Ragunanan, Sha mila; Can , Michael C.; Wiid, Johannes A.
A icle
E alua ing loyal y in Sou h A ica's ho el indus y: The
e ec o se ice quali y and b and equi y
Economic Re iew: Jou nal o Economics and Business
P o ided in Coope a ion wi h:
Facul y o Economics, Uni e si y o Tuzla
Sugges ed Ci a ion: Ragunanan, Sha mila; Can , Michael C.; Wiid, Johannes A. (2024) : E alua ing
loyal y in Sou h A ica's ho el indus y: The e ec o se ice quali y and b and equi y, Economic
Re iew: Jou nal o Economics and Business, ISSN 2303-680X, Uni e si y o Tuzla, Facul y o
Economics, Tuzla, Vol. 22, Iss. 1, pp. 29-46,
h ps://doi.o g/10.51558/2303-680X.2024.22.1.29
This Ve sion is a ailable a :
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. Economic Re iew: Jou nal o Economics and Business, Vol. XXII, Issue 1, May 2024///
* IMM G adua e School, Sou h A ica, sha [email protected]
** UNISA, Sou h A ica, can m@woodlandsne .co.za
*** UNISA, Sou h A ica, [email p o ec ed].za 29 ///
EVALUATING LOYALTY IN SOUTH AFRICA’S HOTEL INDUSTRY: THE EFFECT OF
SERVICE QUALITY AND BRAND EQUITY
Sha mila Ragunanan*, Michael C. Can ** , Johannes A. Wiid***
DOI: 10.51558/2303-680X.2024.22.1.29
Abs ac
The ho el indus y in Sou h A ica is ie cely
compe i i e, wi h a ange o accommoda ion
op ions om in e na ional chains o bou ique
es ablishmen s. Es ablishing and main aining
cus ome loyal y is essen ial o ho elie s o
ensu e epea business and s and ou in a
c owded ma ke . This s udy aimed o e alua e
he e ec o se ice quali y and b and equi y on
cus ome loyal y in Sou h A ica’s ho el indus y
and explo ed he media ing e ec s o angibles,
esponsi eness, eliabili y, empa hy, and
assu ance on cus ome loyal y h ough se ice
quali y, as well as he media ing e ec s o b and
a achmen and b and a i ude on cus ome
loyal y h ough b and equi y. Guided by a
posi i is pa adigm, he s udy employed a
quan i a i e me hodology and a desc ip i e
esea ch design. Da a was collec ed ia an online
su ey om 379 esponden s and analyzed using
Pa ial Leas Squa es S uc u al Equa ion
Modelling (PLS-SEM) o es he hypo heses wi h
Sma PLS e sion 3. The indings e ealed a
s a is ically signi ican e ec o se ice quali y
and b and equi y on cus ome loyal y.
Fu he mo e, he indings indica e ha
cus ome loyal y media es he ela ionship
be ween se ice quali y and b and equi y. The
s udy o e s aluable insigh s o ho el manage s
and ma ke e s, ecommending s a egies o
imp o e cus ome loyal y h ough enhanced
se ice quali y, emo ional b anding e o s, and
e ec i e cus ome loyal y p og ams. These
indings emphasize he impo ance o
excep ional se ice expe iences, obus b and
equi y, and unde s anding cul u al nuances in
consume beha io , p o iding ac ionable
insigh s o achie ing a sus ainable compe i i e
ad an age in he Sou h A ican ho el indus y.
Keywo ds: b and equi y, cus ome loyal y,
se ice quali y, Sou h A ica’s ho el indus y.
JEL: M31, M37
1. In oduc ion
Sou h A ica's di e se landscapes, ich
biodi e si y, and ib an cul u es make i a
compelling des ina ion o global ou is s.
Ranked as he six h mos biodi e se coun y in
he wo ld (A ican Wildli e Founda ion, 2018),
Sou h A ica boas s se en dis inc biomes, i e
wo ld he i age si es, and wen y- wo na ional
pa ks, o e ing a ange o expe iences om
na u e sa a is o cul u al escapes and
ad en u e ou ism (Sou h A ican Tou ism,
2020). In 2019, Sou h A ica welcomed 10.23
million in e na ional ou is s and hos ed 28.5
million domes ic ips, con ibu ing 2.9% o he
coun y's GDP and suppo ing o e 725,000
jobs di ec ly (Sou h A ican Tou ism, 2020).
The ou ism sec o 's alue p oposi ion is
cha ac e ized by high-quali y expe iences ha
o e alue o money, including na u e sa a is,
wildli e encoun e s, cul u al expe iences,
beach ge aways, ci y ou s, and ad en u e
ac i i ies. The accommoda ion sec o is a i al
componen o Sou h A ica's ou ism alue
chain, con ibu ing signi ican ly o he
economy. In 2019, he accommoda ion sec o
con ibu ed R33.2 billion o he economy, wi h
he ho el indus y playing a signi ican ole
(S a s SA, 2024). The indus y, howe e ,
expe ienced se e e se backs in 2020 and 2021
a ibu able o he co ona i us pandemic. In
2022, he accommoda ion sec o con ibu ed
R23.4 billion o he economy, ollowed by
R30.1 billion in 2023. (S a s SA, 2024). The
ho el indus y is a key playe in Sou h A ica's
ou ism alue chain, wi h an income
con ibu ion o be ween R14.6 billion in 2022
and R19.1 billion in 2023, accoun ing o an
a e age o 63% o he o al con ibu ion o he
accommoda ion sec o du ing his pe iod
(S a s SA, 2024). The esea ch by P ice
Wa e house Coope s in 2019 indica ed ha he
o e all ho el oom e enue in Sou h A ica was
R16.7 billion ac oss h ee-s a , ou -s a , and
i e-s a ho els. Acco ding o he Sou h A ican
///. Sha mila Ragunanan, Michael C. Can , Johannes A. Wiid
/// 30 Economic Re iew: Jou nal o Economics and Business, Vol. XXII, Issue 1, May 2024
Tou ism Repo by Fi ch Solu ions in 2022,
he e a e nea ly 3,260 ho els in Sou h A ica,
wi h app oxima ely 76,570 a ailable ho el
ooms. The epo o ecas s g ow h in he
numbe o ho els and es ablishmen s o 3,320
by 2026, wi h an addi ional 1,500 a ailable
ho el ooms. The compe i i e landscape o
Sou h A ica's ho el indus y includes majo
in e na ional chains such as Ma io
In e na ional, Hil on Wo ldwide Holdings,
Radisson Ho els, Acco , and Hya , alongside
s ong domes ic playe s like P o ea Ho els and
Ci y Lodge Ho el G oup (Fi ch Solu ions, 2022).
The indus y's compe i i e na u e unde sco es
he impo ance o cus ome loyal y in
main aining ma ke sha e and p o i abili y.
S a emen o he P oblem
The main p oblem ha his s udy aims o
in es iga e is ha he e ha e been limi ed
s udies dedica ed o e alua ing he e ec o
se ice quali y and b and equi y as cons uc s,
speci ically wi hin he con ex o he ho el
indus y in he Sou h A ican ma ke . The
signi icance o s udying he ela ionship
be ween se ice quali y, b and equi y, and
cus ome loyal y is ampli ied by he coun y's
unique socio-economic landscape. Sou h
A ica's cul u al di e si y, shaped by i s his o y
o apa heid and subsequen democ a iza ion
in 1994, has led o he eme gence o a mo e
di e se consume ma ke . Kaus (2013)
discusses how conspicuous displays a e a pa
o Sou h A ican cul u e, whe e luxu y
consump ion se es as an exp ession o
lamboyance and bold displays o s a us.
Fu he mo e, he widening o he Black middle
class and he eme gence o p e iously
un a eled ma ke segmen s ha e led o an
inc ease in conspicuous consump ion among
Sou h A icans (Kaus, 2013). This end
highligh s he impo ance o b and equi y and
he pe cep ion o luxu y and exclusi i y in he
Sou h A ican ma ke . Sahin and Nasi (2022)
no e ha luxu ious o os en a ious goods a e
o en seen as exclusi e and a e, appealing o a
ce ain segmen o he consume ma ke .
Globaliza ion has played a signi ican ole in
he accessibili y o luxu y p oduc s in eme ging
ma ke s like Sou h A ica.
Wi h inc eased globaliza ion, Sou h A ican
consume s now ha e g ea e access o luxu y
goods and se ices han e e be o e. This
accessibili y has eshaped consume beha io
and p e e ences, pa icula ly in he con ex o
he ho el indus y. Despi e his inc eased
accessibili y, he li e a u e on he ho el
indus y in Sou h A ica indica es a limi ed
explo a ion o s a us as a psychological
mechanism ela ed o cus ome loyal y.
Inco po a ing he Theo y o Conspicuous
Consump ion in o he s udy o cus ome loyal y
can p o ide aluable insigh s in o how s a us-
seeking beha io in luences consume
decisions in he Sou h A ican ma ke . The
p oblem s a emen highligh s a gap in he
exis ing li e a u e ega ding he ela ionship
be ween se ice quali y and b and equi y in he
ho el indus y, pa icula ly wi hin he con ex
o he Sou h A ican ma ke . While some
s udies ha e ouched upon hese opics
indi idually, he e is a lack o esea ch ha
speci ically examines how se ice quali y and
b and equi y in luence cus ome loyal y. By
e alua ing he ela ionship be ween se ice
quali y, b and equi y and cus ome loyal y, his
s udy aims o p o ide a comp ehensi e
unde s anding o he ac o s ha d i e
cus ome loyal y in he Sou h A ican ho el
indus y.
Objec i es o he S udy
Conside ing he abo e p oblem s a emen , he
p ima y objec i e aimed o e alua e he e ec
o se ice quali y and b and equi y on
cus ome loyal y in Sou h A ica’s ho el
indus y.
The seconda y objec i es we e ou lined as
ollows:
• To es ablish he e ec o angibles,
esponsi eness, eliabili y, empa hy, and
assu ance on cus ome loyal y ia se ice
quali y in Sou h A ica’s ho el indus y.
• To es ablish he e ec o b and a achmen
on cus ome loyal y ia b and equi y in
Sou h A ica’s ho el indus y.
• To es ablish he e ec o b and a i ude on
cus ome loyal y ia b and equi y in Sou h
A ica’s ho el indus y.
E alua ing Loyal y in Sou h A ica’s Ho el Indus y: The E ec o Se ice Quali y and B and Equi y///
Economic Re iew: Jou nal o Economics and Business, Vol. XXII, Issue 1, May 2024 31 ///
Hypo heses De elpmen
To add ess he esea ch objec i es, he
ollowing esea ch hypo heses we e
o mula ed.
H1: Se ice quali y has a s a is ically signi ican
e ec on cus ome loyal y in Sou h A ica’s
ho el indus y.
H2: Se ice quali y has a media ing e ec on he
ela ionship be ween angibles and cus ome
loyal y in Sou h A ica’s ho el indus y.
H3: Se ice quali y has a media ing e ec on he
ela ionship be ween esponsi eness and
cus ome loyal y in Sou h A ica’s ho el
indus y.
H4: Se ice quali y has a media ing e ec on he
ela ionship be ween eliabili y and cus ome
loyal y in Sou h A ica’s ho el indus y.
H5: Se ice quali y has a media ing e ec on he
ela ionship be ween empa hy and cus ome
loyal y in Sou h A ica’s ho el indus y.
H6: Se ice quali y has a media ing e ec on he
ela ionship be ween assu ance and cus ome
loyal y in Sou h A ica’s ho el indus y.
H7: B and equi y has a s a is ically signi ican
e ec on cus ome loyal y in Sou h A ica’s
ho el indus y.
H8: B and equi y has a media ing e ec on he
ela ionship be ween b and a achmen and
cus ome loyal y in Sou h A ica’s ho el
indus y.
H9: B and equi y has a media ing e ec on he
ela ionship be ween b and a i ude and
cus ome loyal y in Sou h A ica’s ho el
indus y.
2. Concep ual F amewo k
2.1 Cus ome Loyal y
In 1999, Oli e p o ided one o he i s
comp ehensi e de ini ions o cus ome loyal y,
de ining he cons uc as “a deeply held
psychological commi men o epu chase a
p e e ed p oduc consis en ly in he u u e,
ega dless o he exis ence o o he compe ing
al e na i es and si ua ional ac o s capable o
swaying hem.” Nuanchaona,
Si ipipa hanakul, Nu i amon and
Phayaph om, (2021) e e o a mo e cu en
de ini ion o cus ome loyal y as he
measu emen o a consume ’s in en ion as well
as hei inclina ion o euse and epu chase in
he u u e. Wi hin he con ex o he ho el
indus y, Wa sewicz and Kulyko e s (2020),
asse ha gues loyal y p o ides a a o able
disposi ion o consume s owa ds he se ices
o a ho el which can be coupled wi h a desi e o
equen ly and consis en ly epu chase he
ho el’s se ice. The e a e many ac o s which
con ibu e owa ds cus ome loyal y in he
ho el indus y as indica ed by esea ch om
a ious au ho s (Mohamed, Yazid, Kha ibi &
Azam, 2017; Alsheikh, Halim, Tambi &
Alnawa leh, 2018; Alauddin, Islam & Hossein,
2019; Lai, 2019, Shamsudin, Essa & Ali, 2019;
Wa sewicz & Kulyko e s, 2020; Nusei , 2021;
Anabila, Ameyibo , Allan & Alomenu, 2022 and
Radwan, 2022). Based on he esea ch o hese
au ho s, he mos widely ci ed ac o s a e
cus ome sa is ac ion, b and image, p ice
ai ness, pe cei ed alue, se ice quali y and
b and equi y. This s udy aims o e alua e he
e ec o se ice quali y and b and equi y on
cus ome loyal y, speci ically wi hin he ho el
indus y in Sou h A ica. This wa an s u he
in es iga ion o se ice quali y and b and
equi y as cons uc s o con ibu e owa ds
exis ing empi ical s udies.
2.2 Se ice Qual y
A s udy by Nuanchaona e al., (2021), p oposes
ha se ice quali y has been ex ensi ely
acknowledged wi hin con empo a y li e a u e
as being c i ical o he pe o mance o any
business as i is an unobjec i e concep wi h
complexi ies ha inco po a e dis inc i e
cha ac e is ics. The hospi ali y and ho el
indus ies a e highly p one o se ice ailu es
due o he high le el o in ense cus ome -
employee con ac , as well as p oblems ha
a ise because o gene al se ice cha ac e is ics
o insepa abili y, he e ogenei y, and
pe ishabili y (Anabila e al., 2022). Academic
esea ch conduc ed in 1996 by Zei haml, Be y
& Pa asu aman, which has been con i med by
ecen s udies (Alauddin e al., 2019;
Shamsudin, Esa and Ali, 2019 and Anabila e al.,
2022), e i y ha he e a e i e main
dimensions in measu ing se ice quali y,
namely: angibles, eliabili y, esponsi eness,
assu ance and empa hy, also known as he
Se ice Quali y Model (SERVQUAL). This model
was de eloped by academic esea che s o
measu e se ice quali y wi hin he se ice
indus y and is ep esen a i e o a
measu emen me hod used o se ice quali y
///. Sha mila Ragunanan, Michael C. Can , Johannes A. Wiid
/// 32 Economic Re iew: Jou nal o Economics and Business, Vol. XXII, Issue 1, May 2024
esea ch. The SERVQUAL model has been
widely applied in a a ie y o con ex s and
cul u al se ings, howe e as iden i ied in he
p oblem s a emen , he e is limi ed e idence o
esea ch being conduc ed wi hin he Sou h
A ican ma ke . In addi ion, he e is limi ed
e idence o s udies dedica ed o examining
se ice quali y as an independen cons uc ia
he SERVQUAL model, speci ically wi hin he
con ex o he ho el indus y in Sou h A ica.
Academic s udies wi hin he ho el indus y
(Mohamadi e al. 2017; Alauddin, Islam &
Hossein, 2019; Shamsudin, Esa & Ali, 2019 and
Anabila e al., 2022) ha e highligh ed he
ela i e e sa ili y, eliabili y, and alidi y o
he model o se ice quali y, including i s
associa ed e sions as one o he p ima y
scales o be used when e alua ing se ice
quali y.
Tangibles: Ali, Ga di, and O hman (2021),
de ine angibles “as he appea ance o physical
acili ies, equipmen , pe sonnel, and
communica ion ma e ials.’’ Wi hin he con ex
o he ho el indus y, his includes he physical
appea ance o ho el ameni ies and acili ies
such as oom cleanliness, ood, and be e age
se ices as well as spa and leisu e ac i i ies on
o e . Gues s who pu chase ho el p oduc s may
he e o e ace high unce ain ies when making
hei pu chase decisions be o e hey physically
expe ience wha hey ha e pu chased.
Reliabili y: Reliabili y depic s whe he an
o ganiza ion ollows he assu ance o i s
p omises wi h signi ican impo ance in
ul illing a cus ome ’s eques s p omp ly
(Hameed & Anwa , 2018). Wi hin he ho el
indus y, his dimension o se ice quali y
includes he cus ome in e ac ion p ocess and
communica ion om he poin o booking o
he ime ha he gues a i es a he ho el.
Pe o ming hese se ices dependably and
accu a ely means ha gues s can coun on he
ho el as hey alue eliabili y.
Responsi eness: Responsi eness o “being
willing o help” e e s o an o ganiza ion's
eadiness o se le p oblems and hei
a ailabili y o p o ide p omp se ice (Ali,
Ga di & O hman, 2021). Wi hin he con ex o
he ho el indus y, his can include he amoun
o ime i akes o ge back o a gues on a
po en ial elephonic o elec onic booking
enqui y, p omp ness o oom se ice, on-si e
ac i i y, o concie ge se ices.
Assu ance: Assu ance e e s o “ he knowledge
and cou esy o employees and hei abili y o
inspi e us and con idence” (Ali, Ga di &
O hman, 2021). Wi hin he con ex o he ho el
indus y, i is impo an o a ho el ope a o o
p o e ha i is us wo hy and ha he
se ices p o ided a e wo h he money ha he
cus ome is paying. This can include
communica ion o gues s abou ce i ica ions
o acc edi a ions ha he ho el may ha e such
as T ipAd iso accolades o a ings on online
pla o ms such as Booking.com.
Empa hy: Ali, Ga di, and O hman (2021) e e
o empa hy as he a en ion p o ided o
cus ome s, knowing wha hei speci ic needs
a e, and p o iding business ope a ional imes
ha a e con enien o cus ome s. Wi hin he
hospi ali y indus y, in e ac ing wi h gues s by
showing hem ha you ca e, and going beyond
wha is expec ed is an impo an aspec o
se ice quali y.
2.3 B and Equi y
Acco ding o Nusei (2021), b and equi y
encompasses he inancial as well as mone a y
alue associa ed wi h he s eng h o a b and in
he ho el indus y and as an inc emen al u ili y,
b and equi y is pa amoun o ob aining a
compe i i e ad an age. This iew is suppo ed
by Cina (2020), who s ipula es ha b and
equi y as a concep co e s all ma e ial and non-
ma e ial asse s o a business and is e en mo e
impo an in he ou ism and hospi ali y
indus y whe e b anding has been used as a
s a egy o in oduce and ex end exis ing
b ands o new ma ke s. Academic li e a u e
p oposes ha he e a e se e al dimensions
ela ed o b and equi y, which include b and
awa eness, b and loyal y and b and
associa ions (Aake , 1996; Wa sewicz &
Kulyko e s, 2020 and Nusei , 2021).
A s udy concluded by Iacobucci, MacInnes and
Eisinge ich (2010) highligh s he impo ance o
wo addi ional b and equi y d i e s, namely
b and a i ude and b and a achmen . These
au ho s a e o he opinion ha esea ch has no
e i ied he heo e ical o p ac ical alue o
b and a achmen as well as b and a i ude.
Iacobucci, MacInnes and Eisinge ich (2010) as
E alua ing Loyal y in Sou h A ica’s Ho el Indus y: The E ec o Se ice Quali y and B and Equi y///
Economic Re iew: Jou nal o Economics and Business, Vol. XXII, Issue 1, May 2024 33 ///
well as Scia ino and P uden e (2021) a e also
o he opinion ha b and a achmen o e s
alue o e b and a i ude wi h i s abili y o
p edic a consume ’s in en ion o pe o m
beha io s which a e di icul . The e is limi ed
e idence o esea ch being conduc ed which
includes b and a achmen and b and a i ude
as d i e s o b and equi y, which p o ides an
oppo uni y o expand on he exis ing
li e a u e.
B and A achmen : Magnoni, Vale e-Flo ence
and De Ba nie (2021) and Li (2019) de ine
b and a achmen as a consume s’ s ong
emo ional connec ion wi h a b and whe eby
consume s ega d he b and as a pa o hei
sel -concep , de elop b and commi men ,
sp ead posi i e wo d-o -mou h and a e willing
o pay a p emium p ice o he b and. Li, Teng
and Chen (2020), p opose ha b and
a achmen includes b and-sel connec ion
which is de ined as he consume 's link wi h
he b and cogni i ely and emo ionally.
B and A i ude: A s udy by Razak, Themba and
Sjah uddin (2019) p oposes ha consume s'
a i udes owa ds b ands can be in e p e ed as
deli e ing wha is expec ed by buye s o sa is y
hei needs, he e o e, consume a i udes can
spu he desi e o in en ion o buy a p oduc .
B and a i udes a e use ul in p edic ing
consume beha io wi h he di ec ion o he
beha io being inclined o disinclined owa ds
a pu chase a ying as a unc ion o whe he
a i ude alence is s ongly posi i e o s ongly
nega i e (Iacobucci, MacInnes & Eisinge ich,
2010).
Figu e 1. Cons uc and heo y ela ionships o
his s udy
Sou ce: Au ho s’ own wo k
Figu e 1 shows he ela ionship be ween he
cons uc s as well as he unde pinning heo ies
o suppo he p ima y objec i e o he s udy.
These include he Theo y o Conspicuous
Consump ion which unde pins cus ome
loyal y, G eenbe g’s Jus ice Theo y
unde pinning se ice quali y as a cons uc and
he Sel -Expansion Theo y which unde pins
b and equi y as a cons uc .
2.4 The Theo y o Conspicuous Consump ion
The Theo y o Conspicuous Consump ion
explo es he s a us phenomenon wi h
impo an implica ions o using s a us as a
loyal y-induced mechanism. Fo many
consume s, s a us is highly desi able as i is
associa ed wi h p i ileges and eelings o
supe io i y. Ele a ed s a us con e ed o
consume s as pa o a selle 's ma ke ing
e o s can mo i a e consume s o beha e
loyally, and he desi e o s a us mo i a es
conspicuous consump ion o he pu chase o
pa icula ly luxu ious o al uis ic goods
(Sahin & Nasi , 2022). Acco ding o s udies by
Assimos, Pin o, Lei e and De And ade (2019),
he consump ion o luxu y goods such as
ashion, a el, and li es yle p oduc s can help
consume s in hei pu sui o s a us, sel -
espec , and social app o al. As consume s
de ine hemsel es in ela ion o o he s, loyal y
o en in ol es ewa ds such as special
ea men s and queue exclusi i y which se e
s a us signaling pu poses (Chen, Mandle &
Waa den (2021). The e m “s a us
consump ion” app op ia ely e lec s his
associa ion and he exp ession o he s a us o
he owne h ough his habi s o consump ion
was connec ed o he idea o conspicuous
consump ion by Veblen in 1899 (Assimos,
Pin o, Lei e & De And ade, 2019). Taking in o
conside a ion he cul u al di e si y wi hin
Sou h A ica, Kaus (2013), discusses how
conspicuous displays a e pa o Sou h A ican
cul u e which he e o e highligh s ha he
mo i a ion o Sou h A icans o engage in
luxu y consump ion is o an exp ession o
lamboyance and bold displays o s a us. Sou h
A ican consume s ha ha e eme ged due o
he coun y’s democ acy in 1994 and he
widening o he Black middle class, ha e gi en
ise o a p e iously un a eled Black-ma ke
segmen . This has led o he en ichmen o
conspicuous consump ion amongs Sou h
Cus ome
Loyal y
Theo y o Conspicuous Consump ion
Se ice
Quali y
G eenbe g's Jus ice Theo y
B and
Equi y
Sel Expansion Theo y
///. Sha mila Ragunanan, Michael C. Can , Johannes A. Wiid
/// 34 Economic Re iew: Jou nal o Economics and Business, Vol. XXII, Issue 1, May 2024
A icans. Globaliza ion has esul ed in
eme ging ma ke s like Sou h A ica ha ing
accessibili y o luxu y p oduc s now mo e so
han e e . I would seem om he e iew o
a ailable li e a u e which examines he ho el
indus y in Sou h A ica, ha a limi ed numbe
o s udies ha e explo ed s a us as one o he
psychological mechanisms ela ed o cus ome
loyal y, inco po a ing he Theo y o
Conspicuous Consump ion.
2.5 G eenbe g’s Jus ice Theo y
As ou lined in he SERVQUAL model, se ice
ailu es occu due o speci ic gaps in se ice
quali y. I is a p e equisi e o e ec i e se ice
eco e y ha an o ganiza ion has some
unde s anding o he psychological
expec a ions held by cus ome s ega ding he
se ice being o e ed, i s ailu e o pe o m and
he jus ice o ai ness ecei ed in e ms o any
a emp s a se ice eco e y. G eenbe g’s
Jus ice Theo y is included in his s udy o
suppo he se ice quali y cons uc ,
emphasizing ai ness in se ice in e ac ions.
This heo y sugges s ha cus ome sa is ac ion
and loyal y depend on whe he cus ome s eel
hey we e ea ed ai ly, especially in se ice
ailu e and eco e y scena ios (Mulgund,
2022). The Jus ice Theo y consis s o h ee
pe spec i es: dis ibu i e jus ice, p ocedu al
jus ice, and in e ac ional jus ice, which
collec i ely c ea e a sense o ai ness o
cus ome s. Dis ibu i e jus ice pe ains o he
ai ness o angible ou comes in se ice
encoun e s, such as compensa ion o se ice
ailu es. P ocedu al jus ice ela es o he
ai ness o he se ice eco e y p ocess,
including he speed, dependabili y, and
conside a ion shown o cus ome s.
In e ac ional jus ice ocuses on he
in e pe sonal aspec s o se ice encoun e s,
emphasizing a ibu es like hones y,
poli eness, and empa hy. Toge he , hese
dimensions o jus ice in luence cus ome s'
pe cep ions o se ice quali y and hei
sa is ac ion wi h se ice eco e y e o s.
2.6 Sel -Expansion Theo y
Th ough he inclusion o sel in he sel -
concep , he Sel -Expansion heo y desc ibes a
p ocess by which people end o main ain hei
indi idual iden i y (Ke ay, Beck & Welke ,
2020). The Sel -Expansion Theo y sugges s
ha indi iduals seek o expand hei sel -
concep by inco po a ing aspec s o hei
en i onmen , including b ands (Go lie &
Michel, 2020). Lee (2012) p oposes ha a
b and’s esou ces can ansla e in o pa o he
owne ’s sel , which is a pe spec i e o seeing
he wo ld om he b and’s poin o iew; wi h
he b and’s iden i y becoming pa o he
cogni i e s uc u e o he owne ’s sel . In o de
o be e unde s and he consume 's a i udes
and beha io s wi hin he con ex o he ho el
indus y in Sou h A ica, he Sel -Expansion
Theo y is e iewed o o e he connec ion
be ween b and equi y, a achmen , and
a i ude. In he con ex o he ho el indus y,
his heo y can help explain how consume s'
a i udes and beha io s a e in luenced by hei
ela ionship wi h ho el b ands. B ands ha
o e unique and exci ing expe iences can
enhance consume pe cep ions and lead o
mo e posi i e b and ela ionships. In he ho el
indus y, unde s anding he Sel -Expansion
Theo y can help ho elie s build s onge
ela ionships wi h gues s. This s udy aims o
explo e how applying he Sel -Expansion
Theo y o consume -b and ela ionships can
bene i ho els in Sou h A ica by os e ing
s onge gues ela ionships and inc easing
gues sa is ac ion.
3. Resea ch Me hodology
McDaniel and Ga es (2021), highligh ha he
design o he esea ch inco po a es he
p ocedu e ha will need o be adhe ed o as an
unde lying app oach in acili a ing he
collec ion and analysis o da a wi hin any gi en
s udy. This s udy made use o a desc ip i e
me hod o esea ch aming he design o he
o e all objec i e o he da a collec ion p ocess.
Addi ionally, a quan i a i e app oach is
compa ible wi h desc ip i e esea ch me hods
as well as a posi i is ic pa adigm; he e o e,
his app oach was used o his s udy.
Quan i a i e esea ch also shows he
ela ionship o a iables in ol ed in he
esea ch ia cause-and-e ec (Schindle ,
2021). This app oach was selec ed o add ess
he aim o eaching a b oad audience wi h
nume ous esponden s and o ga he ac ual
da a, acili a ing he c ea ion o summa ies
abou he sample, a he han he moni o ing
and explo a ion o da a.
E alua ing Loyal y in Sou h A ica’s Ho el Indus y: The E ec o Se ice Quali y and B and Equi y///
Economic Re iew: Jou nal o Economics and Business, Vol. XXII, Issue 1, May 2024 35 ///
3.1 Popula ion and Sample
Schindle (2021) de ines a popula ion as he
comple e se o elemen s o which we seek o
make in e ences, while a sample is a subse o
he popula ion consis ing o cases, pa icipan s,
e en s, o eco ds ha a e ca e ully selec ed o
ep esen he popula ion. Due o he
imp ac icali y o selec ing and collec ing da a
om an en i e popula ion, a subg oup is
selec ed o ep esen and mi o he
popula ion a la ge. In assessing he mos
iable sampling echnique o his s udy, non-
p obabili y sampling would be he mos
sui able due o i s p ac icali y, u ilising a simple
andom sampling app oach. Simple andom
sampling is a subse o a s a is ical popula ion
in which each membe o he subse has an
equal p obabili y o being chosen and is mean
o be an unbiased ep esen a ion o a g oup
(Schindle , 2021). Fo his s udy, he
esea che as he Chie Ma ke ing O ice o
D eam Ho els and Reso s in Sou h A ica
ob ained he company consen o communica e
wi h he business's ho el gues s and ma ke ing
da abase as he p oposed esponden s. The
D eam Ho els & Reso s gues and ma ke ing
da abase consis s o a a ge popula ion o
app oxima ely 25 810 leisu e a elle s who
eside ac oss p o inces in Sou h A ica. In
addi ion, he da abase consis s o consume s
who had al eady s ayed a one o he p ope ies
wi hin he D eam Ho els & Reso s po olio as
well as hose who had s ayed a compe i o
p ope ies o e 24 mon hs om Oc obe 2021
o Oc obe 2023. As pa o he D eam Ho els
and Reso s business s a egy, a compe i o
assessmen was conduc ed. This assessmen
in ol ed iden i ying ho el g oups wi h simila
p oduc o e ings and loca ions o hose o
D eam Ho els and Reso s. The compe i o s
iden i ied we e AHA Ho els and Lodges,
P emie Reso s, Legacy Reso s, Sou he n Sun,
and P o ea Ho els. Wi h he use o a Raoso
calcula o and based on a maximum popula ion
o 25 810, a sample o 379 esponden s was
sugges ed as a gene alisable esul which can
be ob ained wi h his sample size a a
con idence le el o 95% and a ma gin o e o
o 5%. The equi emen o he sample o ha e
s ayed a a ho el wi hin 24 mon hs jus i ied he
selec ion o a simple andom sampling
echnique o his s udy.
3.2 Da a Collec ion and Analysis
The s udy u ilised an online sel -adminis e ed
su ey comp ising a se o s uc u ed and
o malised ques ions o elici he necessa y
in o ma ion om he esponden s and collec
he ele an da a. A se o ques ions was
speci ically designed in he o ma o a
s uc u ed ques ionnai e o ga he da a which
enabled conclusions o be d awn ollowing
s a is ical analysis (McDaniel & Ga es, 2021).
The esponden s we e equi ed o documen
esponses using English as a medium using a
sel -adminis e ed ques ionnai e and all
cons uc s in he measu emen we e ancho ed
using a Like -scale o ma , om 1=s ongly
disag ee o 5=s ongly ag ee. Da a o he
ques ionnai e was ini ially en e ed in o a
Mic oso Excel sp eadshee and hen
ca ego ised o handle any inconsis encies.
Ques ionnai es ha we e incomple e o
unlikely o p o ide meaning ul esponses we e
excluded om he analysis. In his s udy, using
an elec onic o ma helped minimise he
e o s associa ed wi h manual ansc ip ion.
Du ing consis ency checks, all missing alues
we e iden i ied and assigned designa ed codes.
The cons uc s and measu emen s used in he
s udy we e de i ed om mul iple empi ical
s udies known o hei high alidi y and
eliabili y as illus a ed in Table 1.
Table 1. Sou ce o empi ical s udies o scale
alidi y and eliabili y
Resea ch Scales
C onbach’s
Alpha
A icle
Sou ce
Cus ome
Loyal y
0.901
Adap ed
om
Anabila,
Ameyibo
, Allan &
Alomenu,
(2022)
Reliabili y
0.877
Responsi eness
0.841
Assu ance
0.867
Empa hy
0.881
Tangibili y
0.846
B and
a achmen
0.919
Adap ed
om
Shimul,
Phau and
Lwin
(2019)
B and a i ude
0.888
Sou ce: Au ho s’ own wo k
///. Sha mila Ragunanan, Michael C. Can , Johannes A. Wiid
/// 36 Economic Re iew: Jou nal o Economics and Business, Vol. XXII, Issue 1, May 2024
The s a is ical analysis ocused on examining
he equencies o demog aphic me ics
ob ained om he esponden s, speci ically
hei age, gende , educa ion le el, and
employmen s a us. In addi ion, he desc ip i e
me hod o analysis was u ilised o measu e he
esponden s' a el beha io , hei equency
o s ays a speci ic ho el g oups as well as hei
loyal y beha io s ela ed o hese ho el g oups.
In e en ial s a is ics was also used o e alua e
he eliabili y and alidi y o he s udy's scales,
employing C onbach's alpha coe icien o
eliabili y and con i ma o y ac o analysis o
alidi y. Composi e eliabili y was employed as
a key me ic o assess he in e nal consis ency
and eliabili y o he la en cons uc s.
C onbach's alpha (α) was used o measu e
in e nal consis ency, simila o composi e
eliabili y.
Con e gen alidi y was also assessed by
examining he ac o loadings o indica o s on
hei espec i e la en a iables. Ano he
common measu e o con e gen alidi y is he
A e age Va iance Ex ac ed (AVE), which
assesses he a e age amoun o a iance in he
indica o s ha a e cap u ed by he la en
a iable. Disc iminan alidi y is a subca ego y
o cons uc alidi y and is impo an o any
esea ch ha in ol es la en a iables o he
p e en ion o mul icollinea i y issues (Fo nell
& La cke , 1981).
The Fo nell and La cke c i e ion is he mos
widely used me hod o his pu pose and is a
popula echnique used o check he
disc iminan alidi y o cons uc s in s uc u al
equa ion models (Fo nell & La cke , 1981). The
He e o ai -Mono ai Ra io o Co ela ions
(HTMT) me hod is a echnique used o assess
disc iminan alidi y (Hensele , 2017).
S uc u al Equa ion Modelling (SEM) was used
o analyze he ela ionships be ween cus ome
loyal y and se ice quali y, as well as be ween
cus ome loyal y and b and equi y. Pa ial leas
squa es s uc u al equa ion modelling (PLS-
SEM), also known as PLS pa h modelling,
s ands ou as a highly a o ed me hod o
mul i a ia e da a analysis wi hin he ealms o
business and social science schola ship
(Memon, Ramayah, Cheah, Ting, Chuah &
Cham, 2021). In his s udy, PLS-SEM was used
u ilising Sma PLS e sion 3 o es he
hypo hesis and model he ela ionships
be ween cus ome loyal y, se ice quali y and
b and equi y. This s udy made use o
con i ma o y ac o analysis o examine
co ela ions be ween la en a iables using he
SEM p og am Sma PLS. SEM p e e s
con i ma o y ac o analysis o explo a o y
ac o analysis as i is conce ned wi h es ing an
exis ing model unde pinned by an exis ing
heo y, he e o e in his s udy, con i ma o y
ac o analysis was used o compu e he
s uc u al model and measu emen model
(Hoyle, 2023). The analysis in ol ed assessing
he measu emen model, s uc u al model, and
alidi y and eliabili y o he cons uc s and he
ac o loadings ep esen he co ela ion
be ween each a iable and i s unde lying
ac o , indica ing how much o he a iance in
he a iable is explained by ha ac o .
A concep ual model examining cus ome
loyal y in Sou h A ica’s ho el indus y
including he e ec o se ice quali y and b and
equi y was p esen ed o empi ical
subs an ia ion. The model included ac o
loadings, pa h coe icien s, indi ec e ec s, and
o al e ec s. Pa h coe icien s, also known as
di ec e ec s, quan i y he impac o an
independen a iable on a dependen a iable,
indica ing he s eng h o his ela ionship
(Hai , 2021). Indi ec e ec s which a e a
common occu ence in PLS-SEM, ep esen he
ela ionships be ween cons uc s. These
e ec s we e e alua ed using boo s apping
which is a me hod ha calcula es he p- alues
o es ima es o es o signi icance.
Boo s apping is a nonpa ame ic p ocedu e
used o es he s a is ical signi icance o
a ious pa ial PLS-SEM esul s, such as pa h
coe icien s, C onbach’s alpha, He e o ai -
Mono ai (HTMT) a ios, and R² alues
(Schube h, Rademake & Hensele , 2023). To
ensu e he o e all i o he p oposed model he
ollowing measu es we e employed: he
s anda dized oo mean squa e esidual
(SRMR), No med Fi Index (NFI), squa ed
Euclidean dis ance (d_ULS), and geodesic
dis ance (d_G).
3.3 E hical Conside a ions
Anonymi y and con iden iali y, in o med
consen as well as da a p o ec ion we e
conside ed o his s udy. I is also impo an o
no e ha he P o ec ion o Pe sonal
E alua ing Loyal y in Sou h A ica’s Ho el Indus y: The E ec o Se ice Quali y and B and Equi y///
Economic Re iew: Jou nal o Economics and Business, Vol. XXII, Issue 1, May 2024 43 ///
Limi a ions
The s udy's sample size o 379 esponden s
was ela i ely small, limi ing he
gene alizabili y o he indings o he en i e
Sou h A ican ho el indus y. The sample may
no ha e ully ep esen ed he di e si y o
ho els and cus ome s in he coun y. The
eliance on su ey da a could in oduce
esponse bias and e o s, and sel - epo ed
da a may no always accu a ely e lec ac ual
beha io o pe cep ions. The ocus on he
Sou h A ican ho el indus y means he
indings may no apply o o he indus ies o
coun ies wi h di e en con ex s. The s udy's
imeline and esou ces may ha e limi ed he
dep h and b ead h o he analysis, po en ially
o e looking ce ain nuances o aspec s o hese
ela ionships.
Fu u e Resea ch
The s udy sugges s se e al key esea ch a eas
o explo e in he Sou h A ican ho el indus y.
These include c oss-cul u al analysis,
examining he impac o echnology on se ice
quali y and loyal y o enhance cus ome
expe iences, sus ainabili y p ac ices, online
e iews and social media, employee
engagemen , ma ke segmen a ion and c isis
managemen .
5. Conclusion
Based on he comp ehensi e analysis
conduc ed, se e al key indings ha e eme ged
ega ding cus ome loyal y, se ice quali y,
and b and equi y in he Sou h A ican ho el
indus y. Analyzing he su ey da a om 379
esponden s, he s udy iden i ied he media ing
ole o se ice quali y and cus ome loyal y.
Speci ically, he s udy ound ha se ice
quali y signi ican ly a ec s cus ome loyal y
wi h a pa h coe icien o 0.503. Tangibles, such
as physical acili ies and ameni ies, we e
pa icula ly impac ul, wi h a pa h coe icien o
0.245 media ed by se ice quali y.
Responsi eness and empa hy also showed
signi ican media ing e ec s h ough se ice
quali y, wi h pa h coe icien s o 0.094 and
0.065, espec i ely. While eliabili y and
assu ance did no show signi ican di ec
e ec s on loyal y (pa h coe icien s o 0.050
and 0.033 espec i ely), hey emain essen ial
o o e all se ice quali y. The s udy u he
e ealed ha b and equi y has a s a is ically
signi ican e ec on cus ome loyal y, wi h a
pa h coe icien o 0.337. Bo h b and
a achmen and b and a i ude signi ican ly
media e cus ome loyal y h ough b and
equi y, wi h pa h coe icien s o 0.119 and
0.204, espec i ely. This indica es ha ho els
wi h s ong b and equi y a e likely o ha e
mo e loyal cus ome s, emphasizing he
impo ance o building a obus b and. In
conclusion, he s udy's indings p o ide
aluable insigh s o ho el manage s and
ma ke e s aiming o enhance cus ome loyal y
in he Sou h A ican ma ke .
By ocusing on imp o ing se ice quali y
ac oss all dimensions and building s ong
b and equi y, ho els can c ea e posi i e
cus ome expe iences ha lead o inc eased
loyal y and long- e m p o i abili y.
Implemen ing pe sonalized se ices,
in eg a ing echnology, and engaging wi h he
local communi y can u he enhance cus ome
loyal y and di e en ia e ho els in a compe i i e
ma ke .
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