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Customer awareness towards Syariah Compliant hotel

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DOI: 10.1109/ICIMTR.2012.6236373

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 2012 International Conference on Innovation, Management and Technology Research (ICIMTR2012), Malacca, Malaysia :
21-22 May, 2012
Customer Awareness towards Syariah
Compliant Hotel
Nur’Hidayah Che Ahmat, Ahmad Hidayat Ahmad Ridzuan, and Mohd Salehuddin Mohd Zahari
Abstract--The increasing number of Islamic followers in
worldwide context and positive tourism trends boost up the
demand for and supply of Islamic hospitality services. It is
assumed that the emergence of Islamic financing is one of the
driving factors of Syariah Compliant hotels besides the increasing
number of Arab and Muslim travellers and their high purchasing
power. However, specific guidelines need to be introduced in
constructing this concept since there are many different opinions
and inconsistencies in understanding such practices among the
Syariah scholars and hotel operators. Corpus of past literatures
affirmed that currently there is no standardization being
introduced and most of the hotel operators came out with their
own interpretation of compliant strategies. Therefore, this study
empirically investigates the customers’ awareness on Syariah
Compliant concept and practices. Self-reported questionnaires
were used to gather the data from the customers using
convenience sampling. Result shows the more customers aware of
Syariah Compliant concept and practices, the more they will
accept it. However, it could be said that customers in general are
not really comprehend about Syariah Compliant hence hotel
operators are responsible to educate the customers.
Index Terms-- Customer Acceptance, Awareness, Islamic
hospitality, Malaysia, Syariah Compliant Hotel
I. INTRODUCTION
F RAGMENTATION in hotel industry has lead to
diversified concept being introduced to cater specific
target market like business travellers, leisure travellers,
business women, up to tourists who are sensitive on the
Islamic religion aspect. The increasing number of Muslim
travellers and the increasing of purchasing power [1]
triggered hotel operators in Middle East to realize the
potential of Muslim market. With the positive prospect, they
introduced Syariah Compliant concept which now start to
expand all over the world. The increase in demand reflected
when the statistic shown 10 percent of the world tourism
market is from Middle East, one of the fastest growing
regions at present and it was reported that they spend more
than $4.9 million USD annually during their travel period
[2].
Reference [3] defined Syariah Compliant hotels as hotels
where services offered and financial transactions are based
on completely Syariah principles, not only limited to serving
halal food and beverages but also for health, safety,
environment, and the benefits on economic aspects of all
people, despite any race, faith, or culture. In simple words,
Syariah is law that cover every aspect of life which allows
and forbids certain things. Basically, the law has set
guidelines for hotel operators to follow, but then, lack of
standardization in addressing Syariah issues is identified as
the main problem [4]. Most of the hotel operators and the
978-1-4673-0654-6/12/$31.00 ©2012 IEEE 124
customers confused with the term “Syariah Compliant” and
the right practices of it. Since there is no standard being
implemented by the authorities, hence this cause hotel
operators and customers to create their own interpretation
and understanding which lead to misconception [5]-[13].
By nailing down to the underpinning, lack of consensus
among hotel operators and scholars regarding the concept
incline to certain versions of interpretations on the exact
requirements of a Syariah Compliant hotel [14]. Not to
mention, hotel operators are too focusing on becoming a
pioneer while neglecting the right application of Syariah
Compliant. Nonetheless, even with all the misconception of
Syariah Compliant concept, De Palma Hotel Groups
declared themselves as the first hotel applying the concept
not only in Malaysia but also in Asian region [15]. De Palma
rebrands their hotels by adapting the Syariah Compliant
concept from Islamic banking firmly contended that if other
hotels claimed themselves as Syariah, they only focus on the
external aspect like the employee’s attire and et cetera, but
not specialized in internal aspect of the concept like them.
Furthermore, most of the international brand hotels refused
to apply the Syariah Compliant because the implementation
of the concept need a proper planning as it involves high cost
due to large space needed for gender segregation between
men and women, for instance [1],[11],[12]. Also, it is clear
that the implementation of the concept could affect the
revenue generated mainly in Food and Beverages due to
alcoholic prohibition [8]. These supported with the statement
by De Palma Hotels who faced initial loss of 20 percent after
rebranding their hotels to Syariah Compliant. Fortunately, it
was a temporary setback because they now earned more than
40 percent from their original sales and it is worth to
mention that their staff turnover rates decreased since they
inculcate Islamic values among their staffs [16].
Recognitions and achievements make their brand
internationally renowned and somehow motivate them to
continuously branding the right Syariah Compliant hotels
and act as a benchmark to other hotels.
Hotel operators agreed that it requires a team of religious
advisors who will monitor every aspect from the operational,
interior designs, up to financial aspect before the hotel could
implement better Syariah Compliant. Reference [17] noted
that many hotels actually have undergone the concept of
Islamization or could be categorized as ‘dry hotel’ but not
Syariah Compliant [12]. It means that, they follow certain
aspect of Islamic way of life in their hotel such as offering
only halal food with no alcoholic beverages served, and
provide amenities for Muslim customers. Therefore, scholars
agreed that there are no such hotels in this category yet
[12],[17],[18]. Nevertheless, it is believed that the concept
will be the same like the banking industry back in 1970s
[19],[20] where at that time it was not strong enough but
slowly gained its strength over the years. Though, to develop
 2012 International Conference on Innovation, Management and Technology Research (ICIMTR2012), Malacca, Malaysia :
21-22 May, 2012
and deliver the right concept is the challenging part [17]
because people are too complacent with conventional hotels
concept besides merely understand the concept of Syariah
Compliant through what is visible in their eyes.
Because the concept can be considered as ‘a new thing’ in
the market, hence it has not yet received much attention
among the Malaysian researchers to conduct the study about
the topic despite there are growing research databases from
the western parts. In fact and not to exaggerate, the study on
Syariah Compliant relating to the hotel realm is rather
rudimentary.
II. LITERATURE REVIEW
The concept of Syariah Compliant was introduced to the
industry to cater the Muslim market specifically. It was
proven that the increasing number of Arab and Muslim
travellers and their growing purchasing power are some of
the key factor driving the growth of Syariah Compliant
hotels [21],[22]. Parallel with the above notion, it could be
said that Syariah Compliant has a very strong competitive
advantage which significantly helps to the increasing in
demand for Syariah Compliant hotels [5]-[8],[10]-
[13],[17],[18],[22],[23].
A. The Emergence of Syariah Compliant
The rise of Muslim travellers in Saudi Arabia and Kuwait
[21] and the increasing wealth of the communities in the
region help the potential growth of the concept [23].
Scholars also noted that the increasing availability of Syariah
Compliant funds together with the changing pattern of
lifestyle has boost up the concept [12]. Further, [17]
simplified that the emergence of Syariah Compliant is well-
correlated with the growth of Islamic finance back in 1970s
where the concept is not strong enough at that time but
slowly gained its strength over the years.
The word “Syariah Compliant” is not clarified enough
within the hotel industry. In fact and not to exaggerate, there
are no such hotels in this category [5] and no written rules or
classifications currently exist for Syariah Compliant hotels
[12],[13]. Reference [17] argued that the biggest challenge is
to develop and deliver the right Syariah Compliant. It is
because people in the industry only understand the concept
and the practices through what is visible to their eyes. The
very popular misconception is when there is no alcohol
served [5],[6] and by providing amenities for Muslims is
already considered as Syariah Compliant. Nevertheless,
hotel industries implicitly follow one aspect of Syariah
Compliant by having halal certificates in their establishment.
Reference [7] noted that most of the international brand
hotels especially four and five-star ratings are still refused to
adopt Syariah Compliant hotel practices because they
believe it gives less commercial value and hotels make a
huge profit from selling alcoholic beverages, discotheque,
and nightclubs.
In addition, [12] divided Syariah Compliant into three
sections namely operations, interior design, and financial,
supported by other scholars who further listed the minimum
requirements for Syariah Compliant hotel [12],[21]. They
identified some of the key criteria that a Syariah Compliant
hotel must have which are: a) separate facilities such as
floors, gym, function rooms for males and females, b) beds
125
and toilets should not be placed in the direction of Mecca, c)
no alcohol and pork in any outlets, d) products served must
be halal and slaughtered in the name of Allah, and e) the
total development and operations should be financed through
Islamic financial in line with the principles of Syariah
finance.
B. Customer Awareness on Syariah Compliant Hotel
Concept
The burgeoning of Syariah Compliant hotel concept
internationally triggers hotel operators in Malaysia to open
up such hotels in this country to cater the demand. However,
the awareness is still uncertain due to misconception, despite
there is an increase in demand for this concept. Reference
[25] posited that information and knowledge could influence
customers’ attitude towards (Syariah Compliant) concept.
Customers should have the basic knowledge of Syariah
Compliant, either through reading or other mediums suitable.
Hotel operators’ could work hand in hand to educate the
customers regarding the concept to avoid misinterpretation.
Reference [26] argued that potential customers may not even
aware of (Syariah Compliant) or may have their own
perception about it. Hence, it is important to ensure
customers are aware of Syariah Compliant concept as it will
spark off the demand for Syariah hotel and help in customer
decision making [27]. Awareness usually based on
consciousness feeling, but it will not necessarily lead to
consumption (decision to stay in such hotel) [26]. The
growing pattern for this concept shows a positive prospect to
expand and success like other conventional hotels supporting
by the rise in intra-region travellers market whose prefer to
stay in hotels that respect their values, cultures, and health
concern [8].
C. Customer Acceptance level towards Syariah Compliant
Hotel Concept
Acceptance always related to positive feedback of the
customers which could be measured through their
willingness to stay in Syariah Compliant hotel. Reference
[22] stated that leisure travellers are very likely and some of
them are fairly likely to use Syariah Compliant hotel for
family trip, in contrast with business travellers. Surprisingly,
[10] identified that more than 50 percent of the customers
are non-Muslims, came from Germany and Korea. The
aforesaid statement dismissing the perception that Syariah
Compliant hotel is not only meant for Muslims since non-
Muslims also choose to stay in this hotel. In supporting the
literatures, Tamani Hotels and Resorts comprises a mix of
business and leisure travellers shows occupancy rose more
than 95 percent for a week [5] and most of their customers
came from Germany, Europe, and Australia. Furthermore,
report from De Palma hotels stated that their business doing
well proven through the increasing number of customers and
they claimed that the concept is successfully implemented
[16],[28]. These positive feedbacks from international
customers had inspired researchers to conduct the study in
Malaysian contextual setting.
III.METHODOLOGY
This study was conducted by using a quantitative method
and empirical investigation was carried out to determine the
relationship between the customer awareness and their
 2012 International Conference on Innovation, Management and Technology Research (ICIMTR2012), Malacca, Malaysia :
21-22 May, 2012

acceptance level on the implementation of Syariah TABLE I

FACTOR ANALYSIS AND THE FACTOR LOADINGS OF SYARIAH
Compliant. The questionnaire was adapted and modified
COMPLIANT AWARENESS
from the previous literatures including socio-demographic Items Factor
information of the respondents (age, education, monthly Loading
income and purpose of trip), and the items that measured the
effect of awareness on the acceptance level of customers. Syariah Compliant Concept (SCC)
I read about the problems due to the application 0.781
of Syariah Compliant hotel
A convenience sampling was used in accessing the I follow news and developments about the 0.769
respondents. Domestic or local tourists comprise of Malays, Syariah Compliant hotel concept
Chinese, Indians and other communities in Malaysia were I discuss with friends and people around me 0.767
selected as the unit of analysis seeing that the researchers about Syariah Compliant concept
want to evaluate the local perspective first. Survey was I am aware of the Syariah Compliant hotel 0.763
problems and consequences
conducted in Penang area supporting with the opening of I aware of the existence of Syariah Compliant 0.730
Halal hub by the state government. Statistic from [29] hotel review in websites
revealed that total Malaysians tourists in Penang were 2, I know about Syariah Compliant through my 0.716
942, 544 million which represent the third highest for hotel friends and relatives
I fully aware about Syariah Compliant hotel 0.707
guests by state in Malaysia hence decision to conduct the concept
study in Penang was justified. Reference [30] stated that a I know about Syariah Compliant through reading 0.706
sample size larger than 30 and less than 500 are suitable materials
enough to reflect the total populations. Thus, a total of 300 I have experience staying in Syariah Compliant 0.683
respondents were chosen to participate in this study. hotel concept
My families or relatives have experience staying 0.665
in Syariah Compliant hotel concept
Personal administered questionnaire was developed and pilot I seek advice from third party whether I should 0.641
test was conducted to ensure the validity and reliability of stay in Syariah Compliant hotel or not
the instruments adapted from [1],[12],[22]. Two parts were Eigenvalue 7.526
created under independent variables namely Part I Variance explained by factor 1 22.14%
(Concept), Part II (Practices) which measured through six- Syariah Compliant Practices (SCP)
Art in the hotel should not depict the human form 0.710
point Likert-type scale with anchors of 1=Strongly Disagree Larger function rooms to cater to males and 0.651
and 6=Strongly Agree. For dependent variable, Part III females separately
(Acceptance) was created and measured with six-point No nightclubs entertainment 0.601
Likert-type scale of 1=Absolutely Not/Low and Furnishings should follow according to Islamic 0.595
rules and regulation
6=Absolutely Yes/High.
Segregated prayer rooms 0.584
Separate male and female wellness facilities, such 0.582
IV. RESULT AND ANALYSIS as “hammams”, spas, and gyms
Separate floors for single males, females, and 0.572
Overall, researchers received 214 completed families
questionnaires with response rate of 71.3 percent. The No alcoholic drinks in the minibar in the rooms 0.562
majority of the respondents were age between 25 to 34 years Beds and toilets should not be placed to face the 0.555
direction of Mecca
old (n=115) and the others were 35 to 44 years old with 22.9 Quran, prayer mats, “subha” in each room or 0.551
percent (n=49), 45 to 54 years old with 20.1 percent (n=43) available at reception
and 55 years old and above with 3.3 percent (n=7). It is Alcohol should not be served in the premises 0.548
worth to mentioned, 71 percent (n=152) or more than half of Staff to be predominantly Muslim 0.541
the respondents never had any experienced staying in Male staff should entertain single men and female 0.515
staff should entertain women and families
Syariah Compliant hotel. This shows that Syariah Compliant International standards of service combined with 0.490
hotel still a new thing in the industry. Albeit there are few the traditions of authentic Middle Eastern
hotels applying this concept, but then the finding shows not hospitality
every people are aware of its existence. Therefore, it is the Only halal food should be served 0.466
Eigenvalue 5.396
hotel operators’ responsibility to introduce the concept like
Variance explained by factor 2 15.87%
what being practiced by De Palma Groups who dare to take Accumulated Variance 38.01%
the risk by rebranding their hotels following Syariah Component 3
Compliant. Most of hotel operators refused to follow them Should have markers indicating the direction of 0.568
due to certain consequences and they are afraid of any prayers
Eigenvalue 2.306
potential loss in revenue generated owing to the alcoholic
Variance explained by factor 3 6.783
banned. Analysis shows that more than half of the Accumulated Variance 44.79%
respondents (n=143) visit Penang for leisure activities either Component 4
with their families or on their own. The educational level I never heard about Syariah Compliant hotel 0.464
reported was 76.6 percent at Master’s Degree or 63 samples concept
earned monthly income of RM3001 to RM5000. Eigenvalue 1.616
Variance explained by factor 4 4.754
Accumulated Variance 49.55%
Exploratory factor analysis was conducted to explore the
data and give information on how many factors needed to
Factor analysis test revealed four components all together.
represent the data [31]. There were 34-items concerning the
However, only two were remained since only one item load
independent variables where 17-items measuring concept
on the last two components. This supported the screeplot to
and another 17-items measuring practices. Table I tabulated
keep only two factors for further investigation. Table I
all the 34-items with acceptable factor loadings [31].

126
 2012 International Conference on Innovation, Management and Technology Research (ICIMTR2012), Malacca, Malaysia :
21-22 May, 2012

shows the new factors were relabelled as “Syariah To further answer the objectives of this study, a standard
Compliant Concept”, and “Syariah Compliant Practices” to multiple regressions was conducted to investigate the most
avoid misinterpretation of the original factors name. The influential factor influencing the awareness of customers.
KMO value for the items was 0.835, which depicts that Table IV shows the regression analysis and it was found that
items were interrelated and shared common factors. the practices of Syariah Compliant were significantly
Furthermore, the Bartlett’s test of Sphericity was significant influenced the level of awareness among customers.
(Approx. Chi-Square= 3446.322, p<0.000). Results of factor Adjusted R² shows the strength of association or the
analysis using Varimax rotated revealed the four factors with explanatory power of the model in Model 1 is 0.281 and
eigenvalue exceeding 1, explaining 66.887 percent of the significant at 0.01 levels. In this study, the value is 0.288
total variance. However, researchers decided to retain only which means, the model (which includes SCC and SCP)
two factors resulted a total variance of 38.01 percent. The only explains 28.8 percent of the variance in customer
first factor is Syariah Compliant Concept (SCC) consisted of acceptance which appears a low result. From the results of
12-items with eigenvalue of 7.526 and factor loadings multiple regression analysis, it is clear that Syariah
ranging from 0.603 to 0.781. The second factor, Syariah Compliant practices is the most influential factor in
Compliant Practices (SCP) is made up of 15-items with the explaining the level of acceptance among local customers.
eigenvalue of 5.396 and the factor loadings ranging from This is because the variable makes the strongest unique
0.466 to 0.710. The third factor is Component 3 with 1-item contribution to explain the dependent variable when the
and factor loading of 0.568 while Component 4 also with 1- variance explained by other variables in the model is
item and factor loading of 0.464. The reliability of composite controlled for.
variables is presented in Table II.
TABLE IV
TABLE II REGRESSION ANALYSIS BETWEEN CUSTOMER AWARENESS OF
CRONBACH’S ALPHA, MEAN, AND STANDARD DEVIATION OF THE CONCEPT AND PRACTICES
ALL VARIABLES Model R R Adjusted Std. F Sig.
Variables Number Cronbach’s Mean Standard Square R Error of
of Items Alpha Deviation Square the
Customer Estimate
Awareness 1 .537ª .288 .281 .53151 42.715 .000ª
(IV)
Model Unstandardized Standardized t Sig. Collinearity
Syariah 12 0.922 3.23 0.815 Coefficients Coefficients Statistics
Compliant B Std. Beta Tolerance VIF
Concept (SCC) Error
1 (Constant) 2.049 .316 6.486 .000
Syariah 16 0.858 5.12 0.650 Syariah .115 .045 .150 2.574 .011 0.997 1.003
Compliant Compliant
Practice (SCP) Concept
Syariah .489 .056 .507 8.711 .000 0.997 1.003
Total 28 Compliant
Customer 14 0.842 4.92 0.627 Practices
Acceptance Dependent Variable: Customer Acceptance
(DV)
N=214 V. DISCUSSIONS AND CONCLUSIONS
TABLE III
CORRELATIONS OF ALL VARIABLES
Measures SCC SCP CA
The main objective of this study is to explore the
Pearson .180** .516** .449** relationship between customer awareness and their
Correlation acceptance level toward the implementation of Syariah
Sig. (2-tailed) .004 .000 .000 Compliant. Literatures on Syariah Compliant predicted that,
N=214 customer awareness in both concept and practices are
**. Correlation is significant at the 0.01 level (2-tailed).
significantly and positively related to their acceptance level
which further bolsters the results of this study. In essence,
Correlations analysis was conducted to test the relationship
the dimensions of Syariah Compliant awareness expounded
between customer awareness with their acceptance level.
28.8 percent of the variation in the customer acceptance (as
Table III shows these relationships and it was found that
simplified in Table IV). Syariah Compliant concept has a
there is a weak or small perfect positive correlation between
positive relationship with customer acceptance. Same goes
customer awareness regarding the concept towards customer
to Syariah Compliant practices which also positively
acceptance (r=.180). In other word of saying, the more
correlated with the customer acceptance but the strength of
customers aware of the concept, the more they will accept
the relationship for practices is much stronger than the
Syariah Compliant. Furthermore, the results also depicted
concept. Nevertheless, both dimensions were found to be
that there is a strong or large perfect positive correlation
considerably related with customer acceptance. This finding
between customer awareness with regards to the practices of
again provides some evidence to the importance of customer
Syariah Compliant towards customer acceptance level
awareness which may affect their level of acceptance on
(r=.516). The more customers aware of the practices, the
Syariah Compliant in hotel industry.
more they will accept the application of Syariah Compliant.
In addition, there was an average, positive correlation Literatures in Syariah Compliant postulated this relationship
between customer awareness of the concept and practices of but little empirical evidence has been provided to prove this
Syariah Compliant towards the acceptance level of relationship. Hence, this study found that customer
customers (r=0.449, n=214, p<0.000), with high levels of awareness in terms of the practices is significantly and
awareness associated with high acceptance level. positively related to customers’ acceptance level. In
conclusion, this study has explored the literatures detailing
the relationship between customer awareness of Syariah

127
 2012 International Conference on Innovation, Management and Technology Research (ICIMTR2012), Malacca, Malaysia :
21-22 May, 2012
Compliant and how it affects customer acceptance level
towards the application of it. A review of theoretical and
empirical research appears to indicate that the more
customers aware about the concept and the practices of
Syariah Compliant, the more they will accept it. Further
study should be undertaken in qualitative manner to close the
loops occurred between both approaches other than in depth
study evaluates on the misconceptions about Syariah
Compliant among hotel operators and customers to ensure
that a standardize requirement being established by the
authorities to achieve their goals.
VI. REFERENCES
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VII. ACKNOWLEDGMENT
This research would not have been started, nor
completed without the financial support from the Universiti
Teknologi MARA (UiTM) through an Excellence Fund
grant. Therefore, authors are thankful to the Research
Management Institute for giving us the opportunity to do this
research.
VIII. BIBLIOGRAPHIES
Nur’hidayah Che Ahmat is born in Perak, Malaysia,
on August 2, 1985. She graduated with distinction from
Faculty of Hotel and Tourism Management, and studied
at Universiti Teknologi MARA, UiTM Shah Alam.
Currently, she is a Lecturer at UiTM branches in
Penang teaching hospitality courses in the same faculty.
Her employment experiences were mainly in hospitality
industry namely fast food, and hotels. Her special fields
of interest included revenue management, strategic
management and customer behaviours.