Service Quality, Brand Loyalty, and Profit Growth in UK Budget Hotels

Although past studies advocate a positive impact of service quality on business performance, empirical studies investigating the nature of the relationship between service quality and profit growth in the hotel industry are limited. This study contributes to an ongoing debate as to whether service q...

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Bibliographic Details
Published in:Tourism analysis 2011-10, Vol.16 (3), p.259-270
Main Authors: Ekinci, Yuksel, Zeglat, Dia, Whyatt, Georgina
Format: Article
Language:English
Subjects:
Brand Loyalty
Budget Hotels
Economics
Hotels
Multivariate statistical analysis
Profit Growth
Profitability
Quality of service
Service Quality
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Summary:Although past studies advocate a positive impact of service quality on business performance, empirical studies investigating the nature of the relationship between service quality and profit growth in the hotel industry are limited. This study contributes to an ongoing debate as to whether service quality has a direct or indirect influence on profitability in the hotel industry. The data were collected from a national budget hotel company in the UK and the research hypotheses were tested through structural equation modeling via the LISREL software. The findings of the study found that service quality had a positive influence on brand loyalty and premium price. The effect of service quality on profit growth was indirect and mediated by premium price, brand loyalty, and sales growth.
ISSN:1083-5423
DOI:10.3727/108354211X13110944387004