Luxury Consumer Perspective Assignment sample

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1. Introduction

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1.1 Background of the Study

The quality of food and beverage service delivery has become a major concern for countries and F&B businesses. According to a few, it is a major problem for hospitality management (Qiu, Dooley, and Xie, 2020). Defects in the service cannot be corrected before they reach the end user as a result of this. Customers’ preferred features and amenities are being reproduced throughout the hotel sector, making it impossible for any hotel to distinguish itself from another save for the level of service it provides. In spite of this, the term "quality" is still seen as a highly subjective one. In the hotel sector, food and beverage service quality cannot be overstated since great service is perhaps the most important factor of success in the tourist and hospitality industry (Rather and Camilleri, 2019).

In any company’s operations management, the customer is at the center of everything. Every company’s clientele should be at the forefront of their thoughts before deciding on a business strategy or organizational structure, according to Forbes. Poor service at a hotel may result in a loss of repeat business and goodwill among visitors, as well as a negative impact on the establishment’s reputation in the local community. It has been shown in a number of studies that unsatisfied consumers often tell eight to ten other individuals about their negative experience (Mallya and Patwardhan, 2018). If a hotel does not give excellent service, customers will move to their rivals’ establishments, resulting in decreasing patronage and poor news for the establishment. Furthermore, it has been shown that restaurant sales growth and profitability are directly related to the quality of service provided at the micro level. Therefore, the following study provides insight into how service quality in luxury hotels influences customer perception and product value by evaluating important secondary sources and author opinions, which in turn serves to address the research issue of service quality in luxury hotels.

1.2 Rationale

The following research conceptualizes a comprehensive overview on how the prospects of service quality in terms of luxury standards influences the consumer perspectives towards the luxury hospitality and tourism businesses. In this context, the research compiles a substantive literature, conceptualizing on the key factors associating the importance of service quality for the hotels that are featuring luxury services together with a key emphasis on the correlation between service quality and satisfaction in the luxury hotel industry. Lastly, an overview on the key factors affecting the service quality and changed consumer perceptions within the luxury hotels are also taken into analysis as well. With integration of these key literatures the article is formalized in a substantive manner which showcases the key importance of luxury prospects on the industry as well as what are key implications of service quality on consumer perspective and satisfaction against the featured luxury services of the company. To this end, summarization of key learnings is integrated in the context of hospitality and tourism business to see what are the potential prospects of quality services and how influences the consumer perspective towards the luxury services.

1.3 Aim and Objectives

The research intends to assess the “impact of how service quality in luxury hotels change customer perception and value of the product”. The objectives of the research are listed below:

• “To assess the significance of service quality in luxury hotels”
• “To analyze the correlation between service quality and customer satisfaction in luxury hospitality industry”
• “To evaluate the factors impacting service quality and changed consumer perception in luxury hotels”.

2. Critical literature review and analysis

2.1 Importance of Service quality in luxury hotels

“The term Service Quality has been defined in a variety of ways by different researchers. Danish (2018) says that service quality is the comparison function that connects customer expectations to the service that is given. Fida et al. (2020) said that service quality is the ability of a company or industry to meet the needs of its customers. Service quality in the hospitality industry has been one of the most important factors in gaining a long-term competitive advantage and customer trust in a very competitive market”. This gives the hospitality industry a lot of opportunities to be different from other businesses. It is thus a very important core idea and a very important factor in the success of the hospitality industry (PJ et al., 2021). “A good hotel gives good service to its customers, and service quality is thought to be the life of the hotel. Service quality has three parts: physical facilities, personnel, and materials. It was also broken down into two parts: functional quality and technical quality. A similar idea said that service quality has three parts: functional quality, environment, and technical quality”.

“Oh and Parks (1996) states that Customer satisfaction is a key each person feels inside, and it can be either satisfied or dissatisfied based on how well an organisation meets the customer’s expectations”. Hotels are always trying to improve their service to make their customers happy, because happier customers are more likely to stay with them. Most people agree that the expectancy disconfirmation theory is the best way to make people happy (Al-Ababneh, 2017). Moreover, according to Al-Ababneh, (2017), the satisfaction stage is the result of the difference between what people expect and what they think they will do. “Satisfaction would be positive when the service level or product is better than expected (positive disconfirmation), and negative whenever the level is lower than expected (negative disconfirmation)” (Al-Ababneh, 2017).

Many people talk about how to choose a hotel, including how many services they offer and how reliable they are. They also talk about price, quality and reliability. To keep customers at their hotel for a long time, it’s important to not only attract them but also keep them there for a long time (known as guest retention) (Mmutle and Shonhe, 2017). In order to stay in the same place and compete in the future, it is important to offer high-quality services that keep old customers (patrons) and attract new customers (millennials, for example).

Customer Loyalty
Satisfied customers are more likely to become long-term customers. It’s important for hotels not just to provide great service, but also to have great products as well. Make it a point to stay on top of trends that their customers might follow, like developing personal assistance services for people who travel or giving special deals to people who buy a lot of things from them again and again (Al-Ababneh, 2017). Items must be on hand for hotels to make sure their customers can get what they need when they stay at them.

Security:
“When customers pay to be delivered, they expect to be able to enjoy themselves without having to think about security. A safe environment means that there are a lot of friendly employees who are visible to visitors from the moment they arrive to the moment they leave” (Zaibaf, Taherikia, and Fakharian, 2013). Helpful, too, are frequent interactions with their customers to make them feel like they’re part of what’s going on at their business. If they want to be safe, they don’t have to be very obvious about it. Security guards who are armed and dressed in uniforms will scare people instead of making them feel safe.

Happier Environment
Customers will be satisfied when they are in a happy environment because of how the business looks. The restaurant or hotel doesn’t need to spend a lot of money to make it a good place to be (Jeong and Oh, 1998). People may think that over-the-top interior design is either cold and unfriendly, friendly and inviting, or somewhere in the middle of all three. The employees’ emotional quality is what makes the difference. This is the most important thing hotels can do to make their guests feel special.

2.2 Correlation between service quality and customer satisfaction in luxury hospitality industry

Various studies have differing views on the order in which one element precedes the other. Others think that customer satisfaction is a by-product of a company’s excellent service quality. “Service Quality” is an important forerunner to “customer satisfaction,” according to the view of Fida et al. (2020). This element suggests that an organisation should focus on improving its offerings before wishing for favourable feedback and client pleasure. These reasons lead to the conclusion that customer pleasure and service quality are inextricably linked (Al-Tit, 2015). The quality of service has an effect on customer satisfaction, but it is not directly linked to it, as Danish (2018) contends. A maximum level of customer satisfaction is directly linked to an increase in customer satisfaction perceptions. Research conducted by Fida et al. (2020) found a strong correlation between customer satisfaction and service quality. “A customer’s satisfaction can only be achieved if all five service quality aspects are met: responsiveness (tangibility, assurance, reliability, and empathy). Customer satisfaction can only be achieved by continuous improvement in the service quality aspects, according to the findings of this research”.

A study conducted by Yasin and Yavas, (2001) in India’s telecommunications business examined the link between customer happiness and service standard parameters while also examining consumer satisfaction. In the service business, client happiness is closely linked to service quality, making it an important aspect in the success of firms (Jeong and Oh, 1998). For the hotel industry’s success, it is seen as an important aspect that precedes the acquisition of good purchasing habits. A company’s long-term financial health and customer loyalty are seen to be directly linked to the quality of its service (Zaibaf, Taherikia, and Fakharian, 2013). To improve customer service, it is critical to keep personnel informed and assess their service encounters on a regular basis. Furthermore, this research found that the dependability component has a greater influence on service quality than other dimensions. The 19 tangibility dimensions, on the other hand, seemed to be less successful. As Yasin and Yavas, (2001) go on to say, because all of the dimensions have a beneficial effect on consumer satisfaction, they should all be updated and enhanced. In Gopi and Samat (2020) investigated how library customers’ pleasure is affected by service quality at se. Gopi and Samat (2020) veral Swedish institutions. There was a 71% correlation between patron happiness and library service quality, according to one study. Gopi and Samat (2020) also found that service dependability has a greater influence on consumer satisfaction than the empathy component does.

Client satisfaction is a critical factor in assessing service quality since the more satisfied a customer is, the more successful a firm will be. A high-quality product or service may serve as a guarantee (Oh and Parks, 1996). Customers’ earlier experiences with satisfaction or dissatisfaction with a product or service have a significant influence on how likely they are to make a purchase the following time around. As a result, the majority of hotel literature views customer satisfaction as a critical element of the industry’s value proposition to customers. It is described as “the customer’s assessment of the product or service’s performance in accordance to their expectations. 

2.3 Factors affecting service quality and changed consumer perception in luxury hotels

People’s views of service quality and luxury standards are heavily influenced by cultural norms, which play a vital part in this process. Consumers may seek for high-end services in order to demonstrate their commitment to the person’s values, according to one industry professional (Wu and Yang, 2018). It has also been suggested that high-quality aspects have an impact on the clients of luxury service providers. According to Podoshen, Li, and Zhang (2011), it is conceivable for consumers who are influenced by luxury quality to believe that luxury services provided by the hotel business are superior to those provided by other organisations. Affluent consumers who want polished perfection often choose for expensive luxury items due to their appreciation for the high quality of the products, their design, their value, and the long cultural importance of such items.

Stegemann (2011), conducted studies that revealed that the Luxury services are popular with tourists since they indicate a person’s refined taste in terms of their lifestyle and standard of living. High-priced services and facilities are enticing to clients because of the high level of brand assurance and great reputation that they have, as well as the perceived value and pleasure that they provide. Cultural considerations have an important effect in the purchase patterns of consumers who seek out high-end services as well. According to Hennigs (2012), the majority of Asians demand luxury services when on vacation in order to demonstrate their social standing and financial means.

According to Teimourpour and Heidarzadeh Hanzaee, social status has a significant impact on people’s future behaviour patterns in the long run (2011). Social class is often mentioned in relation to consumer behaviour, despite the fact that neither knowledge nor sentiments are involved (Le Monkhouse, Barnes and Stephan, 2012). As an alternative to utilising a formal technique based on shared lifestyle, social classes constituted of individuals may be classified as social groups in order to more accurately portray the social groupings that people have developed through time. In spite of the fact that they have similar attitudes, educational levels, communication techniques and ideas, people from various different social classes behave and value in ways that are distinct from those from other people from the same social class (Le Monkhouse, Barnes and Stephan, 2012). An additional aspect that influences consumption and buying behaviours, in addition to the consumption of consumables such as food or other consumables, is one’s socioeconomic status (Fabinyi, 2012).

According to a thorough assessment of the literature, the majority of travellers think about things like cleanliness, location, cost, value, safety, service quality, and reputation when making a hotel reservation. “Six hotel selection dimensions were identified by Chu and Choi (2000), including service quality, business facilities, value, room and front desk and food and leisure and security as the most essential factors for clients in Hong Kong”. Attributes including value for money, clean rooms, staff friendliness, and service efficiency were among the 38 hotel characteristics investigated by Callan and Bowman (2000). They were shown to be significant in determining which hotels British tourists will stay in. “Comparable research was undertaken by Kim et al. (2006) utilising empirical data acquired from 306 Chinese hotel clients staying at 12 sample hotels in Beijing, P. R. China”. They analysed six categories and found that convenience, technology usage, security, and adequate information are the most important elements for Chinese visitors' pleasure. Visitors travelling inside the United States believe clean rooms to be the most significant hotel selection features, whereas visitors going abroad anticipate greater security as the most essential hotel selection attribute (Shanahan and Hyman, 2007). Different samples and markets, such as customer segment, country-of-residence, destination, and nationality, have acknowledged the differences in determining hotel choosing characteristics. Intangible characteristics, such as the friendliness and helpfulness of the hotel employees, and physical characteristics, such as the hotel's appearance, restaurants, and bars, are all factors to consider when making a hotel reservation. These factors come together while influencing consumer perception in which’s case shift towards better quality, standards and attractiveness compared to conventional service available in the market.

3. Conclusion

3.1 Summary

As a result, according to the study’s conceptualization, “it may be inferred that a good hotel provides excellent service to its customers, and that service quality is considered to be the lifeblood of the business. There are three components to service quality such as physical facilities, staff, and resources”. Also divided into two categories were the functional quality and technical quality of the product. According to a similar concept, service quality may be divided into three categories: functional quality, environment quality, and technical quality. Based on the prospects of these quality assurances an overall good service quality is generally being emphasised. As a result, customer satisfaction is directly associated with service quality, making it a crucial factor in the success of hospitality and tourism businesses. It is seen as a critical factor in the success of the hotel sector, and it is considered to come before the development of sound buying habits. It is often believed that the quality of a company’s service has a direct relationship with its long-term financial health and customer loyalty. It is vital to keep employees educated and to evaluate their service experiences on a regular basis in order to enhance customer service. The findings of this study also revealed that the dependability component has a stronger impact on service quality than the other aspects. Since, perspectives are strongly interrelated with cultural norms, quality of life and socio-economic standards promising better service propositions with good hygiene, cleanliness, room and hotel services that are comparatively higher standard than the conventional maybe the key factor for reaching up to consumers with luxury prospects.

3.2 Limitations of the study

As for the key limitations of this article, lack of proper value proposition regarding the luxury consumer prospective and extensive analysis of industrial trends associated with the case of hospitality and tourism sectors and their implications on the business prospects or developments are not properly stressed.
3.3 Future Research Scope
For future research prospects emphasising on the key aspects of the limitations can be taken into consideration. In this regard, evaluation of strategic initiatives to amend the need of people desiring for luxury services. Moreover, a look into the market trends and industrial performances and implications of such insights can also be implemented by the managers of the hospitality and tourism sectors.