Abstract:
Service quality delivery and customer satisfaction have tough relationship in hotel industry.
One of the biggest contemporary challenges of management in service industries is providing
and maintaining customer satisfaction. This study aims to analyze the service quality delivery
and customer satisfaction in hotel industry taking two star rated hotels that found in Dire
Dawa. To achieve the stated objectives both primary and secondary data were used. Primary
data were taken from 141 customers of the two stars rated hotels randomly. Sample random
sampling techniques were used to select customers. The collected data were analyzed using
descriptive statistics and Ordinary Least Squares techniques to identify factors that affect
customer satisfaction. Accordingly, more than half of the customers are male users whose age
is between 25 to 55 years. Majority of the customers’ education level is first degree and above
having their own business and/or employed. From 22 qualities of service indicators, only 15 of
them fairly influence customer satisfaction. There are five service quality dimension namely
tangibility, assurance, empathy responsiveness and reliability. All have positive effect on
customer satisfaction. Therefore, hotels should keep their reliability, smooth their
communications among employees and customers. Moreover, the hotels should be active
enough to maintain equipment’s and facilities that ensure tangibility of the hotels
