Available online at www.sciencedirect.com
ScienceDirect Procedia - Social and Behavioral Sciences 144 (2014) 273 – 279
5th Asia Euro Conference 2014
Memorable customer experience: examining the effects of customers experience on memories and loyalty in Malaysian resort hotels Faizan Alia,*, Kashif Hussainb, Neethiahnanthan Ari Ragavanb a
b
International Business School, Universiti Teknologi Malaysia, Kuala Lumpur, 54100, Malaysia School of Hospitality, Tourism and Culinary Arts, Taylor’s University, No.1, Jalan Taylor’s, 47500 Subang Jaya, Selangor, Malaysia
Abstract The objective of this study is to examine the influence of four facets of customer experience on their memories and loyalty. A convenient sampling technique was used to select the sample. A total of 600 questionnaires were distributed at two tourist spots of Malaysia i.e., Langkawi and Penang, out of which 450 were returned (75% response rate). The result from the finding suggests that all four dimensions of customer experience influence their memories and loyalty. Overall, findings of this study validates the customer experience scale in the context of resort hotels and enhances the theoretical progress on the experience concept in tourism and offer important implications for resort hotel marketers. © 2014 2014 Elsevier The Authors. Published by Elsevier Ltd. under the CC BY-NC-ND license © Ltd. This is an open access article Selection and peer-review under responsibility of the Organizing Committee of Asia Euro Conference 2014. (http://creativecommons.org/licenses/by-nc-nd/3.0/). Peer-review under responsibility of the Scientific Committee of 5AEC2014. Keywords: Customers Experience; Memories; Loyalty; Malaysia; Resort Hotels
1. Introduction Like tourism industry, resort hotels are also becoming one of the fastest growing segments of tourism attractions around the world. A report published by Ibisworld (2013) stated that the global resorts industry has rebounded from a recession-induced decline and experienced positive growth in each of the past four years. This growth was also seen in Malaysian hotels and resort industry. Tourism Malaysia (2013) stated that in 2012, a total of 25.03 million tourists visited Malaysia spending 60.6 billion US$ as compared to 24.71 million tourists spending 58.3 billion US$
*
Corresponding author. Tel.: +6-011-187-746-42 E-mail address:
[email protected]
1877-0428 © 2014 Elsevier Ltd. This is an open access article under the CC BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/3.0/). Peer-review under responsibility of the Scientific Committee of 5AEC2014. doi:10.1016/j.sbspro.2014.07.296
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in 2011. In the recent decade, a drastic increase is observed in the number of people traveling to resort hotels situated in the natural exotic locations to escape from their daily routine life and to enjoy and entertain themselves (Ali, Omar & Amin, 2013; Nadiri & Hussain, 2005). In order to cater for the needs of these increasing number of visitors, an increase in the number and types of accommodation services can also be observed. According to Malaysian Department of Statistics, the number of establishments in Malaysia increased from 2362 in 2009 to 3129 in 2010. 15.5% of these 3129 accommodation establishments are resort hotels and the number is increasing more (http://www.statistics.gov.my, 2012). A recent report published by UNWTO (2013) also categorised Malaysia as a favourite resort destination for tourists from around the world. Although UNWTO highlighted the importance of resort hotels in tourism and hospitality, yet it has not gained much attention in research (Ali & Amin, 2013). In this context, Line and Runyan (2012) reviewed 274 articles published in four top hospitality journals published from 2008 to 2010. In their review paper, they state that resort hotels are the least studied comprising only 0.7% of the total industry studied. However, the presence of research targeting this industry in top hospitality journals suggests its relevance to the field (Ali et al., 2013). The rapid development in this tourism sector makes it very competitive and enforces the service providers to ensure a great and memorable experience for the customers (Quadri-Felitti & Fiore, 2013). Amongst the scholars who proposed different approaches to evaluate customers’ experiences, the experience economy concept (Pine & Gilmore, 1999, 2011) has recently gained attention among hospitality and tourism researchers (Mehmetoglu & Engen, 2011). However, empirical testing of the 4Es (i.e. educational, esthetic, entertainment, and escapist experiences) in resort hotels tourism has yet to be undertaken. In fact, the empirical development of the 4Es’ application in various facets of tourism and hospitality industry is needed (Hosany & Witham, 2010; Oh, Fiore & Jeong, 2007). This study aims to assess guests experience at a resort hotel and its effects on their post-consumption evaluations. The present study expands understanding of the experience economy by examining how guests’ memories operate together with multiple dimensions of their experience at resort hotels to develop their loyal behavior. 2. Conceptual Background of the Study 2.1. Experience Economy Experience economy is used as an overarching concept for service providers in leisure and recreation industry whose primary goal is providing high quality experiences (Mehmetoglu & Engen, 2011). Pine and Gilmore (1999) explored the concept of experiences by coining the term, “experience economy”, which is the final phase of economic progression that has developed from commodity, product and service economy. Pine and Gilmore (1999, p. 12) defined experience as “events that engage individuals in a personal way”; whereas Oh et al., (2007, p. 120) define experiences as, “enjoyable, engaging, memorable encounters for those consuming these events”. While discussing experience economy, Pine and Gilmore (1998) identified four realms of customer experiences including entertainment, education, esthetic and escapism. These four dimensions are differentiated across two axes i.e., the degree of customer involvement and the connection of customer with the surroundings (Hosany & Witham, 2010). The first dimension is entertainment which is developed when passive absorption is observed by the customer such as watching a theatre performance (Oh et al., 2007). The second dimensions is esthetic where the customer has a passive participation and immersion in the experience. Examples for esthetic dimensions includes a beautiful arrangement of historical relics in a museum, an attractive servicescape or ambience in a resort hotel or experiencing the breath-taking scenery of Niagara Falls (Mehmetoglu & Engen, 2011). The third dimension is education which refers to an experience where the participant actively participates but is in absorption such as snorkelling, scuba diving or ski-schools. The fourth and the last dimension is escapism which happens when the participant is affecting the actual performances in the real or virtual environment for example, by rafting or playing in a casino (Hosany & Witham, 2010). To summarise, it can be stated that entertainment experience is about feeling, the educational experience learning, the esthetic experience presence, and the escapist experience doing influence customers’ emotions and satisfaction levels (Hosany & Witham, 2010; Mehmetoglu & Engen, 2011).
Faizan Ali et al. / Procedia - Social and Behavioral Sciences 144 (2014) 273 – 279
2.2. Experience, Memories and Loyalty It has been advised by Pine and Gilmore (2011) that customers’ consumption experiences revolving around 4Es result in strong memories and positive behaviours. A limited number of scholars have studied this phenomena and they support the positive impact of 4Es on consumer memories (Gilmore & Pine, 2002; Quadri-Felitti & Fiore, 2013). In this context, Tung and Ritchie (2011) stated that a hedonic and entertaining experience that can enhance knowledge of the guests can end up with positive memories and positive behaviours such as revisits and recommendations to friends and family etc. (Kim, 2010; Quadri-Felitti & Fiore, 2012). Oh et al., (2007) and Hosany and Witham (2010) also observed a significant relationship between the 4Es and positive memories and loyal behaviour of guests in bed and breakfast and cruise ship industry. This supports the following hypothesis: H1 (a): Educational experience influences memories significantly. H1 (b): Entertainment experience influences memories significantly. H1 (c): Esthetic experience influences memories significantly. H1 (d): Escapism experience influences memories significantly. H2 (a): Educational experience influences customer loyalty significantly. H2 (b): Entertainment experience influences customer loyalty significantly. H2 (c): Esthetic experience influences customer loyalty significantly. H2 (d): Escapism experience influences customer loyalty significantly. H3: Memories influence customer loyalty significantly. 3. Research Methodology The target population for this study was limited to those guests who had stayed at resort hotels in Malaysia for at least once. The survey was conducted through face-to-face interaction with the guests at two tourist spots of Malaysia i.e., Langkawi and Penang. A self-administered survey was used to collect the using non-probability convenience sampling technique. A total of 600 questionnaires were distributed and after deletion of incomplete responses, 450 questionnaires were deemed complete to use further showing a response rate of 75% from the original target sample population. Out of these 450 respondents, 58% were male whereas 42% were female. About 3% were between 16-20 years of age, 60% were between 21 and 30 years, 17% were between the ages of 31-40 years and 20% were older than 41 years. About 53% of the total respondents had bachelor degree whereas 37% had a master degree (See Table 1). The questionnaire was based on 23-items in total. Dimensions of experience were measured using 4-items each adapted from Hosany and Witham (2010) Memories were operationalized using 3items adapted from Oh et al., (2007) whereas customer loyalty was operationalized also using the 4-items proposed by Quadri-Felitti and Fiore (2013). Table 1. Percentages of Demographic Profile of the Respondents (n=450) Variables Values Gender Male Female Age Less than 20 Years 21 –30 Years 31 - 40 Years Above 40 Years Education Level Bachelor Degree Master Degree Others
Percentage 58% 42% 3% 60% 17% 20% 53% 39% 8%
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4. Findings and Analysis For this study, hypotheses were tested based on structural equation modelling using a Partial Least Squares (PLS) method. In order to conduct the analysis, Smart PLS M3 Version 2.0 (Ringle, Wende & Will, 2005) software was used. Bootstrapping technique was applied to determine the significance levels of the loadings, weights, and path coefficients. Following the procedure suggested by Anderson and Gerbing (1988), validity and goodness of fit of measurement model was estimated before testing the structural relationships outlined in the structural model. Table 2. Validity and Reliability for Constructs Measurement Items Education Experience
Loadings
CRa
AVE b
Ed1 The experience has made me more knowledgeable Ed2 I learned a lot during my experience Ed3 It stimulated my curiosity to learn new things Ed4 It was a real learning experience Entertainment Experience
0.880 0.880 0.871 0.836
0.924
0.752
En1 En2 En3
0.781 0.858 0.857 0.812
0.898
0.688
I felt a real sense of harmony Just being here was very pleasant The setting was very attractive Es3 Es4 The setting really showed attention to design detail Escapism Experience
0.842 0.879 0.871 0.834
0.917
0.734
Ec1
0.671 0.673 0.791 0.810
0.827
0.547
E1 I have wonderful memories of my visit to this resort E2 I won’t forget my experience visiting this resort E3 I will remember many positive things about this resort Customer Loyalty
0.866 0.849 0.863
0.894
0.739
CL1
I will recommend this resort to others
0.736
0.846
0.578
CL2
I will encourage others to visit this resort
0.777
CL3
I am willing to visit this resort again
0.769
Activities at the resort were amusing to watch and perform Activities at the resort were captivating to watch and perform Activities at the resort were entertaining to watch and perform Activities at the resort were fun to watch and perform
En4 Esthetics Experience Es1 Es2
I felt I played a different character here
I felt like I was living in a different time or place Ec2 Ec3 The experience here let me imagine being someone else Ec4 I totally forgot about my daily routine Memories
CL4 I will definitely come back to this resort 0.758 a Composite reliability = (square of the summation of the factor loadings) / [(square of the summation of the factor loadings) + (square of the summation of the error variances)] b
AVE = (summation of squared factor loadings)/(summation of squared factor loadings) (summation of error variances)
For measurement model, all the standardized factor loading of each construct were high (above .671) that ensured the convergent validity. Composite reliability for six latent constructs was between .827 and .924 that ensured the internal consistency. The average variance extracted (AVE) from all constructs exceeded the cut-off criterion of .5 (See Table 2), and were greater than the squared correlations between any pair of constructs (See Table 3). Since all these figures and measurement ensure reliability and validity of the measurement items, therefore, this research tested the same measurement model for further testing of the structural model and hypotheses.
Faizan Ali et al. / Procedia - Social and Behavioral Sciences 144 (2014) 273 – 279 Table 3. Discriminant Validity Customer Satisfaction Customer Satisfaction Education Emotions Entertainment Escapism Esthetics
0.761 0.599 0.627 0.610 0.587 0.502
Education
Emotions
Entertainment
Escapism
Esthetics
0.867 0.580 0.773 0.617 0.435
0.795 0.630 0.587 0.510
0.830 0.605 0.456
0.894 0.508
0.857
As PLS does not generate overall goodness of fit indices, a diagnostic tool is presented by Tenenhaus, Vinzi, Chatelin and Lauro (2005) to assess the model fit and is known as the goodness of fit (GoF) index. Hoffmann and Brinbrich (2012) report the following cut-off values for assessing the results of the GoF analysis: GoFsmall = 0.1; GoFmedium = 0.25; GoFlarge = 0.36. For the model used in this study, a GoF value of 0.452 is calculated which indicates a very good model fit. The result of the structural model showed that all the four facets of customer service experience (4Es) had positive and significant impact on consumer memories and loyalty intentions. 51.5% of consumers’ memories can be predicted by 4Es Moreover, it was also observed that memories developed by 4Es may also influence customer loyalty and the 4Es and memories together predict 55.4% of customer loyalty. Hence, all the nine hypotheses were accepted. 5. Conclusions and Implications Resort hotels are shaping to be a rapidly growing and liked facet of Malaysian hospitality and tourism industry, where guests travel to these establishments situated in the natural exotic locations to escape from their daily routine life and to enjoy a memorable experience. Recent scholars have proposed various approaches towards the assessment of tourist experiences and it can be transformed into a memorable experience. One of these approaches is the four-faceted conceptualization of experience proposed by Pine and Gilmore (1999). However, empirical testing of the 4Es (i.e. educational, esthetic, entertainment, and escapist experiences) in resort hotels tourism has yet to be undertaken. Moreover, despite of the importance of resort hotels indicated by UNWTO, they are somewhat ignored in the hospitality and tourism literature. Therefore, this study aimed to assess how guests’ memories operate together with multiple dimensions of their experience at resort hotels to develop their loyalty. Structural equation modelling was used to test the hypotheses and the findings revealed that all the four facets of customer service experience (4Es) had positive and significant impact on consumer memories and loyalty intentions. Moreover, it was also observed that memories developed by 4Es may also influence customer loyalty. These results are consistent with the study conducted by Hosany and Witham (2010) and Oh et al., (2007) who observed a significant influence of dimensions of customer experience over their memories and behavior. The results are also supported by QuadriFelitti and Fiore (2013) who tested the effect of 4Es on consumer memories and behavior of wine tourists. The study implications are discussed below and future research areas are highlighted. Results from this study indicate that customer experiences can be classified in four dimensions including entertainment, education, esthetic and escapism (Pine & Gilmore, 1998). These four dimensions can develop memories of consumers which can ultimately influence their loyalty behaviours. The first dimension is entertainment and its importance has been highlighted by Hosany and Witham (2010) in cruiser experiences. Services providers must focus on the entertainment aspect as it is an integral motivation of tourists visiting resort hotels. For instance, Gee (2000, p.22) stated that, “The core principle of the resort concept is the creation of an environment that will promote and enhance a feeling of well-being, enjoyment and satisfaction”. Experience of the guests can be much more memorable if the service delivery and performance integrates the sense of escapism. In this context, Ali et al., (2013) stated that guests travel to resort hotels situated in the natural exotic locations to escape from their daily routine life. Similarly, Yang and Chan (2010, p. 58) stated, “to escape from normal life” as the main motivating factor to visit a resort hotel. Similarly, Oh et al., (2007) postulated esthetics as the main determinant of experiential outcomes.
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Fig 1. The Result of Structural Equation Model
A service setting’s physical environment is comprised of a variety of different elements including the esthetics and ambient factors such as color, air, scent, illumination, facilities, layout (Han & Ryu, 2009). These factors are all interrelated and they work together to influence consumer memories and behavior (Quadri-Felitti & Fiore, 2013). Richardson (2000) identified explained various characteristics of a resort hotel including sufficient indoor amenities encompassing pleasant physical environment and convenient entertainment facilities where esthetics remain an integral part (Mill, 2008). With regards to the educational dimension, while various resort hotels offers some opportunities for the guests to increase their knowledge and skills (e.g., massage techniques, cooking lessons, swimming and snorkelling etc), such experiences are of importance in developing memories and positive behaviour (Oh et al., 2007; Quadri-Felitti & Fiore, 2013). Since all these four dimensions of customer experience influence guests’ memories and behaviors, marketers should understand their differences while implementing segmentation and positioning strategies based on experiences of customers (Hosany & Witham, 2010). The scales used in this study can also help the management of resort hotels to develop suitable promotional and marketing campaigns. For instance, resort hotels should emphasize the educational, esthetic, escapist, and entertaining values of the stay at their resort. The pre-consumption performance (advertisements) and during-consumption service performance of the resort hotels must portray these facets of experiences in order to make it memorable for the guests as these are the string predictors of customer loyalty. 6. Limitations and Future Research Suggestions Although the results of the current study have shed light on several important issues, some limitations need to be considered in future research. Since convenience sampling was used in this study, results cannot be generalized. For instance the findings should be interpreted with caution when applied to different types of hotels or different industries. Moreover, this study was only conducted in resort hotels located in two Malaysian popular tourist spots (Langkawi & Penang). Conducting a similar study on resort hotels guests’ at other locations in Malaysia may be conducted. Future research should also examine the proposed relationships in other types of hotels and industries. References Ali, F., Omar, R. and Amin, M. (2013). An examination of the relationships between physical environment, perceived value, image & behavioural Intentions: A SEM approach towards Malaysian resort hotels. Journal of Hotel and Tourism Management, 27(2), 9 -26. Ali, F. & Amin, M. (2013). The influence of physical environment on emotions, customer satisfaction and behavioral intentions in Chinese resort hotel industry”. Paper presented at the KMITL-AGBA Conference Bangkok, 15-17/June, Thailand, available at: https://www.academia.edu/5452598/The_Influence_of_Physical_Environment_on_Emotions_Customer_Satisfaction_and_Behavioural_Inten tions_in_Chinese_Resort_Hotel_Industry (accessed 11 February 2013).
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