Service Quality of Lodges on Khaosan Road and Surrounding Areas”

Service Quality of Lodges on Khao-San Road and Surrounding

Areas

Ms. JingJing Luo

A Thesis Submitted in Partial Fulfillment of the Requirements for the

Degree of Master of Business Administration International College

University of the Thai Chamber of Commerce

2014

Service Quality of Lodges on Khao-San Road and Surrounding

Areas

Ms. JingJing Luo

A Thesis Submitted in Partial Fulfillment of the Requirements for the

Degree of Master of Business Administration International College

University of the Thai Chamber of Commerce

2014

THESIS APPROVAL

INTERNATIONAL COLLEGE

Master of Business Administration

Degree

International Business

Title: Study on the Customer Satisfaction and Loyalty of Chinese Commercial Banks

Jingjing Luo 2014

Accepted by International College University of the Thai Chamber of

Commerce in Partial Fulfillment of the Requirements of the Master’s Degree

…………………………… Dean, International College (Jakarin Srimoon, Ph.D.)

…………………………… Chairperson (Nattapan Buavaraporn, Ph.D.)

…………………………… Thesis Advisor (Assistant Professor Napawan Kananurak, Ph.D.)

…………………………… Committee (Piraphong Foosiri, Ph.D.)

…………………………… Committee (Theeranuch Pusaksrikit, Ph.D.)

…………………………… External Committee (Kittiphun Khongsawatkiat, Ph.D.)

Service Quality of Lodges on Khao-San Road and Title: Surrounding Areas

Name: Jingjing Luo

Degree: Master of Business Administration

Major Field: International Business Management

Advisor: Assistant Professor Napawan Kananurak, Ph.D.

Graduation Year: 2014

ABSTRACT

The research is about Service Quality of Lodges on Khao-San Road and

Surrounding Areas. There are two objectives of the study; first, to study the relation of customer demography which focus on customer annual income, customer education and customer occupation, and service quality when customer lodges on Khao-San road and surrounding areas; second, to study the relation between service quality and customer satisfaction when customer lodges on Khao-San road and surrounding areas.

The research methodology was relied on five dimensions of service quality (Tangibles,

Reliability, Responsiveness, Assurance, and Empathy), the number of returned questionnaires was 400 and the data was analyzed by frequency, percentage, ANOVA and Multiple regressions. The result of the research indicated that customer demography which focus on customer annual income, customer education and

4 customer occupation all have no directly relation with service quality when customer lodges on Khao-San road and surrounding areas. Moreover, the lodge’s customer concern about tangibles of service quality at the most which shows mean=3.92 and

S.D=0.957, while they concern about reliability at least which shows mean=3.38 and

S.D=1.003.

ACKNOWLEDGEMENTS

I would like to express my most sincere to my academic advisor, Asst. Prof. Dr.

Napawan Kananurak for support, commend, and encouragement during the process of completion my thesis. This work could not have been completed without her concern and understanding. I would like to thank to the members of advisory committee, Dr.

Pitsamorn Kilenthong, Asst. Prof. Dr. Theeranuch Pusaksrikit, Dr. Nattapan, and Dr.

Suthawan Chirapanda for their comments and suggestions to improve the quality of the paper. Numerous individuals provided advice, support, encouragement and friendship that has helped me overcome difficulties and challenges throughout my graduate study.

These include my colleagues, my friends and staffs in Global MBA at the University of

Thai Chamber of Commerce.

Finally, my deepest appreciation and thanks go to my family for their endless love, support, encouragement and for providing me the life-long opportunities that have allowed me to reach this level of achievement.

Miss JingJing Luo

Table of Contents

Abstract ...... 4

Acknowledgements ...... 6

Table of Contents ...... 7

List of Tables ...... 10

List of Figure ...... 12

Chapter 1 Introduction...... 13

Introduction and problem statement ...... 13

Objectives of the Study ...... 16

Expected Benefits ...... 17

Research Question ...... 17

Scope of the Study ...... 18

Scope of Information ...... 18

Organization of the Study ...... 21

Chapter 2 Literature Review ...... 23

Demographic Concepts ...... 23

Service Concept ...... 25

Characteristics of Service ...... 26

Service Quality Concept ...... 28

Customer Satisfaction Concepts ...... 34

Relationship between service quality and customer satisfaction ...... 38

Khaosan Road ...... 39

Related research ...... 45

Conceptual Framework ...... 48

Chapter 3 Methodology ...... 50

Research Design ...... 50

Research Tool 62

Data Analysis 63

Measurement of Conducting Questionnaire 65

Variables of Research 66

Hypotheses Test 71

Qualitative research ...... 66

Chapter 4 Results ...... 68

Chapter 5 Conclusions and Discussion ...... 91

Conclusions from Findings 97

Discussion 100

Implications 102

Action Plan 103

Limitations & Further Research 109

REFERENCES ...... 105

APPENDICES ...... 130

LIST OF TABLES

2.1 the number of lodges/hotels by the 12 main roads ...... 42

3.1 Krejcie and Morgan sample size table ...... 51

3.2 the number of lodge/hotel separate by 3 main roads ...... 53

3.3 Variables of Research Finding ...... 63

4.1 - Frequency of Gender ...... 69

4.2 - Frequency of Age ...... 70

4.3 - Frequence of Nationality ...... 71

4.4 Frequency of Education ...... 72

4.5 - Frequency of Marital Status ...... 73

4.6 - Frequency of Occupation ...... 73

4.7 - Frequency of Annual Income ...... 74

4.8 - Frequency of Religion ...... 75

4.9 - the analysis level of important of customers ...... 77

4.10 - the analysis level of satisfied of customers...... 79

4.11 Model summary analysis ...... 80

4.12 ANOVA analysis ...... 81

4.13 Coefficients analysis ...... 81

4.14 Model summary analysis ...... 84

4.15 ANOVA analysis ...... 84

4.16 Coefficients analysis ...... 84

4.17 Summary of hypothesis testing result of customer demographic; service quality and customer satisfaction of lodge on Khaosan Road and surrounding areas...... 87

LIST OF FIGURE

2.1 SERVQUAL model by Parasuraman, Zeithaml, and Berry ...... 33

2.2 Khao-San Road and surrounding areas ...... 43

3.1 Conceptual Framework ...... 49

CHAPTER 1

INTRODUCTION

1.1 Introduction and Problem Statement

From around the turn of this century, evidence has grown that shows consumers are placing greater emphasis on their leisure time. They are focusing more on what they consume during their non-working periods, especially when traveling during holidays.

This growing interest has become an international phenomenon known as tourism, which encompasses travel to various places, countries and destinations during one’s non-working time (www.bangkokpost.com).

Since 1957, the travel sector has become a part of the hospitality industry, and it has taken an important role in Thailand’s economy and society. It is also one of the fastest-growing industries over the past three decades. Based on the report from WTCC in 2014, the contribution of tourism to GDP (gross domestic product) was $38.3 billion, or 14.1% of total GDP and it is expected to reach $78.7 billion, or 15.4%, by 2018.

Travel-sector employment is expected to rise from 3,911,000 jobs, or 10.6% of total employment and one out of every 9.4 jobs, to 4,856,000 jobs, or 11.9% and one out of 13 every 8.4 jobs by 2018. The real GDP for the traveling economy is expected to rise to

5.9% per annum over the next 10 years (WTTC 2014 Report).

According to the forecast, a huge number of foreign tourists will come to Thailand; thus, the country can exploit this by developing and promoting its most attractive sites.

Thailand needs to raise the quality of accommodations and service packages

(supporting facilities and facilitating goods), as well as upgrade service quality, to meet all customer requirements effectively. Service market competition is very strong; if an organization wants to survive in this market, it must respond by creating maximized customer satisfaction to impress travelers in every respect, such as by offering excellent facilities, prompt service and great security. In addition, such services must be offered in regard to the diverse cultural, social, educational and economic backgrounds that foreign tourists bring from their different countries. The differences among these backgrounds may affect the tourists’ evaluation of service quality. Therefore, an insightful evaluation of service quality based on the demographic factors of the targeted travel market is an important input for a lodge owner. This study will investigate the crucial role of demographic variables on service quality evaluation by customers who stay in accommodations on Khao-San Road in and surrounding areas.

Khao-San Road is a short but well-known and popular destination for foreign tourists, especially for backpackers. This road and surrounding areas contain many

14 accommodations of differing conditions, and most of them are very inexpensive. This road has been recognized as “a short road that has the longest dream in the world”. To achieve business success, organizations must be aware of the Perception of Service

Quality as Gronroos (2001); which is the ability to create long-term competitive advantages and benefits through Positive Differentiation such as Ghobadian et al.

(1994). Service Quality consists of five dimensions: tangibles, reliability, responsiveness, assurance and empathy. Customers make decisions on service purchases based upon Service Quality as the main consideration as Aaker (1996).

In the end, in order to continue attracting a steady flow of foreign tourists, suppliers/owners must upgrade and maintain their service quality. Good service quality can help a hotel improve its market share and profitability such as Oh and Parks (1997).

In a highly competitive hotel market, individual hoteliers must find ways to create products and services that stand above the competition in quality and value. To achieve this goal, hoteliers must understand the needs of customers, and then set out to meet or exceed their needs. Therefore, one of the most important developments in the tourism industry is to raise service quality to achieve customer satisfaction based on many criteria.

1.2 Objectives of the Study

1) To study the relationship between customer demographic variables and

service quality of lodges on Khao-San Road with its surrounding areas.

2) To study the relationship between service quality as classified by five

dimensions and customer satisfaction of lodges on Khao-San Road and in

surrounding areas.

1.3 Expected Benefits

1) To discover the effects of customer demographic variables on service quality

and to improve the lodging operator’s understandings of the customer from

this study’s results.

2) To discover the different levels of service quality as classified by five

dimensions that can lead to varied levels of customer satisfaction, and to help

the lodging owner to increase service quality to meet customer needs based

on this study’s results.

1.4 Research Question

1) Do customer demographic variables relate to the service quality of lodging

on Khao-San Road and in surrounding areas?

2) Can service quality as classified by five dimensions affect customer

satisfaction of lodging on Khao-San road and in surrounding areas?

1.5 Scope of the Study

The scope of this study on Service Quality encompasses two main points:

Demographics

The target population comprises guests who stay overnight at lodges on Khao-San

Road and in surrounding areas. The database is classified by five dimensions: tangibles, reliability, responsiveness, assurance and empathy.

1.6 Scope of Information

1) Personal demographic data such as gender, age, nationality, continent of country,

marital status, level of education, occupation, annual income and purpose of visit.

2) The relationship between customers' demographic and service quality.

3) The relationship between service quality and customer satisfaction.

4) Survey of respondents who traveled and stayed overnight along Khao-San Road

and with its surrounding areas between February 1 and March 1, 2014.

Operational Definition

This thesis employs the following definitions:

Service Quality:

An evaluation between service performance and a customer’s general expectation of how that service provider should perform, Parasuraman et al. (1990).

Tangibles:

Physical things, facilities, equipment, personnel and communication materials,

Parasuraman et al. (1990).

Assurance:

Organizational competence and ability to provide secure and courteous service,

Parasuraman et al. (1990).

Responsiveness:

The ability to provide prompt service effectively.

Reliability:

How well an organization performs in completing its promised service to a customer,

Parasuraman et al. (1990).

Empathy:

Willingness to provide high-quality and fast service, to think as the customer would think, to make the customer feel valued and special, Parasuraman et al. (1990).

Customer Satisfaction:

The level of difference between what customers expect from the goods or service and the actual service provided, as well as whether it equals, exceeds, or fails to meet that expectation, Lovelock (1992).

Customer Demographics:

The statistical data of a population, especially age, gender, income and education, among other statistics. (http://dictionary.reference.com).

Lodge:

A resort hotel, motel or inn (www.dictionary.com).

Backpacker:

A tourist who wears a backpack and travels on a limited budget, Collins Cobuild

Advanced Dictionary (2007).

Customer’s annual income:

This is the money after taxes and expenses deducted from personal wages per year.

Customer’s education:

The results of a customer’s effort to gain knowledge or development from an educational process (www.wiki.com).

Customer’s occupation:

This is a customer’s regular work or profession; job or principal activity

(www.ask.com).

1.7 Organization of the Study

This thesis is separated into five parts, as outlined in this overview:

Chapter 1: Introduction

This chapter introduces the study, comprising the statement of the problems, objectives, expected benefits, scope of information, definition of terms and organization of the research.

Chapter 2: Literature review

The chapter presents the concept of demographics, the relationship between customer demographic and service quality, service, service quality, customer satisfaction, the relationship between service quality and customer satisfaction, literature review of theory, related research and conceptual framework.

Chapter 3: Methodology

This chapter discusses and explains the design of the research, population of the study, sampling procedure, research instrument, questionnaire, measurement of conducting questionnaire, data collection, data analysis, variables of research, tools for qualitative and quantitative analysis, and hypotheses test.

Chapter 4: Results

This chapter details and discusses information acquired from the questionnaire in order to prove the research objective.

Chapter 5: Conclusion and Discussion

This chapter presents conclusions, discussion, implications, limitations of the study and suggestions for further research, which include: conclusion of this research; discussion of hypothesis; implication of the study and recommendation for further research.

CHAPTER 2

LITERATURE REVIEW

The purpose of this chapter is to provide the related theory, literature and research to support the research topic “the service quality of lodges on Khao-San Road and in surrounding areas” which comprises five parts as follows:

 The concept of demographics, service, service quality and customer satisfaction;

 The relationship between customer demographics and service quality;

 The relationship between service quality and customer satisfaction;

 The history and present state of Khao-San Road and surrounding areas;

 Related research on the conceptual framework of this subject.

2.1 Demographic Concepts

Demographic is a scientific study of the characteristics and dynamics pertaining to the human population; it includes growth rate, size, density and distribution of a special group. A population census, vital records and other data provide a source of information for study. If researchers want to study or record this data, referred to as

23 demographics, they must understand how to scientifically obtain facts and how to define them relatively (http://www.wisegeek.org).

This research considers the customer demographic elements to consist of gender, nationality, age, marital status, education, occupation, annual income and purpose of visit.

Relationship Between Customer Demographics and Service Quality

Some studies investigate the effects of demographic factors on service quality in a variety of fields. According to many of these studies, service quality is perceived differently by a customer’s demographic background, although some findings do not confirm the crucial role of demographic factors; for example, Ramez (2011) studied the service quality of Bahraini commercial banks and found no significant, overall relationship between customer demographic variables and service quality. Likewise, studies by Schwantz (1996) and Ilias, Hasan, Rahman and Yasoa (2008) in the higher education services sector found no significant relationship between customer demographic variables and service quality.

On the other hand, Pallli and Mamilla (2012) studied a higher education institution and obtained mixed results from a survey; they state that no significant relationship exists in the overall satisfaction of their respondents in terms of age, nationality, occupation of parents and total household income, but gender shows a

24 significant relationship in student opinions regarding the service quality of university departments: male respondents were less satisfied than female respondents. Mixed results also can be found in the transport service section. Genesan-Lim,

Russell-Bennette and Dagger (2008) indicate that gender and income are not significant factors of service quality among passenger transport services, but age is a significant factor.

2.2 Service Concept

Various researchers have discussed the suitable definition of service as it would support the quality of business. For example, Beaven and Scotti (1990) state that service may be conceptualized as highly personal events with potential to affect the course of an individual’s life. It becomes part of a consumer’s individual life history and affects one’s quality of life and sense of well-being. Kotler (1989) posits that service production may or may not be tied to a physical product because any act of performance that one party offers another is essentially intangible and results in the ownership of anything. Meanwhile, Burton (1990) describes service characteristics as heterogeneous, inseparable from production and consumption, and intangible; as a result, such characteristics usually make it more difficult for customers to frame decisions between brand alternatives within a product class.

Moreover, Parasuraman, Zeithaml & Berry (1985) state that service is most difficult to define because it is subject to alternative perception and expectation. It is a performance piece rather than an object. They declare that most services cannot be verified, inventoried, measured, counted and tested in advance of sale to assure quality. Walker (1990) asserts that service levels often need to be raised undoubtedly because we all have the daily experience of being a guest when buying general daily services, such as those obtained from our eating and drinking at an establishment, watching a movie or having a haircut. In each situation, we can judge the service quality. We can decide whether to return to the service provider. If we are dissatisfied, we will look to change to another vendor. Other the other hand, Uhl and Upah (1983) describe service as intangible and incapable of accompanying a product. It is like any work performed for another or for the provision of any product, activity, facility for another’s use, but not ownership that arises from an exchange transaction.

2.3 Characteristics of Service

Because service industries are quite vast and heterogeneous, three characteristics of service will be discussed below Lovelock (1998).

1) More Intangible than Tangible

A service is a deed, a performance and an effort, while a good or a product is an object, a thing, a facility or a device. When a service is purchased, there are usually

26 intangibles presented to the customer. For example, students go to school to buy an education. Money has been spent, but no additional things can be seen or touched. In contrast, when goods or product is purchased, something tangible is acquired, something that can be seen and touched, such as a bottle of water.

The concept of intangibility has two meanings, both of which present challenges for marketing:

 That which cannot be seen or touched;

 That which cannot be easily defined, verified, formulated, measured or grasped

mentally.

Solving the marketing problems that intangibility presents is generally a matter of far more concern to the service marketers than, for example, food marketers.

2) Simultaneous Production and Consumption

Simultaneous production and consumption means that service providers are

often physically present as consumption takes place. Goods generally are

produced, then sold, then consumed; on the other hand, services are usually

produced and consumed at the same time. For example, a school produces an

educational service to students while the students consume it. A telephone

company produces telephone service to their customers as they consume it.

However, services are generally consumed first, then produced and consumed

simultaneously.

3) Less Standardized and Uniform

Service industries are distributed into two main categories: people-based or

equipment-based. That is to say, there is a larger human component involved in

performing some services than others. One implication of this distinction is that the

outcome of people-based service operations tends to be less standardized and

uniform than that of equipment-based service or goods-producing operations.

Meanwhile, the extensive involvement of people in the production of a service

introduces a degree of variability in the outcome that is not present when machines

dominate. This is an important consideration given the vast number of service

industries that are labor-intensive.

2.4 Service Quality Concept

2.4.1 Service Quality

It is important to note that over the past decade, the service sector has assumed greater economic significance. The latest statistics show that the sector accounts for

60% of the value added in the European Economic Community. It states that “doing things wrong” typically accounts for 30% to 40% of a service organization’s

28 operating costs; therefore, eliminating waste and meeting customer needs, wants and expectations are major challenges to service industry management. This is why service quality is a crucial issue for a service organization (Abby Ghobadian, Simon

Speller; Matthew Jones, 1994).

Service quality also includes a number of inter-related factors, such as the technical competence of providers, perception of customers, quality of information provided to customers, quality of employee skills and the accessibility and continuity of services. Therefore, McDonald (1996) states that much of service involves intangibles because some specifications concerning uniform quality rarely can be fixed; they are performance pieces rather than physical objects. Clow (1997) describes service quality as the customer’s judgment about facilities succeeding or failing at being excellent and superior. The judgment relates to a customer’s attitude, not to a customer’s occupation, and results from a comparison between expectation and performance. Mullin (2000) states that the definition of service, especially when involving labor-intensive operations, is very heterogeneous because the performance in such operations usually varies daily among customers and products.

While no one would argue that it is important that consumers receive a high level of service, at the same time it is difficult to measure service quality recognition. For example, two customers receiving the same service from the same provider may have

29 different evaluations of the service quality. One customer may feel the service is very good, while the other customer may feel it is poor; therefore, the measurement results cannot depend solely on a customer’s education.

Three principles should be kept in consideration when discussing the concept of service quality as Kurtz & Clow (1998):

 Service quality is more difficult for the consumer to evaluate than the quality of

a good;

 Service quality is based on the customer’s perception of the service outcome

and their evaluation of the process by which service was received;

 Service quality perceptions result from a comparison of what the consumer

expected prior to receiving service and the perceived level of that service.

The process used by consumers to evaluate goods differs from the process used to evaluate service. The evaluation process for goods tends to be high in searching qualities, whereas service evaluation tends to be high in experience and credence qualities. Credence qualities state that consumers have difficulty evaluating even after consumption is completed. Experience qualities state that consumers can evaluate only during or after the consumption process. Search qualities state that consumers can evaluate prior to purchasing a service or good.

On the other hand, Parasuraman, Zeithaml & Berry (1985) have defined several concepts of service quality:

 The quality of goods is easier for consumers to evaluate than service quality.

 Service quality perceptions result from a comparison of consumer expectations

with them actual received service performance.

 Quality evaluations depend on the outcome of a service, and the process of

service delivery.

Parasuraman et al. (1988) declare that service quality has become a new area of interest in marketing research. Parasuraman et al. (1985) also propose a conceptual model concerning service quality that they developed as SERVQUAL with 10 dimensions, which were later reduced Parasuraman et al. (1995) to five dimensions: tangibles, reliability, responsiveness, assurance and empathy.

Tangibles: Tangibles include physical facilities, equipment list and service personnel.

Its components include: 1) a modern service facility; 2) attractive services; 3) employees who have clean clothes and coats; and 4) company facilities and services that match the quality of the offered service.

Reliability: Reliability refers to a reliable, accurate ability to fulfill service commitments. Its components comprise: 5) things a company promises that can be completed in time; 6) demonstrated concern and help when customers encounter difficulties; 7) service reliability; 8) provision of promised services on time; and 9) related records that are properly documented.

Responsiveness: Responsiveness means to help customers as they state their needs. Its components include: 10) providing customer service punctually; 11) not making unrealistic promises that cannot be fulfilled; 12) always being willing to help customers; and 13) never being too busy or unable to provide immediate service.

Assurance: Assurance refers to employees with the knowledge, courtesy and expressed confidence in their ability and credibility. Its components include: 14) trustworthiness; 15) relaxed engagement with the customer; 16) politeness; and 17) appropriate management support to workers so they can provide better service.

Empathy: Empathy refers to concern for customers and the desire to provide them with personalized service. Its components include: 18) providing services for individual customers; 19) giving customers individual care; 20) expecting employees to understand customer needs; 21) giving priority to the interests of customers; and 22) providing service hours to meet all the needs of customers.

2.4.2 Service Quality Measurement Model

Word of Mouth Personal Needs Past Experience

Dimensions of Service Perceived Service Quality Expected Quality 1. Expectation Exceeded Service ES

Reliability 2. Expectation Met

Responsiveness ES=PS (Satisfactory Met)

Assurance 3. Expectation Not Met

Empathy Perceived ES>PS

Tangibles Service (Unacceptable Quality)

Figure 2.4.2 SERVQUAL Model by Parasuraman, Zeithaml, and Berry

Source: Perceived Service Quality, (A. Parasuraman, V.A. Zeithaml, and L.L. Berry, “A

Conceptual model of Service Quality and its implication for Future Research,” Journal of

Marketing, Vol. 49, fall 1985).

The SERVQUAL model has its detractors who consider it overly complex, subjective and statistically unreliable. However, the model is a simple and useful tool for qualitatively exploring and assessing customer service experiences, and it has been used widely by service delivery organizations. It is an efficient model to help an organization measure the gap between expected perceived and service levels.

Parasuraman, Zeithaml and Berry propose that service quality is the mean of the differences between expectations and performance, along with a quality dimension that aims to measure customer expectations of the service and determine customer perceptions of the company providing the service performance. The score from this model is used to measure the perceived service quality to provide more accuracy to the overall service quality score.

2.5 Customer Satisfaction Concepts

Customer satisfaction is the degree of satisfaction provided by goods or services in an industry; it is generally measured by the existence and frequency of customer repeat purchases, which is important for an industry that wants to achieve high sales benefits. Meanwhile, customer satisfaction is an ambiguous and abstract concept; actual satisfaction with performance will differ from person to person, good to good, and service to service. Thus, the state of satisfaction depends on psychological and physical variables that correlate with customer satisfaction behavior, such as a customer’s willingness to return and to recommend the vendor to someone else.

Satisfaction levels can also vary based on a customer’s ability to compare service delivery with other that of other vendors.

Furthermore, customer satisfaction is influenced by service quality as Britner,

Hubbert (1994). It can be an outcome that happens without comparison with expectations such as Oliver (1996). Moreover, “Satisfaction depends on the extent to which customers the service got met, not got met, or exceeded their expectations”

Nicholls, Gilbert, and Roslow (1998).

Satisfaction is defined as an emotional post-consumption response; it may occur as the result of the comparison between what the customer expected and what was actually received disconfirmation. In satisfaction literature, “expectations reflect anticipated performance made by customers about the levels of performance during transaction” Churchill and Surprenant (1982). Therefore, when customers are satisfied, an organization may be performing well; in contrast, when customers are dissatisfied, an organization may be performing poorly.

Furthermore, Klaus (1985) states that customer satisfaction is a customer’s evaluation of a consumption operation. It is based on the relationship between the objective attributes of the product and the customer’s perceptions. Lovelock (1992) describes the level of difference between what a customer expected before a service was rendered and the perception of the service received, whether equal to, lower than, or exceeding the initial expectation. Kotler (2003) proposes that customer satisfaction is a person’s feeling of pleasure or unhappiness after comparing a product’s/service’s

35 perceived performance with one’s initial expectations. If the performance matches the expectation, a customer will feel satisfied. If the performance falls short of the expectation, a customer will experience dissatisfaction. If the performance is far beyond or far below one’s expectation, one will feel highly satisfied or dissatisfied.

Aton (1996) states that customer satisfaction is a state of mind by which what the customer wants, needs or expects throughout the product/service life has been met or exceeded, resulting in consequent repurchase and loyalty. Bowen and Chen (2001) declare that merely satisfying a customer is not enough to ensure loyalty; customers must feel extremely satisfied: customer loyalty is based on satisfaction. The World

Trade Organization (1985) states that customer satisfaction is a psychological concept involving a feeling of well-being and pleasure that results from obtaining what one hopes for and then expects from an appealing product or service. In addition, Senguder

(2002) describes customer satisfaction as a customer’s fulfillment response, which is based on the product or service itself; it provides a certain level of satisfaction, including any under- or over-fulfillment that a customer obtains from a product/service feature. Oh and Parks (1997) state that customer satisfaction is a complex mental process that includes conscious, affective processes, psychological and physiological influences.

In his research, Mohr (1982) provides four constructs for the vast majority of satisfaction studies:

 Expectations

 Performance

 Disconfirmation

 Satisfaction

In their studies, Anderson and Srinivasan (2003) delineate five dimensions of customer satisfaction:

 overall satisfaction

 customer favorite

 customer loyalty

 customer recommendation

 priority option

Understanding customer satisfaction can facilitate a company to maintain or improve satisfaction with its products/services. In addition, inferior products/services can be improved to create new and good impressions on customers.

2.6 Relationship Between Service Quality and Customer Satisfaction

Academicians give various definitions of quality. They state that customer satisfaction can be related to the perceived value or pricing of goods/services, but service quality itself isn’t based solely on prices as Fornell, Anderson, and Lehmann,

(1994).

In the relationship between customer satisfaction and service quality, researchers have found more precise means to measure customer satisfaction and service quality.

Between these two elements, they have certain things in common; however, customer satisfaction usually is the more broader concept because service quality especially focuses on the dimension of service (Wilson et al., 2008, p. 78). Several definitions indicate that factors such as goods/service quality and perceived service quality can affect customer satisfaction as Zeithaml et al. (2006, pp. 106-107).

Thus, a structure equation model provides the evidence that customer satisfaction has been considered as based on service quality Taylor (1992). Another researcher proposed that “definitions of consumer satisfaction relate to a specific transaction (the difference between predicted service and perceived service) in contrast with

‘attitudes’, which are more enduring and less situational-oriented,” Lewis (1993, pp.

4-12). Moreover, customer satisfaction may be a result of service quality, as some

38 researchers have found evidence to support of this point (Anderson & Sullivan, 1993;

Fornell et al., 1996; Spreng & Mackoy, 1996).

In short, a significant relationship exists between service quality and customer satisfaction, but it could be a complex relationship interrelated with customer satisfaction, service quality and service quality dimensions. The point is, customers of service might be satisfied for reasons beyond service quality alone.

2.7 Khao-San Road

The History of Khao-San Road

In 1782, Bangkok was established with the Grand Palace area as the center of town. Around two centuries ago, Khao-San Road was a 20-minute walk from the palace and a quiet, residential area for the elite. The era’s most prominent lawyer and senator, Mr. Marute Bunnag, and billionaire medicine doctor/member of the House of

Representatives, Dr. Decha Sukharom, began their careers in this area decades ago with local officials near the police station on Khao-San (http://www.phurahong.com).

How did this tranquil road become a Mecca for travelers (KPL.co.th)? In 1982, the Thai government issued a policy to commemorate Bangkok’s bicentennial and celebrate the Buddhist calendar’s lucky year 2525 by launching festive ceremonies in order to attract tourist dollars. The most extravagant festivities were performed around

39 the Grand Palace, and because tourists came from all over the world, hotels were booked to capacity at steep prices (http://www.m2fjob.com).

Many backpackers were unable or unwilling to pay inflated rates for a room, so they persuaded locals to rent out vacant rooms in their own homes. Local residents quickly realized that they could earn extra income by providing convenient and inexpensive lodging for these tourists. They began establishing more guesthouses, restaurants and souvenir shops along the road to target this budget-minded tourist market.

Nowadays, Khao-San Road and its surrounding areas of Soi Rambuttri and Soi

-Mayom are home to countless budget guesthouses and mid-range hotels, tattoo shops, travel agents, bookshops, clothing shops, restaurants, massage rooms, internet cafes, swanky bars and clubs, market stalls and more. In the neighborhood, anything goes fine and everyone is relaxed to a degree far different from anywhere else in Bangkok.

Young hipsters and art students throughout the world find this ambiance greatly attractive (www.bangkok.com).

Khao-San Road is located in the old city’s central district. In Banglamphu neighborhood (Phra Nakhon district), about one kilometer north of the grand palace sits Wat Phra Kaew, or the Emerald Buddha temple. It is very charmed for backpacker and ghetto, with their cheap lodge price compared to other areas of

Bangkok. There are so many accommodations, resort hotels, inns, and guesthouses.

Vary from 'mattress in a box' style hotels, to full Western-standard luxury. There are

40 clubs, pubs and bars can make you enjoy an exciting nightlife. Its restaurants, cafes shop serve you international delicious food. And if you need, its agents and dive shops will guide to any famous places of Thailand. Then, a lot of clothes shops and fashion tailors are everywhere for those keen shoppers. It definitely a wonderful place to be when tourists traveling in Bangkok. (en.wikipedia.org/wiki/Khaosan_Road)

Many tourists treat Khao-San Road and surrounding areas as their base for exploring all of Thailand (www.thailandtouroperator). Many buses from the street go to main tourist destinations throughout Thailand, for example, from Chiang Mai in the

North to Koh Pha Ngan in the South. Many tourists also use the advantage of the abundance of relatively cheap travel agents to arrange visa and transport services to surrounding countries, such as Vietnam, Cambodia, Laos and Malaysia.

There are 12 main roads near Khao-San Road, Those roads can be horizontally arranged as: Thanon Phra-Sumen, Thanon Ram-Buttri, Thanon Chao-Fa, Thanon

Bang-Lampoo, Thanon Kraisi, Thanon Tani, Thanon Khao-San, Trok-Mayom and

Ratchadamenoen Road. On the other hand, those roads can be vertically arranged as:

Thanon Phra-Athit, Cha-Kkaphong Road, and Bowon-Niwet Road. Taken together,

80 hotels line these avenues (www.mappery.com):

Table 2.7 The Number of Lodges/Hotels by The 12 Main Roads

Thanon Phra-Sumen

 Ps GH  Apple GH

 Gipsy GH  Thai Green GH

 Ks GH  Sak GH

 Kc GH

Thanon Ram-Buttri

 Sawasdee House  Green GH

 Popiang GH  Cheery GH

 Fun GH  Pro GH

 Baan Sabai GH  Suneeporn GH

 Sawasdee Smile Inn  Mama’s GH

 Orchi GH  Friendly GH

 Ajj-thoung

Thanon Chao-Fa

 Chai’s House  Welcome Sawasdee Inn

 Sunshine GH  Sukpasath Hotel

Thanon Khao-San

ount

C  Yoon GH  Ploy GH

 San Express Ltd Part  N/A orizontal orizontal  Four Son GH  Bangkok GH

H  Hello Int Ernet & GH  Prakob GH

 Lek GH  Chart GH

 KhaoSan Palace Hotel  D&D Inn

 Grand GH  KhaoSan Privacy GH

 New Nith Chao Oen Hotel  Dior Tours GH

 Marco Polo Hostel  Siam Orient Al

 Nat GH  Siri Gh & Tour

 Classic Place GH  Ch I Gh

 Vs GH  Griendly GH

 Harn GH

Trok-Mayom

 J & Joe GH  NaNa Plaza Inn

 New Joe GH  7 Holder

 Barn Thai GH  Ch 2 Gh

 Ranee GH  Nat 2 Gh

 Top GH  Sweety GH

Thanon Phra-Athit

 My House  Bella House

 Merry V GH  Mango GH

 Tp GH  Roof Garden GH

 New Siam GH  Sawasdee Drungthep Inn

 Bann Athit GH  Praathit Mansion

Count  Green House  New Merry V GH

 My House  Peachy GH

Ordinate  Fun GH  N Gampit GH

Cha-Kkaphong Road

 Tm GH

Bowo-Niwet Road

 Central GH  Sarintip GH

 Pc GH  Pannee GH

Figure 2.7 Khao-San Road and Surrounding Areas

With this strong number of hotels on Khao-San Road and in the surrounding areas, more than 100 million tourists arrived annually between 2008 and 2013. In

February 2013, the Thai-Chinese Tourism Alliance Association declared Chinese tourists to be the main supplier to Thailand’s tourism industry and it said it expected

3.3 million Chinese tourists arrivals in 2013 (www.bangkokpost.com) with an expected growth rate of 2-3 percent in 2014.

Thai political turmoil that began in October 2013 ended that vision. The year

2014 began with a forced shutdown of Bangkok government offices on 13 January by anti-government protesters. Foreign governments and tour operators began advising tourists to avoid the Thai capital. As the unrest dragged on, foreign tourist arrivals dropped by 6 percent year-on-year between January and March, and GDP contracted

0.6 percent year-on-year or 2.1 percent quarter-on-quarter (www.aseanbriefing.com).

Nowadays, “We expect a quick economic recovery in the second half because of the easing political situation and a resumption of functioning public policy management,” said Paiboon Kittisrikangwan, the assistant governor for monetary policy at the Bank of Thailand (BoT), earlier December 2014. Meanwhile, Kasikorn

Research Center forecasts that GDP will increase 2.3 percent in 2015. Although the consensus seems to be that the economy will experience slow and improving growth in 2015, tourism is expected to remain slow in 2015 (www.aseanbriefing.com).

2.8 Related research

Leonard L. Berry, 1991. Marketing Services: Competing Through Quality (The Free

Press).

This research indicates that one of the most common service-improvement mistakes companies make is to spend money in ways that do not improve service, which in turn hurts the credibility of the service-improvement cause. When invested money does not produce results, there is little incentive to spend more.

Quality is evaluated by the customer rather than by company. Spending wisely to improve service comes from continuous learning about the expectations and perceptions of customers. Customer research states that the strengths and weaknesses of a company’s service come from the perspective of those who have experienced it.

On the other hand, companies need to install an ongoing service research process that provides timely, relevant trend data that managers become accustomed to using in decision making. Also, they need to build a service quality information system, not just conduct a study.

Valarie A. Zeithaml, (1990). Delivering quality service: Balancing customer

perceptions and expectations.

This research states that one of the most important basic functions that can improve service quality is recovery. When a service problem occurs, the customer’s confidence in the firm hangs in the balance. The company can make things better or worse with the customer.

Generally service companies make things worse. They do not encourage customer to get their problems resolved and even create obstacles for those who try to do so.

They lack sufficiently trained personnel, or have enough of them, in problem resolution positions. They do not give employees the authority to solve most problems immediately. They also do not invest in the communication and information systems that would support a problem resolution service.

As a result, three possibilities occur when a customer experiences a service problem: 1) the customer complains and is satisfied with the company’s response; 2) the customer complains and is dissatisfied with the response; or 3) the customer does not complain and remains dissatisfied.

The research shows that many dissatisfied customers do not complain directly to the company because they wish to avoid a confrontation, perceive no convenient way to

46 complain, or do not believe that complaining will help. Customers tend to complain only when they are faced with serious events that have been well documented.

Moreover, this research suggests that to overcome some of these complaints and improve recovery service, three actions should be followed: 1) encourage customers to complain and make it easy for them to do so; 2) respond quickly and personally to all complaints; and 3) develop a problem resolution system.

David, J. Veale, Ph.D., (1990), Approach of succeeds service quality.

This research states that listening is an important point to consider. Listening to customers and employees, keeping one’s ear to the ground, is a skill that makes succeed service quality happen. In one example, an academic organization invites business leaders to a luncheon. The meeting’s purpose is to discuss improvement of the organization’s program offerings. The business people respond, tossing out various possibilities for change, the most notable of which is to offer more flexibility in scheduling. After a spirited discussion, the facilitator, who happens to be the head of the organization, outlines a number of reasons why the suggested scheduling changes cannot be made. Someone in the audience comments, “Who is the customer?” The subject is dropped and the meeting ends with the organization thanking the participants and indicating that the organization was on target with both its programs and schedules.

This example illustrates the difference between “real” and “false” listening. Real listening means hearing comments about the organization’s service and then trying to appreciate the customer’s point of view, even though the organization may disagree. In contrast, false listening occurs when an organization makes a pretense of listening solely for the purpose of obtaining support or buy-in without any intention of following through. Hence, false listening is used more as a public relations technique than as a service enhancement strategy.

In fact, this research demonstrates that listening is an important point to consider when addressing both customers and employees.

2.9 Conceptual Framework

This research focuses on service quality and customer satisfaction toward lodging on Khao-San Road and in surrounding areas. The conceptual framework studied is based on SERVQUAL and its five dimensions as Parasuraman et al. (1991).

Furthermore, this research examines population demographics and critical factors of perceived service quality in evaluating customer satisfaction in accordance with the conceptual framework.

1) Demographic Factors – independent variables.

2) Service quality with five dimensions; tangibles, reliability, responsiveness,

assurance, and empathy in order to assess how the demographic factors effect to

service quality.

3) The effect of service quality to customers’ satisfaction when they lodges on

Khao-San and surrounding areas.

Demographic Service Quality

- Gender - Tangibles - Age - Reliabilities Customers’ - Country - Responsiveness Satisfaction - Education - Assurance - Marital Status - Empathy - Occupation - Annual Income Parasuraman et - Religion al., 1991

Figure 2.9 Conceptual Framework

CHAPTER 3

METHODOLOGY

This chapter presents the study’s research methodology. It explains Research

Design, Population of the Study, Sampling Procedure, Research Tool, Data Collection,

Data Analysis, Measurement of Conducting Questionnaire, Variables of Research, and

Hypotheses Test.

3.1 Research Design

This research comprises quantitative research and qualitative research.

3.1.1 Quantitative Research

This part is designed to define the different customer demographic effects on service quality. It aims to describe the variable of service quality effect on customer satisfaction when a customer lodges along Khao-San Road and surrounding areas.

This section examines customers who visited and stayed overnight, with data collection by questionnaire.

3.1.2 Population of the Study

The population comprises 100 million foreign tourists who visited and stayed overnight at lodges along Khao-San Road and surrounding areas in 2013.

(http://www.ask.com/wiki/Tourism_in_Thailand)

3.1.3 Sampling Procedure

In this research, the sample size is determined by estimating proportion; the procedure uses the sample to estimate the population proportion. Thus, the sample size for this research is calculated from the Krejcie and Morgan sample size table, such as Krejcie,

R.V. & Morgan, D.W. (1970).

Table 3.1.3 Krejcie and Morgan Sample Size Table

N S N S N S 55 48 320 175 2200 327 60 52 340 181 2400 331 65 56 360 186 2600 335 70 59 380 191 2800 338 75 63 400 196 3000 341 80 66 420 201 3500 346 85 70 440 205 4000 351 90 73 460 210 4500 354 95 76 480 214 5000 357 100 80 500 217 6000 361 110 86 550 226 7000 364 120 92 600 234 8000 367 130 97 650 242 9000 368 140 103 700 248 10000 370 150 108 750 254 15000 375 160 113 800 260 20000 377 170 118 850 265 30000 379 180 123 900 269 40000 380 190 127 950 274 50000 381 200 132 1000 278 75000 382 210 136 1100 285 1000000 384 51

Note:

 N is population size

 S is sample size

From this table, we find the sample size for this research equals 384. To easily collect a database, a sample size of 400 is employed.

3.1.4 Sampling

Khao-San Road and surrounding areas for this study comprise 12 main roads and 80 hotels as mentioned earlier. However, this sampling focuses on the three most popular roads and their main hotels for analysis.

The sampling is separated into three sets: properties along Khao-San Road and two nearby roads: Mayom and Ram-Buttri-Alley. Khao-San Road’s main venues include: the Marcopolo Hostel, Rikka Inn, Center Point Plaza Hotel, Khao-San Palace Hotel,

Boddy Lodge Hotel and Dang-Derm Hotel. Mayom Road’s main lodging includes:

Khao-San Park Resort, Sawasdee Banglumpoo Inn Hotel, Sawasdee Bangkok Inn

Hotel, Top Inn, Khao-San Holiday Guesthouse and Lakasmeenatia Guesthouse.

Ram-Buttri Alley Road’s main properties are: Sakul House Hotel, Ram-Buttri House,

Viengtai Hotel, Green House Hostel and Villa Cha-Cha Hotel. The researcher used a random technique for selecting the venues along each road.

Table 3.1.4 The Number of Lodge/Hotel Separate by 3 Main Roads

Thanon Phra-Sumen

 Ps GH  Apple GH

 Gipsy GH  Thai Green GH

 Ks GH  Sak GH

 Kc GH

Thanon Ram-Buttri

 Sawasdee House  Green GH

 Popiang GH  Cheery GH

 Fun GH  Pro GH

 Baan Sabai GH  Suneeporn GH

 Sawasdee Smile Inn  Mama’s GH

Horizontal CountHorizontal

 Orchi GH  Friendly GH

 Ajj-Thoung 

Thanon Chao-Fa

 Chai’s House  Welcome Sawasdee Inn

 Sunshine GH  Sukpasath Hotel

Thanon Khao-San

 Yoon GH  Ploy GH

 San Express Ltd Part  N/A

 Four Son GH  Bangkok GH

 Hello Int Ernet & GH  Prakob GH

 Lek GH  Chart GH

 Khao-San Palace Hotel  D&D Inn

 Grand GH  Khao-San Privacy GH

 New Nith Chao Oen Hotel  Dior Tours GH

 Marco Polo Hostel  Siam Orient Al

 Nat GH  Siri GH & Tour

 Classic Place GH  Ch I Gh

 Vs GH  Griendly GH

 Harn GH 

Trok Mayom

 J & Joe GH  NaNa Plaza Inn

 New Joe GH  7 Holder

 Barn Thai GH  Ch 2 Gh

 Ranee GH  Nat 2 Gh

 Top GH  Sweety GH

Thanon Phra-Athit

 My House  Bella House

 Merry V GH  Mango GH

 Tp GH  Roof Garden GH

 New Siam GH  Sawasdee Drungthep Inn

 Bann Athit GH  Praathit Mansion

 Green House  New Merry V GH

Count

 My House  Peachy GH

Ordinate  Fun GH  N Gampit GH

Cha-Kkaphong Road

 Tm GH

Bowo-Niwet Road

 Central GH  Sarintip GH

 Pc GH  Pannee GH

This figure shows the number of lodge/hotels by road (with data from the internet and survey by researcher).

3.1.5 Data Collection

Zikmund (2003) states that a survey is the most common method to gather primary data. It provides cheap, quick, efficient and accurate means of assessing information about a population. The research uses this methodology to gather primary data.

This survey comprises a closed-form questionnaire with a data collection method of three sections of checklist answers. To get the right and core data, 40 questionnaires were distributed on Khao-San Road and in surrounding areas to check the effectiveness and usefulness of the questionnaire.

Afterwards, 400 copies of new questionnaires were distributed to foreign tourists who stayed at lodges on Khao-San Road and in surrounding areas:

 Khao-San Road (Marcopolo Hostel, Rikka Inn, Center Point Plaza Hotel,

Khao-San Palace Hotel, Buddy Lodge Hotel and Dang Derm Hotel);

 Mayom Alley (Khao-San Park Resort, Sawasdee Banglumpoo Inn Hotel,

Sawasdee Bangkok Inn Hotel, Top Inn, Khao-San Holiday Guesthouse and

Buddy Bouttque Inn);

 Ram-Buttri Road (Sakul House Hotel, Ram-Buttri House, Viengtai Hotel,

Green House Hostel and Villa Cha-Cha Hotel).

There are 3 main road around Khao-San with top 17 lodges and hotels that been selected.

The research involved 16 days of collecting data from tourists who traveled and stayed overnight at lodges on Khao-San Road and in surrounding areas, plus three days to interview nine lodging owners on Khao-San Road and in surrounding areas, or a total of 19 days on Khao-San Road and in surrounding areas.

Within the 16 days, five were spent on Khao-San Road with 25 questionnaires per day. Forty-eight Chinese respondents and 27 Canadian respondents came on their vacation, while 30 UK respondents and 20 US respondents came on business. Six days were spent on Ram-Buttri Alley Road with 25 questionnaires per day. Eight

Japanese respondents, 30 Chinese respondents, 11 Italian respondents, 10 Malaysian respondents, 20 Singaporean respondents, seven Egyptian respondents, 20 French respondents, 15 Australian respondents and two Danish respondents came on holiday, while 10 Canadian respondents, seven Chinese respondents and 10 Australian respondents came for work. Six UK respondents and four US respondents were college transfer students. Five days were spent on Mayom Road with 25 questionnaires per day. Twenty UK respondents, 18 US respondents, 12 German respondents, 13 Spanish respondents, 10 Australian respondents and seven French respondents were vacationing, while eight Germany respondents, five Malaysian

57 respondents, 19 Singaporean respondents and nine Swiss respondents were working in BKK. Four Switzerland respondents were university transfer students.

On the three days of interviews with lodge owners, three owners were addressed each day. Most owners believe that customer demographics have no effect on service quality, though they recognize that service quality is an important, basic factor affecting customer satisfaction.

3.1.6 Research Tool

The survey required participants to respond to all items in the questionnaire. Each questionnaire contains 40 closed-end questions, and the respondents would spend 10 to 15 minutes answering all questions. All continuous variables are measured using

Descriptive, Frequencies, Means, and Multiple Regression analysis.

The questionnaire is in English and consists of three sections:

Section 1: Demographic Information

The basic profiles of respondents’ demographics comprise eight questions designed to obtain the needed demographic characteristics of foreign tourists. The questions are adopted from Hanna and Wozniak (2001) and survey gender, age,

58 nationality, education, marital status, occupation, annual income, and religion of respondents.

Section 2: Service Quality

This part consists of about 25 questions as defined by Parasuraman et al. (1988) and their SERVQUAL five dimensions: tangibility, reliability, responsiveness, assurance and empathy. The questions are adopted from Jamie L. Baker-Prewitt (2000) and Arpita Khare (2013).

Section 3: Customer Satisfaction

This part has seven questions adopted from Megha Jain, Bowen and Chen (2001),

George Kyaw Myo Aung (2012) and Arpita Khare (2013). It focuses on the differing levels of service quality as determined by the various satisfaction levels of customers.

3.1.7 Data Analysis

After the data had been collected, the returned questionnaires were encoded and interpreted by a statistics program, then analyzed in terms of descriptive analysis and inferential statistics.

3.1.8 Quantitative Analysis:

Descriptive statistics are used to describe the basic features of the data gathered from surveys.

1) Frequencies & Percentage: used to analyze Part 1 of the questionnaire that

addresses the demographics of age, gender, status, education, occupation, income

and address.

2) Means and standard deviation: used for analysis in Part 2 (Service Quality) and

Part 3 (Customer Satisfaction).

Inferential statistics are used to test that hypothesis and make inferences or judgments about the population on the basis of the sample.

1) Multiple regression is used for testing hypothesis 1: the relationship between

customer demographics and service quality.

2) Multiple regression is used for testing hypothesis 2: the relationship between

service quality (tangibility, reliability, responsiveness, assurance and empathy)

and customer satisfaction.

3.1.9 Measurement of Conducting Questionnaire

This research uses the five-point Likert scale to measure the tourist opinions toward different perspectives of service quality. The Likert Scale is the most widely used rating scale to measure attitudes; it allows one to express how important/satisfied or important/satisfied one is with a particular statement. The higher of the score, the more important the variables are as evaluative criteria (Likert, Rensis, 1932).

The five-point Likert scale is as follows:

 Not important/satisfied at all

 Not important/satisfied

 Average

 Important/satisfied

 Very important/satisfied

With five-point scales, the interval for breaking the range in measuring each variable is calculated by 5 1  0.8 5

Data analysis with mean scores falling between the ranges as follows:

 1.00 – 1.80 will be analyzed as not important/satisfied at all

 1.81 – 2.60 will be analyzed as not important/satisfied

 2.61 – 3.40 will be analyzed as average

 3.41 – 4.20 will be analyzed as important/satisfied

 4.21 – 5.00 will be analyzed as very important/satisfied

3.1.10 Variables of Research

There are variables for identifying customer demographics and service quality when a customer lodges along Khao-San Road and surrounding areas. The tables consist of these variables, components and the measurement scales appropriate to them.

Table 3.1.10 Variables of Research Finding

Variables Components Type of Measurement

 Male Gender Nominal  Female

 Africa

 Asia

 Europe

Continent of Country  North America Nominal

 South America

 Oceania

 Others

Variables Components Type of Measurement

 20 years and below

 21-30 years

 31-40 years

Age  41-50 years Ordinal

 51-60 years

 61-70 years

 71-80 and above

 Single

 Married Marital Status Nominal  Divorced

 Others

 Middle School or Lower

 High School Degree

 Bachelor Degree Education Nominal  Master Degree

 Doctoral Degree

 Others

 Student

 Government Officer

 Corporate & Private Occupation Nominal  Business Owner

 Unemployed

 Others

 Bth600,000 & below

 Bth600,000-900,000 Annual Income Ordinal  Bth900,001-1,200,000

 Bth1,200,001-1,500,000

 Bth1,500,000 & above

 Buddhism

 Christianity

Religion  Islam Nominal

 Catholicism

 Others

Variables Components Type of Measurement

 Cleanliness of facility

 Cleanliness of equipment

 Comfort of facility

Tangibles  Comfort of equipment Interval

 Attractiveness decoration

 Staff with good communication skill

 Clearly staff uniform

 Staff performance at keeping dependable

 Industries keep their promised service to customer

Reliability  Staffs give right clear information to customer Interval

 Staffs show sincerity to resolve the

problems to customer

 always provide promptness of the service to customer

 Staffs are available to respond to customer any time

Responsiveness  Staffs are always willing to help the guests Interval

 Staffs always say “yes” with customer reasonable want

 Staff always offer the warm helps

 Staffs skilled enable to obtain customer trust

 Staffs are friendly and courteous to customer

Assurance  Provision of privacy to guests Interval

 Industries need to security of guests and their Belongings

 Industries can not to disclose the guests privacy

 Industries provide special service packages for special guests

 Staffs need to understand the needs of Guests Empathy Interval  Industries convenient operating hours for guests

 Industries provide the individualized attention to guests

 Lodges’ physical facilities is comfortable to customer

 the service of employee is qualified to customer

 lodges’ security is safety to customer

Service quality & Customer satisfaction  customer is satisfied with employee’s behavior Interval

 customer is satisfied with employee’s attitude

 customer is satisfied with employee’s dress

 customer is satisfied with individualized services from employee

Hypotheses Test

This study sets the hypotheses to tourists in order to study two key factors as follows:

1) There is a significant relation between customer demographic characteristics and

service quality when measured on five dimensions; and

2) There is a significant relationship between service quality and customer

satisfaction.

This research consists of hypotheses as follows:

Hypothesis 1

H0 1: There is no significant relationship between a customer’s demographic characteristics and service quality; and

H1 1: There is a significant relationship between a customer’s demographic characteristics and service quality.

Hypothesis 2

H0 2: There is no significant relationship between service quality and customer satisfaction; and

H1 2: There is a significant relationship between service quality and customer satisfaction.

3.2 Qualitative Research

This part is designed to obtain subjective suggestions from interviews with the nine lodging owners.

3.2.1 Population of the Study

The target populations are the owners/supervisors of nine lodges along Khao-San

Road and surrounding areas during 3-19 November 2014.

3.2.2 Data Collection

Three days were spent to interview nine lodging owners/supervisors along Khaosan

Road and surrounding areas to gain insights for the study’s two objectives. Four lodges were interviewed along Khao-San Road: Rikka Inn, Dang-Derm Hotel, Buddy

Lodge and Khao-San Palace Hotel, with nearly 10 minutes spent to interview each owner/supervisor. Two lodges were interviewed on Mayom Ally: at Sawasdee

Bangkok Inn and Buddy Bouttque Inn, where about 10 minutes was spent interviewing each owner/supervisor. Lastly, about 10 minutes was spent interviewing three owners/supervisors along Ram-Buttri Road at Viengtai Hotel, Sakul House

Hotel and Ram-Buttri House.

3.2.3 Research Tool:

The survey required that participants to respond to two questions related to the objectives of the study. The respondents would spend almost five minutes answering each question. The collected data are analyzed by content analysis.

3.2.4 Qualitative Analysis:

Content analysis is used to describe the collected data from the interviews with the nine lodging owners/supervisors.

Those interviews are based on the study’s objectives and revolve around three questions: 1) what’s your name; 2) do you think customer demographics affect service quality, and if so, which demographic has the greatest effect; and 3) do you think service quality can affect customer satisfaction, and if it does, which dimension has the greatest effect.

Chapter 4

RESULTS

In this chapter, detailed information acquired from the questionnaire is presented and discussed to prove the research objective. Six sections comprise this chapter as follows:

Section 1. Summary of demographic data by using descriptive statistic (Frequency &

Percentage);

Section 2. Means and standard deviation are used for analysis in Part 2 (service quality) and Part 3 (customer satisfaction);

Section 3. Multiple regressions are used to test the relationship between customer demographics and service quality;

Section 4. Multiple regressions are used to test the relationship between service quality

(tangibility, reliability, responsiveness, assurance and empathy) and customer satisfaction;

Section 5. Summary of hypothesis testing results;

Section 6. Analysis of interviews at nine lodges.

4.1 Section 1: Summary of Demographic Data by Employing Descriptive

Statistics (Frequency & Percentage)

4.1.1 Gender of Respondents

Table 4.1.1 shows the number of samples at 230 male respondents, or 57.50%, and

170 female respondents, or 42.5% for a total of 400 respondents, or 100%.

Table 4.1.1 - Frequency of Gender

Gender Frequency Percent

Male 230 57.5

Female 170 42.5

Total 400 100

4.1.2 Age of Respondents

Table 4.1.2 shows that the number of samples aged below 20 years old is 18, or 4.5%; aged between 20-30 years old is 90, or 22.5%; aged between 31-40 years old is 142, or

35.5%; aged between 41-50 years old is 102, or 25.5%; aged between 51-60 years old is

30, or 7.5%; aged above 61 years old is 18, or 4.5%.

Table 4.1.2 - Frequency of Age

Age Frequency Percent

Below 20 18 4.5

20-30 90 22.5

31-40 142 35.5

41-50 102 25.5

51-60 30 7.5

Above 61 18 4.5

Total 400 100

4.1.3 Nationality of Respondents

Table 4.1.3 shows that the nationality of the samples can be categorized as Canada with 37 respondents, or 9.3%; UK with 56 respondents, or 14.0%; USA with 42 respondents, or 10.5%; Germany with 20 respondents, or 5.0%; Spain with 13 respondents, or 3.3%; Denmark with two respondents, or 0.5%; Australia with 25 respondents, or 6.3%; China with 85 respondents, or 21.3%; Egypt with seven respondents, or 1.8%; France with 27 respondents, or 6.8%; Italy with 11 respondents, or 2.8%: Japan with eight respondents, or 2.0%; Malaysia with 15 respondents or 3.8%;

Singapore with 39 respondents or 9.8%; and Switzerland with 13 respondents, or 3.3%.

Table 4.1.3 - Frequency of Nationality

Country Frequency Percent

Canada 37 9.3

UK 56 14.0

USA 42 10.5

Germany 20 5.0

Spain 13 3.3

Denmark 2 0.5

Australia 25 6.3

China 85 21.3

Egypt 7 1.8

France 27 6.8

Italy 11 2.8

Japan 8 2.0

Malaysia 15 3.8

Singapore 39 9.8

Switzerland 13 3.3

Total 400 100

4.1.4 Education of Respondents

Table 4.1.4 shows that the education levels of the samples can be categorized as below Bachelor’s degree at 73, or 18.3%; Bachelor’s degree at 194, or 48.5%; Master’s degree at 89 or 22.3%; and Ph.D. at 44, or 11.0%.

Table 4.1.4 Frequency of Education

Education Frequency Percent

Below Bachelor Degree 73 18.3

Bachelor Degree 194 48.5

Master Degree 89 22.3

PhD 44 11.0

Total 400 100

4.1.5 Marital Status of Respondents

Table 4.1.5 shows that the number of singles is 92 respondents, or 23%; married ats

153 respondents, or 38.3%; and divorced at 155 respondents, or 38.8%.

Table 4.1.5 - Frequency of Marital Status

Marital Status Frequency Percent

Single 92 23

Married 153 38.3

Divorce 155 38.8

Total 400 100

4.1.6 Occupation of Respondents

Table 4.1.6 shows that the occupation of the samples can be categorized as government officer, corporate employee, student, business owner and other. The numbers of each category are 74, or 18.5%; 158, or 39.5%; 29, or 7.3%; 101, or 25.3%; and 38, or 9.5%, respectively. Another 38 respondents, or 9.5%, are unemployed.

Table 4.1.6 - Frequency of Occupation

Occupation Frequency Percent

Government Officer 74 18.5

Employee of Company 158 39.5

Student 29 7.3

Business Owner 101 25.3

Others 38 9.5

Total 400 100

4.1.7 Annual Income of Respondents

Table 4.1.7 shows that the annual income of samples can be categorized as below than

Bt600,000, Bt600,001-900,000, Bt900,001-1,200,000, Bt1,200,000-1,500,000 and above Bt1,500,000. The numbers of each category are 44, or 11%; 70, or 17.5%; 150, or 37.5%; 76, or 19%; and 60, or 15%, respectively.

Table 4.1.7 - Frequency of Annual Income

Annual Income Frequency Percent

Below than Bth600,000 44 11.0

Bht600,001-900,000 70 17.5

Bht900,001-1,200,000 150 37.5

Bht1,200,001-1,500,000 76 19.0

Above than Bht1,500,001 60 15.0

Total 400 100

4.1.8 Religion of Respondents

Table 4.1.8 shows that the religion of samples can be categorized as Buddhist,

Christian, Islamist, Catholic and other. The number for each category are 91, or 22.8%;

96, or 24%; 57, or 14.3%; 131, or 32.8%; and another 25 respondents, or 6.3%, are nonbelievers.

Table 4.1.8 - Frequency of Religion

Religion Frequency Percent

Buddhism 91 22.8

Christianity 96 24.0

Islam 57 14.3

Catholicism 131 32.8

Others 25 6.3

Total 400 100

4.2 Section 2: Means and Standard Deviation: Used for Analysis in Part 2

(service quality) and Part 3 (customers satisfaction)

Table: 4.2.1-4.2.2 shows the results of important/satisfied levels among customers.

The researcher asked customers to give the feedback about service quality by choosing on a provided scale the satisfaction ratings toward each related factor from 1 (not important/satisfied at all) to 5 (very important/satisfied). Using a five-point rating scale,

75 it can be seen that the means 3.41-4.20 reveal the important/satisfied level affecting customer satisfaction on service quality, except No. 21 (reliability) shows a mean 3.38, which discloses the average level affecting customer satisfaction on service quality.

Service quality contains about 25 questions. It was sorted by five dimensions: tangibility, reliability, responsiveness, assurance and empathy. The mean of majority question are between 3.41-4.20 and show the important/satisfied levels of service quality on customer satisfaction, except No. 21 (reliability) with a mean of 3.38 that reveals the average level of service quality on customer satisfaction. The highest important level of the factor is question No. 12 (tangibles) at mean = 3.92 and S.D. =

0.957, while the lowest is question No. 21 (reliability) at mean = 3.38 and S.D. = 1.003.

Service quality & customer satisfaction constitute seven questions in the survey.

The mean of all questions are between 3.41-4.20, which shows the satisfaction level of lodging customers. The highest satisfied level is question No. 37 (what do you feel about the lodge’s physical facilities) with mean = 4.0 and S.D. = 0.931, while the lowest is question No. 38 (what do you feel about the lodges employees’ prompt service) with mean = 3.60 and S.D. = 0.961.

Table 4.2 - The Analysis Level of Important of Customers

Level of Service Quality --- Tangibles Mean S.D. Agreement

The lodge has modern service equipment 3.61 1.019 Important

The equipment of the lodge is attractive for you 3.92 0.957 Important

The equipment of the lodge is neat 3.66 0.986 Important

The equipment of the lodge is properly 3.83 1.002 Important

The equipment of the lodge is safe 3.80 1.059 Important

The employee of the lodge wears the clearly uniform 3.77 0.885 Important

Level of Service Quality --- Reliability Mean S.D. Agreement

The lodge’s employee gives you the service during a comfortably 3.84 0.951 Important way

The lodge’s employee shows a sincere interest to solving your 3.63 1.176 Important problems

The lodge’s employee is able to give the right serve to you 3.63 1.105 Important

The lodge performs what they promised service for you 3.55 0.975 Important

The lodge provides its services right at the first time 3.38 1.003 average

Level of Service Quality --- Responsiveness Mean S.D. Agreement

The lodge’s employee is willing to provide prompt service to you 3.51 1.117 Important

all the time

The lodge’s employee is able to give a prompt service effectively 3.61 1.087 Important

The lodge’s employee is able to complete the service efficacious 3.63 1.003 Important

The lodge’s employee is able to tell you exactly what service they 3.54 1.008 Important will give to you

Level of Service Quality --- Assurance Mean S.D. Agreement

The employee in the lodge is consistently courteous with you 3.55 1.073 Important

The employee in the lodge is able to provide secure service to 3.72 1.066 Important you

The lodge’s employee offers up high quality of service to you 3.85 1.030 Important

The lodge’s employee make you feel trustworthy 3.78 0.996 Important

The employee in the lodge has the knowledge to answer your 3.73 0.889 Important questions clearly

Level of Service Quality --- Empathy Mean S.D. Agreement

The lodge’s employee is always set out to meet what you need 3.60 0.968 Important

The lodge’s employee understands the specific needs of you 3.57 0.929 Important

The lodge’s employee give you individual attention 3.62 0.888 Important

The lodge always has your best interests at heart 3.57 0.936 Important

The lodge provides the special service packages to you 3.75 0.883 Important

Table 4.2.1 - The Analysis Level of Satisfied of Customers

Level of Service Quality & Customer’ Satisfactions Mean S.D. Agreement

What do you feel about the lodge’s environment 3.86 0.961 Satisfied

What do you feel about the lodge’s physical facilities 4.00 0.931 Satisfied

What do you feel about the lodge employees’ prompt service 3.60 0.961 Satisfied

What do you feel about the lodge’s service security 3.86 1.073 Satisfied

What do you feel about the lodge employee’s attitude 3.77 1.033 Satisfied

What do you feel about the lodge employee’s behavior 3.77 1.033 Satisfied

What do you feel when the lodge’s employee give you some 3.74 0.997 Satisfied individualized services

4.3 Section 3. Use of Multiple Regressions to Get Results of the Relationship

Between Customer Demographic Characteristics and Service Quality.

The following part displays the hypotheses testing results in evaluating the relationship between gender, nationality, age, marital status, education, occupation, annual income and religion of lodging customers along Khaosan Road and surrounding areas.

4.3.1 Hypothesis Testing

Hypothesis 1

H0 1: There is no significant relationship between a customer’s demographic characteristics and service quality.

H1 1: There is a significant relationship between a customer’s demographic characteristics and service quality.

Table 4.3.1Model Summary Analysis

Model Summary

R R Square Adjusted R Square Std. Error of the Estimate

.545 .316 .311 .362

Table 4.3.2 ANOVA Analysis

ANOVA

Model Sum of Squares df Mean Square F Sig.

Regression 50.154 2 10.051 83.907 .063

Residual 74.555 397 .114

Total 143.709 399

*Significant at 95% Confidence Level

Table 4.3.3 Coefficients Analysis

Coefficients

Unstandardized Coefficients standardized Coefficients Model t Sig. B Std. Error Beta

Constant 1.298 .149 8.636 .072

Gender .375 .048 .408 7.758 .053

Age .157 .051 .174 3.039 .071

Country .129 .046 .410 2.751 .058

Education -.321 .047 -.332 -6.752 .081

Marital Status .328 .043 .372 7.549 .065

Occupation .377 .049 .310 7.760 .078

Annual .160 .048 .146 2.753 .066 Income

Religion .334 .058 .443 6.763 .048

*Significant at 95% Confidence Level

Table 4.3.1, Model Summary table, shows the R-squared at 31.6%, which means the service quality of the lodges can be explained by customer demographics. But the adjusted R-squared is 31.1%, which means the value of the R-squared and adjusted

R-squared are much closer because the number of observations is very large compared with the number of predictors.

Table 4.3.2, ANOVA table, shows a p-value of more than 0.05 at the 95% confidence level, which means the null hypothesis cannot be rejected. Thus, there is no significant relationship between a customer’s demographic characteristics and service quality.

Table 4.3.3, the coefficients table, indicates that most of a customer’s demographic characteristics bear no significant effect on the service quality of lodges on Khao-San Road and surrounding areas without the factor of a customer’s religion, because religion is the only factor with a p-value less than 0.05 at the 95% confidence

82 level. Therefore, only religion has a significant relationship with service quality when customers stay at lodges on Khao-San Road and in surrounding areas.

Meanwhile, from the coefficients table, the standardized coefficients column shows that, when comparing all factors of customer demographics, the level of a customer’s religion is the highest, which indicates that religion is the most important factor that can influence service quality. In addition, a customer’s nationality and gender are important factors influencing service quality for customers staying in lodges on Khao-San Road and in surrounding areas.

4.4 Section 4. Use Multiple Regressions to Test the Relationship Between Service

Quality (tangibility, reliability, responsiveness, assurance and empathy) and

Customers’ Satisfaction.

Hypothesis 2

H0 2: There is no significant relationship between service quality and customer satisfaction.

H1 2: There is a significant relationship between service quality and customer satisfaction.

Table 4.4.1 Model Summary Analysis

Model Summary

R R Square Adjusted R Square Std. Error of the Estimate

.708 .502 .496 .425

Table 4.4.2 ANOVA Analysis

ANOVA

Model Sum of Squares df Mean Square F Sig.

Regression 72.924 5 14.584 80.051 .000*

Residual 71.782 394 .180

Total 144.708 399

*Significant at 95% Confidence Level

Table 4.4.3 Coefficients Analysis

Coefficients

Unstandardized Coefficients standardized Coefficients Model t Sig. B Std. Error Beta

Constant .896 .144 6.169 .000*

Tangible .312 .042 .345 7.212 .000*

Reliability -.003 .056 -.004 -.074 .939

Response .142 .047 .160 2.953 .001*

Assurance .156 .055 .161 2.751 .005*

Empathy .168 .047 .175 3.464 .000*

*Significant at 95% Confidence Level

Table 4.4.1, Model Summary table, shows the R-squared is 50.2%, which means customer satisfaction in lodges on Khao-San Road and in surrounding areas can be explained by service quality, and the adjusted R-squared is 49.6%.

Table 4.4.2, ANOVA table, shows a p-value at less than 0.05 at the 95% confidence level. The null hypothesis can be rejected. Thus, there is a significant relationship between service quality and customer satisfaction.

Table 4.4.3 shows the coefficients of four dimensions (tangibility, responsiveness, assurance and empathy) of service quality with a positive relationship on customer satisfaction in lodges along Khao-San Road and surrounding areas, because these four dimensions all have a p-value less than 0.05 at the 95% confidence level, which means they have a positive relationship on customer satisfaction.

However, reliability of service quality has a negative relationship due to its coefficients, which are negative to customer satisfaction with a p-value above 0.05, so it means the reliability of service quality has a negative relationship to customer satisfaction among lodges along Khao-San Road and surrounding areas.

Therefore, from the coefficients table, at the standardized coefficients column, the tangible level is highest compared with all related dimensions, which means that tangible is the most important factor in a positive relationship with customer satisfaction in lodges along Khao-San Road and surrounding areas.

Customers Satisfaction = 0.896 + 0.312SQ_Tangi - 0.003SQ_Reli +

0.142SQ_Respo + 0.156SQ_Assu + 0.168SQ_Emp

These estimates tell the amount of increase in satisfaction that would be predicted by a one-unit increase in service quality.

4.5 Section 5: Summary of Hypothesis Testing Results

The results from tables 4.3.1-4.4.3 show the results of hypothesis testing in the following summary:

Sig.(1tailed) Hypothesis Description of Ho Result /Mul-regrresions

There is no a significant relation between in customer’s Not 1 .63 demographic characteristicsr and service quality. Reject Ho

There is no a significant relation between in service 2 .000 Reject Ho quality and customer satisfaction

Table 4.5 Summary of Hypothesis Testing Result of Customer Demographic;

Service Quality and Customer Satisfaction of Lodge on Khaosan Road and

Surrounding Areas.

4.6 Section 6. Result of Interview Nine Lodges’ Owner

Table 4.6 - The Analysis of Interview to Nine Lodges

Two Research Questions Owner/Supervisor Do you think the customer Lodge Name Do you think the service quality could Name demographic is effect to service effect on customer satisfaction? quality? (YES) Rikka Inn Mr. Atthawot M. None Assurance ( Khao-San ) Tangible (YES) (YES) D&D Hotel Mr. Bent Nationality Assurance ( Khao-San ) Religion Reliability (YES) Buddy Lodge (YES) Mrs. Phaptawan Tangible ( Khao-San ) Religion Assurance Khao-San (YES) Palace Hotel Mr. Chatpong None Assurance ( Khao-San) Empathy Sawasdee (YES) (YES) Bangkok Inn Mrs. Samon Responsiveness Nationality (Mayom -Ally) Assurance Buddy (YES) Bouttque Mr. Tee None Tangible Inn Kongpbadid Responsiveness (Mayom -Ally) (YES) (YES) Viengtai Hotel Ms. Muay Punchai Gender Tangible ( Ram-Buttri ) Religion Assurance (YES) Sakul House Assurance Hotel Ms. Vanapan None Reliability ( Ram-Buttri )

Ram-Burrri (YES) Mr. See Myinl (YES) House Tangible Aurg Religion ( Ram-Buttri ) Empathy

Table 4.6 shows the results of interviews with nine lodges’ owners/supervisors.

As to the relationship between customer demographic and service quality, four owners see no factor of customer demographic affecting their service quality because they treat all customers equally. Four owners think a customer’s religion would always be of concern, in order to respect and avoid any taboos. On the other hand, a few owners chose gender or nationality as their primary concern because they said a customer’s nationality could directly influence the service they provide. For example, employee attitudes are more ebullient toward European tourists compared with those toward Asian tourists. One owner chose gender as the factor that would influence service quality, because men pay greater tips than women. As to the relationship between service quality and customer satisfaction, seven owners consider assurance to be the most of important factor affecting customer satisfaction, with tangibles, responsiveness and empathy following in order.

Chapter 5

CONCLUSIONS and DISCUSSION

This chapter presents the conclusions, discussion, implication, limitations of the study and suggestions for further research, as follows:

Section 1: Conclusions from findings

Section 2: Discussion

Section 3: Implications

Section 4: Limitations & suggestions for further research

5.1 Section 1: Conclusions from Findings

The main objective of the research is to investigate the relationship between customer demographic and service quality, and the relationship between service quality and customer satisfaction of tourists who take up lodging on Khao-San Road and in surrounding areas. This study uses descriptive statistics for data analysis to indicate the frequency and percentage, and means and standard deviation. It then employs means and standard deviation and one-way ANOVA with multiple regression to test hypothesis.

According to tables 4.1.1-4.1.10, the frequency & percentage analysis, men comprise the largest percentage of respondents. The majority are 31-40 years old.

Most come from China, which conforms to the literature review stating the

(www.bangkokpost.com) Thai-Chinese Tourism Alliance Association’s declaration in

February 2013 that Chinese tourists are the main supplier of Thailand’s tourism industry and 3.3 million Chinese tourists were expected in 2013. Likewise, 194 respondents have Bachelor’s degrees and most respondents were divorced. The majority of respondents were company employees, with many earning annual incomes of B900,001-1,200,000. Most respondents declared their religion to be

Catholic.

Table 4.2.1 shows that most customers chose the most in question No. 12 (the equipment of the lodge is attractive for you) among tangibles and the lowest in question No. 21 (the lodge provides its services right the first time) among reliability.

Thus, the findings indicate that most customer feel a lodge’s equipment is most important to them.

Meanwhile, table 4.2.2 shows that the highest satisfaction level from respondents is found in question No. 37 (what do you feel about the lodge’s physical facilities) and the lowest in question No. 38 (what do you feel about the lodges employees’ prompt service). Therefore, the majority customers think that employee service is adequate.

According to table 4.6.1, most owners see service quality as hard to define by customer demographics. However, among demographic data, most place greatest important on religion, because they feel a need to respect a customer’s beliefs and they try their utmost to respect any taboos. The results conform to the literature review in Chapter 2 (Parasuraman, Zeithaml & Berry, ,1985), which states that service is most difficult to define when it cannot be verified, inventoried, measured, counted and tested.

On the other hand, the table also found that all owners admit customer satisfaction can be explained by service quality, especially on the factors of assurance, tangibles and empathy. The results conform to the Chapter 2 literature review stating that a structure equation model provides the evidence that customer satisfaction has been considered based on service quality (Taylor, 1992).

5.2 Section 2 Discussion

The relationship between customer demographics and service quality

Tables 4.3.1-4.3.3 list seven customer demographic factors: gender, age, nationality, education, marital status, occupation and annual income, all of which cannot be considered as key factors in the evaluation of service quality except for a customer’s religion, because those seven factors all have a p-value greater than 0.05 at the 95% confidence value. The results reveal that almost all factors of customer demographic characteristics have no significant relationship with service quality among customers in lodges on Khao-San Road and in surrounding areas, which conforms to the Chapter 2 literature review in which Ramez (2011), studying the service quality of Bahraini commercial banks, finds no overall significant relationship between customer demographic variables and service quality. The studies by

Schwantz (1996) and Ilias, Hasan, Rahman and Yasoa (2008) in the higher education services also find no significant relationship between customer demographic variables and service quality.

On the other hand, the results similarly conform to the literature review in which

McDonald (1996) states that service is largely intangible, because some specifications concerning uniform quality can rarely can be set; it is a performance piece rather than a physical object. Clow (1997) describes service quality as a customer’s judgment

94 about facilities and whether they are perceived as excellent or even superior; it relates to a customer’s attitude, but not equal to a customer’s occupation and results from a comparison of expectation with performance. Kurtz & Clow (1998) indicate that a result of measurement cannot depend on a customer’s education. Likewise, the results indicate only one factor, religion, has a significant relationship with service quality for customers in lodges on Khao-San Road and in surrounding areas. In comparing all factors, a customer’s religion is the most important potential influence on service quality, even above nationality and gender. Therefore, to gain greater credibility from customers and increase market share and benefits, lodging operators along Khao-San

Road and surrounding areas need to pay more attention to these three factors (religion, nationality and gender) concerning their customers’ demographic characteristics.

The relationship between service quality and customer satisfaction

Tables 4.4.1-4.4.3 show that service quality possesses five factors: tangibility, reliability, responsiveness, assurance and empathy. The study finds their R-squared value at 50.2%, and a p-value of less than 0.05 at a 95% confidence level, thus revealing that service quality has a positive relationship with customer satisfaction for guests along Khao-San Road and surrounding areas. These results conform to the

Chapter 2 literature review in which Zeithaml et al. (2006, pp. 106-107) state that

“Several definitions indicated that some factors such as goods/service quality and

95 perceived service quality can affect to customer satisfaction.” They provide evidence that service quality is a subordinate construct of customer satisfaction. Meanwhile, the coefficients table’s standardized coefficients column shows that reliability has a negative relationship due to its coefficients and p-value being over 0.05, meaning that reliability has a negative relationship with customer satisfaction on Khao-San Road and in surrounding areas. Therefore, this result indicates that most customers have a negative attitude toward aspects of reliability of service quality regarding the lodges.

Regarding multiple regression analysis, the negative coefficient shows that customers have lower confidence and trust regarding reliability of service quality; thus, the lodge owners need to compare their levels of customer confidence and trust with lodges located in other renowned parts of Bangkok, where tourist services have been familiar for a longer time.

5.3 Section 3 Implications

Nowadays, 80 customer lodges are located on Khao-San Road and in surrounding areas. According to the findings herein, most lodging customers are 31-40 years old and come from China. Many are divorced men with incomes of Bt900,001-1,200,000 who have earned Bachelor’s degrees and work for companies. The bulk of them are

Catholic.

Multiple regressions testing reveals that, in general, no direct influence from customer demographic variables exist in the evaluation of service quality except for customer religion. However, a positive significant influence exists between service quality and customer satisfaction with the exception of reliability. Thus, these results imply that the operators of lodges from Khao-San Road and surrounding areas need to pay more attention as to how can they effectively improve their service quality. The operators should start with their employees by focusing on teamwork, interpersonal skills, inter-departmental communication and coordination with each other.

Meanwhile, the operators also need to encourage employees to be active and enthusiastic team players in order to build a positive work attitude. If team work improves, service quality will improve as well and customers will be more satisfied.

5.3.1 Action Plan

To raise the service quality of lodges on Khao-San Road and in surrounding areas, this study combines all of the above findings with the results of nine lodges interviewed to develop an action plan. The process of development is as follows:

What action or change will occur: lodges on Khao-San Road and in surrounding areas are aware that not all customer demographic data (gender, age, nationality, marital status, education, annual income, purpose of visit, occupation, and religion or lodges) can directly affect service quality because all above findings indicate that the

97 customer is always right or even that the customer is king. But when lodges provide service, they should pay attention to a customer’s religion to avoid performing a taboo and to make them feel more respected by the establishment.

Who will carry it out: all lodge employees will be responsible. The organization as a whole will work toward finding the best strategy to improve components of service quality, especially reliability, because the findings indicate that this factor has a negative relationship with customer satisfaction.

When will it take place, and for how long: the action plan will need six months at each lodge.

What resources are needed to carry out the action plan: all lodge employees need to clearly understand the meaning of the service quality components and the importance of customer religion on quality and satisfaction.

Communication about the action plan: the lodge’s staff should generally maintain good communications with customers to better implement the service quality plan.

During the action plan development, the plan’s vision is to make the lodge’s business more successful. The mission is to improve service quality. Meanwhile, the

98 objective of the action plan is to meet or exceed customer needs. To turn the vision and mission into a reality, six steps are needed for implementation as follows: 1) become aware of the industry’s shortcomings; 2) survey suggestions from the target population; 3) learn more good strategies by examining how better lodges in other renowned parts of Bangkok operate; 4) improve shortcomings noticed after examining better lodges by developing a best or suitable strategy for the organization;

5) implement the plan after the best strategy is developed; and 6) gain feedback from the target population after the action plan is implemented.

Moreover, to implement an action plan, this study has developed more detailed strategies for each dimension (tangibles, reliability, responsiveness, assurance and empathy) of service quality as follows:

 Tangibles

The findings show that the tangibles rank highest against all related dimensions, which is the most important factor of a positive relationship with customer satisfaction on Khao-San Road and in surrounding areas. Therefore, this study suggests an action plan such as: lodges around Khao-San Road and surrounding areas should increase facilities and equipment that offer customers more convenience. Meanwhile, lodge owners should develop and strengthen the reasons customers choose to visit, which should be convenience, atmosphere and variety, in order to gain market share from

99 competitors. This action plan forecasts a required timeframe of about six months.

Following plan implementation, it is hoped that lodges will have increased their market share at the expense of their competitors.

 Reliability

The results reveal that reliability is a weakness in customer satisfaction among these lodges, which is why the owners should move quickly to improve and recover from this shortcoming in these ways: 1) train employees to supply service correctly the first time; 2) train employees to provide service in a comfortable manner; 3) train employees to pay a sincere interest to solving customer problems; 4) train employees to be able to give correct service; and 5) train employees to perform services as promised.

This action plan is projected to take about six months; following implementation it is hoped that lodges could gain greater credibility from customers.

 Responsiveness

The findings state that responsiveness at the lower-middle level has a positive relationship with customer satisfaction among lodges on Khao-San Road and in surrounding areas. Thus, lodge owners should pay more attention to this dimension by:

1) training employees to be always willing to provide prompt service; 2) training employees to supply prompt service effectively; 3) training employees to complete their service efficacious; and 4) training employees to tell their customers exactly what

100 service they will give them. This plan is expected to take about six months; following implementation, it is hoped that the plan will gain and/or recover greater trust among lodges on Khao-San Road and in surrounding areas.

 Assurance

The findings describes assurance as a third dimension with a positive relationship with customer satisfaction for these lodges. Plans for lodge owners to improve their quality based on this dimension would address: 1) training employees to provide courteous service; 2) training employees to provide secure service; 3) training employees to offer high-quality service; 4) training employees to engender trust; and 5) training employees with professional knowledge to answer all questions. This plan will likely take six months; following implementation it is hoped that most customers would receive satisfactory service and that lodges will obtain a high level of customer satisfaction.

 Empathy

The results indicate that empathy has a high positive relationship with customer satisfaction, second only to tangibles. Thus, to keep and develop this strength, lodge owners should do the following: 1) train employees to always set out to meet what customers need; 2) train employees to understand customers’ specific needs; 3) train employees to give individual attention to each guest; 4) train employees to always have

101 the customer’s best interest at heart; and 5) train employees to provide special service packages to customers as appropriate and desired. This plan will take around six months to implement; following implementation, it is hoped that this plan will increase the number of repeat customers through good word-of-mouth from guests.

Moreover, the results of the hypothesis imply that all customer demographic data

(gender, age, nationality, marital status, education, annual income and occupation) cannot directly influence service quality because all the above findings indicate that the customer is always right or even that the customer is king. But when lodges provide service, they should pay attention to a customer’s religion in order to avoid customer taboos and to make customers feel more respected. Furthermore, the study found that only the reliability of service quality has a negative relationship with customer satisfaction. It implies that operators should move quickly to improve this factor so as to gain credibility from customers.

The study also found that the factor of tangibles in service quality has the highest positive influence on customer satisfaction compared with other factors. Therefore, lodge operators should maintain this strong advantage to boost repeat business and attract greater numbers of new guests. At the end, it is believed that the service quality of these lodges will do better in the near future, after their operators reduce their disadvantages and develop new and effective strategies.

102

5.4 Section 4 Limitations & Further Research

 Limitations

The study is limited to guests in the lodges of Khao-San Road and surrounding areas; thus, the findings cannot be extended to other places. Sometimes, if respondents were in a hurry or did not pay close attention to the questionnaire, they may have answered inaccurately. Khao-San Road and the surrounding areas attract tourists who just want to have fun or relax; therefore, few tourists were willing to accept the questionnaire and complete it.

 Further Research

This research limits the scope of study, so the data were collected only from lodges along Khao-San Road and surrounding areas. For further study, it is recommended that research should examine service quality and customer satisfaction at lodging near other renowned areas of Bangkok, such as the Rose Garden, Amphara Floating

Market and Chao Phraya River.

This research studied only five dimensions of service quality affecting customer satisfaction. Therefore, further research is recommended that analyzes other factors, such as customer attitude and customer behavior, in order to gain a variety of elements to better understand customer satisfaction.

103

This research is limited to studying only the relationship between service quality and customer satisfaction; thus, further research is recommended to study the relationship between customer loyalty and customer satisfaction so as to build repeat business.

104

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APPENDICES

130

Appendix A

QUESTIONNAIRE

Dear Tourists,

My name is Quinnita Luo. I am a MBA student at Thai Chamber of Commerce

University, Bangkok, Thailand. I am conducting a research to fulfill my MBA degree.

I would like to get some information about general characteristics of how you perceived on “Service Quality of Lodges on Khaosan Road and Surrounding Areas”. I would be very grateful if you fill in the questionnaire to help me to complete the research process. All the responses will be used for the purpose of this individual study only.

Thank you very much for your valuable time and great cooperation.

Yours sincerely

131

SECTION 1: Demographics (Please mark (√) one)

Gender:

Male Female

Age:

Below 20 20-30 31-40 41-50 51-60 above 61

Country:

North America Europe Asia Oceania Africa South America Antarctica

Please identify your country ……………………………………..

Education.

Below Bachelor degree Bachelor degree

Master degree Doctoral degree

Others, please specify …………………………….

132

Marital Status.

Single Married Divorce

Occupation.

Government Officer Employee of Company

Student Business Owner

Others, please specify ……………………………..

Annual Income.

Below than Bht 600,000 Bht 600,001- 900,000 Bht 900,001- 1,200,000

Bht 1,200,001- 1,500,000 Above Bht 1,500,000

Religion.

Buddhism Christianity

Islam Catholicism

Other ………………….

133

SECTION 2: Service Quality

Please check the number best describes your perception of the value equity drivers with the following statement.

Degree of Agreement: (1= Not important at all, 2 = Not important, 3 = Average, 4=

Important, 5= Very important) (Please mark (O) one of each question)

Tangibles:

The lodge has modern service equipment

1 2 3 4 5

The equipment of the lodge is attractive for you

1 2 3 4 5

The equipment of the lodge is neat

1 2 3 4 5

The equipment of the lodge is properly

1 2 3 4 5

The equipment of the lodge is safety

1 2 3 4 5

134

The employee of the lodge wears the clearly uniform

1 2 3 4 5

Reliability:

The lodge’s employee gives you the service during a comfortably way

1 2 3 4 5

The lodge’s employee shows a sincere interest to solving your problems

1 2 3 4 5

The lodge’s employee is able to give the right service to you

1 2 3 4 5

The lodge performs what they promised service for you

1 2 3 4 5

The lodge provides its services right at the first time

1 2 3 4 5

135

Responsiveness：

The lodge’s employee is willing to provide prompt service to you all the time

1 2 3 4 5

The lodge’s employee is able to give a prompt service effectively

1 2 3 4 5

The lodge’s employee is able to complete the service efficacious

1 2 3 4 5

The lodge’s employee is able to tell you exactly what service they will give to you

1 2 3 4 5

Assurance:

The employee in the lodge is consistently courteous with you

1 2 3 4 5

The employee in the lodge is able to provide secure service to you

1 2 3 4 5

136

The lodge’s employee offers up high quality of service to you

1 2 3 4 5

The lodge’s employee make you feel trustworthy

1 2 3 4 5

The employee in the lodge has the knowledge to answer your questions

1 2 3 4 5

Empathy:

The lodge’s employee is always set out to meet what you need

1 2 3 4 5

The lodge’s employee understands the specific needs of you

1 2 3 4 5

The lodge’s employee give you individual attention

1 2 3 4 5

The lodge always has your best interests at heart

1 2 3 4 5

137

The lodge provides the special service packages to you

1 2 3 4 5

SECTION 3: Service Quality & Customer’ Satisfactions

Please check the number best describes your perception of the value equity drivers with the following statement.

Degree of Agreement: (1= Not satisfied at all, 2 = Not satisfied 3 = Average, 4=

Satisfied, 5= Very satisfied)

what do you feel about the lodge’s environment

1 2 3 4 5

what do you feel about the lodge’s physical facilities

1 2 3 4 5

what do you feel about the lodge employees’ prompt service

1 2 3 4 5

what do you feel about the lodge’s security

1 2 3 4 5

138

what do you feel about the lodge employee’s attitude

1 2 3 4 5

what do you feel about the lodge employee’s behavior

1 2 3 4 5

what do you feel when the lodge’s employee give you some individualized services

1 2 3 4 5

Thank you very much for your valuable time and great cooperation.

139

Appendix B

The process of interview nine lodges’ owner

This interview revolve around two mainly questions base on the objective of the study. Fist, do you think the customer demographic is effect to service quality, if it is then which factor of customer demographic that you think are more effected comparing with others. Second, do you think the service quality could effect on customer satisfaction, if it is than which dimension of service quality that you think are more effected than others.

Lodge one:

Lodges’ name & location: Rikka Inn located in Khaosan road

Owner name: Mr. Atthawot M.

Actually, Mr Atthawot M. almost did spend more time to consider the answer of this question, when the researcher asks the first question to him. In his opinion, he stated that no matter customer demographic or background like what, as long as they spent money to live here and they are always god to receive the good; fast and quick service from the lodge. Meanwhile, Mr Atthawot M took maybe one minute to give his answer to the researcher, which he said, ”yes, the service quality is effect to customer

140 satisfaction.” And he selected two factors which Assurance and Tangible as his favorite dimensions that could effect on customer satisfaction. He said that most of customer came to his lodge because their wonderful swimming pool, on the other hand, these customers is attracted by their beautiful equipments. Also, a lot of customers pay more attention on their security, thus the assurance is another important dimension as well.

Lodge two:

Lodges’ name & location: D & D Hotel located in Khaosan road

Supervisor name: Mr. Bent

For the first question, Mr. Bent thinks that customer demographic is effect to service quality on two mainly factors which nationality and religion. He indicated that most of customer from Europe are very glad to pay more tips to employee, so that some employee are enjoy to supply more and better service to them. On the other hand, Mr.

Bent trained their employee to pay more attentions on customers’ religion, in order to avoid their taboo. For the second question, Mr. Bent described that the answer is definitely yes, the service quality could effect on customer satisfaction, and he said that assurance and reliability of service quality are two important dimensions effect on customer satisfaction, because in his lodge most of customer pay more attention on

141 their security and equipment, such as their environment of rooms or does they have a clearly swimming pool.

Lodge three:

Lodges’ name & location: Buddy Lodge located on Khaosan road

Owner name: Mrs. Phaptawan

For the first question, this lady told the researcher that there is only one factor customer religion which she trained her employee to pay more attention with. Because she noted that customer are always right and they are god no matter their demographic or background. The reason why select customers’ religion only because they need to respect on customers’ belief then avid their taboo. For the second question, Mrs.

Phaptawan stated that majority their customer pay more attention on two dimensions tangible and assurance of service quality. She noticed that customer always give priority to the lodges’ facility from website, then conceder the lodges’ safety.

Lodge four:

Lodges’ name & location: Khaosan Palace Hotel located on Khaosan road

Supervisor name: Mr. Chatpong

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For the first question, Mr. Chatpong stated that no factor is effect to lodges’ service quality, because they treat all customers as the same. For the second question, he told the researcher that absolutely service quality could effect on customer satisfaction. In his lodge that security is first condition which customer concerned, and the secondary is empathy, because majority customer very happy to receive the especially service from employee.

Lodge five:

Lodges’ name & location: Sawasdee Bangkook Inn located on Mayom Ally road

Owner name: Mrs. Samon

For the first question the lady indicated that only one factor nationality of customer demographic is effect to her lodges’ service quality. Because Europe customer always give more benefit to their employee so that some employee enjoy to service to them.

Likewise, the answer is definitely yes for the second question, and she stated that their customer more worried about the lodge’s safety and they would like to receive the prompt service effectively. Thus, Mrs. Samon selected dimensions responsiveness and assurance.

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Lodge six:

Lodges’ name & location: Buddy Bouttque Inn located on Mayom Ally road

Owner name: Mr Tee

For the first question, the owner Mr Tee said that no factor of customer demographic is effect to their lodges’ service quality, because he trained his employee to remember that customer are god and they are always right. Moreover, for the second question his answer is “yes, the service quality could effect on customer satisfaction.” And he choose dimensions tangible and responsiveness as his mainly options of service quality.

Because he noticed that most of customer give preference on their lodges’ environment and equipment, beside that, lot of customer concerned about whether they could receive the prompt service when they need.

Lodge seven:

Lodges’ name & location: Viengtal Hotel located on Rambuttri road

Owner name: Ms. Muay Punchai

For the first question Ms. Muay Punchai stated that two factors gender and religion of customer demographic are mainly reason which is effect to her lodges’ service quality.

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At the gender side, male generally pay more tips to their employee so that they received more and better services than female from employee. At the religion side, she taught her employee to clearly understand their customers’ religion in order to avoid touching their taboos. For second question, the lady indicated that equipment and safety are mainly dimensions of service quality which could effect on their lodges’ customer satisfaction. Because majority customer of them are concerned whether they environment is comfortable or whether their environment is safety.

Lodge eight:

Lodges’ name & location: Sakul House Hotel located on Rambuttri road

Owner name: Ms. Vanapan

For the first question, Ms. Vanapan said that no factor of customer demographic is effect to their lodges’ service quality, because she taught her employee to service any customer as the same, can not be difference or have some bias. For the second question, the lady indicated that assurance and reliability are important dimensions that could effect on her lodges’ customer satisfaction. Because most of their customer concerned that whether they will perform and complete their promised service to customer.

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Lodge nine:

Lodges’ name & location: Rambuttri House located on Rambuttri road

Owner name: Mr. See Myinl Aurg

The customers’ religion from customer demographic is only factor that Mr. See Myinl

Aurg selected for question one. In his mind, he thinks that customer is all the same no matter they have what kind of background, the reason that he selected religion because he told his employee to pay more respect on customers’ belief or their taboos. For the question two, he noticed that tangible and empathy are two mainly dimensions that their customer more concerned with. For example: their customer preference to choose the lodges’ environment and equipment, or lot of their customer glad to receive the valued and special service.

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