Summary of Doctoral thesis: Factors influencing loyalty of customers for 4 and 5 star hotels in Ho Chi Minh city

Determine factors influencing the loyalty of customers using 4 and 5-star hotel service in Ho Chi Minh City in a multidimensional approach in the service quality model; assessing the impact of customer loyalty factors on the use of 4 and 5-star hotels in Ho Chi Minh City based on a multidimensional approach in service quality model; propose some policy recommendations to increase the loyalty of customers using 4 and 5-star hotels in Ho Chi Minh City.

MINISTRY OF EDUCATION AND TRAINING HONG BANG INTERNATIONAL UNIVERSITY

- - PHAN THANH LONG

FACTORS INFLUENCING LOYALTY OF CUSTOMERS FOR 4 AND 5 STAR HOTELS

IN HO CHI MINH CITY

Major: Business Administration

Code: 62.34.01.02

Instructor:Assoc Prof PhD Đinh Phi Hổ

PhD Student Phan Thanh Long

Ho Chi Minh City, 2018

The work was completed at:

Hong Bang International University

Instructor: Assoc Prof PhD Đinh Phi Hổ

Review 1: Assoc Prof PhD Nguyen Quyet Thang

Review 2: Assoc Prof PhD Le Tan Buu

Review 3: Assoc Prof PhD Doan Thi My Hanh

The dissertation will be protected by the thesis review panel at

Hong Bang International University

at 09:00 on December 28, 2018

Can find thesis at:

- The Library of Hong Bang International University

215 Dien Bien Phu Street, Ward 15, Binh Thanh District, Ho Chi Minh City

- General Sciences Library of Ho Chi Minh City

69 Ly Tu Trong Street, Ben Thanh Ward, HCMC

- National Library of Vietnam

31 Trang Thi Street, Hoan Kiem District, Hanoi

LIST OF RESEARCH WORKS

1 Phan Thanh Long (2018), Effects of service quality on customer satisfaction and customer loyalty: A case of four and five star hotels in Ho Chi Minh City, Vietnam, and Business Horizons (Scopus)

2 Phan Thanh Long (2018), Factors influencing loyalty of customers for 4 and 5 star hotels in HCMC, Journal of Economics and Forecasting

3 Phan Thanh Long (2018), The Impact of Service Quality on Satisfaction and Loyalty of Customers Using 4 and 5-star Hotels in Ho Chi Minh City, Scientific Workshop (ISBN : 973-604-73-5980-6)

1

CHAPTER 1 OVERVIEW OF RESEARCH PROJECT

1.1 BACKGROUND TO RESEARCHRESEARCH BACKGROUND

After joining WTO, the government has determined that tourism is the key economic sector that needs to be invested in proportion Reality shows that Vietnam hasa lot of advantages in terms of tourism potential (many beautiful natural landscapes, long coastline along the country, variety of national parks are preserved and developed, etc.), besides, Vietnam is also a country with political economy which are currently being considered significantly stable by the international community It is now easily seen thatVietnam has become a focal point for attracting many domestic and foreign tourists

In recent years, more and moreVietnamese tourists tend to return back to domestic tourism, the population of Vietnam is about 90 million people, together with improved living standards, this is

a source of abundant tourists in the tourism industry Particularly for international visitors, there have been recently positive changes from the general department to attract the return of visitors However, the international and domestic tourism market in the short and medium term has not tended to be clear, the structure of hotel guests and resort guests is constantly changing Vietnamese travelers, as well as international visitors, have also changed somewhat from previous years They are more demanding, more interested in values and service, and more informed about the trends nowadays As a result, what do hotel managers do to solve this problem? There are many options to answer this question, but now most hotel managers do not understand what visitors need and want? As the needs of the visitors have risen to modern living lifestyle? Therefore, how do visitors continue to use the service at the hotel, managers need to find out the factors that affect the loyalty of the visitors, in other words, to find out the customers’ need? That is the most important thing for hotel managers The creation of loyalty will bring many benefits for tourism units in general and business units in particular

1.2 OBJECTIVES AND STUDY QUESTIONS

The research objectives are: (i) determine factors influencing the loyalty of customers using 4 and 5-star hotel service in Ho Chi Minh City in a multidimensional approach in the service quality model; (ii) assessing the impact of customer loyalty factors on the use of 4 and 5-star hotels in Ho Chi Minh City based on a multidimensional approach in service quality model; (iii),

propose some policy recommendations to increase the loyalty of customers using 4 and 5-star hotels in Ho Chi Minh City

About the research question:

1.3 OBJECT AND SCOPE OF THE STUDY

1.3.1 Research subjects

Research subjects of the project: loyalty of customers using 4 and 5-star hotels in Ho Chi Minh City

About the subject of the survey: customers are using the service / products in 4, 5 star hotels in

Ho Chi Minh City

1.3.2 Research scope of the project

On theoretical grounds:

Firstly, the research focuses on customer loyalty in terms of their evaluation of service quality and satisfaction

Secondly, customer loyalty can be approached in a variety of ways: (i) customer behaviors, (ii) customer attitudes, and (iii)the combination between the two that were mentioned Within the scope of the topic, the author approaches customer loyalty from an attitudinal perspective

Spatial scope: The author conducted the survey in Ho Chi Minh City

Time Range: Qualitative Research: 5/2015 to 01/2017; Preliminary quantitative study: 3/2017; Official study: 04/2017 to 7/2017

1.4 RESEARCH METHODS

Methodology: Based on the cognitive system, the methodology used in this study is a mixed method by combining qualitative research (through expert interviews, focus group discussion with participants) and quantitative research (through direct interviews with survey participants) to conduct modeling and research hypotheses

Methods and tools for processing information (Method / Tools):

Secondary data collection method: Secondary data collected from VNAT

Primary data collection method: Expert interviews: The author interviewed 10 experts who are scientists and managers; Group discussion: the focus group discussions were conducted with 10

respondents; Surveys: The author conducted the survey twice: (i) the first time: interviewed 100 respondents; (ii) the second interview: 400 respondents

Information Processing Tool: Data is encrypted and cleaned using SPSS 20.0 software Analysis tool: Data are used to evaluate the scale using the Reliability Analysis tool through Cronbach's Alpha, EFA, CFA and SEM

1.5 NEW THEMES

On the academic side: (i) the topic identifies factors influencing customer loyalty to the 4 and 5-star hotel system in HCMC; (ii), the topic of implementing a service-oriented approach to service quality in a multidimensional approach (direct and indirect combination) to consider the impact

on customer loyalty Service at 4, 5 star hotels in Ho Chi Minh City The research results of the project have demonstrated the loyalty of customers directly affected by customer satisfaction and

04 components of service quality (reliability, responsiveness, tangible means and assurance), and

is indirectly affected by the overall service quality and its five components (reliability, responsiveness, tangible means, empathy and assurance); (iii), the topic of adjusting the scale of loyalty, satisfaction, quality of service and its components for 4, 5 star hotel in Ho Chi Minh City

to complement the ladder system measure theory

Practically: (i), the theme is to help 4, 5 star hotel managers, policymakers identify and measure the factors that influence customer loyalty , 5 stars in Ho Chi Minh City; (ii), the topic also suggests some feasible implications for increasing visitor loyalty, enhancing the competitiveness

of tourism destinations

1.6 STRUCTURE OF THESIS

The research project consists of 5 chapters presented in the following order: Chapter 1: Overview

of research topics; Chapter 2: Theoretical Foundations and Research Models; Chapter 3: Research Design; Chapter 4: Research Results; and Chapter 5: Conclusions and Implications for Research

CHAPTER 2 THEORETICAL BASIS AND RESEARCH MODEL

2.1 THEORY OF THEORY

2.1.1 Loyalty

Customer loyalty refers to the tendency of a customer to buy and use a brand's product or service

in a various choices of brand that is widelymarketed and repeat this behavior (Chaudhuri and Holbrook , 2001); Expressing attitudes or behaviors attached to the customer's service provider(Oliver,1993)

Customer loyalty can be approached under several perspectives: customer behavior (Backman and Crompton, 1991, Chaudhuri and Holbrook, 2001, Yoon and Uysal, 2005, Kabiraj and Shanmugan, 2011; (Backman and Crompton, 1991; Chaudhuri and Holbrook, 2001; Yoon and Uysal, 2005; Kabiraj and Shanmugan, 2011; Iordanova, 2016), and the angle of integration

(Backman and Crompton , Yoon and Uysal, 2005; Iordanova,2016)

Access to Customer Behavior: This approach considers customer loyalty through repetitive purchases, using a product / service frequently (Chaudhuri and Holbrook, 2001; Kabiraj and Shanmugan, 2011) In this approach, loyalty is a commitment of the customer to purchase or use the brand of a product / service in the future, although influenced by market situations and impacts can do Abnormal customer behavior change (Oliver,1997)

Reach from the perspective of the customer: This approach of loyalty is based on the attitudes of customers who want to emphasize the consumer's intention to consume the product / service (Kabiraj and Shanmugan, 2011) Thus, customer loyalty according to this view is expressed by their sympathetic attitude to the product / service and will use that product / service over time (Rossiter and Percy, 1987) The Indicate the intention to purchase the product / service as a primary choice (Oliver, 1997)

Integrated approach: This approach examines customer loyalty based on a combination of customer attitudes and behaviors (Backman and Crompton, 1991, Yoon and Uysal, 2005, Iordanova, 2016 ) According to this approach, customers who buy and are loyal to a particular brand must have a positive attitude toward the brand (Yoon and Uysal, 2005)

2.1.2 Service quality

Concept:

Quality of service is seen as the distance between customer expectations and their perceptions when using service (Parasuraman et al., 1985), as is the ability of a service to include Reliability,

accuracy, ease of use, ease of repair, and other valuable attributes to perform its function (Kotler

et al., 2005)

Quality of service model

Model of Gronroos (1984): By Gronroos (1984), quality of service is measured by three components: technical quality, functional quality and image quality

Model of Parasuraman et al (1985, 1988, 1991, 1994): Parasuraman et al (1985, 1988) suggest that service quality is measured by five components by SERVQUAL: reliability, responsiveness, assurance, tangible means and empathy Parasuraman et al (1991) assert that SERVQUAL is a complete scale of service quality, value and reliability, and can be applied to all types of service;

In addition, the results of the study by Parasuraman et al (1991) also showed that the quality of service, including 05 components and 05 components, had the same effect on quality of service

In 1994, Parasuraman et al (1994) argued that service quality was one of the three components that impacted customer satisfaction along with product quality and price

Model of Dabholkar et al (2000): Dabholkar et al (2000) suggest that service quality is directly influenced by four factors: reliability, personal attention, benefits, characteristics of products / services; and quality of service will have an impact on customer satisfaction and hence influence the intended use of the product

2.2 OVERVIEW OF RELATED STUDIES

Empirical studies of customer loyalty to the quality of service of local and foreign scientists are based mainly on the model of Parasuarman et al (1985, 1988), consisting of five components : reliability, tangible means, empathy, responsiveness and service (Lawrence and Lucy, 2016; Nguyen Hue Minh et al., 2015; Mai Ngoc Khuong et al., 2015; Nguyen ThiBich Dao and Nguyen Huu Tin, 2015; NhamPhong Tuan and Nguyen Thi Hai Linh, 2014; Hoang Sa Dang and Ying Fang Huang, 2014; Galib, 2013; Kofi et al., 2013; Xiangyu and Jarinto, 2012; Rousan et al.,

2010 ) However, major studies conducted in developed countries differ in their level of economic and cultural development over Vietnam (Lawrence and Lucy, 2016; Galib, 2013; Kofi

et al , Xiangyu and Jarinto, 2012; Rousan et al., 2010) or in Da Nang, Hanoi, KienGiang (Nguyen Hue Minh et al., 2015; NhamPhong Tuan and Nguyen Thi Hai Linh, 2014; Hoang Sa Dang and Ying Fang Huang, 2014) or the previous time in Ho Chi Minh City (Mai Ngoc Khuong

et al., 2015) also differs from the 4 and 5 star hotels in Ho Chi Minh City the present time when the ASEAN Council took effect In addition, most studies of the impact of service quality on customer loyalty or customer satisfaction are ongoing research, which means that these components represent quality of service and when researching service quality affects satisfaction

or loyalty, these components influence satisfaction or loyalty (Lawrence and Lucy, 2016; Nguyen Hue Minh et al., 2015; Mai Ngoc Khuong et al., 2015; Nguyen ThiBich Dao and Nguyen Huu Tin, 2015; NhamPhong Tuan and Nguyen Thi Hai Linh, 2014; Hoang Sa Dang and Ying Fang Huang, 2014; Galib, 2013; Kofi et al Xiangyu and Jarinto, 2012; Rousan et al., 2010); or indirect research ie study the components that affect service quality and service quality as a factor (measured by specific five-dimensional observational variables in addition to the components of service quality ) have an impact on service quality and satisfaction (Lee et al., 2000; Tsou and Liao, 2010) While the interaction effect between service quality components and overall service quality (Parasuraman et al., 1991)

Therefore, an empirical study on the quality of 4 and 5 star hotels in Ho Chi Minh City is needed

to examine the relationship between these components and the overall service quality Examines the impact relationship between service quality and its components with customer satisfaction and loyalty

2.3 MODELS AND PROBLEMS FOR RESEARCH PROPOSAL

In this study, the authors used the model of Parasuraman et al (1985, 1988) to measure the quality of 4, 5 star hotel services through the SERVQUAL scale because SERVQUAL is a complete scale of Quality of service, value and reliability (Parasuraman et al., 1991)

Quality of service and its components

Service quality is viewed as the distance between customer expectations and their perceptions when using service (Parasuraman et al., 1988); The extent to which the service responds to customer expectations (Lewis & Mitchell, 1990) As such, the quality of hotel services is reflected in the subjective perception of customers about the quality of services provided by the

4, 5 star hotel system compared with their expectations At the same time, Parasuraman& Associates (1988) has released five components of quality of service including:

Reliability: is considered through the ability of the supplier to respond accurately and reliably to the services they provide to clients (Parasuraman et al., 1988) Thus, the reliability of customers for the quality of 4 and 5 star hotels is reflected in the fact that the hotel system of 4, 5 stars always perform what they promise to customers, always support Customer service is always stable and reliable, always notify customers when the service will be done

Tangible means: assessed through facilities, equipment and staff (Parasuraman et al., 1988) Thus, the tangible means of the 4, 5 star hotel system are understood as the facilities, and the staffs of the hotel are available to meet the expectations of customers as the facilities are packed Great, professional and beautiful staff