SERVICE QUALITY DELIVERY AND CUSTOMER SATISFACTION IN HOTEL INDUSTRY: THE CASE OF TWO STAR RATED HOTELS IN DIRE DAWA, ETHIOPIA

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