customers’ expectations and customers’ real expectations.

• Gap 12: Contact personnel’s perceptions of customers’ experiences – it is a discrepancy between the contact personnel’s perceptions of customers’ experiences and customers’ real experiences.

• Gap 13: Consumer perception – the gap arises when there is a difference between what customers expect from the service and what they actually perceive of it once received. It is very important for managers to do constant assessment of customers’ expectations and their perceptions of the quality provided. The gap of consumer perceptions in guest houses will be measured later in this report, in order to find out what factors contribute to customer satisfaction.

81 • Gap 14: Service quality evaluation – it is a process of evaluation based on quality standards set by the company. Organisations set quality standards according to essential strategy elements. Setting standards, however, is not enough to ensure quality. In order to ensure that quality service is being offered, measures for monitoring and observation have to be implemented, which correspond to the quality strategy of the company.

SQGs occur during day-to-day activities and some may occur during strategy formulation and the implementation process (Candido & Morris, 2000). It is crucial for managers to identify those gaps in the operations of their establishments and work toward eliminating them. This will ensure that quality is offered in the services provided and that customers are satisfied. Customer satisfaction in return would enhance the company’s reputation through word of mouth, would improve customer loyalty and would increase repeat business.

4.6 Summary

Superior quality and high levels of customer satisfaction are seen as two major goals by service providers in order to enhance their business performance. The two constructs are independent, but are closely related, and an increase in service quality is likely to lead to an increase in customer satisfaction and vice versa. It has been suggested that customers base their evaluation of service quality on various service quality dimensions. At the same time service providers strive to provide consistent service quality through a process of defining it and measuring it. The difficulty of ensuring quality stems from the fact that quality is based on what the individual customer expects it to be, and not on what the organisation might believe that it is. For that reason service quality gaps have been identified, which might lead to unsuccessful service delivery. Service quality gaps happen when the customer’s perception of service differs from the expectations. Elimination of the gaps will contribute to the satisfaction of customers.

82 5. RESEARCH METHODOLOGY

5.1 Introduction

This chapter deals with the steps of the research process that were taken in order to obtain the data on the matter researched. It includes a statement of the problem and the objectives of the research. It then explains how the data was obtained; the formulation of the sample; distribution of the questionnaires and analysis; problems experienced during the study; and the reliability and contribution of the study.

5.2 Statement of the problem

The guest house sector in South Africa only came into existence during the past decade and ever since 1995 has been developing and growing. However, there is limited information published on customer satisfaction in guest houses. There are no clear criteria of what factors contribute to customer satisfaction and this generated the need to establish:

• what are the customers looking for when selecting a guest house; • what are customers’ specific needs; and • what is the level of quality in guest houses in order to help managers/ owners of guest houses to provide the quality of service that their customers expect.

5.3 Research objectives

The study aims to establish what factors contribute to customer satisfaction in guest houses and to achieve this, research objectives were set. The objectives are to:

83 • describe the notion and significance of customer satisfaction; • establish what attracts customers to guest houses; • establish what are the guest house customers’ needs; • analyse the quality of service in the guest houses; • determine the rate of return of customers; • analyse occupancy figures of the individual guest houses; and • develop a framework of criteria that are associated with customers’ choices of guest house accommodation to ensure their satisfaction.

Statement of the problem and the research objectives provide guidelines to the researcher in terms of what information needs to be collected (Malhotra, 2004: 49).

5.4 Collection of data

The notion and significance of customer satisfaction is described in chapters two, three and four. The information is obtained from national and international literature, which is otherwise known as secondary data. Secondary data is data that already exists and can be accessed (Sudman & Blair, 1998: 74). However the data has to be evaluated as it is generally collected for various purposes and not necessarily for the specific issues that are being researched. The secondary data selected for this document was chosen because it was considered as relevant to the topic, impartial, valid and reliable as it was obtained from accredited journals and publications.

If the secondary sources of data do not provide sufficient information, primary data is collected. In this survey, primary data was collected from guest house managers/ owners and their customers by means of survey research. Survey research is the most common method for collecting primary data to define and explain a research question. It involves systematic gathering of information from respondents for the purpose of understanding and/ or predicting some aspects of

84 behaviour of the population of interest (Huysamen, 2000: 61). In this survey research, questionnaires were used in order to obtain information on the return rate of customers, their needs, how they evaluate the quality of service, how guest houses advertise and other aspects of the guest house sector. The questionnaires were self-administered, which allowed the respondents to complete the answers at a time convenient for them.

Two questionnaires were used – the one was used to obtain information from management, and the other from customers. Both questionnaires followed a qualitative and quantitative approach. The quantitative questions were used to obtain more general information about the guest house management and their customers. The qualitative questions were used to present greater clarity on customer satisfaction. The types of questions used in the questionnaires were structured questions with structured answers for the purpose of obtaining and rating specific information; and open-ended questions for the purpose of understanding how customers evaluated the offering of the guest houses. The majority of the questions were adapted from questionnaires used by H.C.Kleynhans for completion of a Master in Consumer Science at the University of Pretoria in 2003. The layout of the questions was modified through a software programme Pin Point so that the results could later be analysed with the help of the same software programme. The use of the programme ensured faster processing and easier and more accurate analysis of the data. Copies of the questionnaires are in annexure one (management) and annexure two (customers).

5.5 The sample

In Gauteng there are 115 guest houses and 203 bed and breakfast establishments (City of Johannesburg official website, 2005). Owing to the similarity of guest houses and bed and breakfast establishments, both types of establishments were included in the study, as it was stated in paragraph 2.5, and

85 the term guest house used in this research represents both. The population covered in the study includes guest houses in Gauteng Province. The sample consists of 65 guest houses from a possible 318 (115+203). They were selected from the AA Hotels, Lodges, Guest Houses and B&Bs Guide, The Portfolio B&B Collection, Internet, brochures of the B&Bs Association of Pretoria, Accommodation in Pretoria/ Tshwane, Johannesburg International Guest House Association, Midrand B&B Association, Accommodation and Visitor’s Guide Gauteng and General Sales Agent (GSA) Travel Marketing magazine. The sample included guest houses that serve different target markets and have different price categories and these were located within a radius of 70 km from Johannesburg Central Business District (CBD). The respondents in the sample were 65 guest house managers/ owners and 177 guest house customers.

Initially it was decided that the sample would be randomly selected. However, owing to poor response rate during pilot study, convenience sampling was used and respondents were selected on the basis of willingness to respond.

5.6 Distribution and response rate

The questionnaires were distributed personally. During the distribution of the pilot questionnaires, the researcher encountered a lot of scepticism and unwillingness to participate from the guest house owners. Therefore, any other method of distribution like e-mail or post most likely would have been unsuccessful. For the purpose of the pilot study it was planned to obtain responses from 15 guest houses. However no responses were achieved from the first 15 establishments approached and the researcher had to visit 40 guest houses in total in order to collect responses from 18 guest house managers and 44 customers. The completed questionnaires were inspected for any problems of misunderstanding experienced by the respondents. None were encountered and the same questionnaire forms were used for further distribution. Owing to the poor response rate in general, questionnaires were distributed in December 2004, as

86 well as in February, March, April and the beginning of May 2005. Initially the researcher felt that one week was sufficient time for the guest house owners and their guests to complete the questionnaires. However, after a week hardly any of the establishments, and in most instances none, had completed their questionnaires. Therefore the researcher had to allow more time for completion. Structured interviews were not carried out, owing to the general unwillingness of managers of guest houses to participate, however, additional information was obtained from owners who were willing to spare a few minutes to meet the researcher.

In total 203 guest houses were visited, of which 99 agreed to participate in the survey. That meant that 99 management questionnaires and 487 customer questionnaires were distributed (the aim was an average of five customer questionnaires per guest house). Of the 99 management questionnaires, 65 were returned completed which constitutes 66 percent return rate. Of the 487 customer questionnaires, 177 were completed and this constitutes a 36 percent return rate for customer questionnaires. From the 177, there were 169 useable for analysis. The eight questionnaires which were not considered for analysis were completed by guests of a guest house who were at the establishment for a conference. The guests had only spent a few hours at the establishment and had not been exposed to the majority of services offered, therefore could not make an experienced evaluation of the guest house offering.

5.7 Analysis method

For the purpose of analysing the data collected during the survey, the software programme Pin Point was used. This software was made available to the researcher by the University of Johannesburg. This research is an exploratory and descriptive study, and did not include co relational analysis. The analytical methods used were cross-tabulations which provide information on two variables at a time, bar charts and pie charts for comparing responses across groups,

87 intervals and descriptive measures like mode for most frequently occurring values, range for difference between the largest and smallest observations and mean for average values (Dillon, Madden & Firtle, 1987: 432-436).

5.8 Problems experienced during the collection of data

The collection of primary information depended on the willingness of managers/ owners of guest houses to participate in the study and also to approach their customers to complete the specific questionnaires. Many guest house owners were not co-operative and refused to participate in the survey. Other guest house owners said that they would not benefit in any way by participating in the survey and were not willing to engage in a conversation with the researcher. Many also perceived that approaching their customers to complete questionnaires would be bothering them. Some owners were away, which made it impossible for them to participate. This difficulty of obtain primary data is confirmed by Keyser (2002: 37) who stated that quality data and information collected by the private sector is commercially sensitive and generally unavailable.

During the survey, it came to the attention of the researcher that many of the guest house owners were unsure and worried about the future of the guest house sector in Gauteng Province (GP), because of Black Economic Empowerment (BEE) legislation. Some guest house owners expressed their opinion that BEE compliance would not benefit the guest house industry and many guest house owners felt threatened. This situation could have contributed to the reluctance of some guest house owners to participate in the survey.

Another problem experienced during the survey was that some of the available information about guest houses was incorrect. Guest houses were advertised on the Internet or in recent publications and when the researcher went to the physical address indicated in those sources, it was found that they no longer existed or that they no longer operated as guest houses.

88 The managers of guest houses that agreed to participate took a long time to complete the questionnaires; on average three weeks. The researcher reduced the intended collection time, which was initially one week, to four days with the aim to get the questionnaires in faster, but it proved unsuccessful. The result was that the questionnaires were not filled in and the collection period had to be extended. The delay in the completion of the questionnaires resulted in an extension of the research process.

5.9 Reliability and validity of the research data

The research data includes information collected from guest houses in Gauteng Province. Therefore, it reflects particulars about these establishments in the province in question and it may not necessarily be applicable on a larger scale. The reliability of the responses of guest house managers and their customers is based on their integrity and the researcher’s good faith. The sample is representative of the population as it comprises 20 percent of all guest houses in the province.

The primary information collected by the researcher was tested for its validity, by asking participants of the study whether the questionnaires had covered all aspects of the researched topic. Managers and customers confirmed the construct validity and therefore the internal validity of the information. Research is valid if it observes, identifies or measures what it says it is doing (Bresler, 2001: 223). External validity is also called generalizability, because it reflects the extent to which findings of the study generalize the market place (Sudman & Blair, 1998: 214). In this study, the findings of the primary research correspond with the obtained theory from secondary research, which was information obtained from accredited journals and publications. Therefore, all these reflect the validity of the information. Additionally, the researcher presented the findings of the study to a guest house owner and she expressed her opinion that the findings reflect the reality of the guest houses in Gauteng.

89 5.10 Significance and contribution of the study

The research will provide a framework of criteria associated with the factors that contribute to customer satisfaction in guest houses in GP. In Chapter 1 – Introduction, it was mentioned that information would be distributed to guest house owners to assist them in understanding the expectations and perceptions of customers in order to provide the quality of service required. Guest house owners, however, requested that the findings and conclusion of the research document be sent to them electronically (by e-mail). Therefore, Chapter 7 – Summary of findings, conclusion and recommendations will be distributed to the guest house owners, which includes the above mentioned information.

5.11 Summary

This chapter describes what steps the researcher undertook in order to execute the research study. It is explained that information on the topic was obtained through secondary and primary research. The secondary research is presented in chapters two to four and it is collected from existing publications. The primary research data was obtained directly from guest house owners and their customers by means of questionnaires. The responses were then processed with the help of a computer software programme in order to ensure accuracy in the analysis. The findings of the study corresponded with the generic theory on customer satisfaction and this confirmed the validity of the study.

90 6. REPORT ON DATA AND ANALYSIS

6.1 Introduction

During December 2004, as well as February, March, April and May 2005, two hundred and three guest houses were visited and approached to participate in the survey. Their participation involved completion of separate questionnaires by management and their customers. In total 99 management and 487 customer questionnaires were distributed. About half (99) of the establishments agreed to participate and at the end 65 management and 169 customers completed questionnaires were collected. The completion rate is therefore 66 percent return rate for the management and 36 percent for the customer questionnaires.

The data from the management questionnaires is reported on and analysed in order to obtain a profile of the guest house sector in Gauteng Province (GP). Topics such as the guest houses, demand, target market, services, meals and advertising are covered from the point of view of managers/ owners of guest houses.

The data from the customer questionnaires gives information on two major customer profiles – the Nationality profile, which provides a comparison between South African (SA) customers and non-South African customers (foreigners), and a Purpose of visit profile, which compares the business and leisure customers. Additionally, topics such as how customers perceive the guest houses, what impressed them and what needs to be improved are discussed. All the data was used to establish what attracts customers to guest houses, what their needs are and to analyse the quality of service.

No literature study is included in this chapter and the responses of the participants are presented in the form of cross-tables, bar charts and a pie chart, which were generated with Pin Point software. However, Pin Point is not Word compatible and does not allow for certain changes or corrections to be made to

91 the tables, like for example Figure 6.6 “Mnts High demand”, Figure 6.13 “Advertising med”, Figure 6.16 “Service most imp” and so forth.

6.2 Management questionnaires

6.2.1 The guest houses

During the survey 203 guest houses were approached to participate in the study, of which 99 took questionnaires to complete. Not all of them, however, were willing and able to participate. Only 65 eventually completed the questionnaires and these 65 establishments constituted the sample of the study. A copy of the questionnaire appears in annexure one.

The managers/ owners of these guest houses were asked in the questionnaire to indicate how long their establishments have been in operation by selecting one of the five given options. Their responses are reflected In Figure 6.1. Figures, which illustrate the responses of management, are coloured in blue in order to differentiate them from the responses of customers, which are coloured in red. It became evident that the sample consisted of guest houses which have been in operation from two years and less to nine and more years. For the purpose of analysis, the researcher categorised the guest houses, based on the answers, into two groups of establishments – fairly new establishments (up to four years in operation) and well-established guest houses (five years and more in operation).

The majority (41 or 63.1%) of the establishments that participated in the survey have been in existence for five years and more and can therefore be categorised as well-established operations. The other 24 (36.9%) of the guest houses have been in operation for up to four years and can consequently be categorised as fairly new establishments. The distinction between well-established and fairly new establishments provides an opportunity to describe the guest house sector

92 more fully and to compare how fairly new establishments operate in comparison to well-established ones.

Figure 6.1 Years of operation of guest houses

16 15 15 13 13

10 8

Frequency 5

0 0

3-4 years 5-6 years 7-8 years 9 and more Up to 2 years

Not answered Q1 How long

The product offerings of the guest houses represent different price categories and for the purpose of analysis have been grouped as follows: inexpensive R100 – R225, moderately priced R226 – R350 and expensive R351 – R950 (Table 6.1). The price categories are based on the single room rate (bed and breakfast rate) of the establishments and the frequency as seen in Table 6.1, is the number of establishments from the sample per price category. It appears that the majority (34) of the establishments fall under the moderately priced category.

Table 6.1 Price categories of guest houses

Q18 Single room rate Frequency R [100 - 225] 11 R [226 - 351] 34 R [352 - 950] 20

93 The number of staff employed in the establishments is generally small. In Figure 6.2 the majority (47 or 72.3%) of the guest house owners have indicated that their staff consists of one to five workers; 13 (20%) said that they have six to ten workers; two (3.1%) have 11-15 workers; two (3.1%) have 16-20 workers and one (1.5%) has 21 and more workers.

Figure 6.2 Number of staff employed by guest houses

50 47 40

20 Frequency 13

2 2 0 1 0 Not 1-5 6-10 11-15 16-20 21 and answered more Q2 Number of staff

The data collected shows that the guest houses employ few staff, regardless of whether the establishment is a fairly new (up to four years of operation) or a well- established one (five years and more of operation). According to Table 6.2, 72 percent of all guest houses employ one to five staff members and only 28 percent employ more than five staff members. It is the well-established guest houses (77%) that employ six to ten staff members, and not the fairly new ones (23%).

Table 6.2 Years of operation versus number of staff employed

Q1 How long Q2 Number of staff counts

%columns 21 and %rows 1-5 6-10 11-15 16-20 more Total Up to 4 years of 19 3 1 1 0 24 operation 40% 23% 50% 50% 0% 37% 79% 12% 4% 4% 0% 5 years and more 28 10 1 1 1 41 operation 60% 77% 50% 50% 100% 63% 68% 24% 2% 2% 2% Total 47 13 2 2 1 65 72% 20% 3% 3% 2%

Managers/ owners were asked to classify their staff turnover as high, average or low, according to their own perception of whatever constitutes a high, average or low turnover. The majority of 47 managers (72%) indicated that they have a low staff turnover, 15 (23%) said theirs is average and three (5%) considered theirs as high (Figure 6.3).

Figure 6.3 Staff turnover

50 47

Frequency 15

10 3 0 0 Not High Average Low answered Q4 Staff turnover

95 Figure 6.4 illustrates how many managers work in each guest house. Thirty eight (58.5%) guest house owners have answered that there is only one manager; 22 (33.8%) have two managers and five (7.7%) have three managers on their premises. Irrespective of whether it is a fairly new establishment or an established guest house, the majority have only one manager (Table 6.3). Two managers are more prevalent in well-established guest houses (68%) than in newly established ones (32%).

Figure 6.4 Number of managers in a guest house

40 38

22 20

Frequency 10 5

0 00 0 Not 1 2 3 4 5 and answered more Q3 No of managers

Table 6.3 Years of operation versus number of managers in a guest house

Q1 How long Q3 No of managers

counts %columns %rows 1 2 3 Total

Up to 4 years 15 7 2 24 operation 39% 32% 40% 37% 62% 29% 8% 5 years and more 23 15 3 41 operation 61% 68% 60% 63% 56% 37% 7% Total 38 22 5 65 58% 34% 8% 96 The data shows that there is a relationship between the number of staff employed and the number of managers in a guest house. Of establishments who employ up to five workers, 70 percent have only one manager, and of the guest houses with five and more staff members, 50 percent have two managers (Table 6.4).

Table 6.4 Number of staff employed by a guest house versus number of managers in a guest house

Q2 Number of staff Q3 No of managers counts

%columns %rows 1 2 3 Total Up to 5 staff 33 13 1 47 87% 59% 20% 72% 70% 28% 2% 5 and more staff 5 9 4 18 13% 41% 80% 28% 28% 50% 22% Total 38 22 5 65 58% 34% 8%

The majority of guest houses (56 or 86%) work in alliance with other guest houses, and very few (only 9 or 14%) said that they do not work with other guest houses (Table 6.5 – total figures).

Table 6.5 Working in alliance with other guest houses versus profitability

Q15 Alliance Q16 Profitability counts %columns Breaking %rows Profit even Loss Total Yes 31 23 2 56 86% 88% 67% 86% 55% 41% 4% No 5 3 1 9 14% 12% 33% 14% 56% 33% 11% Total 36 26 3 65 55% 40% 5% 97 It is noted that 96 percent (55%+41%) of those who work in alliance with other guest houses make a profit or break even and 89 percent of those who work independently also make a profit or break even (56%+33%). The difference is not much and that means that those working independently of others are running successful operations. It also means that profitability is not influenced by the fact that the guest houses have alliances with other establishments. This reflects the data collected from the selected sample and its validity on a larger scale is difficult to assess, because the number of guest houses not working in alliance is too small to make a general statement.

In terms of profitability 36 of the managers (55.4%) have indicated that their establishments generally operate at a profit, 26 (40%) said they are breaking even and three (4.6%) are running at a loss (Figure 6.5).

Figure 6.5 Profitability of guest houses

40 36 35 30 26 25

Frequency 15

5 3 0 0 Not answered Profit Breaking even Loss Q16 Profitability

According to Table 6.6 the managers of more than three quarters (76%) of well- established guest houses reported that their establishments are making a profit. In comparison, less than one quarter (21%) of fairly new establishments are making a profit, but more than two thirds (67%) are breaking even. Managers/

98 owners of well-established guest houses have stated that none of their establishments run at a loss in comparison to fairly new establishments, of which 12 percent indicated that they are running at a loss.

Table 6.6 Years of operation versus profitability of guest houses

Q1 How long Q16 Profitability counts %columns Breaking

%rows Profit even Loss Total Up to 4 years of 5 16 3 24 operation 14% 62% 100% 37% 21% 67% 12%

5 years and more 31 10 0 41 operation 86% 38% 0% 63% 76% 24% 0% Total 36 26 3 65 55% 40% 5%

When comparing fairly new with well-established guest houses (Table 6.7), it is noted that the majority 91 percent (58%+33%) of fairly new establishments charge moderate to expensive rates and 78 percent (49%+29%) of well- established ones also charge moderate to expensive rates. Therefore, more of the fairly new establishments serve the market that is prepared to pay moderate to expensive rates for accommodation. For example, 22 percent of well- established guest houses charge R100 – R225, as opposed to only eight percent of fairly new establishments. This means that even though fairly new guest houses are charging expensive rates, their reported profitability is less than the established guest houses as most of them (67%) are breaking even. The well- established guest houses which have less expensive offerings tend to be financially more successful.

99 Table 6.7 Single room rates versus years of operation of guest house

Q18 Single room rate Q1 How long counts Up to 4 5 years %columns years of and more %rows operation operation Total R 100..225 2 9 11 8% 22% 17% 18% 82% R 226..350 14 20 34 58% 49% 52% 41% 59%

R 351..950 8 12 20 33% 29% 31% 40% 60% Total 24 41 65 37% 63%

6.2.2 Demand

It is evident from the managers’ responses that most guest houses experience peak demand during the months of September, October, March and August (in this order). The months with the lowest demand are December and January. To determine periods of peak demand, the managers had to select the months that they feel their establishment experienced high demand. They could select any number of the months of the year. In Figure 6.6 the frequency represents the number of guest houses that have selected the particular month as one of high demand and September scored 53 guest house counts, October – 48 guest house counts, March and August – 47 guest house counts each.

100 Figure 6.6 Months of high demand

60 53 50 47 47 48

40 40 39 38 38 35

30 29

Frequency 20

14 11 10

0 0 Apr Jan Oct Feb Mar Aug Nov Dec July May Sept June

Not answered Q5 Mnts High demand

When asked to indicate the average weekly occupancy rate in percentages during high demand season, 20 managers responded that they experience almost full occupancy, which ranges between 81-100 percent (Figure 6.7). Almost half of the respondents (32 or 49.2%) said that their average weekly occupancy ranged between 61-80 percent. The managers of the remaining 13 guest houses have stated that their average weekly occupancy during high demand season is 60 percent and less, which can not be considered as a high occupancy rate, but rather an average to low occupancy rate.

101 Figure 6.7 Average weekly occupancy rates in high demand season

35 32 30

20 20

Frequency 11 10 5 1 1 0 0 Not 0-20% 21-40% 41-60% 61-80% 81-100% answered Q6 Occupancy High

From the data collected it also became apparent that the guest houses are seldom empty. Figure 6.8 represents the average weekly occupancy that the establishments experience during low demand season. More than half (35 or 54%) of the guest houses run operations at 21-40 percent occupancy during low demand, nine (14%) at 41-60 percent and 11 (17%) at 0-20 percent. The other nine (14%) guest houses have stated that their occupancy rate during low demand season ranges between 61-80 percent and one has given 81-100 percent as low demand season occupancy rate. The occupancy rates of these ten guest houses are actually high for a low demand season, therefore it could mean that they do not experience low demand, or alternatively, the guest house owners have not answered the question correctly.

Figure 6.8 Average weekly occupancy in percentage (%) during low demand season 35 35

15 Frequency 11 10 9 9

5 1 0 0 Not 0-20% 21-40% 41-60% 61-80% 81-100% answered 102 Q7 Occupancy Low 6.2.3 Target market

To determine the target market of the guest houses, managers/ owners were asked to indicate the type of customers that frequent their establishments. They were given several options to choose from and were also given an opportunity to add other types of customers, if these customers were not in the given options. In Figure 6.9 it can be seen that 34 (25.3%) guest houses stated that their target market consists of both leisure and business tourists and 30 (46.2%) guest houses indicated that they cater only for business travellers. It is therefore obvious that the target market of guest houses in GP is predominantly business travellers. Some of the establishments also cater for other types of guests, which are in the minority, like students, training groups (not specified if students or business), hospital/ medical visitors and other customers (embassies and international backpackers).

Figure 6.9 Type of guests in the guest houses

35 34

30 30

15 Frequency

5 4 3 2 2 0 0 0

Leisure tourists Students Business travellers Other customers

Both, leisure and business Not answered Training groups Hospital visitors/ medical Q8 Type guest

103 Table 6.8 was generated from the data collected to establish whether there is any difference between the target markets of fairly new establishments and well- established guest houses.

From all fairly new establishments in the sample, 58 percent target a market that consists of both business and leisure travellers and 42 percent target business travellers. Well-established guest houses have an equal split of the groups business travellers and both, business and leisure travellers – 49 percent for each group. None of the guest houses have said that they cater only for leisure customers. From the data it is apparent that business travellers make an important contribution to the income of the guest houses in GP. The province is known as the business centre of the country and the data collected shows that people that stay in the guest houses are business travellers and not so many are leisure travellers.

Table 6.8 Years of operation versus type of guests in the guest houses

Q1 How long Q8 Type guest counts Both, leisure Hospital %columns Not Business Leisure and Other Training visitors/

%rows answered travellers tourists business customers Students groups medical Total Up to 4 years of 0 10 0 14 0 1 1 0 24 operation 0% 33% 0% 41% 0% 25% 33% 0% 37% 0% 42% 0% 58% 0% 4% 4% 0% 5 yrs and more 0 20 0 20 2 3 2 2 41 operation 0% 67% 0% 59% 100% 75% 67% 100% 63% 0% 49% 0% 49% 5% 7% 5% 5%

Total 0 30 0 34 2 4 3 2 65 0% 46% 0% 52% 3% 6% 5% 3%

The nationality profile of the target market is a combination of both South African (SA) residents and foreigners. The majority of guest houses (54 or 83.1%) target both SA residents and foreigners. Only about a tenth (7 or 10.87%) target mainly SA residents and even fewer (4 or 6.2%) target mainly foreigners (Figure 6.10).

104 Figure 6.10 Nationality of market targeted by guest house owners

60 54

Frequency 20

10 7 4 00 0 0 Not Only SA Mainly SA Both SA Only Mainly answered residents residents residents foreigners foreigners and foreigners Q10 Customer nation

6.2.4 Services offered by the guest houses

Guest houses offer a variety of services such as accommodation, breakfast, other meals, information about places of interest in the area. In the questionnaire, managers/ owners were asked what services they offer to their business customers, and were given answers to choose from and/ or to add other services not mentioned on the list. The respondents indicated, as illustrated in Figure 6.11, that the most common services offered by the guest houses are personal computer (PC) sockets and modem sockets for the travellers to connect their personal computers (31 and 17 counts respectively). Then there are Internet/ e- mail (11), typing (11), fax (6), phone (4) and other services (5), which include shuttle, laundry, secretarial service, international plug adaptors and peace and quiet. Quite a number of guest houses (16 or 24.6%) did not answer the question and five (7.7%) guest houses stated that they do not offer any of the above services.

105 Figure 6.11 Business services offered at guest houses 35

31 30

20 17 16 15 Frequency 11 11 10 6 5 5 5 4 0 0

Fax Phone No answer PC sockets Modem sockets No services

Not answered Other services Internet/ e-mail Typing services Q9 Business service

When comparing guest houses that target only business travellers with guest houses that target both business and leisure, it is noted that guest houses that target only business travellers seem to offer more services than guest houses that target both leisure and business travellers. The percentages are given in Table 6.9.

Table 6.9 Types of guests in the guest house versus business services offered at the guest houses

Q8 Type guest Q9 Business services counts %columns PC Modem Typing Other Internet/ No No %rows sockets sockets services services e-mail Fax Phone services answer Business travellers 15 10 5 1 7 4 3 3 4 48% 59% 45% 20% 64% 67% 75% 60% 25% 50% 33% 17% 3% 23% 13% 10% 10% 13% Both leisure and 15 7 6 3 4 2 1 2 12 business 48% 41% 55% 60% 36% 33% 25% 40% 75% 44% 21% 18% 9% 12% 6% 3% 6% 35% Others 3 2 3 1 3 1 1 1 4 10% 12% 27% 20% 27% 17% 25% 20% 25% 27% 18% 27% 9% 27% 9% 9% 9% 36% Total 31 17 11 5 11 6 4 5 16 48% 26% 17% 8% 17% 9% 6% 8% 25% 106 Subsequent to analysing the data, it would appear as if the question about business services was not understood, and the consequence is that this result may not represent the reality. The question required guest house owners/ managers to specify what services they provide, if they catered for business travellers. It was not taken into consideration that not only business travellers make use of the Internet, PC sockets and other similar services. Unfortunately, during the pilot study it was not established that the wording actually makes the question misleading. This assumption could be confirmed by the larger number of respondents from guest houses that cater for both leisure and business travellers, who gave a “no answer” (35%), as opposed to those who cater for business travellers and gave a “no answer” (13%).

6.2.5 Meals

All guest houses and B&Bs serve breakfast as the name suggests. The breakfast is actually included in the accommodation rate. Other meals are not necessarily provided and in some cases they are provided by prior arrangement. From the data collected it is evident that all guest houses that participated in the survey do serve breakfast, 11 guest houses (16.9%) serve lunch and 31 (47.7%) serve dinner by prior arrangement (Figure 6.12). these numbers indicate that many guest houses show flexibility in satisfying the need for meals of their customers.

Figure 6.12 Meals offered at guest houses

70 65

31 30 Frequency

11 10

0 0 Not answered Breakfast Lunch Dinner Q12 Meals offered

107 Managers were also asked to indicate how they decide on the menu items – if they use a set menu for each day of the week or if they pre-arrange with guests individually. If they have a different arrangement, they were asked to specify the arrangement. The respondents gave the following information:

• 36 (55.4%) stated that they pre-arrange with guests individually; • 27 (41.5%) have a set menu for each day of the week; • three (4.6%) change the menu every day; and • three (4.6%) have other arrangements like “set breakfast lay out and cook on request”; “standard breakfast (quite wide) and other meals individual” and “set menu with four options”.

By pre-arranging individually the menu with the guests, the managers are learning more about what meal would satisfy the patrons. They are also including the guests into the service delivery and that contributes to less service errors.

6.2.6 Advertising

When asked how they advertise the guest house, the managers/ owners were given several options from which to choose, like magazines, newspapers, Internet, distribution of pamphlets and dedicated publications. They were also given the option to add any other methods of advertising they use, and were allowed to give more than one answer. The results are captured in Figure 6.13 and are summarised as follows:

• 54 (83.1%) guest houses said they use Internet; • 28 (43.1%) use dedicated publications; • 13 (20%) distribute pamphlets; • 11 (16.95) rely on word of mouth; • nine (13.8%) advertise in magazines; • seven (10.8%) advertise in an association booklet;

108 • five (7.7%) advertise in tourism guides; • three (4.6%) rely on street advertising, signs and posters; • three (4.6%) use other sources like: teleguide/ airport, overseas publications, one-on-one marketing; • one (1.5%) advertises in newspapers; and • one (1.5%) does not advertise at all.

The most popular means of communicating with prospective customers are thus via the Internet (54 or 83.1%), via dedicated publications (28 or 43.1%) and via distributing pamphlets.

Figure 6.13 Advertising media 60 54

30 28 Frequency 20 13 11 9 10 7 5 3 3 0 1 1 0

Others Internet Magazines Newspapers Not answered Tourism guide Word of mouth Do not advertise Association booklet

Distribute pamphlets

Street adds, signs, posters

publications Dedicated Portfolio e.g. Q14 Advertising med

109 When comparing what managers/ owners report their customer return rate is, it would seem that the methods of mass communication used as well as the services offered seem to be satisfactory, because 53 (81.5%) owners have indicated that the majority of their patrons return. Only 12 guest houses (18.5%) said that some visitors return and nobody said that their patrons never return (Figure 6.14).

Figure 6.14 Return rates of customers as perceived by management

60 53 50

Frequency 20

12 10

0 0 0 Not answered Majority return Some return Never return Q11 Return rate

6.2.7 Management comments

Managers/ owners of guest houses were asked to communicate any matter that they felt was not covered in the questionnaire. Most of them (56 or 86.2%) had nothing to add, five (7.7%) merely clarified their responses to questions in the questionnaire. The only comments (7 or 1.5%) that were made are as follow:

“Gender (male/ female) for guest questionnaire”; “Security issues for foreign pax”; “Language barriers”;

110 “Specific services for tourism industry”; “Must include new entrants in the market”; “Most questions did not suit my needs”; and “What percentage of income is needed to cover overheads”.

Unfortunately the above statements are not that useful as it is not clear to the researcher what is meant by them. The fact that 56 guest houses out of a total of 65 did not have anything to add, could be interpreted that the questionnaire was well formulated and covered almost everything, thus satisfies construct validity. The data is captured in Figure 6.15.

Figure 6.15 Matters that managers/ owners feel are not covered in the questionnaire

60 56

Frequency 20

10 5 0 1 1 1 1 1 1 1 0

No Answer Language barriers

Not answered Security issues for foreign pax Specific services for tourism industry

Must include new entrants in the market Most questions did not suit my needs Gender (male/female) for guest questionnaire Other information clarifying above answers What % of income is needed to cover overheads Q17 Comments

111 6.3 Customer questionnaires

During the survey 177 customer questionnaires were completed by the customers of 51 guest houses. Sixteen guest houses did not manage to convince their customers to complete questionnaires. Of the 177 completed, 169 questionnaires were useable for analysis. The other eight questionnaires were not used, because they were completed by guests who were at a guest house for a conference. The guests had only spent a few hours at the establishment, therefore could not evaluate the offering of the guest house. Many of the respondents were staying for the first time in the particular establishment (59.8%) and many had stayed there several times (40.2%). From the answers given, information was obtained on how customers evaluate the performance of the guest houses. The researcher also developed customer profiles in order to better understand customer needs.

6.3.1 How customers perceive the guest houses

In order to determine how customers perceive the guest houses they visit, they were asked a number of questions which involved rating the service of the particular guest house, certain characteristics of the guest house, such as the atmosphere, the room and their experience as a whole. Then they were asked which characteristic of the above-mentioned topics is the most important to them.

In terms of the service the customers determined in order of importance (Figure 6.16):

• Friendly and polite staff with 77 responses (45.6%); • Efficient service with 64 responses (37.9%); • Helpful staff with 19 responses (11.2%); • Ability of staff to suggest additional services and information with seven responses (4.1%); and

112 • Sympathetic handling of complaints with two responses (1.2%). Figure 6.16 Most important aspects/ characteristics of service

80 77

70 64 60

50 40 Frequency 30

20 19

10 7 2 0 Friendly and Helpfull staff Efficient Symphatetic Ability of staff polite staff service handling of to suggest complaints additional services and information Q7 Service most Imp

When asked to rate the service of the guest house, the majority of answers showed that the experience customers had at the guest house exceeded their expectations (Table 6.10). That means that the customers were more than satisfied with the services that the guest houses offer. The only characteristics that could be improved upon are the suggestion of additional information and services and handling of complaints.

Table 6.10 How did customers’ experience meet with their expectations regarding the service?

(Not answered) Not met Met some Met all Exceeded

6a Friendly polite staff 0 0 4 50 115

6b Helpful staff 0 0 4 61 104

6c Efficient service 0 0 5 58 106

6d Handle complains 29 1 6 52 81 well 6eSuggest additional 6 0 12 63 88 info 113 The most important characteristics of the guest houses (Figure 6.17) were rated in order of preference as follows:

• Safety and security with 50 responses (29.6%); • Satisfies your needs with 32 responses (18.9%), • Value for money with 30 (17.8%), • Location with 29 (17.2%), • Suits your lifestyle with 14 (8.3%), • Suits your personality with ten (5.9%) and • Quality of meals with four responses (2.4%).

Figure 6.17 Most important aspects/ characteristics of the guest house

50 50

35 32 30 30 29

15 14 10 10

5 4

Location Safety and Satisfies Suits your Suits your Quality of Value for security personality lifestyle meals money your needs

Q9 gh- most importa

When evaluating their experience against their expectations regarding the guest house, most customers pointed out that location, safety and security and suits your lifestyle met all their expectations. That means that they were satisfied with

114 what the guest houses provided, but they were not delighted. However, the characteristics: satisfy needs, quality of meals and value for money exceeded the expectations of most customers (Table 6.11).

Table 6.11 How did customers’ experience meet with their expectations regarding the guest house?

(Not answered) Not met Met some Met all Exceeded 8a Location 0 0 8 85 76 8b Safety & security 1 0 3 93 72 8c Satisfy needs 0 0 15 72 82

8d Suits lifestyle 2 1 7 82 77

8e Quality of meals 6 1 4 74 84

8f Value for money 5 0 6 73 85

The homely environment proves to be the most important characteristic of the atmosphere with 72.2 percent, then it is effective lay out; easy entry/ exit with 20.7 percent, décor with four point seven percent and lastly is staff appearance with two point four percent (Figure 6.18).

Figure 6.18 Most important aspects/ characteristics of atmosphere

140

122 120

100

60 Frequency

40 35

20 8 4 0 Effective lay out; Decor Homely Staff appearance easy entry/ exit environment Q11 Atmosphere Impt 115 The majority of customers stated that the homely environment exceeded their expectations. That is very important because homely environment is a particular characteristic of guest houses and this survey proves that customers are delighted with what they encounter in the establishments. Effective layout, décor and staff appearance have met most customers’ expectations (Table 6.12).

Table 6.12 How did customers’ experience meet with their expectations regarding the atmosphere

(Not answered) Not met Met some Met all Exceeded

10a Effective layout 0 0 11 80 78

10b Decor 0 1 15 83 70

10c Homely 0 0 3 64 102 environment 10d Staff appearance 0 1 8 83 77

The most important characteristics related to the room have been rated in order of preference as follows (Figure 6.19):

• Comfort with 74 responses (43.8%); • Cleanliness with 73 (43.2%); • Quietness with 14 (8.3%); • Size of the room with seven (4.1%); and • Equipment with one (0.6%).

Choice of furniture has not been rated, therefore it could be assumed that it is not perceived as an important characteristic at all.

116 Figure 6.19 Most important aspects/ characteristics of the room

80 73 74

50 40 Frequency 30

20 14 10 7

1 0 0 Cleanliness Comfort Quietness Equipment Choice of Size of the furniture room Q13 important-room

Evaluating the experience of the room against the customers’ expectations, once again the majority of answers are “met all” and “exceeded” the expectations. Regarding cleanliness and size of the room, most customers indicated that the experience exceeded their expectations (92 and 82 responses respectively) and regarding the rest of the characteristics, customers’ experiences at the guest houses have mostly met all their expectations (Table 6.13).

Table 6.13 How did customers’ experience meet with their expectations regarding the room?

(Not answered) Not met Met some Met all Exceeded 12a Cleanliness 0 0 2 75 92

12b Comfort 0 0 10 80 79

12c Quietness 1 1 16 78 73

12d Equipment 2 1 22 77 67 12e Choice furniture 0 2 18 91 58 12f Size of the room 4 0 10 73 82

117 In summary, the characteristics which exceeded the expectations of customers were: friendly and polite staff, helpful staff, efficient service, satisfied needs, quality of meals, value for money, homely environment, cleanliness and size of the rooms. These characteristics describe the product offering of the guest houses and it appears from the data collected that the patrons of these establishments are highly satisfied and delighted with the service they receive.

6.3.2 Satisfaction with the overall experience

The results of the overall evaluation of the combined experiences against expectations were very positive. Almost four fifths of the respondents (131 or 77.5%) stated that they were totally satisfied, 30 respondents (20.7%) said they were satisfied, one (0.6%) was dissatisfied and two (1.2%) were totally dissatisfied (Figure 6.20). Both customers who said they were totally dissatisfied, stated that they would come back to the guest house and that they would recommend it to friends and family. They also did not make any comments on what they thought should be improved in the guest house. Therefore, it could be assumed that they were not at all dissatisfied, but rather, by mistake, selected the wrong answer. The customer who said that he/ she was dissatisfied, stated that he/she would not come back or recommend the establishment. He/she also mentioned that he/ she found the establishment to be “too expensive”.

Figure 6.20 How satisfied are customers with whole experience

140 131 120

100

60 Frequency

40 35

2 1 0 Totally dissatisfied Dissatisfied Satisfied Totally satisfied 118 Q14 Whole experienc

Almost all the respondents (167 or 98.8%) stated that they would return to the guest house. Only two (1.2%) customers have stated they would not come back (Figure 6.21).

Figure 6.21 Would customers come back to guest house?

180 167 160 140 120

100

Frequency 60

2 0 Yes No Q15 Come back

When asked if they would recommend the guest house, 166 (98.2%) have stated that they would recommend it to friends and family and only three (1.8%) have said that they would not recommend it (Figure 6.22). This proves that good or excellent service leads to satisfied or delighted customers who would gladly recommend a guest house to other people.

Figure 6.22 Would customers recommend the guest house?

180 166 160

140

120

100

80 Frequency

20 3 0 119 Yes No Q16 Would u recomen 6.3.3 Uniqueness of guest houses

Having discussed how customers have evaluated the guest houses it is important to look at what impressed them and what suggestions they made for improvements. To the question what impressed them, customers made a number of statements, which the researcher grouped in terms of similarity (Figure 6.23). It was then noted that those groups fall under the service quality dimensions, which were discussed in paragraph 4.3 and they are:

• Reliability – ability to perform the promised service dependably and accurately; • Responsiveness – willingness to help customers and provide prompt service; • Assurance – employees’ knowledge and courtesy and their ability to inspire trust and confidence; • Empathy – caring individualised attention given to customers and • Tangibles – appearance of physical facilities, equipment, personnel and written materials.

From customers’ answers to this question, one can deduct that they rated Empathy as the most outstanding characteristic of a guest house. It was mentioned by 105 respondents. Physical evidence (tangibles) is the second most important characteristic and was described by 59 respondents. Responsiveness was mentioned by 32 respondents and that places it in third place of importance, followed by Reliability in fourth with comments by 20 respondents and Assurance on fifth place with 16 statements by respondents. There were 31 people that did not answer the question and there were 6 comments, which could not be categorised under the service quality dimensions. Figure 6.25 represents the customers’ answers, which are organised into sub-groups of the service quality dimensions. In this paragraph no percentage figures are presented, because customers gave more than one answer, therefore the number of answers does

120 not coincide with the number of customers, which constitute a 100 percent in the software program.

Figure 6.23 What impressed customers the most?

50 49

35 32 31 30

25 23 21 20 Frequency 20 17 16 16 15 15 15

10 8 6 5 0

No Answer Empathy of owner Empathy - General

Reliability Assurance

Responsiveness Empathy - Home from home Other things that impressed Empathy - Friendly staff Physical evidence - General Physical evidence - Good meals Physical evidence - Hygiene Physical evidence - Ambience Q18 What impressed

Empathy was the characteristic of the service offering of the guest house that was mentioned most by respondents and confirms the reliability of the findings from the structured part of the questionnaire. Empathy was mentioned 105 times and in 23 cases the comments referred to the empathic disposition of the owner. Customers said the manageress was caring and very pleasant, that the interaction was warm without being overbearing. Empathy experienced from staff members was mentioned 17 times by customers. Sixteen customers said it really felt like home away from home. The more general comments (49) covered aspects such as privacy, people skills, generosity, positive attitude, politeness,

121 service with a smile, great hospitality where friends were welcomed and children catered for.

Many comments were made about tangible aspects (physical evidence) of the guest house product. To facilitate interpretation these were split into categories of facilities namely those that relate to food, ambience, hygiene and general. Fifteen comments on meals were made and 15 on ambience that was created by the physical environment. These include statements such as a peaceful and happy guest house, quietness, harmony and a relaxing atmosphere. Eight statements were made about how customers experienced the guest houses as very clean and hygienic. Then there were 21 more general statements about tangibles such as a nice room, sauna and swimming pool, nice layout and tennis court. Space, comfort, neatness and gardens were also mentioned.

Responsiveness was rated as the third most impressive aspect of the guest house offering. Customers made 32 statements about how impressed they were with the effort that was made to meet their needs, how everyone walked the extra mile to ensure satisfaction, nothing was too much of a trouble, the staff was helpful and all business facilities were available on the premises. Customers were also impressed with the support, promptness and a great service that they received.

Reliability was the fourth most impressive aspect of the guest house product. It described 20 customers’ statements about how they perceive the guest house as a perfect, complete package, excellent, fantastic place, divine and value for money.

The aspect of Assurance was rated last in terms of impressiveness. Customers made 16 comments about best security, well organised, attention to detail, total efficiency, courtesy, ability to be independent.

122 There were also other comments, which could not be grouped under the quality service dimensions. These are called other things that impressed (6 responses) and include:

• Loved the resident dog; • Easy use of communication equipment; • Will recommend the guest houses and • Interesting other guests.

6.3.4 Matters to be improved upon

Customers were requested to indicate some things that they feel should be improved or added to the services of the guest houses (Figure 6.24). From the responses of the customers it could be concluded that the guest houses in GP do not have many weaknesses in that 68 (40.2%) customers did not feel the desire to answer the question and another 35 (20.7%) stipulated that there is nothing that requires improvement. The comments received were categorised as follows: those related to the room (19), the facilities (11), the services (10), the bathroom (9), DSTV and other improvements (8 each), meals (5), heating/ cooling system and television comments (4 each), parking (3) and cleanliness (2).

123 Figure 6.24 Matters to be improved in the guest house

70 68

40 35

30 Frequency

20 19

11 10 10 8 9 8 4 4 5 3 2 0

Meals Prefer DSTV No answer Shaded parking Nothing Services

Cleanliness Other improvements References to Bathroom References to Room Heating/ Cooling System required wanted Facilities for guest house References to TV Q19 Improvements

Comments about the room (19) included improvements such as more cupboard space, glasses, cooler blankets/ sheets for summer, phone in the room, a fridge. Some customers felt that the room should also have a radio, toaster, darker curtains, kitchenette and that linen and towels need to be upgraded and the rooms painted.

According to the expectations of some customers, the facilities of the guest house could be upgraded. Eleven comments were made suggesting that that could be done by adding things such as internet access, international adaptors, laundry service, pool, more magazine and newspaper choice, pool tables, dart boards, vending machine and a health room.

124 Ten customers expressed opinions about service shortcomings. Two were concerned about security and two mentioned that communication with guests could be improved. Others felt that a midnight snack bar or self-catering could be added, better street signage was required and the plumbing needed attention.

Nine comments were made about the bathroom. Customers indicated that the showerheads needed to be changed, windows were too public, shelves in the bathroom and more choice of soaps and shampoos were needed.

Eight requests were made about DSTV and eight other improvements were mentioned relating to transport, price of internet/ phone, pre-paid phone facility, décor, better pay for staff and street noises.

The five comments on the meals included requests for dinner by arrangement. Four customers requested heating/ cooling system and another four made comments about the television sets and programmes. Three customers requested shaded parking and two felt that there is a need to attend to cleanliness.

It is interesting to note that even though customers did not consider décor (Figure 6.18) equipment and size of room (Figure 6.19) as very important, the majority of the above statements can be related to Physical evidence or Tangibles, which contributes to comfortable accommodation that customers seek in the guest houses. No references have been made about the other four dimensions of service quality, except two comments “Customer service” and “Communication with guests” which could be related to Responsiveness and another comment on “Security” which could be classified under Assurance.

125 6.3.5 Nationality profile of customers

The customers that participated in the survey were 105 (62%) SA residents and 64 (38%) not SA residents/ foreigners (Figure 6.25).

Figure 6.25 Nationality of customers

64 Non-SA residents (38%)

105 SA residents (62%)

Sample size is 169 guest house customers

The majority (78 or 74%) of the SA residents indicated that they travelled for business purposes, 16 residents (15%) said that they were leisure travellers and 11 (11%) were using the services of the guest house because they were in the area for sport (4%) and other reasons (7%) like moving house, medical reasons, wedding or seeing off friends.

Of the foreign customers, 37 (58%) travelled for business purposes, 22 (34%) were leisure travellers, four (6%) were visiting friends and family and one (2%) was staying in the guest house for other reasons. This indicates that, fractionally, more foreigners (58%) travel for holiday purposes to GP compared to South African residents (42%) (Table 6.14).

126 Table 6.14 Nationality of customers versus reason for stay in the guest house

Nationality Q1 Reasons for stay count Leisure Visiting

%columns Professional/ Tourism Other family & %rows Business reasons Sport friends Total SA 78 16 7 4 0 105 68% 42% 88% 100 0% 62% 74% 15% 7% 4% 0% Not SA 37 22 1 0 4 64 32% 58% 12% 0% 100 38% 58% 34% 2% 0% 6% Total 115 38 8 4 4 169 68% 22% 5% 2% 2%

When asked if it was the first time that they were staying in the particular establishment, 64 (61%) SA clients said that they were staying there for the first time and 41 (39%) said that have stayed there more than once (Table 6.15). Of the foreign customers, 37 (58%) were staying in the guest house for the first time and 27 (42%) were return customers. The difference between the first time customers and return patrons is 22 percent (61%-39%) for SA residents and 16 percent (58%-42%) for foreigners and this indicates that the guest houses’ offering satisfies the needs of the customers and contributes to loyal patrons. More than a third (40%) return to the same establishment.

Table 6.15 Nationality of customers versus first time stay in the guest house or not

Q2 Nationality Q3 First stay counts %columns %rows Yes No Total SA resident 64 41 105 63% 60% 62% 61% 39% Not SA resident 37 27 64 37% 40% 38% 58% 42% Total 101 68 169 60% 40%

127 The customers who had stayed in the particular establishment before were asked how many times they had visited it (Table 6.16). The results were as follows:

• 27 percent of return customers had stayed one to five times, of which 29 were SA residents and 17 foreigners;

• 8 percent had stayed six to ten times in the particular guest house, of which ten were SA residents and three foreigners; and

• 6 percent had stayed 11 and more times, of which three were SA residents and seven foreigners.

Table 6.16 Number of times stayed in guest house versus nationality of customers

Q4 Times stayed Q2 Nationality counts %columns SA Not SA %rows resident resident Total NV* 63 37 100 60% 58% 59% 63% 37% 1..5 29 17 46 28% 27% 27% 63% 37% 6..10 10 3 13 10% 5% 8% 77% 23% 11..119 3 7 10 3% 11% 6% 30% 70%

Total 105 64 169 62% 38%

NV* stands for respondents who have not given any response to the question (No Value)

The good service of the guest house managers is reflected in the ways that the customers heard about the establishments. The three main sources of information about guest houses were the Internet, friends and a company and these are reflected in Table 6.17. The customers were given several options in

128 the questionnaire of sources of information about the guest house. They could also add other than the given sources and company was one of those sources. However, customers did not explain what they meant by company, therefore the researcher assumed that they were referred by the company they work for.

For the SA visitors the Internet is the most important source of information with 28 respondents’ counts (27%). Information supplied by a friend is the second most important source with 27 respondents’ counts (26%) and information provided by their company is in third place with 25 respondents’ counts (24%). The three sources of information are almost of equal importance for SA customers.

With respect to foreign visitors, information supplied by a friend (21 or 33%) is used more than information obtained from the Internet (16 or 25%) and a company (13 or 20%). Information readily available on the Internet plus word of mouth are two sources of information about guest houses that clearly play a very important role when communicating with prospective customers. Even though management reported that they work in alliance with other guest houses, very few customers confirmed this. Only two percent (Table 6.17) of customers reported that they were referred to the establishment by another guest house.

129 Table 6.17 How customers heard of particular guest house versus nationality of customers

Q5 How heard Q2 Nationality counts %columns SA Not SA %rows resident resident Total From a friend 27 21 48 26% 33% 28% 56% 44% From a magazine 4 0 4 4% 0% 2% 100% 0% Internet 28 16 44 27% 25% 26% 64% 36% Others sources of 1 0 1 inform ation 1% 0% 1% 100% 0% Company 25 13 38 24% 20% 22% 66% 34% Other people 8 6 14 8% 9% 8% 57% 43% Sign board 7 1 8 7% 2% 5% 88% 12% Publications 3 1 4 3% 2% 2% 75% 25% A gent 0 5 5 0% 8% 3% 0% 100% Referral - other 2 1 3 guest house 2% 2% 2% 67% 33% Total 105 64 169 62% 38%

It is interesting to compare this information with that supplied by managers of guest houses. They have indicated the marketing media most frequently used to advertise their establishments are the Internet, dedicated publications and distribution of pamphlets (Figure 6.13). They are definitely reaching their customers through the Internet. The distribution of pamphlets could be considered successful if it is assumed that they are distributing them through

130 companies. Publications on the other hand, seem to play an insignificant role. Only four customers had read about the guest house of their choice in publications. Therefore, guest houses are not reaching many customers through publications. Word of mouth advertising however, proves to be the most effective way of advertising, as 48 (28%) customers have selected a friend as a source of information, 14 (8%) have selected other people, five (3%) have selected an agent and three (2%) have selected referrals from other guest houses. These figures indicate that 41 percent of all customers have selected the guest house based on referral by someone else.

Customers were asked to identify which aspects or characteristics of the service they considered to be the most important and were given options from which to choose (Table 6.18). The characteristics of service that SA and foreign customers have chosen as the most important in a guest house are friendly and polite staff (SA customers – 47%, non-SA residents – 44%) and efficient service (SA customers 44%, not-SA residents – 28%). Even though the other characteristics were not considered as very important, it is interesting to note that more foreign customers find helpful staff (63%) and ability of staff to suggest additional services and information (71%) important, as compared to SA customers (37% and 29% respectively).

Table 6.18 Nationality of customers versus most important aspects/ characteristics of service

Q2 Nationality Q7 Service most Important counts Friendly Sympathetic Ability of staff to %columns and polite Helpful Efficient handling of suggest additional %rows staff staff service complaints services and...

SA resident 49 7 46 1 2 64% 37% 72% 50% 29% 47% 7% 44% 1% 2%

Not SA resident 28 12 18 1 5 36% 63% 28% 50% 71% 44% 19% 28% 2% 8% Total 77 19 64 2 7 46% 11% 38% 1% 4%

131 When asked to indicate the characteristics of the guest house that customers find most important, the SA customers stated the following (Table 6.19):

• Safety and security 25 (24%); • Satisfies needs 24 (23%); • Location 21 (20%) and • Value for money 19 (18%).

Foreigners indicated that for them the most important are:

• Safety and security 25 (39%); • Value for money 11 (17%); • Satisfies needs 8 (12%); and • Location 8 (12%).

Table 6.19 Nationality of customers versus most important aspects/ characteristics of the guest house

Q2 Nationality Q9 gh- most important counts Safety Suits Quality Value

%columns and Satisfies Suits your your of for %rows Location security your needs personality lifestyle meals money SA resident 21 25 24 6 8 2 19 72% 50% 75% 60% 57% 50% 63% 20% 24% 23% 6% 8% 2% 18% Not SA resident 8 25 8 4 6 2 11 28% 50% 25% 40% 43% 50% 37% 12% 39% 12% 6% 9% 3% 17%

Total 29 50 32 10 14 4 30 17% 30% 19% 6% 8% 2% 18%

Safety and security, therefore, proves to be the main concern for travellers to GP. Considering that foreigners have indicated that value for money is the second

132 most important characteristic of the guest house and the fact that 37.9 percent of all customers are foreigners, it could be assumed that foreigners perceive that guest houses in SA offer value for money. It must also be taken into consideration that many foreigners are holidaymakers who pay for their own accommodation, which might not be the same for most of SA residents of the sample, who travel for business purposes and their expenses are carried by their organisations.

In terms of what characteristics of the atmosphere customers consider as most important, 72 percent of all customers have stated that a homely environment is the most important, followed by effective layout; easy entry/ exit (21%). It appears that staff appearances and décor play an insignificant role (2% and 5% respectively) in creating an atmosphere (Table 6.20).

Table 6.20 Nationality of customers versus most important aspects/ characteristics of the atmosphere

Nationality Q11 Atmosphere counts Effective lay %column out; easy Homely Staff %rows entry/ exit Decor environment appearance Total SA 27 7 69 2 105 77% 88% 57% 50% 62% 26% 7% 66% 2% Not SA 8 1 53 2 64 23% 12% 43% 50% 38% 12% 2% 83% 3% Total 35 8 122 4 169 21% 5% 72% 2%

When asked which characteristic of the room customers consider to be the most important, comfort (44%) and cleanliness (43%) appear to have the highest importance to visitors, regardless of the customers’ nationality. Size of the room and equipment have scored very low – seven percent and one percent respectively, which means that customers do not see them as very important.

133 These two characteristics could also be reclassified because they could contribute to the category comfort. It is surprising that quietness has only scored eight percent and that not many business people regard it as important (Table 6.21).

Table 6.21 Nationality of customers versus most important aspects/ characteristics of the room

Q2 Nationality Q13 important-room counts Size of the %columns %rows Cleanliness Comfort Quietness Equipment room Total SA resident 48 46 7 1 3 105 66% 62% 50% 100% 43% 62% 46% 44% 7% 1% 3% Not SA resident 25 28 7 0 4 64 34% 38% 50% 0% 57% 38% 39% 44% 11% 0% 6% Total 73 74 14 1 7 169 43% 44% 8% 1% 4%

The predominant age group for both SA clients and foreigners that participated in the study is 35-49 years old with 35 percent and 38 percent respectively (Table 6.22). For SA customers the second largest group is between 25-34 years of age with 29 counts (28%) and the third is between 50-64 years old with 23 counts (22%).

Table 6.22 Nationality of customers versus age group

Q2 Nationality Q17 Age group counts 16-24 25-34 35-49 50-64 65+

%columns years years years years years %rows old old old old old Total SA residents 11 29 37 23 5 105 61% 72% 61% 56% 56% 62% 10% 28% 35% 22% 5% Not SA residents 7 11 24 18 4 64 39% 28% 39% 44% 44% 38% 11% 17% 38% 28% 6% Total 18 40 61 41 9 169 11% 24% 36% 24% 5% 134 For foreign customers the second biggest group is 50-64 years old with 18 counts (28%). This figure could be explained with the fact that more foreigners than South Africans come for leisure purposes to GP as it was established earlier in this chapter (Table 6.14). This age group is generally people whose children have left home, therefore they have more time and funds to spend on leisure activities. The third largest group is 25-34 years old with 11 representatives (17%).

6.3.6 Business versus leisure profile

The business and leisure customer profile is examined below as these two groups represent the majority of the guest house customers. According to Figure 6.26, 115 (68%) customers have indicated that they are staying in the guest house for business reasons, 38 (22.5%) for leisure and 16 (9.5%) for other reasons, sport or visiting family and friends.

Figure 6.26 Reasons for stay in the guest house

120 115

100

Frequency 38 40

8 4 4 0 Professional/ Leisure/ Other reasons. Sport Visiting family Business Tourism & friends Q1 Reasons for stay

135 The business customers consist of 78 SA residents (68%) and 37 foreigners (32%). The leisure customers consist of 16 SA residents (42%) and 22 (58%) foreigners (Table 6.23). This means that more business customers are SA residents and more leisure customers are foreigners. For the purpose of this profile the figures compared are for business customers and leisure customers only.

Table 6.23 Reasons for stay in the guest house versus nationality of customers

Q1 Reasons for stay Q2 Nationality counts %columns SA Not SA %rows resident resident Total Professional/ 78 37 115 Business 74% 58% 68% 68% 32% Leisure/ Tourism 16 22 38 15% 34% 22% 42% 58% Other reasons 7 1 8 7% 2% 5%

88% 12% Sport 4 0 4 4% 0% 2% 100% 0% Visiting family & 0 4 4 friends 0% 6% 2% 0% 100% Total 105 64 169 62% 38%

It has been noted that generally the business travellers are the biggest customer group in the guest house sector in GP, regardless of whether the establishment is fairly new or well-established (Table 6.24). However, it appears that leisure travellers frequent well-established guest houses as 71 percent of all leisure respondents were accommodated in such establishments. Business travellers however seem to be almost evenly distributed among fairly new establishments (47%) and well-established guest houses (53%).

136

Table 6.24 Years of operation of guest house versus reason for stay in the the guest house

Q1 How long Q1 Reasons for stay counts Visiting %columns Professional/ Leisure/ Other family & %rows Business Tourism reasons Sport friends Total Up to 4 years 54 11 1 0 0 66

47% 29% 12% 0% 0% 39% 82% 17% 2% 0% 0% 5 years and more 61 27 7 4 4 103 53% 71% 88% 100% 100% 61% 59% 26% 7% 4% 4% Total 115 38 8 4 4 169 68% 22% 5% 2% 2%

When asked how did they come to hear about the particular guest house the business travellers said:

• 37 (32%) heard about it from their company; • 30 (26%) found it on the Internet; • 22 (19%) heard about it from a friend; • ten (9%) heard from other people; • six (5%) saw the guest house advertised on a sign board; • four (3%) read about it in publications/ magazine ; • three (3%) were told by an agent; and • three (3%) were referred by other guest houses.

The leisure travellers responded as follows:

• 16 (42%) heard about the guest house from a friend; • 11 (29%) found it on the Internet; • three (8%) heard about it from other people; • three (8%) read about it in a magazine; • two (5%) were told by an agent;

137 • one (3%) heard about it from a company; • one (3%) used other sources of information; and • one (3%) saw the guest house advertised on a sign board.

Therefore the three main sources of information are friends, the Internet and companies. It is interesting to note in Table 6.25, that many more business customers became aware of the particular guest house from the Internet (68%) in comparison to only 25 percent leisure customers. More business customers (71%) have indicated that other people are a source of information in comparison to 21 percent leisure customers. Also, 75 percent of business travellers read about the establishment in publications in comparison to zero percent leisure tourists and 60 percent business customers obtained information from an agent compared to 40 percent leisure customers. It seems that guest house owners are reaching their customers mostly by word of mouth, the Internet and companies. Publications prove to be a source of information for business customers, however, it is still a weak source of information, as was established in section 6.3.1, because only three business travellers (75%) listed it.

138 Table 6.25 How did customers hear about the guest house versus reasons for stay at the guest house

Q5 How heard Q1 Reasons for stay counts %columns %rows Business Leisure Others Total From a friend 22 16 10 48

19% 42% 62% 28% 46% 33% 21% From a magazine 1 3 0 4 1% 8% 0% 2% 25% 75% 0% Internet 30 11 3 44 26% 29% 19% 26%

68% 25% 7% Others sources of 0 1 0 1 information 0% 3% 0% 1% 0% 100% 0%

Company 37 1 0 38 32% 3% 0% 22% 97% 3% 0% Other people 10 3 1 14 9% 8% 6% 8% 71% 21% 7% Sign board 6 1 1 8 5% 3% 6% 5% 75% 12% 12% Publications 3 0 1 4 3% 0% 6% 2% 75% 0% 25% Agent 3 2 0 5 3% 5% 0% 3% 60% 40% 0%

Referral - other 3 0 0 3 guest house 3% 0% 0% 2% 100% 0% 0%

Total 115 38 16 169 68% 22% 9%

139 The characteristics of service that both business and leisure customers find most important for the guest houses are: in the first place, friendly and polite staff with 52 responses (45%) for business and 16 (42%) for leisure customers and in second place, efficient service with 45 (39%) for business and 14 (37%) for leisure customers. The other services namely sympathetic handling of complaints and ability to suggest additional services and information have not been selected by customers as very important, as 7 customers (4%) and 2 customers (1%) respectively chose these options. Helpful staff, was considered by only 18 percent of leisure and only 9% of business customers as important (Table 6.26).

Table 6.26 Reason for stay in a guest houses versus most important aspects/ characteristics of service

Q1 Reasons for stay Q7 Service most Important counts Friendly Sympathetic Ability of staff to %columns and polite Helpful Efficient handling of suggest additional staff staff service complaints services and... %rows Business 52 10 45 1 7 68% 53% 70% 50% 100% 45% 9% 39% 1% 6%

Leisure 16 7 14 1 0 21% 37% 22% 50% 0% 42% 18% 37% 3% 0%

Others 9 2 5 0 0 12% 11% 8% 0% 0% 56% 12% 31% 0% 0%

Total 77 19 64 2 7 46% 11% 38% 1% 4%

Safety and security have been identified as the most important characteristic of the guest house by both business and leisure customers (Table 6.27). The business travellers rate the characteristics in order of importance as follows:

• Safety and security with 34 responses (30%); • Location with 23 responses (20%);

140 • Satisfy needs with 20 responses (17%); • Value for money with 19 responses (17%); • Suits your personality with eight responses (7%); • Suits your lifestyle with seven responses (6%); and • Quality of meals with four responses (3%).

Leisure customers rate the most important characteristics of the guest house in order of preferences as follows:

• Safety and security with 12 responses (32%); • Value for money with 11 responses (29%); • Suit your lifestyle with 7 responses (18%); • Location and satisfy your needs with 3 responses (8%) each; • Suits your personality with 2 (5%).

It is interesting to note that characteristics such as: suits your personality, suit your lifestyle and quality of meals do not seem to be very important.

Table 6.27 Reason for stay in the guest house versus most important aspects/ characteristics of the guest house

Q1 Reasons for stay Q9 gh- most important counts Safety Suits Quality Value %columns and Satisfies Suits your your of for %rows Location security your needs personality lifestyle meals money Business 23 34 20 8 7 4 19 79% 68% 62% 80% 50% 100% 63% 20% 30% 17% 7% 6% 3% 17% Leisure 3 12 3 2 7 0 11 10% 24% 9% 20% 50% 0% 37% 8% 32% 8% 5% 18% 0% 29%

Others 3 4 9 0 0 0 0 10% 8% 28% 0% 0% 0% 0% 19% 25% 56% 0% 0% 0% 0% Total 29 50 32 10 14 4 30 17% 30% 19% 6% 8% 2% 18%

141 In Table 6.28 it can be seen that the most important characteristic of the atmosphere of a guest house is indisputably the homely environment (72%). Business customers rate it in first place with 77 responses (67%). In second place they put effective layout; easy entry/ exit with 31 (27%). Décor and staff appearance do not seem to be very important, as they have scored only 6 (5%) and 1 (1%) responses.

Leisure customers also rank a homely environment as the most important characteristic with 32 responses (84%). The other six responses (16%) are equally distributed between effective layout; easy entry/ exit and staff appearance. It is interesting to note that décor is of no importance to leisure customers as no leisure customer (0%) has chosen this option.

Table 6.28 Reason for stay in the guest house versus most important aspects/ characteristics of atmosphere

Q1 Reasons for Q11 Atmosphere counts Effective lay Homely %column out; Staff entry/ exit %rows Decor environment appearance Total Busines 31 6 77 1 115 89% 75% 63% 25% 68% 27% 5% 67% 1% Leisure 3 0 32 3 38 9% 0% 26% 75% 22% 8% 0% 84% 8% Other 1 2 13 0 16 3% 25% 11% 0% 9% 6% 12% 81% 0%

Total 35 8 122 4 169 21% 5% 72% 2%

With respect to important characteristics in the room, 44 percent of business travellers and 45 percent of leisure travellers rated cleanliness and comfort as most important characteristics in the room. Quietness, equipment and size of the

142 room received low scores (8%, 1% and 4% respectively), and are not considered as important (Table 6.29).

Table 6.29 Reasons for stay in the guest house versus most important

aspects/ characteristics of the room

Q1 Reasons for stay Q13 important-room counts Size of %columns the %rows Cleanliness Comfort Quietness Equipment room Total Business 51 51 9 1 3 115 70% 69% 64% 100% 43% 68% 44% 44% 8% 1% 3% Leisure 17 17 2 0 2 38 23% 23% 14% 0% 29% 22% 45% 45% 5% 0% 5%

Others 5 6 3 0 2 16 7% 8% 21% 0% 29% 9% 31% 38% 19% 0% 12% Total 73 74 14 1 7 169 43% 44% 8% 1% 4%

The majority of business travellers (42%) are between the ages of 35-49 years old and the majority of leisure tourists (37%) are between 50-64 years of age (Table 6.30).

Table 6.30 Reason for stay in the guest houses versus age group

Q1 Reasons for stay Q17 Age group counts 16-24 25-34 35-49 50-64 65+ %columns years years years years years %rows old old old old old Total Business 11 32 48 22 2 115 61% 80% 79% 54% 22% 68% 10% 28% 42% 19% 2% Leisure 7 7 8 14 2 38 39% 18% 13% 34% 22% 22% 18% 18% 21% 37% 5% Others 0 1 5 5 5 16 0% 2% 8% 12% 56% 9% 0% 6% 31% 31% 31% Total 18 40 61 41 9 169 11% 24% 36% 24% 5%

143 6.3.7 How the customers evaluated the questionnaire

The customers were asked to give their opinion of any other issues they felt were not covered in the questionnaire. The majority (136 or 80.5%) did not comment, 22 (13%) answered that there was nothing that they felt that should be added, four (2.4%) gave other comments which were not related to this question – they were comments explaining some of the answers given in the other questions (Figure 6.27). Three people (1.8%) answered that the questionnaire was good or that it covers everything. Three suggestions were made about including a question related to customers’ previous travel experiences, which the researcher found not to be relevant for the survey. This survey aims to evaluate their experiences in the particular guest house that they were visiting. Three people felt that customer particulars should be included in the questionnaire. Once again the researcher found this not to be relevant as the questionnaire is anonymous to allow the respondents to give their honest opinion. The particulars that were felt to be necessary were nationality in terms of South African and foreigner customers, reason for staying in the guest house (business, leisure and others) and age group, which were asked in the questionnaire. One customer thought that there should be a question “Reason to choose guest house rather than regular hotel”. This information became evident from the answers to the rest of the questions. Lastly, another person felt that transport is something, which should be included in the questionnaire, but unfortunately they did not specify in what way they found it relevant to the context. Considering all the answers and suggestions given to this matter, it is safe to assume that the questionnaire covered everything.

144 Figure 6.27 Customer comments

140 136

120

100

60 Frequency

22 20

4 3 3 3 1 1 0

No answer Transport Nothing, None, No Customer particulars

Other comments Good questionnaire, covers everything Reason to choose guest house rather than regular hotel Travel experiences Q20 Comments

6.4 Summary

In this chapter the data from 65 management and 169 customer questionnaires was reported on. The management questionnaire generated overall information about guest houses in Gauteng Province, about who the managers perceived to be their customers, who they targeted, what methods they used to attract new customers and what services they offered to customers.

The customer questionnaires provided more insight into the point of view of customers about the guest houses they were staying at. It gave an overview of how they evaluated the services offered by the establishments, what they liked or disliked. All this information will be used to conclude what factors contribute to customer satisfaction in guest houses in GP.

145 7. SUMMARY OF FINDINGS, CONCLUSIONS AND RECOMMENDATIONS

7.1 Introduction

In this final chapter, a summary of the findings from the primary data collected from the questionnaires integrated with the literature study is presented. The primary data was obtained with the purpose of analysing the quality offered at guest houses and establishing what attracts customers to guest houses, what are their needs, what is the significance of customer satisfaction and what should be done to ensure customer satisfaction. The collected information is divided into summary of findings from the management questionnaires which provides the feedback received by guest house owners/ managers and summary of findings from the customer questionnaires which provides the responses by the customers. The final conclusions are then made based on the primary and secondary data collected during the research. Chapter 7 forms a document, which will be electronically distributed to all guest houses that participated in the study.

7.2 Summary of findings from management questionnaires

During the survey, 99 management questionnaires were given to guest house owners/ managers. However, not all guest house owners were willing or able to participate, and only 65 completed questionnaires were returned. The guest houses that participated in the study could be divided in two groups – well- established guest houses and fairly new establishments. The establishments that were in operation for five years and more were classified as well-established guest houses and they were in the majority (63%). The guest houses that existed for four years and less (27%) were classified as fairly new establishments.

Over half of the establishments charge prices ranging from R226 to R350 for a single person with breakfast. Thirty percent could be considered more expensive

146 as their prices vary between R351 and R950 and only 17 percent have rates ranging between R100 and R225.

From the data it has become apparent that 72 percent of all the establishments that participated in the study employ only one to five staff members. The advantages of having fewer staff members are firstly keeping the expenses low, and secondly, if there are few staff they are likely to have contact with the guests and get to know them better. That could result in improved service and a homely environment, provided that the staff members receive customer care training. Additionally, owners considered their staff turnover to be predominantly low. This could indicate that because there are fewer staff members on the premises, they have a better opportunity to receive appropriate training from management and thus perform well. Good performance from staff contributes to customer satisfaction. People like to work for companies, whose customers are happy and loyal and they end up working for a company longer, therefore contributing to a low staff turnover (Zeithaml & Bitner, 2003: 162). The creation of memorable experiences where both staff and customers are satisfied leads to return visits and improved return on investment.

The data collected revealed a relationship between the number of staff and number of managers employed in a guest houses. Most establishments that have up to five employees, have one manager and most establishments that have five and more employees, have two managers. It has also been noted that of the guest houses that employ more than five members of staff, the well established ones are in the majority.

The majority of guest houses (86%) in the sample work in alliance with other guest houses. Their profitability does not seem to be affected by whether they work in alliance with other establishments or not. It was established that both guest houses who work in alliance and on their own run successful operations. This could be said only for the respondents of the chosen sample and whether all

147 guest houses that operate on their own are successful is difficult to assess. The number of guest houses in the sample that work on their own is too small to claim that that is generally the case. Theoretically, it is considered that by working in alliance with other establishments, more customers get referred to and get to know about the guest house. Ultimately this would lead to increased sales, provided the guest house satisfies its customers’ needs, and it would contribute positively to profitability. It would also help to reduce marketing costs.

In general, more than half of the establishments operate at a profit and only five percent operate at a loss. The others break even. Most well-established guest houses make a profit and none run at a loss. Most of the fairly new establishments break even. However, one can assume that the financial success or stability are not necessarily applicable to all guest houses as one considers the number of guest house mangers who were not willing to participate in the study or the establishments that were no longer in operation (paragraph 5.8). The more successful ones would be inclined to let their customers evaluate their performance for inclusion in an academic study.

It is interesting to note that the majority of fairly new and well-established guest houses charge bed and breakfast single rates ranging between R226 and R950. It has also become apparent that more of the well-established guest houses charge lower rates when compared to the prices asked by fairly new guest houses. This means that even though fairly new guest houses charge higher rates, their profitability is less and that is why most of them are breaking even. This could be attributed to the fact that they initially have more fixed costs, such as a bond on the property and also expenses related to establishing a new business. They may also aim at the wrong target market, be less well known, or have fewer repeat customers, so their occupation rate is lower. On the other hand, the older establishments have already established their operations, their expenses per visitor are less and they seem to be more financially secure and profitable.

148 The months during which the guest houses experience the highest demand are March, August, September and October. These months do not really coincide with the school holidays, which confirms that not many people visit the guest houses in GP for leisure, but rather for business purposes. The guest houses in GP are less frequented during the months of December and January, which are months of festivities and associated with travelling for leisure purposes.

In terms of occupancy rates, most managers experienced a weekly occupancy percentage ranging from 61 to 100 during the high demand season, and a 21 to 40 percent weekly occupancy, during the low demand season. This means that guest houses are seldom empty, which underpins their reported financial success.

From the data collected it would appear that business travellers make an important contribution to the income of guest houses in GP. The majority of guest house owners have stated that their customers are business travellers or a combination of both business and leisure travellers. None of them have stated that their establishment caters only for leisure travellers. Once again, it confirms that people that stay at guest houses in GP are mainly business travellers and not so much leisure travellers. Most of the guest houses owners stated that they cater for both SA residents and foreigners, which means that not only South African travellers make use of the services of guest houses, but also foreign travellers who come to GP for business and leisure.

The majority of guest house owners have stated that they offer additional services to their customers like PC sockets, modem sockets, Internet/ e-mail, typing services, fax, phone and so forth. All the establishments offer breakfast and some offer lunch and dinner. The menu is mostly pre-arranged with guests individually or there is a set menu for each day of the week. The quality of meals was not considered by customers as an important characteristic of the guest house, but nevertheless, most customers were delighted with the quality of meals

149 they received. These services represent the supporting and/ or facilitating products of the guest house offering. There is no clear distinction between the supporting and facilitating products, because they depend on how customers perceive them. Generally, the supporting and facilitating products create a differential advantage between one service offering and another. However, the customers of the guest houses in GP, have not rated the characteristics of these products as very important, therefore it could be assumed that they are not the main differentiators of the guest house offering.

The guest house owners have indicated that the most popular means of communicating with prospective customers in order to advertise their establishments, are via the Internet, dedicated publications and via distributing pamphlets. When comparing this information with the responses of customers to the question how they heard about the particular establishment, interesting findings have been noted. For customers, the most important sources of information are a friend, the Internet and company. This means that guest houses are reaching their patrons through the Internet. The Internet is a tool used for direct marketing. It is cost-effective, based on knowledge of customers and, as it proves for guest houses, it provides a direct successful communication. The distribution of pamphlets could be considered successful if it is assumed that they are distributed through companies. Publications on the other hand seem to play an insignificant role, as only four business travellers indicated that they have read about the guest house of their choice in a publication. Word of mouth proves to be the most effective way of advertising as 41 percent of all customers have selected a guest house, based on the referral by someone else. This confirms that customers rely on referrals by other people, because the referrals lessen the risk of purchasing a service offering that the customer has not yet experienced.

The majority of guest house owners pointed out that most of their patrons return to their establishments. To verify the response of management, customers were

150 asked how many of them have stayed in the same guest house previously and 40 percent stated that they are return patrons. This figure does not represent the majority, however, it indicates that these customers were satisfied with the services of the guest houses. Additionally 98.8 percent of customers have indicated that they would return to the particular establishment, therefore there is further indication that the guest house offering meets the needs of its customers.

7.3 Summary of findings from customer questionnaires

During the survey 177 customer questionnaires were completed by the guests of the guest houses, of which, 169 were used for the purpose of analysis. The responses were organised into information of how customers perceive the guest houses, followed by two customer profiles. The first profile is according to the residency of customers, done by drawing a comparison between the responses of SA residents and foreigners. The second profile is according to purpose of visit and a comparison is made between the answers of business travellers and leisure travellers.

7.3.1 How customers perceive the guest houses

For the purpose of analysing how customers perceive the guest houses, they were asked to rate the guest house offering under several topics, namely the service, the guest house, the atmosphere, the room and the overall experience.

Customers have rated friendly and polite staff as the most important characteristic of service, followed by efficient service. Helpful staff, ability of staff to suggest additional services and information and sympathetic handling of complaints have not been considered very important. When asked to rate the services of the particular guest house they were staying at, the majority of customers responded that the experience they had at the establishment exceeded their expectations, which means that they were more than satisfied with the services offered.

151 From the characteristics of the guest house in general, safety and security had the highest importance for customers, followed by satisfy your needs, value for money, location, suits your lifestyle, suits your personality and quality of meals. When evaluating their experiences of the guest house against their expectation, the majority of customers stated that location, safety and security and suits your lifestyle have met their expectations, but satisfy your needs, quality of meals and value for money exceeded their expectations.

Homely environment proves to be the most important characteristic of the atmosphere for patrons. The majority of the respondents stated that their experience of the homely environment exceeded their expectations, which means that they were delighted with the experience they received. The homely environment is part of the augmented product of the guest house and combines what is offered and how it is offered. The other characteristics, such as effective lay out; easy entry/ exit, décor and staff appearance, which could be classified as the supporting and facilitating products (or tangible), were not considered by customers as important. However, the majority of them indicated that their experience of these characteristics met their expectations, therefore they were satisfied. This indicates that the facilitating, supporting and augmented products differentiate the guest house offering from other accommodation offerings. The augmented product, however, proves to be a stronger differentiator than the tangible product.

The most important characteristic of the room is comfort, followed by cleanliness. They are indicators of the quality expected by guests. Quietness, size of the room and equipment seem to have little importance to customers, and choice of furniture seems to have no importance at all. When commenting on their experiences, the majority of customers indicated that cleanliness and size of the room exceeded their expectations and the rest of the characteristics met all their expectations. One cannot neglect the aspects that customers selected as not so

152 important, because they are facilitating services that must be present for the guests to use the core product and do not necessarily differentiate or add value.

From the responses of the customers, it appears that they were satisfied with the offerings of the guest houses, as almost 80% percent stated that they were totally satisfied with the whole experience they had in the particular guest house. In addition almost all of the customers (98.8%) said that they would come back to the establishment and (98%) would recommend it to friends and family.

In order to understand better how customers evaluate their experiences in the guest house, they were asked what impressed them and what that they thought should be improved. These were open questions, so customers could give their own impressions, without having to follow specific guidelines, or to select from given answers. A service or an experience is difficult to evaluate because of its intangibility, non-standardisation and because of the fact that consumption is closely intertwined with production (Zeithaml & Bitner, 2003: 36). The answers of the customers proved that people do evaluate service on the basis of certain criteria, which are the service quality dimensions. All the statements made by the customers could be successfully grouped into the main dimensions:

153 Customers’ responses on the question “what impressed them the most in the guest house”, were grouped in the following way in order of importance of responses:

• Empathy included positive comments about the owner, friendly staff, home away from home and general comments on the personalised services received at the guest house.

• Physical evidence (tangibles) included comments on good meals, hygiene, ambiance and general physical evidence.

• Responsiveness included comments on the extra effort that staff and management of the guest houses made when dealing with their guests.

• Reliability included statements about the fact that the guest house offering was a complete package and that everything related to customers’ experiences was great.

• Assurance included the customers’ confirmation about how well organised the guest houses are, how there is attention to detail and courtesy.

The customers also suggested some improvements to the offering of the guest houses. It is interesting to note that even though customers did not consider décor, equipment and size of room as very important in the structured questions, most of their responses to the open ended questions could be related to Physical evidence or Tangibles. Responses indicated that the following would improve the offering of guest houses: a television, DSTV, heating/ cooling system, shaded parking, references to bathroom, to room, cleanliness, meals, facilities wanted for the guest house, services and other improvements. An emphasis should be made on the way that equipment and furniture are arranged and the ability of these items to facilitate consumers’ enjoyment. Physical surroundings can

154 influence customers’ decision to stay for longer or to come back to a guest house. No references were made that could be categorised under the other four dimensions of service quality, except the following comments: “Customer service” and “Communication with guests” which could be categorised as responsiveness and “Security” which falls under assurance. It should also be mentioned that 40 percent of customers did not respond to the question, which could be interpreted as if they considered that nothing needed to be improved in the guest houses. Another 21 percent said that nothing should be improved.

7.3.2 South African residents versus foreigners

The customers were represented by 62 percent SA residents and 38 percent foreigners. Most of them, regardless of nationality, were business travellers. However, more foreign customers than SA customers have indicated that they were leisure travellers, which means that more foreigners travel for holiday purposes to GP than SA residents.

It seems that guest houses are succeeding in meeting the needs of their guests, because 40 percent of patrons return to the same establishments. Word of mouth is another indicator of how satisfied customers are with the services of a particular guest house. Most customers have indicated that they heard about the establishment from referrals by other people, being friends, acquaintances, agents or other guest houses – therefore, through word of mouth. The other two main sources of information are the Internet and the company where customers work.

In terms of what customers consider to be an important characteristic of the service, both SA residents and foreigners have stated that friendly and polite staff is the most important one. This characteristic is a source for differentiating the guest houses product from other types of accommodation. The second most important characteristic is efficient service of the guest house. From the characteristics of the guest house, safety and security proves to be the main

155 concern for travellers to GP, regardless of nationality. Considering that foreigners have indicated that value for money is the second most important aspect of the guest house and the fact that 37.9% of all customers of the sample are foreigners, it could be assumed that foreigners perceive that guest houses in SA offer value for money. It must also be taken into consideration that many foreigners are holidaymakers who pay for their own accommodation. This might not be the same for most of the SA residents in the sample. They travel mainly for business purposes and their expenses are carried by their organisations. SA residents have ranked the second most important characteristic of the guest house as satisfy (your) needs.

The homely environment is the most important characteristic of the atmosphere for both national and international tourists. Customers have not regarded the décor, staff appearance and effective layout; easy entry/ exit as very important. When considering the characteristics of the room, the most important are comfort and cleanliness. Quietness, equipment and size of the room, have not been regarded as important.

The predominant age group of customers that frequent guest houses in GP is 35- 49 years old, who are likely to be in the parenthood stage of the life cycle referred to in paragraph 3.3.2. For SA residents the second largest group is between 25-34 years of age and they would represent honeymooners, or young individuals who have recently started their career. For foreigners, the second largest group is 50-64 years old. This could be explained by the fact that more foreigners than South Africans, who come for leisure purposes to GP are accommodated at guest houses. This age group is generally people whose children have left home, therefore they tend to have more time and funds to spend on leisure activities. This age group represents the post parenthood stage of the life cycle. The third largest group is 25-34 years old.

156 7.3.3 Business versus leisure profile

From the data collected, a profile comparing business and leisure customers was developed. The reason for this is that these two types of customers represent the majority of customers of guest houses in GP – 68 percent of the customers from the sample are business travellers and 22.5 percent are leisure travellers. The purposes of travel for the other 9.5 percent are sport, visiting family and friends or other reasons. It was established in paragraph 7.3.2 that more business customers who are SA residents, and more leisure visitors who are foreigners are accommodated at guest houses in GP. In the province, in general, the tourists are mostly holiday/ leisure tourists followed by tourists coming for shopping, tourists visiting friends and family, tourists for business purposes and other (South African Tourism, 2005c: 12).

It appears that leisure travellers rather frequent well-established guest houses as 71% of all leisure respondents were accommodated in such establishments. Business travellers however seem to be almost evenly distributed among fairly new establishments (47%) and well-established guest houses (53%). This may indicate that guest houses start their operations by targeting business travellers, and as they acquire more business customers, they become better known by word of mouth. These guest houses then become frequented not only by business travellers, but by leisure travellers as well.

In terms of the sources of information mostly used by customers to find out about guest houses, the three most common ones for business and leisure customers are friends, the Internet and company, with the Internet being the most popular source used by business travellers. For both business and leisure customers, friendly and polite staff, followed by efficient service, are the two characteristics of the service considered as most important. They have also indicated that from the characteristics of the guest house, safety and security are the most important. Business customers place location in second place, which can be

157 associated with the fact that they go to a specific location because it is convenient for business purposes. The leisure customers have placed value for money in second place and that could be because they carry their own expenses related to their leisure travelling. The homely environment is, once again, considered by both business and leisure customers as the most important characteristic of the atmosphere and comfort and cleanliness as the most important characteristic of the room.

The majority of business travellers visiting guest houses in GP are between the ages of 35-49 and the majority of leisure tourists are between 50-64 years of age.

7.4 Conclusion

In Gauteng Province there are 115 guest houses and 203 Bed and Breakfast registered establishments (City of Johannesburg, 2005). During December 2004, and February, March, April and May 2005, 203 of these establishments were approached to participate in a study aiming to establish what factors contribute to customer satisfaction in guest houses in GP. At the end only 65 participated, which represented a quarter of all registered guest houses and B&Bs in the province. The participation of the guest houses involved completing a questionnaire by management and another one by customers. The data from the management questionnaires provided information of the guest houses in GP and their management and the data from the customer questionnaires provided an information on customer expectation of guest houses and on how they evaluate the offering of the guest houses.

From the data collected it became evident that there were fairly new establishments that were in operation for up to four years and there were well- established ones that were in operation for five years and longer. The sample of the study consisted of two thirds well-established guest houses and one third fairly new guest houses. The term guest houses used in this document

158 represents guest houses and bed and breakfast establishments in Gauteng Province.

The guest house product consists of three levels – core, tangible and augmented (Middleton & Clarke, 2001: 129-131). The core product is the essential service or benefit designed to satisfy the identified need of the target market, like relaxation or rest. The guest houses offer a variety of services to their clients, such as Internet, PC/modem sockets, fax, phone, which are all tangible products. The tangible product, also known as the supporting and facilitating products, is the specific offer for sale stating what the customer will receive for his money. The tangible product of the guest houses is the physical setting where the service is delivered or extra products offered to add value to the core product like comfort, cleanliness, décor, staff appearance and safety and security. The augmented product comprises of all forms of added value that producers build into their formal product offers to differentiate them from competitors’ offers. The most important augmented products in the guest houses are the homely environment, the friendly/ helpful staff and friendly/ helpful manager which are stronger differentiators of the guest house offering than the tangible products.

Statistical records illustrate that the number of bed nights spent in SA in 2004 were over 2 million less than in 2003. In the first quarter of 2005, the number of stay units sold also decreased by 0.6 percent compared with the last quarter of 2004 (Statistics South Africa, 2005b). Gauteng, however, did not lose out on bed nights in 2004. It actually increased its share by one percent (South African Tourism, 2005b). Hotel accommodation has suffered the most during the third quarter of 2004 as it sold almost a million bed nights less as compared to 2003 (South African Tourism, 2005c). On the other hand small gains were made by guest houses, B&Bs and Game lodges (South African Tourism, 2005c: 5). The weekly occupancy of the guest houses from the sample, for high demand season ranges between 61 to 100 percent and for low demand season between 21 to 40 percent. These occupancy rates mean that guest houses have customers

159 throughout the year. However managers have indicated that the highest demand is in March, August, September and October; and the quietest months are December and January.

In terms of profitability, the owners of the majority of well-established guest houses stated that they are making a profit and none of them reported to be running at a loss. The fairly new establishments are mostly breaking even due to high fixed costs and expenses related to establishing a business. Therefore, the well-established ones are financially more secure.

In 2004 foreign tourists spent R13 billion in GP, which was the highest amount spent per province for that year (South African Tourism, 2005b: 63). However, the amount was R2.2 billion less than in 2003 (South African Tourism, 2005b: 63), even though there were more tourists in 2004 than in 2003. Tourists were buying less than previous years due to higher prices explained with the strengthening of the rand. Guest house owners should also take note that unit nights sold in South Africa are continuously decreasing, as there was a further decrease in the second quarter of 2005 by 11.9 percent compared to first quarter. Occupancy rates and total income from accommodation have also decreased in the second quarter of 2005 (Statistics South Africa, 2005a). These decreases could be a threat to small private establishments, such as guest houses, because they could result in fewer customers and less income. This trend could also be used to the advantage of the guest houses, because they are generally more cost-effective than hotels (Gillingham, 2004). Therefore guest house owners should take the opportunity of having price wise more appealing offerings to attract customers in order to increase sales.

Statistics show that the majority of foreign travellers come to GP for holiday purposes, then for shopping, visiting friends and family, business and other (South African Tourism, 2005c: 12). Guest houses in GP attract more business travellers. In terms of nationality, they are SA residents and foreigners. From the

160 study it appears that there are more SA residents who are business travellers and more foreigners who are leisure travellers in the guest houses. From statistical reports of the tourism industry, it has become known that the largest share of foreign tourists to SA is land-based travellers from neighbouring SADC countries (Paragraph 2.5.1). From the responses of the customers of the guest houses in GP it became evident that 62 percent were SA residents and 38 percent were foreigners. This research did not involve in differentiating the various nationalities of customers.

Customers identified the most common sources of information about guest houses as from a friend, the Internet and their company. Therefore, guest houses are attracting customers on the Internet and by word of mouth, rather than from publications, pamphlets or other sources. If tourists are finding their way to the guest houses by word of mouth, it means that they were referred to the particular guest house by satisfied customers of that establishment. This shows how satisfied customers influence other customers’ behaviour.

Satisfaction is one of the most important criteria for determining the quality delivered by the guest house. Customer satisfaction creates a positive attitude towards the services of the service provider and leads to repeat purchase and recommendation of the services to others. Customer satisfaction is also a prerequisite for customer retention and loyalty and it helps achieving profitability, market share and return on investment. In order to ensure satisfaction, establishments have to meet customers’ needs. Customers identified certain characteristics of the service, guest house, atmosphere and the room, as the most important characteristics for them in the offerings of the guest houses. These characteristics could be considered as customers’ needs, which are the decision criteria for selecting a guest house accommodation. They are:

• Homely environment; • Friendly and polite staff;

161 • Comfort; • Cleanliness; • Efficient service; • Safety and security; • Satisfy needs; • Value for money; and • Location.

Customers’ expressions of what they want are revealed by their expectations and their perception of what they think they are getting from the service provider (Pit & Watson, 1995: 176). That is why the first and most critical step in delivering service quality is knowing what customers expect. Customer expectations, as suggested by Zeithaml et al. (1990: 20), are influenced by word of mouth communications, personal needs, past experiences and communications by the service provider to the user. Perceptions are influenced by physical stimuli from the outside environment and by the individuals’ predisposition, based on previous experiences, expectations, motives and learning (Schiffman & Kanuk, 1991: 157). Through the customer questionnaires, customers were asked to do a global appraisal on the offering of the guest house. They indicated that their experiences of the service, the guest house in general, the atmosphere and the room in most instances exceeded or met their expectations. This means that the customers were satisfied and even delighted, and because customer satisfaction is one of the most important criteria for determining the quality delivered to customers, it indicates that the guest houses are offering good quality service that does not appear to have quality gaps. Customers perceive the offering of the guest house as good, therefore guest house owners actually have a knowledge and understanding of the expectations and perceptions of their customers.

The open questions of the customer questionnaires were used to obtain information on what impressed customers about the guest house or what they thought should be improved. The information on what impressed them indicates

162 to the researcher what they would be looking for when choosing to stay in other similar establishments. The reason for this statement is that people remember when they have a good experience in a guest house and next time they choose to stay in another guest house, their expectations are high, and based on the previous good experience.

The comments of customers on what impressed them were grouped by similarity. It was then noted that the categorisation corresponded with the services quality dimensions (empathy, responsiveness, reliability, assurance and physical evidence/ tangibles). The fact that the answers of customers corresponded with the existing theory on service quality dimensions, pointed out that the current service marketing theory is applicable to guest houses and can be used by guest house owners for obtaining guidelines for customer behaviour and service quality.

It was determined that what impresses customers in guest houses and what could attract them to similar establishments are the following characteristics, which are listed in order of importance:

• The warm and friendly hospitality of the host, the friendly environment, the friendly and helpful staff, the feeling of being home away from home and others related to empathy. Empathy clearly indicates why people choose the accommodation of guest houses.

• Neatness, comfort, hygiene, easy atmosphere, big and tidy rooms, good food and others related to physical evidence/ tangibles.

• Great service, everyone walked the extra mile to satisfy customers, promptness, flexibility and others related to responsiveness.

• Value for money, everything great, complete package (reliability).

163 • Best security, well-organised, courtesy, attention to detail and others related to assurance.

All these characteristics represent the personalised services that customers receive in the guest houses, and these characteristics are in fact, the factors which contribute for the customers’ satisfactory experience. All these characteristics also indicate that it is the augmented product (atmosphere, accessibility, customer interaction with the guest house staff and management, customer participation and interaction with other guests, quality of service) and the tangible product of the guest house offering that differentiate guest houses from other accommodation establishments and influence customers’ decision to purchase.

Customers also pointed out improvements that should be added to the services of the particular guest house. Their comments were related to physical evidence/ tangibles, such as: television, DSTV, heating/ cooling system, shaded parking, references to bathroom, references to room, cleanliness, meals and so forth. It is important for guest house owners to pay attention to the physical elements of their offering, because if customers are not satisfied with the physical surroundings of the leisure setting, they may not return (Wakefield & Blodgett, 1996: 48). In total 61 percent of customers did not respond or did not express an opinion on what should be improved. Additionally, the majority of customers who took part in this study indicated that they were totally satisfied with the whole experience in the particular guest house they stayed at, and further stated that they would return and/ or recommend the establishment to friends and family. In total, 40 percent of the customers wrote that they were return customers. All these factors led to the assumption that the customers are satisfied, if not even delighted with the offerings of the guest houses. This means that even though guest house owners generally do not have formal hospitality backgrounds, they are successfully providing good quality of service. A good service in a guest house enhances the establishment’s reputation through word of mouth, improves

164 customer loyalty, which results in repeat business, increases the first-time customers arising from personal recommendations and contributes to fewer complaints (Seaton & Bennett, 1996: 454).

7.4 Recommendations

During the study it was established that guest houses in Gauteng Province run successful operations. They are providing good service to their customers and that is contributing to satisfied customers. However, the tourism statistics of the country are presenting decreasing figures of tourist spending, unit nights sold, rates of occupancy and income from accommodation. In order for guest houses to avoid losing market share, they must attract more customers.

South African Tourism (2005b) stated, as mentioned in Paragraph 2.5.1 and 7.4 that the largest share of foreign tourists to South Africa is land-based travel from neighbouring SADC countries. Surveys with the tourists from the African countries indicated that these tourists stay mostly at hotels and with friends and family. Very few of these tourists have said that they stay at guest houses or B&Bs. Therefore, there could be an opportunity to attract more of these travellers to the guest houses. In order to reach them, guest house owners could distribute brochures of their establishments at toll gates at the main highways or at border posts. By doing so, they will reach not only the foreign travellers, but domestic travellers as well. Pamphlets could also be distributed at the airport, for those who come by air. Customers from Australia and India could be targeted, as they do not make much use of guest houses and B&Bs. The Internet could be used to market the establishments in order to reach the foreign tourists in their own countries.

Another way of increasing the market share is by targeting a different market and in this case it is the leisure market. Guest house owners should advertise more aggressively close to school holidays, so that visitors from other provinces could get to know about the establishments. They could advertise on Internet sites of

165 Gauteng Tourism or could create links with frequently visited sites. This could help to increase the occupancy during the months of December and January.

Guest house owners should also try to persuade their customers to stay for longer at their establishments. Currently, the most common length of stay of domestic tourists for the first quarter of 2005 was two nights and for foreign tourists in 2004, it was also two nights, as it was mentioned in Paragraph 2.4. Customers, who have come to the province by air, might be difficult to persuade to stay an extra day, because it would involve changing reservations and aeroplane tickets. Customers, who came by road and with their own transport, could be more flexible with their travel arrangements. In order to persuade them to stay longer, managers or guest house owners should be able to interest them with exciting events happening in the province. Therefore guest house owners should have a good knowledge of cultural events, theatre shows, shopping specials for the customers that come to Gauteng for shopping and, in general, anything interesting that customers might consider a good reason to spend an extra night in the province. They can also target the tourists before they get to the destination by advertising special offers like for example “spend three nights at our guest house and get one night free” to transport companies or travel agents. Unfortunately advertising means that the guest houses would have to spend some financial resources, because marketing by pamphlets, adverts in newspapers or flyers costs money. That is why guest house owners should ensure that their establishments constantly provide quality service and maintain satisfied customers who would inexpensively market the guest house by recommending its services to other people.

Guest house owners should investigate the perceptions of their customers regarding the physical element in their offering as the improvements mentioned by guests were all related to physical aspects of the offering. Such investigation would determine if there is a gap between the customers’ expectations and what is delivered. Servicescapes have a relatively consistent and strong effect on the

166 length of time consumers desire to stay in the leisure service setting and on their repatronage intentions (Wakefield & Blodgett, 1996: 49).

Customers should be allowed to participate in the delivery of service, because by doing so, more personalised service is delivered to them (Bresler, 2001: 110). Good communication with guests should be encouraged, so that if there is any unsatisfactory matter that needs to be addressed, the guests would raise the issue. In that way, problems could be identified and resolved in time without leaving unhappy customers.

Guest house owners should also interact with as many people as possible in order to form networks that would have a knowledge of the offering of the guest house. Those people together with the satisfied customers will market the establishment by word of mouth and that would contribute to increasing business.

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ANNEXURE 1

Management Questionnaire

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179

180

ANNEXURE 2

Customer Questionnaire

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182

183

ANNEXURE 3

List of guest houses that participated in the study

184 LIST OF GUEST HOUSES THAT PARTICIPATED IN THE STUDY

1. Acacia Cottage 2. Airport Lodge GH 3. Anderly GH 4. Avalon 5. Avondhu 6. Avondsrus 7. B&B in Waterkloof 8. B’GH 9. Big Tree B&B 10. Brickhaven 11. Brooklyn Cottage 12. Brooklyn GHs 13. Carpe Diem Lodge 14. Chateau Brisan 15. Claus – In 16. Cotswold Inn 17. Die Agterplaas 18. Eden Garden B&B 19. Eden Lodge GH 20. Egoli Lodge 21. Eland GH 22. Execu Lodge 23. Executive Guest Homes 24. Graton Guest House 25. Greenfields GH 26. Guinea Fowl Lodge 27. Indlovu GH 28. Intermezzo GH 29. Ipe Tombe 30. Kelkiewyn B&B 31. Kiepersol House 32. Kloof GH Premier 33. Kozy Korner B&B 34. La Bougain Villa 35. La Chaumiere 36. Lala Nathi 37. Liz at Lancaster 38. Manor House

185 39. Manor Inn B&B 40. Melrose Lodge 41. No 2 off Douglass B&B 42. Oak Tree Lodge 43. Ons Tuiate Lodge 44. Paddington Lane 45. Parson’s Place 46. Pigeon’s House 47. Place to Stay 48. Royal Ridge GH 49. Sari’s GH 50. Stay a While GH 51. Summerset GH 52. Ten Stirling 53. That’s it! Guest Home 54. The Celtis Manor 55. The Grooves GH 56. The Guesthouse B&B GH 57. The Melville Turret Guest House 58. The Roosters Nest 59. The Rose GH 60. The Thatch Cottage 61. Villa Tuscana GH 62. Villas Latino 63. Vivrez Voux GH 64. Waterkloof GH 65. Willow Place

186