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Influence of customer experience on loyalty and word-of-mouth in

hospitality operations

Article  in  Anatolia · November 2013

DOI: 10.1080/13032917.2013.841094

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 The  original  version  of  this  article  can  be  reached  on  
http://www.tandfonline.com/doi/abs/10.1080/13032917.2013.841094     1  
 
Influence of customer experience on loyalty and word-of-mouth in
hospitality operations
Customer experience is emerging as a relatively new concept and regarded as an
important determinant for hospitality organizations success. However, factors
affecting customer experiences and the influence of experiences on consumer
behavior are still unclear. Through a quantitative field research, this paper attempts
to determine as well as exhibit the impacts of customer experiences on customer
loyalty and recommendation behaviors in hospitality. To reach this objective, a
sample of 350 adult respondents staying in five-star hotels in Istanbul were
requested to rate the items related to physical environment and social interactions
that are found to be relevant to hotel stay experiences. The results indicate that
there is a strong relationship between desired customer behaviors and perceived
dimensions of customer experiences.

Keywords: customer experience, guest loyalty, word-of-mouth, tourist experience, experiential

marketing

Introduction
Despite the evolution of consumer behavior field, from purely functional theories to more
hedonic explanations, customer experiences have been subject to limited number of
research papers. Experiences are not a new concept though; they are part of human nature.
Experiences have been analyzed by various disciplines such as philosophy, psychology
and anthropology (Abrahams, 1986; Csikzentmihalyi, 1990; Maslow, 1964). Concerning
tourism, Cohen (1979) and MacCannell (1989) have approached experiences from a
sociological approach rather than a marketing perspective. According to them, tourists
seek experiences that are not available in their regular environment and in sharp contrast
with daily routine life.
The fact that experiences also affect organizations as an effective tool for
differentiation and competitive advantage in an increasingly commoditized market is a
relatively new argument. It has been discussed that experiences are distinct economic
offerings just like products and services and impact consumers’ perception of value (Pine
& Gilmore, 1999; Walls, 2009). Therefore, experiences create a unique value for
customers, hard to be imitated by competition and strongly affect satisfaction, loyalty, and
recommendation behaviors of consumers (Berry, Carbone & Haeckel, 2002; Pine &
Gilmore, 1999). In other words, offering just commodities, products, and services are no
longer enough for long-term profitability, but offerings must be accompanied by
experiences.
Pine and Gilmore (1999) illustrate customer experience through different coffee
offerings. A coffee bean as a commodity is bought and sold in bulk and the price is
minimal, at about two cents per cup. Coffee sold in grocery stores as a product is
processed and the packaged version of the coffee bean, when sold as a product, the price
of coffee becomes 5–25 cents a cup. When it is prepared and served at a café, it becomes
a service and the price increases to 0.5–2 USD per cup. However, they state that there is a
fourth economic offering; as an experience, drinking coffee at a famous Italian café in
Venice across the city scenery, customers might pay up to 15 USD for a cup of coffee.
Therefore, customers seek unique and personal encounters with the company products and
services besides the functional benefits and they are willing to pay for memorable
experiences.
Although experiences have attracted considerable attention in recent years, creating
and managing experiences are still among major challenges for hospitality industry

 
  
(Walls, Okumus, Wang & Kwun, 2011a). Tourist experiences are still considered as a by-
product (context) rather than created (content) (Stamboulis & Skayannis, 2003). Although
there are several conceptual studies on experiences, fragmented theories on customer
experiences have only been verified by a few empirical studies. This demonstrates
insufficient clarification about factors influencing customer experiences. So far literature
on customer experiences might be considered as complex, inconsistent, indecisive, and
subjective. This situation fails to build on previous studies and bridge the gap between
literature and practice.
There are different opinions on definition, antecedents, variables, measurement, and
impacts of customer experiences. Without a more clear direction on experience items and
their contribution on organizational performance, strategies established to create desired
customer experiences might become ineffective (Kim & Brown, 2012). This study
attempts to close this knowledge gap and examine customer experiences in hospitality
industry with regard to guests’ behavioral outcomes.
Customer experiences are extremely relevant to tourism industry. Tourism is an
experience-intensive service. This is why travelers are more active and alert on their trips.
They are open to new experiences as discussed by Cohen (1979), Crompton (1979),
MacCannel (1989), Smith (1994) and many other pioneers. Probably this is the main
reason why hospitality is one of the most dispersed industry in the world, charging very
different prices for the same basic product; accommodation in a safe, clean place. In
particular, consumer behavior discipline for tourism should also consider hedonic,
emotionally driven, and irrational behaviors of travelers rather than purely rational models
(Bigne & Andreu, 2004).
Acknowledging the importance of customer experiences in hospitality raises further
questions. First, what exactly is customer experience? Second, what are the factors
influencing customer experiences? Third, how are customer experiences beneficial to the
firm? Finally, what are the strategies to create, manage and monitor desired customer
experiences? The first three questions are challenged in this study. However, adapting
customer experience to organization strategy and operations is beyond the scope of this
paper, although some brief suggestions on implications are given at the end.

Literature review
Traditional marketing concepts are insufficient for explaining changing customer needs
and behaviors in today’s competitive buyer markets (Knutson, Beck, Kim & Cha, 2006;
Pine & Gilmore, 1999; Schmitt, 1999). The notion of customer experiences has emerged
from this need. However, customer experiences have in most studies been vaguely
defined, if at all (Walls, Okumus, Wang and Kwun (2011b).
According to Holbrook and Hirschman (1982), experiences are part of consumer
behavior related to emotions, fantasies, and different customer perceptions. Pine and
Gilmore (1998, 1999) defined experiences as distinct economic value for consumers that
are sustainable and memorable. Experiences also involve an intention to repeat and be
shared with others (Pine & Gilmore, 1999).
Berry et al. (2002) stated that experiences are a result of coordination of mechanic
and humanic clues in the consumption environment. Mossberg (2007) defined
experiences as an integrated whole that affect customers emotionally, physically,
intellectually, and spiritually. According to Oh, Fiore and Jeoung (2007), experiences are
enjoyable, engaging, and memorable events and moments for customers consuming those
events.
Despite these various illustrations created a rich background for the concept, they
failed to offer a universal definition. Although terminology lacks a shared definition, there
are recurrent characteristics of experiences that might be used to support a theoretical
understanding of the concept. First, experiences are personal and exceptional, they

 
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involve customers’ perception and participation, engage customers emotionally , shared
with others and remembered for a while (Walls, 2009). Therefore, this study accepts the
operational definition of guest experiences in hospitality as memorable events and
impressions that engage customers in an emotional and personal way during their hotel
stay, which influence future purchase decision (loyalty) and shared with others (word-of-
mouth). Hence, guest experiences are multidimensional outcomes that occur in response
to some interaction with servicescape and/or service providers.
It has been supported in numerous studies that loyalty and recommendation
behaviors of customers are major factors for long-term success of the organizations;
however, mere satisfaction is not enough for loyalty (Brakus, Schmitt & Zarantonello,
2009; Reichheld, 1996). Customers seek experiences that would bond them emotionally
to the brand and reflect that in their behaviors. Researchers point out the importance of
customer experiences particularly for services (Pine & Gilmore, 1998,1999; Schmitt,
1999). As services are intangible, inseparable, and heterogeneous, physical environment
and social interactions in hospitality are more important than products.
Tourism product in general is an experience (Gunn, 1988), customers not only buy
products but also experiences in tourism. Experience is the main outcome after a leisure
trip. Accommodation can also be considered as an important part of tourism activity
(Smith, 1994). By definition, travelers need to stay at the destination for a minimum 24
hours to be considered as tourists. Therefore, hospitality experiences should be taken into
account as an integral component of the overall travel experience.
Hospitality is among those industries with high involvement. Hotels do not just
offer shelter with a clean bed, but experiences also accompany these functional benefits.
In several cases, experiences are the reason guests pay many times more to the same
clean, secure, and comfortable bed. Positive experiences support high-price strategies of
luxury hotels. The rich physical environments and social interactions make hospitality
industry an attractive domain to analyze experiences. The challenge here lies in
determining variables that impact consumers’ decision set concerning experiences.

Factors influencing guest experiences in hospitality

A substantial number of studies attempted to establish items that influence customer
experiences. The seminal work of Pine and Gilmore (1999) is the most recognized among
these studies. They offered four realms of customer experiences as entertainment,
educational, esthetic, and escapist experiences. The entertainment realm is related to
events that make customer smile; this is the most basic experience (e.g., watching a stand-
up show on TV). Educational experiences are concerned with consumers’ need to learn
and understand (e.g., reading history books or watching documentaries). Esthetic
experiences are related to customers’ tendency to appreciate beauty and harmony (e.g., art
works). Escapist dimension of experiences refers to people’s desire for a change and try
new and different (e.g., cultural travel).
Another classification for experiences has been offered by Dube and LeBel (2003)
after their five-level qualitative research. They posited experiences through pleasure and
suggested physical, social, emotional, and intellectual pleasure as experience dimensions.
Physical experiences are related to physical activity and senses; social experiences refer to
affluence and belonging; emotional experiences are related to feelings emerge as a result
of external stimuli and intellectual experiences reflect appreciation and understanding of
complexity, knowledge, and advancement.
Schmitt (1999), approached experiences from marketing communications
perspective and offered five categories as sense, feel, think, act, and relate. Sense
dimension of experiences refers to the sensory experiences that are perceived by five

 
  
senses; feel dimension refers to affective experiences such as joy, happiness, pleasure, and
pride; think dimension can be associated with intellectual experiences such as creativity
and problem solving; act reflects physical experiences such as mountain climbing; and
finally relate dimension refers to social interactions and belonging. Therefore, the concept
of customer experiences involves not only cognitive evaluations but also affective
elements (Verhoef, Lemon, Parasuraman, Roggeveen, Tsiros & Schlesinger, 2009).
Verhoef et al. (2007) suggest assortment, price and promotions, social environment,
atmosphere, and service interface as determinants of customer experience in a retail
environment. A more comprehensive conceptualization was offered by Diller, Shedrof
and Rhea (2008). They formulated experiences through their meaning to the person. Their
work stated fifteen items (accomplishment, beauty, creation, community, duty,
enlightenment, freedom, harmony, justice, oneness, redemption, security, truth,
validation, and wonder) that would create positive customer experiences.
It is obvious that none of the above dimensions are mutually exclusive. For
example, educational experiences can also be entertaining, or feelings (emotional
experiences) are triggered through perceptions in physical environment (sensory
experiences). In other words, research on customer experiences is fragmented and lacks a
structured direction and replication. Different authors used different parameters depending
on the interest. Although different approaches produced a healthy environment for the
development of the concept, many of these dimensions lack enough empirical support to
be used and transferred to a quantitative research.

Physical environment and social interactions

Customer experience can also be framed as a function of physical environment and social
interactions from an organizational perspective. Carbone and Haeckel (1994) argue that
experiences can be created by organizations by offering mechanic (physical environment)
and humanic (social interactions) clues during service encounters. Importance of physical
environment (servicescape, atmospherics, tangibles, etc.) and social interactions (service
encounters, service profit chain, hospitality, intangibles, etc.) have also been supported as
factors influencing customer experiences in literature (Baker, 1987; Bitner, 1992;
Brocato, Voorhees & Baker, 2012; Huang, Scott, Ding & Cheng, 2012; Schmitt, 1999;
Smith, 1994; Stamboulis & Skayyannis, 2003; Turley & Milliman, 2000; Yuan & Wu,
2008; Walls, 2009). Yet the most effective experiences integrate mechanics with
humanics (Carbone & Haeckel, 1994).
Numerous studies have been indicating that physical environment and social
interaction dimensions can be used to determine a structured set of experiences. A similar
typology had been offered by Walls et al. (2011a). According to them, experiential
marketing is the process of creating experiences for customers through physical
environment (e.g., decoration, lighting and background music) and social interactions
(e.g., professionalism, courtesy and reliability). The concept of physical environment and
its effects on consumption has heavily been studied in tourism literature (e.g., Urry,
1995). Importance of social interactions has also been stated by various authors. For
example, Crompton (1979) expressed social interactions as one of the main motives for
travel.
This study also grouped experiences under physical environment and social
interaction dimensions. This classification, although simple, is able to encompass other
structures mentioned in literature. Physical environment and social interactions
(employees and other customers) are among the factors that can be manipulated by
organizations. In other words, outcomes of such a categorization would be more
meaningful to practitioners as well. After all experiences should principally be produced
to be consumed (Stamboulis & Skayannis, 2003).

 
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Importance of customer loyalty and positive word-of-mouth (recommendation) had
been demonstrated by numerous authors (Reichheld, 1996). Impact of loyalty and
recommendation on organizational performance is ever increasing in regard to
competition, accessibility, and ease of creating word-of-mouth through internet. Mere
satisfaction is not enough for loyalty any more. Even satisfied customers easily change
their suppliers for better experiences. Obviously, it is reasonable to measure loyalty and
recommendation as positive outcomes of experiences (Brakus et al., 2009; Yuan & Wu,
2008).

Methodology
As mentioned earlier, there is a need to describe customer experiences from hospitality
operations’ perspective. The main objective of the study is to contribute to a theoretical
framework concerning customer experiences in hospitality industry. To reach this
objective, factors (physical environment and social interactions) influencing quest
experiences in hospitality were established, then influence of these dimensions on
consumer behavior are determined. The primary purpose of the field research has been to
investigate to what extent customer experience dimensions that are supported in literature
and theory influence customer behavior in hospitality operations.
Consequently, answers this paper seeks are related to the following questions:
1- What are the factors influencing customer experiences in hospitality?
2- How do positive experiences affect customer behavior (loyalty and
recommendation)?
Therefore, the independent variables of the research are factors (physical
environment and social interaction) influencing customer experiences and dependent
variables are intention to return (loyalty) and recommendation.
Creating and managing experiences depends on the ability to determine factors
influencing customer experiences. After a review of existing literature, 49 items were
found to be related to guest experiences in hospitality (Baker et al., 2002; Bitner, 1992;
Walls, 2009; Verhoef et al. 2009; Wu, 2007). These items were then discussed with
experts (four frequent five-star hotel guests, two hospitality professionals and two
scholars served as the jury). The items were then refined to 33 before the pilot surveys.
The pilot questionnaire was administered on 10 hotel guests from the sampling frame to
eliminate any misinterpretations, overlapping and unclear items. Based on the feedback
received during the pilot study, three items were removed and two items were integrated
with others. Eventually 28 items (14 under physical environment and 14 under social
interaction dimensions) were used in the final questionnaire.

Sampling and data collection

The field research has been conducted in five-star hotels in Istanbul. Istanbul has been a
pioneer destination hosting more than eight million international visitors per year. The
city attracts both business and leisure travelers. Five-star hotels can also be regarded as an
ideal domain to study experiences. These luxury hotels can give more insight into
experiences because of their experienced and demanding clientele as well as importance
given on product and service design.
The study population consisted of 61 five-star hotels in Istanbul that are also
members of TUROB (Association of Turkish Hotels). Thirty five of these were willing
and convenient to participate in the study. A total of 350 adult five-star hotel guests were
surveyed during the field research upon their consent. All hotels except three allowed the
researchers to administer the questionnaire: three of the hotels (22 respondents) however
preferred their staff (guest relations mainly) to handle the survey process. In those cases

 
  
where surveyors were not researchers, the appointed staff was instructed concerning the
survey procedures and experience dimensions.
The screening process was based on guests being above 18 years of age and having
stayed in a five-star hotel on the previous day. This purposive sampling criterion was set
to eliminate guests who did not have stayed in the facility long enough to evaluate their
experiences. The surveys were conducted in hotels (hotel lobby mostly) during or right
after hotel stay. This procedure would create better results on recall, improve the
homogeneity and contribute external validity, rather than a survey sent to guests after their
stay (Lincoln & Guba, 1985).
The instrument was a self-administered, standard survey that was conducted
between June and July 2012 for seven weeks. Field research was conducted based on
intercept survey procedures. The first part of the questionnaire comprised guest
experience dimensions, the second part included demographic and tripographic
information and the final part covered questions regarding loyalty and recommendation.
Although the items were refined several times, the final version of the questionnaire was
still considered lengthy and took 15–20 minutes to complete. To avoid questionnaire
fatigue and comprehension errors, all experience statements were positively worded
(Buttle, 1996).
On completion of field research the data were uploaded to SPSS (version 19). First,
their frequency and variance were investigated and then correlation and regression
analysis were applied.

Results
The participants were 53% males, and 69% were above 30 years of age: 74% of the
sample had more than 15.000 Euro net annual income. Of 350 guests, 263 (75%) had
university or higher degree of education and they were mostly from Europe (44%),
Russian Federation (12%), and Middle East (12%). Considering tripographic factors, most
of the participants were leisure travellers (68%), majority of them had never stayed in
their current hotel before (81%). The participants might also be considered as experienced
travelers; more than half (56%) of them had at least two international trips during 2011.
Reliabilities of the factors used as independent variables on the questionnaire were
measured using Cronbach’s alpha and were considered high (physical environment with α
= 0.91 and social interactions with α = 0.93). It was also found that guests were positively
influenced by physical environment and social interaction dimensions. “Safety and
security” (mean = 4.35), “natural and cultural resources in the surroundings” (mean =
4.35), “architectural design” (mean = 4.32), and “quality of materials used” (mean = 4.32)
have greater loadings in regard to physical environment items. With regard to the social
interaction items, “caring staff” (mean = 4.35), “staff having technical knowledge” (mean
= 4.32), “staff recognizing guests” (mean = 4,29), and “respectfulness of the other guests”
(mean = 4.27) have greater averages, as demonstrated in table 1.

Table 1. Descriptive statistics related to experience items used in the questionnaire.

Factors Mode Mean S.D.**
Physical Environment Items*
Hotel’s architectural design is attractive. 5 4.32 0.95
The surrounding natural and cultural resources are 5 4.33 0.87
impressive.
The materials used in the hotel are of high quality. 5 4.32 0.74
The interior design is attractive in the hotel. 4 4.19 0.74
The hotel is clean. 4 4.25 0.77
The hotel furnishing is comfortable. 4 4.16 0.77
The music played inside the hotel is nice. 4 4.00 0.92

 
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The lighting is enjoyable in the hotel. 4 4.16 0.79
The signage and information are arranged right. 4 4.19 0.81
The physical facilities are maintained well. 4 4.16 0.77
The hotel is spacious. 4 4.20 0.73
The food is enjoyable in the hotel. 4 4.17 0.78
I was surprised with the physical items in the hotel. 4 4.10 0.84
The hotel is safe and secure. 4 4.35 0.62
Social Interaction Items*
Hotel staff cares about guests. 4 4.35 0.68
Hotel staff recognizes guests. 4 4.29 0.73
Hotel staff shows individual attention to guests. 4 4.23 0.80
Hotel staff customizes the services according to guests’ 4 4.12 0.83
individual needs.
Hotel staff is friendly. 4 4.25 0.80
Hotel staff is neat and clean. 4 4.18 0.83
Hotel staff is well organized. 4 4.18 0.79
Hotel services are quick and prompt. 4 4.21 0.74
Hotel staff has technical knowledge about the products and 4 4.32 0.69
services.
Hotel employees are always willing to help guests. 4 4.24 0.74
Hotel staff goes out of their way to help guests. 4 4.26 0.66
Other guests of the hotel are respectful. 4 4.27 0.69
Other guests are friendly and social. 4 4.18 0.78
I was surprised by the services supplied in the hotel. 4 4.26 0.75
Note: *5 point Likert scale was used (1—Strongly Disagree, 2—Disagree, 3—Neither
Disagree Nor Agree 4—Agree, 5—Strongly Agree). ** Standard Deviation

Relationship between customer experience and consumer behavior

The main objective of this study is to explore the relationship between customer
experiences and loyalty and recommendation behaviors. Loyalty and positive word-of-
mouth are considered to be desired outcomes of customer experiences and among the
reasons organizations are striving to create positive customer experiences.
Table 2 exhibits this relationship between experiences (independent variable) and
consumer behavior intention to return (loyalty: dependent variable) and willingness to
recommend to others (word-of-mouth recommendation: dependent variable). The findings
clearly show that most of the items are significantly related to loyalty and
recommendation behaviors at p<0.01 level.

Table 2. Relationship between customer experience dimensions on customer behavior

(Pearson’s Correlation Analysis).
Factors Loyalty Recom.***
Physical Environment Items
Hotel’s architectural design is attractive. 0.12* 0.22**
The surrounding natural and cultural resources are impressive. 0.13* 0.17**
The materials used in the hotel are of high quality. 0.27** 0.20**
The interior design is attractive in the hotel. 0.20** 0.20**
The hotel is clean. 0.23** 0.22**
The hotel furnishing is comfortable. 0.21** 0.19**
The music played inside the hotel is nice. 0.22** 0.18**
The lighting is enjoyable in the hotel. 0.28** 0.21**

 
  
The signage and information are arranged right. 0.31** 0.28**
The physical facilities are maintained well. 0.33** 0.29**
The hotel is spacious. 0.35** 0.30**
The food is enjoyable in the hotel. 0.34** 0.19**
I was surprised with the physical items in the hotel. 0.31** 0.24**
The hotel is safe and secure. 0.21** 0.11**
Social Interaction Items
Hotel staff cares about guests. 0.30** 0.27**
Hotel staff recognizes guests. 0.30** 0.28**
Hotel staff shows individual attention to guests. 0.28** 0.30**
Hotel staff customizes the services according to guests' 0.26** 0.22**
individual needs.
Hotel staff is friendly. 0.34** 0.26**
Hotel staff is neat and clean. 0.26** 0.14*
Hotel staff is well organized. 0.17** 0.17**
Hotel services are quick and prompt. 0.24** 0.30**
Hotel staff has technical knowledge about the products and 0.32** 0.30**
services.
Hotel employees are always willing to help guests. 0.34** 0.37**
Hotel staff goes out of their way to help guests. 0.42** 0.31**
Other guests of the hotel are respectful. 0.29** 0.22**
Other guests are friendly and social. 0.29** 0.19**
I was surprised by the services supplied in the hotel. 0.41** 0.30**
Note: *Correlation is significant at p<0,05 level (two tailed). **Correlation is significant
at p<0.01 level (two tailed). *** Recommendation

Considering loyalty, as table 2 indicates, most important experience statements are

as follows: “hotel staff goes out of their way to help guests” (r = 0.42), “I was surprised
by the services supplied in the hotel” (r = 0.41), “the hotel is spacious” (r = 0.35), “the
food is enjoyable in the hotel” (r = 0.34), “hotel staff is friendly” (r = 0.`34), and “hotel
employees are always willing to help guests” (r = 0.34).
The results also show that experience dimensions are also closely related to
intention to recommend. Items that are highly correlated with positive word-of-mouth are
as follows: “hotel employees are always willing to help guests” (r = 0.37), “hotel staff go
out of their way to help guests” (r = 0.31), “the hotel is spacious” (r = 0.30), “hotel staff
care about guests” (r = 0.30), “hotel services are quick and prompt” (r = 0.30), “hotel staff
have technical knowledge about the products and services” (r = 0.30), “I was surprised by
the services supplied in the hotel” (r = 0.30). Therefore, there is strong evidence for the
prediction that customer experiences accompany both customer loyalty and
recommendation behaviors.
The final step in analyzing data is regression analysis. Regression analysis, different
from correlation, is used to determine the factors that demonstrate greater influence on
dependent variables (Pallant, 2005). Tables 3 and 4 indicate the experience items that
explain loyalty and recommendation behaviors at 95% confidence interval.

Table 3. Results of regression explaining the impacts of independent variables on loyalty.

Independent Variables B SE β t Sig.
Constant 0.13 0.42 0.31 0.75
Physical Environment Items
The surrounding natural and cultural resources are 0.20 0.07 0.21 2.79 0.01**
impressive.
The materials used in the hotel are of high quality. 0.40 0.1 0.35 4.24 0.00**
The interior design is attractive in the hotel. 0.25 0.87 0.24 2.95 0.00**

 
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The physical facilities are maintained well. 0.15 0.08 0.14 1.97 0.05*
Social Interaction Items
Hotel staff care about guests. 0.26 0.09 0.24 3.04 0.01**
Hotel staff is friendly. 0.15 0.76 0.14 1.93 0.05*
Hotel services are quick and prompt. 0.25 0.09 0.20 2.69 0.01**
Hotel staff have technical knowledge about the 0.18 0.08 0.14 2.00 0.05*
products and services.
0.30
Hotel staff go out of their way to help guests. 0.09 0.26 3.49 0.00**
0.28
I was surprised by the services supplied in the hotel. 0.08 0.26 3.24 0.00
Note: B: Coefficient; SE: Standard Error; β: Standardized Coefficient; t: t-Value; Sig.:
Significance, Dependent Variable: Loyalty; R = 0.689; R² = 0.47; Adjusted R² = 0.41;
Standard Error = 0.595. Insignificant items were excluded in this table. *Significant at
p<0.05 level. **Significant at p<0.01 level.

According to table 3, ten items out of 28 were found to explain loyalty (R² = 0,41),
six of which are social interaction dimensions. Factors with a greater impact on loyalty
are; “the materials used in the hotel are of high quality” (β = 0.35), “hotel staff go out of
their way to help guests” (β = 0.26), and “I was surprised by the services supplied in the
hotel” (β = 0.26).

Table 4. Results of regression explaining impacts of independent variables on

recommendation.
Independent Variables B SE β t Sig.
Constant 1.63 0.39 4.17 0.00**
Physical Environment Items
The hotel is spacious. 0.14 0.08 0.16 1.94 0.05*
The food is enjoyable in the hotel. 0.16 0.07 0.18 2.23 0.03*
The hotel is safe and secure. 0.19 0.09 0.16 2.09 0.04*
Social Interaction Items
Hotel staff recognizes guests. 0.31 0.11 0.34 2.92 0.00**
Hotel staff is friendly. 0.18 0.07 0.21 2.61 0.01**
Hotel staff is well organized. 0.16 0.08 0.17 2.23 0.03*
Hotel staff has technical knowledge about the 0.20 0.08 0.19 2,47 0.01**
products and services.
Note: B: Coefficient; SE: Standard Error; β: Standardized Coefficient; t: t-Value; Sig.:
Significance, Dependent Variable: Recommendation; R = 0.583; R² = 0.34; Adjusted R² =
0.26; Standard Error = 0.554. Insignificant items were excluded in this table. *Significant
at 0.05 level. **Significant at 0.01 level.
Seven of the guest experience dimensions as independent variables were found to
have a major impact on recommendation behavior of guests (R² = 0.26) as shown in table
4. Items with greater beta coefficients are as follows: “hotel staff recognize guests” (β =
0.26), “hotel staff is friendly” (β = 0.21), “hotel staff has technical knowledge about the
products and services” (β = 0.19), and “the food is enjoyable in the hotel” (β= 0.18).
Regression analysis also revealed that influence of social interaction items on both loyalty
and recommendation is greater than physical environment dimensions.

Conclusion and Implications

This study provides empirical reinforcement for impacts of positive customer experiences
on consumer behavior. It also suggests factors influencing guest experiences in hospitality
and measures their intensity and relative importance in strengthening customer loyalty

 
  
and word-of-mouth recommendation. The findings confirm that physical environment and
social interaction items proposed in this study as experience dimensions are closely
related with customers’ loyalty and recommendation behaviors.
Although all experience items were found to be related with positive consumer
behavior, factors with greater average loadings in general are revealed as follows: safety
and security, staff showing personal care, location of the facility, technical knowledge of
staff, quality of materials, and architectural design.
Based on the findings, it can be argued that both physical environment and social
interaction items are important antecedents of loyalty and recommendation. In particular,
social interactions are important elements influencing guest behavior. The importance of
physical environment and social interactions on customer experiences was also confirmed
by various manuscripts (e.g., Gupta & Vajic, 1999)
For example, safety and security are among the items that received a greater average
rating from guests. This might be because travelers in general are visiting a foreign
destination, with different environment, norms, and culture. The hotel is perceived as a
safe house, although considered to be a part of overall travel experience, being in a
completely different and unfamiliar environment make travelers feel unfamiliar and at the
end of the day they desire to be in a secure and familiar environment. On the basis of this
fact, practitioners might choose to lay more emphasis on safety and security through some
physical and social clues such as the fire exit lamps, smoke detectors, evacuation plans on
corridors, or the appearance and professionalism of the security staff in the facility.
Social interaction items have also found to be correlated with consumer behavior.
More social interaction items were measured to be explaining loyalty and
recommendation tendency than the physical environment factors. Items such as personal
care, technical knowledge, recognizing guests, willingness to serve, being friendly, and
staff going out of their way to help guests are directly related to human resources.
Selection, promotion, motivation, training, empowerment, and retention are of crucial
importance. It would be hard to expect a staff to remember a guest who had stayed in the
hotel two years ago if the team member does not possess the right skills, not motivated, or
trained enough and/or just got the job three months ago. Hence, high turnover is an enemy
to organizational memory in hospitality industry. If the clients want to be recalled and
recognized, employee turnover should be minimized.
Quantity of staff should also be considered with the quality if the staff is expected to
go out of their way to help guests (e.g., technical service trying to fix a client’s computer
so that she can have her presentation later the same day, or a bellboy accompanying a
senior guest to the spa), there needs to be some back-up for the employees to have the
opportunity to leave their posts to help guests. It is now accepted by many commentators
that most of the tasks completed by hospitality staff are not written on job descriptions;
voluntary but necessary (Shoemaker & Lewis, 1999).
Another suggestion that can be derived from the results is that hospitality
organizations should understand that their clientele is also part of their product. Travelers’
motivation of sharing and communicating with other clients has also been discussed in
other studies (e.g., Wang, 1999). Other guests (respectful and social) are also ranked high
as an important factor of customer experiences. Dysfunctional and misbehaving
customers and a heterogeneous customer base might affect customer experiences
negatively, as discussed by Wu (2007) and Verhoef et al. (2009). This should not mean
that management should discourage interactions between guests; rather they should be
able to understand their different needs and cultural backgrounds. Targeting and grouping
compatible customers together might result in positive interpersonal encounters (Wu,
2007).
The business strategy and position of the organization might also influence design
of experiences. Small boutique hotels might be more focused on social interaction

 
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  1  
dimensions whereas a luxury hotel with several hundred rooms would concentrate on
physical environment experiences. Regardless of the product position, hospitality firms
should try to reach a better understanding of their clients to offer experiences desired by
their customers (McIntosh & Siggs, 2005). Their personality, emotions, and other
personal issues should be investigated besides their transactions.
One general limitation with consumer behavior measurement scales is that their
intensity is subject to change based on personal (e.g., demographics and personality) and
tripographic factors (e.g., motivation for travel, length of stay, and previous experiences)
and customer experience is not an exception. Experiences are not very stable over time
and space; they might change depending on personal and situational factors. It would not
be realistic to expect a business traveler to show same level of interest to some experience
clues as would do a leisure tourist.
Another limitation of the study is that when created, produced, and standardized;
experiences lose their essence and authenticity, they might become ordinary and
impersonal. Trying to manage customer experiences with too many rules and regulations
may turn experiences into routine events. In other words, experiences can be
commoditized and lose their authentic value when manufactured. Prior customer
experiences do affect the authenticity of the experience (Verhoef et al., 2009). Boorstin
(1964) also expressed his anxiety about standardization of tourist experiences.
It is getting harder to differentiate hospitality services based on traditional physical
clues; physical facilities are also suffering from standardization, homogenization, and
imitation. This is why increasing number of organizations are trying to create experiences
for their customers by focusing on design and delivery to differentiate their services and
increase customer loyalty (Yuan & Wu, 2008). This paper is also suggesting experiences
as a solution for differentiation and proves that offering the right physical environment
and social interactions might have a positive impact on consumer behavior. There still are
ambiguous concepts about hospitality experiences and this work should be reconsidered
for different brands, strategies, positions, and markets. It is not argued that this study
generated a universal experience continuum. Findings discussed here aid in a better
understanding of complex guest behavior but are not in themselves proof of validity of a
comprehensive framework of customer experiences.
The results of this study would be able to provide a better understanding of factors
affecting customer experiences and their relation to customer behavior. The findings
might be used in improving marketing strategies, to create, manage, and control guest
experiences in hospitality. The results are able to offer insight to both practitioners and
scholars on their quest for experience design. Further studies are needed to establish
determinants of guest experiences and their effects on consumer behavior.
This study was conducted on five-star hotel guests only. Future studies might
investigate hotels from different categories. Restaurants, attractions, and transportation
might also be areas of future study or one can also focus on the overall travel experience.
Emotions are also emerging as a relevant subject to experiences. Experiences create
emotions, exploring the emotions felt during and after the experience might offer clues on
how to design products and services to facilitate positive experiences.

Acknowledgments. (removed for the integrity of review process)

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