Exploring Perceived Fairness in Hotel Service Recovery: The Case of ...

DOI 10.7603/s40930-014-0001-3

Exploring Perceived Fairness in Hotel Service 1 Asia-Pacific Journal of Innovation in Hospitality and Tourism Recovery: The Case of Kingdom Plaza, Wuhan APJIHT Vol. 3 No. 1 March 2014 pp. 1–19 ISSN 2289-1471

Research Paper

Exploring Perceived Fairness in Hotel Service Recovery: The Case of Kingdom Plaza, Wuhan Hanyu Chen, Yun Lok Lee & Betty Weiler Southern Cross University, Australia © The Author(s) 2014. This article is published with open access by Taylor’s Press.

Abstract: The purpose of this study is to explore the fairness perceptions of Chinese hotel consumers about service recovery. A total of 460 Chinese hotel guests participated in this study. The measures were adopted from previous studies and data were collected in a hotel in Wuhan. The findings confirmed the importance of compensation to Chinese consumers whilst highlighting their emphasis on interactional fairness. The study also revealed that Chinese hotel consumers lacked the knowledge in procedural fairness. Keywords: Hotel industry, fairness theory, service recovery, Chinese hotel consumers, Chinese tourism sector Suggested citation: Chen, H., Yun, L.L. & Weiler, B. (2014). Exploring perceived fairness in hotel service recovery: The case of Kingdom Plaza, Wuhan. Asia-Pacific Journal of Innovation in Hospitality and Tourism, 3(1), 1–19

Introduction Consumers demand more of services provided today as they have become more aware of their consumer rights (Lovelock, Patterson, & Walker, 2004). This poses a serious challenge to hoteliers attempting to offer high-quality service. Even though consumers may accept lapses in service, they expect the service providers to resolve these lapses with efficacious service recovery (Bitner, Booms, & Mohr, 1994). A cost-

Correspondence: Hanyu Chen, Southern Cross University, Australia. E-mail: [email protected]

APJIHT Vol. 3 No. 1 March 2014

2 Hanyu Chen, Yun Lok Lee & Betty Weiler

effective service recovery is now recognised as an offensive rather than a defensive service management strategy. Service failure is defined as when service performance falls below consumers’ expectations (Kelley & Davis, 1994; Oliver, 1999). Its obverse counterpart, service recovery, is defined as the actions service providers undertake in response to service failure, to return customers to a state of satisfaction (Gronroos, 1988; Zemke & Bell, 1990). The pair has received considerable attention from hotel managers and hospitality researchers. Previous research showed that effective service recovery could contribute to a) customer satisfaction; b) positive word of mouth; c) customer loyalty; and ultimately d) help increasing business profit (Hart, Heskett, & Sasser Jr, 1990; Spreng, Harrell, & Mackoy, 1995; Tax, Brown, & Chandrashekaran, 1998). Fairness/justice theory has been used to understand consumer behaviour in situations of service failure/recovery (Goodwin & Ross, 1992; Seiders & Berry, 1998). As justice is a salient, traditional Chinese cultural value (Carr & Mahalingam, 2003), it is likely to affect the evaluation of Chinese consumers of service failure/recovery. A survey of the literature review suggests that service failure/recovery studies with a focus on fairness have been conducted mostly on Western consumers (Blancero, Johnson, & Lakshman, 1996; Olsen & Johnson, 2003; Smith, Bolton, & Wagner, 1999). As culture asserts an important influence on consumer behaviour, insights from Western studies cannot be appropriately applied to Chinese consumers (Lee & Sparks, 2007). A gap in knowledge exists in how the Chinese perceive and respond to service recovery and there is a clear opportunity in utilising this to improve the provision of services to Chinese hotel consumers in a culturally sensitive manner. This study, therefore, aimed to explore how the Chinese perceive fairness in deficient service situations. The insights from the study may help hoteliers develop efficacious and culturally-relevant service recovery for Chinese hotel guests. The importance of the Chinese as global consumers also indicates that this study makes a timely significant contribution to service management. Literature Review The Importance of the Chinese Market China has been making impressive progress in economic development. The market reforms and “opening up” policy initiated by Deng Xiaoping in 1978 resulted in China’s current remarkable economic transformation that powered a double-digit rate of economic growth for decades (Garner, 2005). This economic growth is producing a large and growing middle class with the means and appetite for quality goods and services. It is reported that the Chinese middle-class will be the world’s largest


Exploring Perceived Fairness in Hotel Service Recovery: The Case of Kingdom Plaza, Wuhan

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consumer market exceeding half a billion in the next two decades (Farrell, Gersch, & Stephenson, 2006). It is also predicted that a significant number of middle class will be traveling which will lead to a rise in demand for hotel services (Arlt, 2006). This projection offers hoteliers not only ample business opportunities, but also challenges to meet consumers’ demand. Chinese travellers are becoming more conscious of service quality (Cai, 2004). Yet, low service standards prevail and frontline staff are ill-equipped to manage service failure/recovery in Chinese hotels (Cai, 2004; Magnini & Ford, 2004). Service Failure and Service Recovery As stated heretofore, service failure occurs when service performance falls below consumers’ expectations (Kelley & Davis, 1994). In the hotel industry, service failure cannot be completely eliminated due to the distinctive features of service (intangibility, simultaneity in production and consumption, and heterogeneity) and in part to the complexity of service delivery in the hospitality context (Lovelock et al., 2004). Therefore, delivering zero-defect service can be difficult. If guests perceive the level of service has fallen outside the zone of tolerance, service failure will occur and guests may engage in negative post-purchase behaviour, which is detrimental to service providers (Kelley & Davis, 1994; Parasuraman, Berry, & Zeithaml, 1991, 1994). Dissatisfied consumers may defect (exit and switch brand) and/or engage in negative word-of-mouth (Grönroos, 1984; Lovelock et al., 2004). Consumer defections have serious consequences on a company’s revenue. Research shows that a 5 percent loss in consumer retention may result in a fall in profit of between 25 to 125 percent (Reichheld & Sasser, 1990). Moreover, the Chinese are known for a strong proclivity for word-ofmouth communication, which may damage the company’s image (Swanson & Kelley, 2001; Yau, 1988). However, it is also reported that if the service provider takes remedial action in an appropriate manner, the consumer is likely to return to a state of satisfaction (McCollKennedy & Sparks, 2003). Service recovery may help hotels bring back consumers to a state of satisfaction and regain their loyalty (Gronroos, 1988; Zemke & Bell, 1990). In hotels, service recovery may take the form of an apology, room upgrade, discount, refund, or a combination of these (Lovelock et al., 2004). If a company’s recovery effort exceeds consumers’ expectations, their overall satisfaction level may be even higher than those not having experienced service failure in the first place (Maxham Iii & Netemeyer, 2002; Smith & Bolton, 2002). This insight suggests that hoteliers aspiring to deliver high-quality service must have suitable service recovery provisions. This in turn requires careful planning, evaluation and efficacious implementation. The key to implementing efficacious service recovery is to understand customers’ views and preferences in service recovery (Yim, Gu, Chan, & Tse, 2003). The fairness



notion can be traced back to Confucian analects which underpin much of the Chinese culture. This reference of fairness is also justifiable because a few earlier empirical studies on Chinese confirmed the multi-dimensional fairness notion among Chinese consumers (Han, Kwortnik, & Wang, 2008; Hui & Au, 2001). Fairness Theory In recent hospitality research, the concept of fairness (justice) pertaining to distributive, interactional and procedural dimensions was used to gain insights of consumer evaluations of service failure/recovery (Blodgett & Granbois, 1992; McColl-Kennedy & Sparks, 2003; Tax et al., 1998). The key idea is that the consumers’ satisfaction level and loyalty depend on how justly or fairly they have been treated. Before moving on to a detailed discussion of each fairness dimension, it has to be noted that perceptions of fairness in service recovery could be culturally different because culture can influence people’s perception and behaviour (Maheswaran & Shavitt, 2000). Research on cultural differences in the evaluation of service recovery was scant until the late 1990s (Mattila, 1999). Studies showed that Asians generally expect highly respectful and polite service while Westerners are more likely to be influenced by compensation (Hui & Au, 2001; Mattila, 1999). Some comparative studies provided insights on Asian consumers’ preferences. For example, Hui and Au (2001) compared Chinese consumers with Canadian consumers using the fairness theory. Voice which refers to allowing consumers a chance to express dissatisfaction was found to have a stronger effect on Chinese consumers, whereas Canadian consumers were more likely to be influenced by compensation. However, fairness perception was only measured using three dimensions (voice, compensation and apology) and procedural fairness was not included in the survey. Moreover, the study only sampled students who may not be representative of other population groups. Another study that specifically addressed service recovery in the Chinese context was done by Magnini and Ford (2004). Their study attempted to illustrate that Western-based hoteliers would benefit from making adaptions to their training programmes in China. The types of modifications which Western hoteliers should consider were also discussed. The study provided guidelines for hotel staff training but consumer perceptions were not addressed. A recent study by Kwortnik and Han (2011) examined how perceptions of service fairness influence loyalty in the context of lodging. The results showed that distributive fairness and interactional fairness have more a significant effect on loyalty than procedural fairness. While this study provided empirical evidence that Chinese hotel guests use fairness dimensions to evaluate service provision, it did not



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focus specifically on service recovery. Applying these findings to contexts of service failure and recovery is, therefore, questionable as consumers generally have higher expectations for service recovery (McCollough & Bharadwaj, 1992). In summary, no study has specifically addressed Chinese consumer perceptions of hotel service recovery. The present study adopted the fairness theory and examined the fairness perception of Chinese hotel guests in service recovery. Each fairness dimension is discussed next. Distributive fairness refers to the compensation given to guests for service failure (Kim, Wang, & Mattila, 2010). People appear to base their evaluation of outcome on the principles of ‘equity,’ ‘equality’ or ‘need’ (Adams, 1965). Western researchers found that offering tangible compensation has a positive effect on customer satisfaction with the recovery process (Goodwin & Ross, 1992). It is also argued that perceptions of distributive fairness are formed as a result of comparing with others. Lapidus and Pinkerton (1995) found that consumers receiving higher compensation have an increased perception of justice when they are informed that other consumers received lower compensation. Similarly, a study by Van den Bos, Lind, Vermunt, and Wilke (1997) showed that in the presence of social comparison data, consumers use the outcomes of others’ to make evaluations. However, providing fair outcomes alone may not be sufficient, particularly when consumers consider the means and manners of service delivery as unfair (Tax et al., 1998). Consumers may employ other aspects when evaluating service recovery including interactional fairness and procedural fairness. Procedural fairness refers to the consumers’ perceived fairness of policies, procedures and criteria in the decision-making process to reach an outcome in a dispute (Blodgett, Hill, & Tax, 1997). Process control, decision control, accessibility and flexibility have also been identified as major elements of procedural fairness (Tax et al., 1998). Other researchers reported that empowering service staff to address service failure issues to make it easier for consumers to complain may result in higher fairness perceptions (Tax et al., 1998). Offering immediate service recovery would also be effectual (Wirtz & Mattila, 2004). However, dissatisfaction occurs when firms coerce customers to comply with their company policy (Bitner et al., 1994). Western studies further reported that the ‘how’ or ‘the manner’ in which service staff treat a customer during service recovery process is salient for customers (Bies & Moag, 1986; Tax et al., 1998). Interactional fairness is perceived when service staff treat customers with propriety, care, empathy, concern or sensitivity (Blodgett et al., 1997). Interactional fairness is critical because customers have higher expectations for interpersonal treatment when service fails. Literature review also shows that impolite staff behaviour may not only cause customers to feel dissatisfied, but also degrade perceptions of distributive and procedural fairness



(Sparks & McColl-Kennedy, 2001). Hence, being treated fairly by service staff in service failure/recovery situations raise customers’ perception of the quality of the service process. The studies reviewed above provide some examples of items that have been used to measure each dimension of fairness. In this study, the measurement of service recovery fairness was based on a five point rating scale where consumers rated their perceptions from 1 (very unfair) to 5 (very fair). Each question was written in a simple and understandable manner. Methods A questionnaire-based survey was employed for this study. The questionnaire consisted of 12 question statements on fairness perceptions and 3 demographic questions. Each question item measured a particular element of a fairness dimension and the measurement was modelled on previous findings. In an iterative process conducted by the researchers, each of the question was constructed with reference to previous studies. Respondents were asked to judge how fair the recovery effort was by using a five-point rating scale (1 = very unfair treatment, 5 = very fair treatment). Table 1 shows sample questions from each fairness dimension. Prior to data collection, the questionnaire was tested on a convenient sample that included 20 Chinese students to clear any ambiguities in the questionnaire. This approach ensures the scale has content validity. Based on the feedback, some wordings of the questions were modified to ensure clarity and appropriateness of the questionnaire. Table 1. Sample questions Distributive fairness

Q1 (higher compensation) You had been given a very small room. After you complained, the hotel offered a 15% discount and you were told that the usual discount is 10%.

Interactional fairness

Q4 (slow service recovery) You were given a dirty room, and when you complained, management did not offer any help to immediately clean your room.

Procedural fairness

Q8 (inconvenient to complain) You were highly dissatisfied with the room service and asked to speak to the manager. However, you were told that the manager was unavailable and the only option was to write a letter to complain.



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With the consent of the hotel manager, data were collected at the lobby of Kingdom Plaza, a five star hotel in Wuhan, China. The hotel was selected for the purposes of convenience and this of course represents a very narrow sampling frame for the general Chinese population. The limitations will be discussed at the end of this paper. Every third person checking in or checking out from reception was invited to participate in the survey and participation was voluntary. To capture the correct target sample for the study, potential participants were screened based on two selection criteria: he/she must be a mainland Chinese and be at least 18 years old. In the event that the hotel guest refused or did not fit the selection criteria, the next person was invited to participate. The completed questionnaires were placed in a box to ensure respondents’ anonymity. Of the 460 questionnaires, 347 were returned but 4 of them were found to be incomplete. In total, 343 questionnaires were thus deemed valid and data analysis was conducted on the valid questionnaires. Findings Validity and Reliability An iterative scale purification procedure was used to develop a reduced but more parsimonious scale (Churchill Jr, 1979). Item-to-total correlations were computed for the 12 items. The two items that produced substantial or sudden drop in the correlation were deleted (Churchill Jr, 1979). Next, a principal component analysis with oblique rotation was applied (Anderson & Gerbing, 1988) for checking a possible overlap of items across factors. After the iterative deletion of a small another item, nine items remained. Table 2 shows the construct of the questions. The exploratory factor analysis confirmed that there are three factors (distributive, procedural and interactional) underlying the service recovery perceptions, which is consistent with the theory of fairness. Finally, to verify the reliability and construct the validity of the scale, a confirmatory factor analysis was employed for parameter estimation. Every single factor was then submitted to a confirmatory factor analysis (Table 3). All factor loadings were found to be significant at the 0.01 level and all individual item reliabilities were above the required value of 0.4 (Bagozzi, 1994). According to Bagozzi and Yi (1988), one way to assess convergent validity was to check if all factor loadings are significant. All factor loadings were significantly different from zero as evidenced by consistently large t-values. Convergent validity was also supported since the average variance that was extracted clearly exceeded 0.5 for all dimensions (Fornell & Larcker, 1981). In summary, statistics confirmed the validity and reliability of the scale.



Table 2. Framing of question items Measurement in current study

Source

Findings

Q1: Higher compensation

Lapidus & Pinkerton, 1995; Van den Bos et al., 1997

Consumers who received higher compensation have an increased fairness perception than those who received lower compensation.

Q2: Free room upgrade

Hoffman & Chung, 1999

Hotel consumers overwhelmingly perceive room upgrade as the most effective response to hotel service failures.

Q3: Tangible compensation

Goodwin & Ross, 1992; Mount & Mattila, 2002

Tangible compensation increases perceived distributive fairness.

Q4: Slow service recovery

Sundaram et al., 1997

A quick recovery response to service failure can enhance the customer’s perception

Q5: Lack of trust and respect

Winsted, 1997; Becker et al., 1999

Japanese and Cantonese consumers prefer a formal (respectful) service style. Trust could help strengthen consumer-sellers relationship

Q6: Rude staff behaviour

Lovelock et al., 2004; McCollough et al., 1992

Politeness/courtesy can result in high ratings of fairness and satisfaction while seemingly uncaring or rude behavior may violate the customers’ self-esteem and cause dissatisfaction.

Q7: Lack of staff empowerment

Sparks & Bradley, 1997

Empowerment can increase The consumers’ perceptions of the efforts put in dealing with service failures and can lead to a higher evaluation of service recovery.

Q8: Lack of convenience to complain

Tax et al., 1998; Goodwin & Ross, 1990

Strong customer voice results in greater customer satisfaction. In contrast, failure to consider customers’ voice may result in the lack of sense of fairness and overall, low satisfaction.

Q9: Compliance with hotel policy

Bitner et al., 1994

Employee’s attempts to enforce customer compliance with company policy may induce customer dissatisfaction

Distributive fairness

Interactional fairness

Procedural fairness



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Table 3. Results of reliability confirmatory factor analysis Fairness perception

Individual item reliability

t-value of factor loading

Q 1: Higher compensation

4.55

10.12

Q 2: Free room upgrade

4.80

9.89

Q 3: Tangible compensation 4.77

7.45

Distributive fairness

Interactional fairness Q 4: Slow service recovery

4.89

6.55

Q 5: Lack of trust/respect

4.02

9.08

Q 6: Rude staff behaviour

4.36

9.49

Procedural fairness Q 7: Lack of staff empowerment

4.24

11.45

Q 8: Inconvenient to complain

4.79

9.34

Q 9: Compliance with hotel 4.10 policy

8.89

Construct reliability

Average variance extracted

Coefficient alpha

0.98

0.78

0.83

0.78

0.69

0.64

0.92

0.86

0.77

Characteristics of Sample The descriptive statistics of the participants are presented in Table 4. Of the 343 participants, 61.1% of the participants were female and 38.9% of the participants were male. The most dominant age group was ‘18 to 29’ (64.6%), followed by ‘30 to 49’ (20.8%), and ‘50 and above’ (14.3%). A majority of the participants (83.3%) had completed higher education, while 9.8% of the participants received secondary education and 6.9% of the participants’ highest level of academic qualification was primary education. Despite using probability sampling methods, the sample for this study was found to be skewed to young and educated females of the guest profile from the hotel. This may be explained by the fact that the hotel is located near a number of universities. It has to be noted that the random sampling technique used in the present study did not ensure an equally distributed sample.



Table 4. Demographic statistics (n = 343) Characteristic Percentage Gender Male 38.9% Female 61.1% Age 18-29 64.9% 30-49 20.8% 50 and above 14.3% Education Primary education 6.9% Secondary education 9.8% High education 83.3%

Fairness Perceptions The descriptive statistics for all the questions are summarised in Table 5. Firstly, the statistics results for Q1, Q2 and Q3 suggest a tendency to perceive ‘fair treatment.’ However, these opinions are not very strong with means ranging from 3.05 to 3.69. Statistics for Q1 show a roughly normal distribution which suggests that respondents tend to agree that treatment is fair, with a sizeable number of ‘neutral.’ Data for Q2 and Q3 suggest that a majority of the respondents are likely to agree that the treatment is (very) fair. Overall, compensation is considered a fair treatment while some respondents, however, showed no preferences when they are given compensation that is better than usual. Secondly, data for Q4 and Q6 which examined perceived interactional fairness were skewed to the right with small means. In other words, the majority of the respondents perceived the treatment as (very) unfair. The relatively small standard deviations of Q4 and Q5 suggest that respondents have very strong opinions when service recovery is slow and when staff show no trust and respect. Thirdly, regarding procedural fairness, statistics for Q7 and Q8 shows that most respondents think that a lack of staff empowerment and opportunity to complain can be categorised as unfair treatment while a sizable number of respondents chose ‘neutral.’ Statistics for Q9 revealed a right-skewed distribution with ‘neutral’ as the leading group.



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Table 5. Statistics on perceptions of fairness Distributive Fairness

Mean

Median

Standard Deviation

Q1: Higher compensation

3.05

3

0.956

Q2: Free room upgrade

3.69

4

1

Q3: Tangible compensation

3.47

4

0.946

Q4: Slow service recovery

1.44

1

0.782

Q5: Lack of trust/respect

1.35

1

0.778

Q6: Rude staff behaviour

1.83

1

0.946

Q7: Lack of staff empowerment

2.38

2

0.835

Q8: Inconvenient to complain

2.37

2

0.966

Q9: Compliance with hotel policy

2.69

3

1.005

Demographic Differences An independent sample t test was conducted to investigate the differences of fairness perception between male and female. No significant differences were identified with the p values for all questions above 0.05. The one-way ANOVA test was conducted to examine the influence of education levels on fairness perceptions. Again, no significant difference was identified. Finally, the one-way ANOVA test was conducted to examine the influence of age on fairness perceptions and significant differences were found in Q3 which examined respondents’ perception on tangible compensation. The multiple comparisons using the Hochberg GT2 method showed that the mean difference between ‘18 to 29’ group and ‘50 and above’ was significant, with p = 0.044. Discussion As suggested in column 1 of Table 2, the scenarios of Q1 to Q3 (distributive fairness) presented to respondents were positively worded so that higher rating (closer to 5) can confirm that these elements are associated with a higher level of fairness perceptions. For Q4 to Q9 (interactional and procedural fairness), the opposite is true. In other words, the scenario was negatively worded and a lower rating indicates that the elements are not associated with a high level of perceived fairness. Distributive Fairness Overall, the statistics showed that guests felt compensation constitutes fair treatment. A general explanation may be that compensation is sufficiently large to cover the cost



related to the inconvenience and time taken to lodge a complaint. The findings of the three questions are discussed in the following paragraphs. Firstly, it is only expected that people would be very happy when they receive more than they outlay. This finding confirms that fair compensation in service recovery is an universal trait. Lapidus and Pinkerton (1995) also reported similar findings with Western consumers. However, the cultural nuance for these perceptions of fairness in different cultural groups may differ. The extra compensation may be perceived by Western consumers from an individualist culture as necessary for the inconvenience caused while for the Chinese, being compensated for more than what the ‘equity’ (input-output) principle often applied is likely to convey to them a special treatment or conferment of ‘face” (social status and moral character of an individual) — a tradition highly practiced by the Chinese (Lee & Sparks, 2007). The finding that showed a sizable number of participants took a neutral position with regards to better compensation was peculiar. This can be attributed to the higher socio-economic status of the participants sampled as evidenced by their capacity to stay in a five star hotel. Secondly, the Chinese perceive room upgrades and tangible compensations as fair. A possible explanation may be that the compensation was sufficiently large to cover the cost of being inconvenienced, and the time and trouble taken to lodge a complaint. Previous studies also indicated that room upgrades and tangible outcomes could enhance consumers’ satisfaction and fairness perceptions in the distributive sense (Goodwin & Ross, 1992). The compensations are tangible and the compensatory value can be more readily calculated and compared to the losses incurred. Thus guests feel secure about what they have received. Interactional Fairness Overall, the findings of Q4 to Q6 indicate interactional fairness as the most strongly held perception. Winsted (1997) found similar findings regarding other Asian consumers. Asian consumers appear to emphasise on interactional fairness on a broad basis. The findings are discussed as follows. Firstly, Western research indicates that customers prefer prompt service recovery and long waits would induce dissatisfaction (Clemmer & Schneider, 1989). This study revealed similar findings with Chinese hotel guests. Prompt service recovery clearly lessens the inconvenience and waiting time for customers. For many, a quick resolution allows them to settle into the hotel and afford them time to engage in other planned activities. A prompt resolution also conveys to the customers that they are important and socially valued. When the service recovery effort is slow, their perception of unfairness is induced by the feeling of not being valued or being socially



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discriminated. Discrimination violates the ‘ren’ concept (the universally accepted right to human equality) under which many Chinese are brought up (Lee & Sparks, 2007). Secondly, Chinese consumers perceive the lack of trust and respect as a very unfair treatment. Generally, trust and respect in service seems to be the priority for the common Asian consumer. For example, Winsted (1997) found that Japanese consumers also value respectful treatment highly in the service recovery process. The Chinese consumers value highly being treated with respect and trust in social interactions (Lee & Sparks, 2007). Moreover, trust and respect are important in a ‘service provider-customer’ relationship where customers expect to have the privilege of occupying a higher social position than the service personnel. Thus, when this social order is broken, customers are likely to feel very unfairly treated. Furthermore, the Chinese generally attempt to avoid confrontation and conflict and expect two parties in a service transaction to work together to redress service failure rather than blaming each other (Hui & Au, 2001). Finally, Chinese customers consider rude staff behaviour as very unfair. In Chinese culture, showing ‘li’ (propriety and politeness) to others in a social interaction is highly emphasised and taught to every child in the family and at school (Lee & Sparks, 2007). Therefore, it is not surprising that the Chinese feel very unfairly treated when there is a lack of ‘li’. Moreover, a service personnel’s rude behaviour may violate a customer’s self-esteem leading to a loss of ‘face’, which is humiliation. Procedural Fairness This study produced various findings regarding procedural fairness. Firstly, regarding lack of staff empowerment, there might be various reasons why treatment is perceived as unfair. It may be burdensome and time-consuming for guests to lodge the claim. Guests are often busy with their schedule and their time has a premium. Moreover, it is expected that any established hotel would have a good customer service policy and there would always be a staff appointed to handle customers’ complaints. Past findings suggest that the lack of staff empowerment would result in the negative evaluation of the customer on the establishment’s service recovery (Sparks, Bradley, & Callan, 1997). The present study reveals that many participants held neutral positions, inconsistent with previous Western studies. A possible explanation may be related to Chinese consumers’ knowledge of their consumer rights. Since China is a latecomer in economic development, consumerism in China is still at a developing stage. The understanding that consumers have rights to be adequately attended to by service providers in China is still not as widespread as in the Western societies (Zhao, 1997).



Secondly, most participants perceive the lack of convenience to complain about unfairness in a procedural sense. The hotel is perceived as providing services not to the convenience of customers but rather for the management’s convenience. Similarly, Western studies reported that customers perceive that service providers who followed rulebooks assiduously are managing for their own convenience rather than their customers. Consequently, customers may take a unfavorable view of such service providers (Goodwin & Ross, 1992; Tax et al., 1998). In addition, when it becomes cumbersome and time consuming to complain, guests may assume that the hotel is trying to escape from its responsibilities, which does not project a good image. The neutral views presented in the survey suggests that the whole issue of complaining may still be a novel idea and not many have experienced this in practice. Hence, participants expressed no opinion or preference. Thirdly, Chinese consumers generally show no preferences when they are compelled to comply with the hotel policy. This finding is surprising and intriguing. This perhaps again suggests that this sort of service recovery experience is still relatively new. Chinese consumer rights is still in its infancy, although consumers in big cities such as Beijing and Shanghai are more cognisant of their rights (Zhao, 1997). Nevertheless, it is still surprising that customers who were sophisticated and rich enough to stay in an established 5 star hotel did not react strongly to such unfriendly hotel policies. Demographic Differences Overall, the study did not show significant differences between male and female, or hotel guests with different education levels. However, young and middle-aged participants (18 to 49) have neither positive nor negative feelings when receiving tangible compensation while participants aged 50 and above felt fairly treated. This finding is consistent with Lim et al.’s (2006) finding that the perceived quality of older people is much higher than their younger counterparts. A plausible explanation may be that compared with older respondents, younger and middle-aged Chinese participants have grown up between 1980s to 2000s where China had begun to experience huge economic transformation. Thus, increased wealth and consumption of goods and services raises their expectations for improvements in service and product standards. Participants in the older age groups had grown up at a time when China was beginning to develop in the 1950s and 1960s. Life then was frugal and consumption of goods and services were limited. Therefore, there was not much expectations on service quality (Ho & Lo, 1987). Moreover, the younger participants may also have received more education and exposure at schools and universities about consumerism and they may have travelled



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more for purposes of business, education and leisure. Thus, the younger participants are probably more sophisticated consumers. Conclusion The contribution of this study can be seen from theoretical and practical perspectives. Theoretically, this is one of the few of studies that applied the ‘fairness theory’ in the context of Chinese hotel service. Compared with previous studies on Western consumers, this study revealed some new and innovative findings. Unlike Western consumers who are more sophisticated and generally value outcomes, the Chinese place specific emphasis on interactional fairness. The Chinese consumer’s lack of knowledge in procedural fairness was also revealed. The study also offered practical contributions by highlighting measures that hotels could adopt to restore customer satisfaction in service recovery. Firstly, when offering compensation, hotels are recommended to package it as a ‘special treatment’, which should at least match the value of service failure encountered. Clearly, there is a cost consideration. The provision of compensation needs to be affordable and the cost should be factored into the hotel’s price structure and profit margin. Secondly, hotels need to pay extra attention to interactional fairness when dealing with Chinese consumers. Treating Chinese hotel guests in a polite, respectful and formal manner in a service recovery process is paramount. This can be implemented if hotel employees are properly selected and trained to effectively deliver quality service recovery. Thirdly, given that procedural fairness is still perceived as important to some Chinese participants, it is recommended that hotels consider adopting hasslefree and speedy policy and procedures to compensate customers for any material loss or inconveniences. Hotels need to establish clear and fair compensation rules which includes a staff empowerment policy and streamlined procedures to enable customers to claim compensation easily. In addition, when dealing with Chinese customers, hotels should inform and explain customer rights in the event of service failure and service recovery. Limitations and Recommendations Common to all research, there are limitations in the present study. Firstly, the usage of the random sampling method did not produce an evenly distributed sample but one that was skewed towards more young and educated females. As such, the findings may be more representative of young and educated females and not of the broader population group of hotel consumers. It is therefore recommended that future studies target a more demographically representative sample to make sure that the findings can reflect better on the broader population.



Secondly, given the time and resources available, this study surveyed guests from one hotel only which limits the generalisation of the findings. The findings however can also be expanded to hotels of similar categories (e.g. five star hotels) in cities of similar sizes as Wuhan. However, any other generalisations of the findings should be made with caution. It is recommended that future studies should target other types of hotels to gain insights into the broader population. Thirdly, it is still unclear as to why some Chinese customers opted for a fairly neutral position in answering some of the questions. Future research should be directed to understanding how Chinese customers’ service perceptions are formed and factors influencing them. Open Access: This article is distributed under the terms of the Creative Commons Attribution License (CC-BY 4.0) which permits any use, distribution, and reproduction in any medium, provided the original author(s) and the source are credited.

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