Drawing on the literature on service quality, marketing, and tourism, the present study tests a comprehensive model of the effects of perceived quality (PQ) on loyalty in the context of a tourism destination. Using a sample of 249 residents from the United Kingdom and the United States who visited Australia between 2008 and 2012, this research applies partial least squares–structural equation modeling to examine these relationships. PQ is operationalized as a multidimensional construct determined by six destination dimensions: natural and well-known attractions, variety of tourist services, quality of general atmosphere, entertainment and recreation, general environment, and accessibility. Our results support the conceptualization of PQ as a “reflective first-order, formative second-order” model (also referred to as a molar, or type II, higher order model, see Diamantopoulos A, Riefler P, and Roth KP (2008) Advancing formative measurement models. Journal of Business Research 61(12): 1203–1218). Results from this study found that the six reflective first-order dimensions of PQ form the higher (second)-order PQ construct. Moreover, PQ has a stronger effect on loyalty (both direct and indirect through satisfaction) compared to perceived value, which only exercises an indirect effect on loyalty. The study presents new insights on the operationalization of PQ and the network of causal relationships among PQ, value, satisfaction, and loyalty in tourism destinations.
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