The effect of customer satisfaction on the performance of the small an medium-sized hotels

Purpose – To investigate the effect of customer satisfaction dimensions on the SMSHs’ performance. Design – A quantitative, self-administered questionnaire was used to derive information from all respondents. Approach – The researchers used a different approach (which included the operational performance, financial (like the traditional approach) and non-financial indicators) compared to the conventional approach for measuring the hotel performance. Customer loyalty was used as a performance measure for assessing the operations of SMSHs from the hotel guests’ perspectives. Methodology – A double-respondent method and dual-rating system were used for investigating the influence of various customer satisfaction dimensions on the SMSHs’ performance. The two questionnaires were adapted and adopted from the review literature. The questionnaires were distributed to the hotel practitioners and hotel guests in 1-3 star/orchid rated hotels located in four states of Malaysia. The data set comprised of 212 SMSHs and 424 Malaysian hotel guests and the data was analysed using SmartPLS and SPSS. Findings – Customer satisfaction increased with an improvement in five service quality aspects like Core Product, Pricing, Technology, Islamic-Friendly Facilities, and Food and Beverage. Originality – This study has offered an insight into the manner in which the SMSHs allocate resources for improving customer satisfaction. The study also offered many insights into the significance of hotel attributes used by the SMSHs for improving customer satisfaction and SMSHs’ performance at the same time.