Development of a Model to Measure Customer Satisfaction with International Tourist Hotels in Taiwan by Chung-Hao Chen, M.B.A. A Dissertation In HOSPITALITY ADMINISTRATION Submitted to the Graduate Faculty of Texas Tech University in Partial Fulfillment of the Requirements for the Degree of DOCTOR OF PHILOSOPHY Approved Dr. Betty L. Stout Co-Chairperson of the Committee Dr. Tim Dodd Co-Chairperson of the Committee Dr. Lynn Huffman Dr. Shane Blum Fred Hartmeister Dean of the Graduate School December, 2009 COPYRIGHT 2009, CHUNG-HAO CHEN Texas Tech University, Chung-Hao Chen, December, 2009 ACKNOWLEDGMENTS I would like to express my thanks to all those who gave me the opportunity to complete this dissertation. I am honored to give my deepest gratitude to Dr. Betty Stout, my dissertation committee co-chair and Doctoral Advisor for Hospitality Administration who offered me valuable ideas and suggestions throughout the process of the research. Besides, she always put high priority on my dissertation and was willing to spend extra time discussing with me through the SKYPE system. Dr. Stout looked closely on the final version of the dissertation for English style and grammar, correcting both. Her patience and kindness are greatly appreciated. I am deeply indebted to Dr. Tim Dodd, my dissertation committee co-chair and Associate Dean of Operations of the College of Human Sciences for his professional direction and advice throughout the completion of this research. His valuable guidance and support were crucial to the accomplishment of my doctoral degree. I am very much obliged to him for his efforts to bring this work to fruition. I would like to extend my sincere appreciation to my committee members, Dr. Lynn Huffman, Executive Associate Dean of the College of Human Sciences and Dr. Shane Blum, Chair, Nutrition, Hospitality, and Retailing Department for devoting their time and ii Texas Tech University, Chung-Hao Chen, December, 2009 encouragement along the way. Their questions and comments contributed to the quality of this dissertation. I also owe my thankfulness to these close friends: Jie-Hong Huang, Director-general, Division of Marketing, Far Eastern Plaza Hotel; Heng-Qing Liu, General Manager, the Capital Hotel Taipei; and Dr. Cheng-Ho Wu, Chair of the Department of Tourism, Providence University. They not only assisted me in conducting the survey but also shared their networks by contacting the managers of the hotels where I collected the data. I would also like to acknowledge the encouragement I received from Dr. Shelley Harp, Professor in the Nutrition, Hospitality, and Retailing Department at Texas Tech University and my colleagues in the Department of Food and Beverage Management at Jinwen University of Science and Technology. Most importantly, my special appreciation goes to my parents, Xian-Xiong Chen (陳 賢雄) and Gui-Mei Jiang (江貴美), for their thoughtfulness and encouragement all the way from the very beginning of my education. I also would like to extend my sincere thanks and appreciation to Shu-Chuan Liu for her help and support. iii Texas Tech University, Chung-Hao Chen, December, 2009 TABLE OF CONTENTS ACKNOWLEDGEMENTS ………………………………………………………….. ii ABSTRACT ……………………………………………………………………….. viii LIST OF TABLES ……………………………………………………………………. x LIST OF FIGURES ………………………………………………………………….. xii CHAPTER I. INTRODUCTION …...………………………………………………………...……. 1 Research Background and Problem Statement ……...………….…..………. 1 Statement of the Problem ………..……………………………….……..…… 4 Purpose of the Study ……………………………………..……….………..… 5 Objectives of the Study ……………………...……………………..…..…….. 6 Research Hypotheses ………...……………………………………………... 7 Limitations of the Study ….…………………………………………………. 9 Definition of Terms …...…………………………………………………….. 11 II. REVIEW OF LITERATURE …………………………………………………….. 13 Hotel Image, Service Quality, Perceived Value, and Customer Satisfaction…………………….…………………………….. 14 Hotel image ………………………………………………..………… 14 Service quality in the hotel industry …..…………………..………… 15 Perceived value in the hotel industry …..…………………..………… 16 Customer satisfaction in the hotel industry ………………..………… 17 iv Development of Customer Satisfaction Indices ………...…………………. 17 Swedish customer satisfaction barometer (SCSB) model …………… 18 American customer satisfaction index (ACSI) model ……………….. 19 Norwegian customer satisfaction barometer (NCSB) model ……..….. 20 European customer satisfaction index (ECSI) model ……..……….... 21 Relationships among Hotel Image, Service Quality, Perceived Value, and Customer Satisfaction ………………………………………………………. 22 Influence of image on perceived value and customer satisfaction …… 22 Influence of service quality on perceived value and Customer satisfaction …………………………………………………. 23 Influences of perceived value on customer satisfaction ……………… 24 Development of Proposed Customer Satisfaction Index Model .................... 25 Language Skills in the Hotel Industry .......................................................... 26 III. RESEARCH METHODOLOGY ……………...…………………………………. 28 Objectives of the Study ………………………………………….................. 28 Research Model …………………………………………………………… 29 Instrumentation ……………..……………………………………………… 30 Questionnaire Translation …….……..……………………………………... 34 Description of Sample ……….………………………………………….….. 35 Sample ……………………………………………………………….. 36 Pilot Study ………………………………………………………………..… 39 Reliability of the Pilot Study …………..…………………….………. 43 Qualitative Research ………..……………………………………………… 46 Content Analysis …………...……………………………………..…. 47 Content Validity …………...……………………………………..…. 48 Data Collection …..………………………………………………………… 49 Data Analysis …………………………………………...…………………. 52 Hypotheses in the Proposed Model of Customer Satisfaction Index … 53 Structural Equation Modeling (SEM) …………...…………………... 54 Hypotheses for Significant Differences …..……...…………………... 56 Statistical Package for the Social Sciences Version 16.0 (SPSS 16.0)…………...……………………………………………….. 58 IV. RESULTS ………..…...………………………………………………………..... 60 Personal Information of the Sample …..…………………………………… 60 Demographic Characteristics of the Sample …..…………………………… 64 Scale Assessment ………………………………………………………….. 66 Data Screening ……………………………………………………….. 66 Factor Analysis ……………………………………………………… 72 Composite reliability ………………………………………………… 75 Convergent Validity and Discriminant Validity …………………….. 76 Scale Qualification ………………………………………………………… 78 Model Modification and Model Estimation ……………………………….. 80 Hypothesis Testing: One-Way Analysis of Variance (ANOVA) ………….. 87 Qualitative Research: Content Analysis ………………………………….. 102 Quotations of Respondents ………………………………………… 109 V. CONCLUSIONS ………………………………………..……………………..... 118 Implications for Hotel Managers …..………………………..…………… 120 Recommendations for Future Research ………………………………….. 137 REFERENCES …………………………………………………………………….. 139 APPENDICES ……………………………………………………………………… 152 Texas Tech University, Chung-Hao Chen, December, 2009 A. SURVEY COVER PAGE English Version ……………………………….. 152 B. SURVEY COVER PAGE Chinese Version ……………………………… 154 C. FINAL QUESTIONNAIRE English Version .............................................. 156 D. FINAL QUESTIONNAIRE Chinese Version ………………………………. 161 E. FINAL QUESTIONNAIRE Japanese Version …………………………….... 166 F. OPEN-ENDED QUESTIONNAIRE English Version ……………………... 171 G. OPEN-ENDED QUESTIONNAIRE Chinese Version …………………….. 174 H. AMERICAN AUTOMOBILE ASSOCIATION (AAA) DIAMOND RATING………………………………………………………. 177 I. SIX CATEGORIES OF HOTEL IN TAIWAN BY GEOGRAPHIC LOCATION………………………………………………. 179 J. CHECKLIST OF PARTICIPANTS ……………………………………… 182 K. INTERCEPTOR GUIDELINES FOR FIELDWORKERS ………………. 184 vii Texas Tech University, Chung-Hao Chen, December, 2009 ABSTRACT In Taiwan, there is no commonly accepted and official standard to measure customer satisfaction in hotels. A customer satisfaction index represents a uniform system for evaluating, comparing, and enhancing customer satisfaction within firms and industries (Fornell, Johnson, Anderson, Cha, & Bryant, 1996). The purpose of this preliminary study was to develop an appropriate customer satisfaction index model associated with Taiwanese international tourist hotels and identify any significant differences in guests’ perceptions of service quality, hotel image, perceived value and customer satisfaction based on gender, age, nationality, education, and annual income. This study utilized a convenience sampling method to collect data in six international tourist hotels in Taipei, Taiwan from May 1 through May 20, 2009. Questionnaires with stamped envelopes were given to each guest as they checked out. Each of six hotels was allotted 200 questionnaires, which were distributed by fieldworkers who stood in front of reception desk to invite guests to participate in this study. Of the 1,200 questionnaires distributed, 352 were usable (29.33% response rate). Respondents included 65.90% male and 34.10% female. Taiwan R.O.C was the nationality of 34.38% of guests with 20.17% from Japan, and 11.93% from North America. viii Texas Tech University, Chung-Hao Chen, December, 2009 The study used Structural Equation Modeling to test the hypotheses and relationships among variables in the proposed customer satisfaction index model. In addition, this study used ANOVA to test for significant differences in terms of service quality, hotel image, perceived value, and customer satisfaction based on gender, age, nationality, education, and annual income. Statements of hotel guests who responded to open-ended questions during the pilot study as well responses to qualitative questions by experts in the