The Effects of Service Recovery Satisfaction on Customer Loyalty and Future Behavioral Intentions: An Exploratory Study in the Luxury Hotel Industry

Abstract

This study investigated the quality of the complaint management process employed in five luxury hotels around the United States. Over the past two decades, complaint management research has focused on methods to evaluate service failures and identify and measure service recovery attributes. Although research has contributed to the evolution of supporting literature, there appears to be numerous opportunities for additional contributions. In 2000, Andreessen observed that service recovery research only focused on why, to whom, and how customers responded to dissatisfaction. Moreover, Ruyter and Wetzels (2000) revealed that very little research had examined the relationship between service recovery and service quality variables (i.e. on-going customer satisfaction, loyalty and behavioral intentions). Current research has centered on the relationship between service recovery satisfaction, loyalty and future behavioral intentions (Boshoff, 1997, 1999; Mattila, 2001; Boshoff & Staude, 2003; Matilla & Wirtz, 2004) with research methods primarily focused on hypothetical service scenarios; which measured customer expectations opposed to customer perception. Furthermore, evaluating hypothetical service scenarios has eliminated the role of post-failure and post-recovery emotion and how the two relate to on-going satisfaction, loyalty and future behavioral intentions (FBI). Therefore, the primary focus of this research was 1) to empirically test the performance of a pre-developed service recovery satisfaction measurement in the luxury hotel industry, 2) to explore the relationship between the customer’s degree of pre-failure loyalty with service recovery satisfaction, 3) to explore the relationship between post-failure emotion, post-recovery emotion on on-going satisfaction, loyalty and FBI and 4) to explore the relationship between on-going satisfaction and the customer’s post-recovery loyalty and FBI intentions. A total of 553 or 48% claimed to have experienced a service failure while staying at one of the selected hotel properties. Results of the factor analysis revealed a two factor structure as drivers of service recovery satisfaction. The factors support the concept that customer satisfaction is achieved through a combination of what is done and how well it is done. Results also revealed a unique relationship between pre-failure loyalty and emotion with on-going satisfaction, post-recovery loyalty and the customer’s FBI toward the organization.