Department of business Administration post graduate program

IMPACT OF HOTEL STANDARDIZATION AND

COORDINATION IN CUSTOMER PERCEPTION IN
CASE OF FOUR STAR HOTELS IN ADDIS ABABA

by
Dagmawit Mesgena
ID: MBAD/18/10/14

Summited to: Dr.Teshome D.

Submission Date:
August 15, 2022
Addis Ababa,Ethiopia
Table content
CHAPTER ONE
1. Introduction
1.1background of the study
1.2 statement of the problem
1.3 objective of the study
1.3.1 General objective
1.3.2 Specific objective
1.4 research questions

1.5 The significance of the study

1.6 scope of the study
1.7 Limitation of the study
1.8 background of organization
1.9 organization of the study
CHAPTER TWO
2. REVIEW OF RELATED LITERATURE
2.1 definition of service
2.2 service quality
2.3 The customer’s perspective of service quality
2.4 Conceptual fame work of the research
2.5 service quality and its determinants
2.6 development of service quality standards
2.7 service features
CHAPTER THREE
3. RESEARCH DESIGN METHODOLODY
3.1. Research design
3.2 sampling technique
3.3Method of data collection
3.4 date sources
CHAPTER FOUR
4. TIME SCHEDULE & BUDGET BREAKDOWN
4.1 time schedule
4.2 budget breakdown
5. Reference
 CHAPTER ONE:
Introduction
1.1. BACKGROUND OF THE STUDY
Obtaining an economic development for the purpose of increasing life standards in a
comprehensive level is a matter of concern for every society. In this regard, it is contended
that the Tourism Industry is one of the most salient sectors in ensuring sustainable
development thereby getting rid of poverty. Being cognizant of this reality, both the public
and private sectors are earmarking a significant amount of resources towards the truism
industry particularly in hotels. The most visible advantages accrued from the massive
expansion of hotels have been an increased level of employment. The rising nature of hotel
industry can be better gauged by an increasing rate of jobs and apprenticeship which
illustrates that this sector is experiencing a shift towards highly competitive, integrated and
customer oriented market framework. Many fresh graduates are looking forward to pick this
sector being most promising with advancement opportunities and new exposure.

The progressive career path is evident from the fact that universities are now offering degrees
in hotel management courses and other kinds of diplomas and short courses. Academic
services marketing and management literature widely acknowledge that keeping current
customers and developing relationships with new ones, is a key business strategy Piercy,
(1995). If customers are satisfied with a product, service or brand, they will be more likely to
continue to purchase and use it, and to tell others of their favourable experience with it. If
they are dissatisfied however, they will be more likely to switch brands or hotels and
complain to management and to everyone else they meet. This indicates that, Satisfaction of
customers also happens to be the cheapest means of promotion and advertisement.

According to Pizam and Ellis (1999) a Customer Satisfaction Measurement program must be
incorporated into an organizations corporate culture. Knowledge of customer expectations
and requirements are essential as it provides understanding of how the customer defines
quality of service and products, and furthermore it facilitates the development of customer
satisfaction and intention
1.2. Statement of the Problem

In countries endowed with many historical and natural sites and diverse culture, historic and
natural tourism attractions, the tourism industry has been given great emphasis. It is widely
reported that the sector is becoming a significant contributor to the national income of most
developing nations. In Ethiopia, for example, it has been publicized thataround 1.7 billion
USD is secured from the 2.9 million tourists visiting the country in the past ten years (MoCT,
2010). Available literature indicates that even though the sector is emerging to become vital
in generating foreign currency, the country has not fully exploited the economic benefits of
the sector. In this regard, one official document asserted that the Ethiopian tourism market
share in Africa is 0.68% while Egypt and South Africa each took 20% in 2010 (MoCT,
2010).

Broadly speaking, socio-economic and political reasons can be attributable to the low market
share of the tourism sector in Africa. Some of them are poor communication facilities,
inadequate infrastructure, security problems, and sub-standard hotel services. In association
with hotel service, it is contended that Hoteliers should maintain and provide quality service
as per their standards to increase customer satisfaction. While echoing this stance, Lam and
Zhang (1999) claim that overwhelming customer demand for quality products and service has
in recent years become increasingly evident to professionals in the tourism and hotel industry.
Among all customer demands, service quality has been increasingly recognized as a critical
factor in the success of any business, and ultimately in retaining customer satisfaction
(Grönroos, 1990) and (Parasuraman et al., 1988).

Beside they has stated that improving service quality and service features will augment the
level of customer satisfaction. The same authors concluded that doing so will positively
influence customers to re-visit the hotel service providers in the future- a scenario that plays
positive role for the development of the tourism industry at large. The findings of numerous
researches carried out on the area of customer satisfaction concluded that the level of
customer satisfaction on the overall services rendered by hotels has been low. For instance, in
their study targeting both foreign and domestic customers’ Malaysian pending hotel,
Farzaneh and Jamil (2010) reported that customers will not satisfied because of the fact that
their perceived service quality hasn’t been met.

Unlike the above researches this study will assess the matter of domestic and foreign
customer satisfaction on four star hotels working in Ethiopia, a country that has different
socio economic and political setting than the country addressed above. This research is
potentially targeted to only four star (saromaria) hotels .This hotel mostly visited by domestic
and foreign customers. This research will also target to identify the level of both domestic
and foreign customer satisfaction.

1.3. Objective of the study

1.3.1. General objective
The general objective of this study is to know the satisfaction level of customers’ perception
on the service quality provided by four star hotels in Ethiopia.

1.3.2. Specific objective

 To examine the customers expectation and perception gap with respect to tangibility
 To explore the customers expectation and perception gap with respect to Reliability
 To determine the customers expectation and perception gap with respect to
Responsibility
 To assess the customers expectation and perception gap with respect to Assurance
 To examine the customers expectation and perception gap with respect to Empathy

1.4. Research questions

1. How to examine the customers’ expectation and perception gap with respect to
tangibility
2. How to explore the customers’ expectation and perception gap with respect to
Reliability
3. How to determine the customers’ expectation and perception gap with respect to
Responsibility
4. How to assess the customers’ expectation and perception gap with respect to
Assurance
5. How to examine the customers’ expectation and perception gap with respect to
Empathy

1.5. The significance of this study is

This research will be of value to the hotel industry by identifying the impediments of
service quality and forwarding feasible solutions to improve quality of services.
 It is also significant for the hospitality industry in Ethiopia which hosts many
international organizations including the African Union This research is useful
especially to hoteliers in establishing and implementing
Appropriate strategies for customers’ satisfaction and making profit from the services.
Suggesting hoteliers the ways of maximizing satisfaction of foreign customers and
can be
Use as a bench mark for other researchers to undertake further exploration on the
areas studied. The hospitality industry serves as a catalyst for flow of foreign capital
into the country.
An improvement of hotel industry services will not be only important to hotels being
researched, but also the industry as a whole. So this study has an economical
importance to the country as a whole. Finally the research findings can be a bench
mark in judging the completeness.

1.6. Scope of the study

First the study will delimited to assess the level of foreign customers’ satisfaction in
Ethiopian four star hotels (saromaria Hotel) in the month July 2022. These hotels are selected
on the bases of their standard given by Ministry of Culture and Tourism.

Secondly the research does not consider the model service quality irrespective of the
availability of other models like Server, Nor med quality and Qualitometro models designed
to measure service quality. This model (servqual gap analysis model) is only limited to the
five dimensions only such as tangibles, reliability, responsiveness, assurance and empathy
and service of the hotels are evaluated based on these dimensions. Beside to this foreign
customers psychological makeup in perceiving the quality of services is not considered in the
study.

Thirdly the specific quality goods and services that the hotels provide at the time range of
data collection are not considered. In other words the services of the hotels and its goods and
services quality range is assumed in aggregated manner. Furthermore seasonal difference is
not considered to measure the satisfaction level of the customers.
Fourthly the task of adequately measuring the real level of service requires a two- tier study
of assessing the extent of expectation of foreign customers before and after consuming a
goods and services rendered by the hotels. But this research conducted the study in a single
phase that both the expectation and perception of the respondents captured anonymously.

Finally the population of this research is confined to foreign customers, who will served in
these hotels in the month of July 2022.

1.7. Limitation of the study

The main hurdles encountered during conducting this study are stated like: hotel authorities
will not cooperative and some guests will not interested to fill the questionnaires. The other
problem faced will be absence of literature related to foreign customers’ level of satisfaction
in Ethiopian four star hotels.

1.8 Background of the Organization

The Saro Maria hotel is the one of the leading 4 star hotel situated in the heart of Bole, in the
capital city of Addis Ababa. The Hotel is strategically located in the prime business area of
city and is just 2kms away from the Bole International Airport, Making it ideal for the ever
increasing number of our business and leisure travelers.

SaroMaria Hotel is an international Standards Hotel Furnished with intricate designs,

amenities and detail. The Hotel is a walking distance from most shopping molls, embassies,
financial service, government and nongovernmental organizations found in this part of the
city

1.9. Organization of the study

The study will assess both primary and secondary data. Using more than one data collection
approach give opportunity to the researcher to combine the strengths and correct some of the
deficiencies of any one source of data. Primarily questionnaire which includes open-ended
and closed ended will distributed for four star standard hotels. Their responses will be
interpreted and analyzed using descriptive statistics. In addition to this, published and
unpublished literatures will be use.
CHAPTER TWO

LITRATURE REVIEW

2.1. Definition of Services

Various definitions will be use for services, in relation with intangibility and immediate
consumption. Here are some definitions for services: Example, Services are attitudes,
processes and functions (Zethaml & Bitner, 1996,). -Service is an act or activity, necessarily
immovable and intangible, suggested by one transaction party to another one that will lead to
the ownership of no external object.

2.2. Services Quality

Service quality is a customer perception of how well a service meets or exceeds their
expectations Czepiel (1990). It is considered as a key factor for enhancing customer
satisfaction Geetika(2010). Service quality not only play vital role to satisfy customers
Grzinic (2007) but also considered as a value driven for consumers and a way to position
product in a dynamic environment (Kaul, 2005). Understanding the customers’ requirement
about the service quality and catering the need in this regard is beneficial in many ways
(Shahin, 2002).

The concept of service quality as a whole construct is large and varied. The theory has been
elaborated on by many researchers. Berry, Parasuraman and Zeithaml (1985) write service
quality as perceived by consumers stems from a comparison of what they feel service firms
should offer (i.e. from their expectations) with their perception of the performance of the firm
providing the services. Perceived service quality is therefore viewed as the degree and
direction of discrepancy between consumers’ perceptions and expectations. For example in
real estate, this will be what the client is expecting from the agent in comparison to which is
actually delivered by that agent.

Quality is a multi-dimensional concept. Grönroos (1984) argued that service quality

comprises of technical quality, functional quality and corporate image.
2.3. The Customer’s Perspective of Service Quality

Service quality is usually expressed as a function of customers’ expectations of the service to

be provided (based upon their previous experience, the organizations image, the price of the
service for example) compared with their perceptions of the actual service experience.
According to Gronroos, (1984) and Berry et al, (1985) Perceptions are defined as the
consumer’s judgment of the service organization’s performance. However, Parasuraman et al
(1988) define the service performance gap as the discrepancy between the specifications of
service and the delivery

Imrie, Cadogan and McNaughton (2002) study shows that using service quality as a key point
of marker differentiation positively influences customer retention and market
growtharguesthat customer orientation plays a more important role in service firms than in
any other firms because of the intangibility, heterogeneity and inseparability of service.

Kellogg (2000) states that customers have contact with the service delivery system in three
ways: directly, being physically present; indirectly, via a surrogate, such as paper or some
electronic media, or with no contact.

In many cases, customer contact employees are the first and only representative of a service
firm. Therefore, customers often base their impressions of the firm largely on the service
received from customer contact employees. This is one of the paradoxes of service quality as
identified by (Gronroos, 1989). This will also be affected by nationality and culture, where
expectations can differ greatly.

2.4. Conceptual frame work of the research

The following research Conceptual frame work is adopted from the above research
model/frame that (seyed, 2010) is employed to figure out the relation between variables and
their consistent relation.

Tangibility: Appearance of physical facilities, equipment, personnel and communication

materials Customers tend to expect clean and professional facilities and shop, employees who
look groomed and neat, and well-written and designed materials such as menus, websites, and
signs. Attention to appearance can indicate that your company takes customer comfort
seriously
 Reliability: Ability to perform the promised service dependably and accurately. Doing what
you say you’re going to do when you say you’re going to do it is essential to pleasing your
customers. They want to rely on your business to deliver a working product or effective
service, to get help when they need it, and for all of this to happen in timely fashion.

Assurance: Knowledge and courtesy of employees and their ability to convey trust and
confidence. Assurance is significant when customer have many option but aren’t sure who to
trust when purchasing. Suppose you run an ecommerce store, for example. in that case
,customers are bombarded regularly with ads from potentially entrust worthy online shops all
day, so you need to determine how to set yourself apart and gain consumer trust.

Responsiveness: Willingness to help customers and provide prompt service. Responding

quickly to customers question and concerns is vital, especially in today fast –paced world
Responsiveness even applies when customers are slow in responding to you. Answer swiftly
to, at the very least, late customer know, that you are on working there request

Empathy: Caring, individualized attention the firm provides its customers

It should be noted that service quality and customer satisfaction are distinct concepts,
although they are closely related. According to some authors, satisfaction represents an
antecedent of service quality. In this sense, satisfactory experience may affect customer
attitude and his or her assessment of perceived service quality. Thus, satisfaction with a
specific transaction may result with positive global assessment of service quality. Other
authors argue that service quality is antecedent of customer satisfaction (Churchill and
Suprenant, 1982). Authors suggest that service quality is a cognitive evaluation, which may
lead to satisfaction. Hence, customer satisfaction is the result of service quality. To sum up,
the relationship between quality and satisfaction is complex.

Service quality Customer satisfaction

Tangibility Reliability Assurance Responsivenes Empathy

s:
2.5. Service quality and its determinants

There is a lack of consensus about the construct of service quality which asserts that quality
can be defined as the gap between customers’ expectations and perceptions (Parasuraman,
Zeithaml, & Berry, 1990). These researchers proposed a conceptual framework capturing the
dimensions utilized by customers when evaluating service quality. The dimensions will then
applied to a gap model SERVQUAL, where customers compared prior expectations of
service provision with post experience perceptions (Parasuraman, Zeithaml, & Berry, 1985;
Parasurman et al., 1988). Criticism of the gap model Cronin & Taylor, (1994) led to the
emergence of the derived importance approach which links customer satisfaction to service
quality.

Early work on satisfaction and dissatisfaction treated (dis)satisfaction as a two state construct
(e.g. angry or not angry) whilst recently satisfaction is conceptualized as a continuum often
expressed in terms of emotions. However the emotional basis for the satisfaction response is
not well documented (Oliver, 1997).

Notwithstanding, recent research suggests that emotions play a major role in perceived levels
of service quality and satisfaction. Researchers linked feelings of anger and frustration to
decreases in dissatisfaction and emotions such as happiness to increases in satisfaction.
Excellent service results in positive feelings of ‘delight’ at one end of this increasingly
important in forming service quality perceptions. However, definitions, determinants and
robust delivery of service quality remain elusive. The combination of characteristics and
complexity identified in the proceeding discussion leads to four propositions that become the
focus of the study.

2.6. Development of Service Quality Standards

Atkinson and Brown (2001:130), predict that a hotel who fail to understand and meet its
customer service standards, will be out of business in seven to nine years. To survive, the
hotel must establish proper service standards in relation to its customer’s needs and
expectations.

To develop an objective service standard, the raw ratings are then converted to relative
priority scores using an Analytic Hierarchy Process (AHP). Accordingly, the AHP assisted
the hotel management to not only identify the principal competitors in the market, but also to
assess the service performance of the hotel relative to its principalcompetitors. In contrast
with the SERVQUAL instrument, AHP permits the hotel management to investigate the
sensitivity of the service performance measure to changes in customer perception of
importance of service attributes, and the customer’s degree of satisfaction with those
attributes.

2.7. Service Features

Service features can be defined as the quality or the user requirements related to the matters such
as frequency, reliability, regularity, suitability, location, safety and convenience (Lam and Zhang,
2003). Among all these factors, reliability is treated as the important service feature in a way to
enhance customer satisfaction, but according to convenience and service specific factors (e.g.
competitive interest rates) are the two core ingredients to satisfy customers. If service providers
fail to properly tackle such behavior, it can have severe ramifications. But service features vary
from environment to environment.
CHAPTER THREE
3. RESEARCH METHODOLOGY
3.2. Background of the study area
3.3. Research Design

This study will use both qualitative and quantitative approach. According to Saunders et.al
(2009) mixed method approach is both qualitative and quantitative data collection and
analysis methods are use. It is more than simply collecting and analyzing both kinds of data
rather the use of both approaches has greater strength in the overall study than either
qualitative or quantitative research. Since the central purpose of the study is to measure the
level of satisfaction of customers.

The other incentive to use the quantitative design is its merit of simplicity and convenience in
stating the phenomenon to be investigated. Simultaneously, data about the adequacy and
applicability of the model, factors that have will the satisfaction of the customers and their
cause, and possible solutions to overcome these impediments will be collected and analyzed
qualitatively.

3.4. Sampling Technique

The sampling techniques will both probability and non-probability sampling methods. The reason
behind to select purposively is the availability of high amount of standard hotels and a place where
very high hotel business undertaken. The area is one of the most standard hotels found areas in the
city.

3.5. Method of Data Collection

In order to do this study, the researchers will employ two different data collection methods.
Primary data will be collected through questionnaire, and in-depth interview as per time
availability. Secondary data will also be gathered through physical observation, reports and
different documents.

3.6. Data Sources

Both secondary and primary sources will be use. Various secondary sources such as academic
journals, articles, and books will be consulted. On top of these, brochures, pamphlets, and
official reports from numerous organizations will be critically review to further corroborate
the findings of the study. Questionnaires will be utilized to gather primary data. From the
widely applicable sorts of primary data generating tools, as it has been duly suggested by
Emory and Cooper (1995),a self-administrated closed-ended 41questionnaire will use for its
elevated importance of practicability and easiness in filling out.
CHAPTER FOUR

4. TIME SCHEDULE AND BUDGET BREAKDOWN

4.1. Time schedule

Description Duration
No. April June July August
1 Title selection √
2 Developing introduction and √
review of literature
3 Developing of research √
Methodology
4 Summation of proposal √

5 Presentation and defense of √

proposal
6 Distributing instrument and √
collecting data
7 Organization data analysis √

8 Conclusion and √
recommendation
9 Submission of first draft √

10 Submission of final research √

paper
11 Presentation and defense final √

4.1.2. Budget Breakdown

No Items Unit of Measurement Cost in birr

1 Stationeries (pen, Flash note pad..... Price, ream 850.00
2 Computer access (typing, price 560.00
printing......
3 Internet browsing Birr 120.00
4 Transport cost Birr 430.00
5 Miscellaneous cost Birr 1000.00
 Total Birr 2960.00
5. Reference
(Churchill and Suprenant, 1982

(Gronroos, 1989).

(Grönroos, 1990) and (Parasuraman et al., 1988).

(Kaul, 2005).

(MoCT, 2010).

(Oliver, 1997).

(Parasuraman, Zeithaml, & Berry, 1985; Parasurman et al., 1988).

(seyed, 2010)

(Shahin, 2002).

(Shahin, 2002).

(Zethaml&Bitner, 1996,).

Atkinson and Brown (2001:130),

Berry, Parasuraman and Zeithaml (1985

by (Gronroos, 1989).

Czepiel (1990).

Emory and Cooper (1995)

Farzaneh and Jamil (2010)

Geetika (2010)

Grönroos (1984)

Gronroos, (1984) and Berry et al, (1985

Grzinic (2007)

Imrie, Cadogan and McNaughton (2002)

Kellogg (2000)
Lam and Zhang (1999)

MoCT, 2010).

Pa(Kaul, 2005

Parasuraman et al (1988)

Piercy, (1995).

Pizam and Ellis (1999

rasuraman and Zeithaml (1985)

Saunders et.al (2009)