Moving out of the silo: How service quality innovations can develop customer loyalty in Indonesia’s hotels

Abstract

This study developed and empirically tested a model to explore the relationships between contact personnel, physical environment, service quality, relationship quality, service innovation, and customer loyalty in Indonesia five-star hotels. Structural equation modeling was conducted on data collected from 596 hotel guests staying at five-star hotels in Jakarta, Indonesia. Results indicated significant relationships between contact personnel and service quality, service quality and customer loyalty, and the moderating effect of service innovation on the interaction of service quality and customer loyalty. It is important for hotel management to focus on service excellence, as it will transpire into guest satisfaction, trust, and commitment from the customer, thus, enhancing the relationship quality between the customer and the hotel. This study demonstrated that service innovation can allow the hotel industry to see beyond the silo mentality of good service and focus on greater value proposition in the business model to increase customer loyalty.