Introduction and Research Design

CHAPTER I

INTRODUCTION AND RESEARCH DESIGN

1.1 INTRODUCTION

The Star Hotel industry is a newly developing and growing service industry with huge

potential in India for the decades to come. The hotel industry has already been an industry of

high ripe development, and found to be in great demand in quality service to the customer.

It is commonly accepted that service industry is viewed as a gauge for market modernization.

The hospitality industry has been portraying itself as a very significant service sector industry

in the entire world. The Indian hospitality industry has recorded healthy growth, fuelled by

robust inflow of foreign tourists as well as increased tourist movement within the country.

However, with the increasing competition in this industry, the demand for the service quality

should be able to compete with the global industry. The World Travel and Tourism Council

estimated that in 2014 the tourism industry generated INR 6.4 trillion or 6.6 per cent of the

nation's GDP. It supported 39.5 million jobs, 7.7 per cent of its total employment. The sector

is expected to grow at an average annual rate of 7.9 per cent from 2013 to 2023. This gives

India the third rank among the countries with the fastest growing tourism industries over the

next decade. According to provisional statistics by Ministry of Tourism, Govt of India

6.84 million foreign tourists arrived in India in 2015, an increase of 8.8 per cent from

6.58 million in 2014 and an increase of 7.1 per cent from 2014. As per the UNWTO World

Tourism Barometer, December 2015, India’s rank in the World Tourism Receipts during

2014 was 16th rank. The rank of India was seventh among Asia and the Pacific Region in

terms of tourism receipts during 2014.

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 The Star Hotels are an establishment that provides accommodation or rightly

described as one that provides us a home away from home. In the recent years Five Star

Hotels have become very important in the development of a country’s economy as most

of the International tourists and high profile domestic tourists stay in these Hotels, and

the demand for service quality in these Hotels ought to be matched with the International

Standards.

Modern luxurious Hotels provide various facilities to customers like climate

control, internet connectivity, pool, spa etc. The Federation of Star Hotels and Restaurant

Associations of India (FHRAI) is a regulating body which collects information from its

members through a questionnaire and then publishes its findings in Annual Indian Star

Hotels Industry Survey, which serves as an extremely beneficial report. The Indian

Tourism is encouraging and wooing many foreign and domestic players to set up their

operational facilities in the country. It is an accepted fact that tourism is a rapidly

growing industry worldwide that is partially fuelled by the continual globalization of

businesses around all nations. However, this newly perceived easy access across the

countries does not necessarily translate to an easy integration of difference in beliefs and

culture. Culture is highly ignored when it comes to achieving customer satisfaction.

With the ever-evolving population and customers becoming more sophisticated and

demanding, service providers are falling behind in keeping up with the needs of their

customers and retaining their high level of satisfaction they once practised. Thus, it is

time to take a closer look into how culture influences modern customers’ satisfaction

evaluation. Previous literature focused primarily at the customer satisfaction evaluation

process only, however, in order to cope with the rapidly changing tourism trend, it was
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found important to pay attention to the effect of culture on customers’ preferences too.

Limited research has been done in this area of interest, which explains what attributes are

important in the process of every satisfying culture. This understanding is vital to set a

common understanding of customers’ satisfaction based on the cultural backgrounds.

1.2. SERVICE QUALITY

According to Parasuraman, Zeithaml and Leonard (1988), service quality is

defined as the discrepancy between expected service and perceived service. Also, service

quality is identified as an important indicator for customer satisfaction and business

performance measurement (Lewis and Mitchell, 1990). According to Fornell, Johnson,

Anderson, Cha and Bryant (1998), “the customers’ perception of service quality is more

important than the customers’ perception driven by price”. Therefore, satisfaction is

quality-driven rather than value-driven. Parasuraman et al. (1988) studied on dimensions

of service quality (SERVQUAL) and the study provided an extremely valuable insight in

to the measurement of service quality. The authors identified five different dimensions,

namely Tangibility: refers to physical aspects such as facilities, equipment, appearances

of personnel. Reliability: refers to ability to perform the promised service efficiently and

accurately. Responsiveness: refers to willingness to help customers and provide prompt

service. Assurance: refers to knowledge and courtesy of employees and their ability to

convey trust. Empathy: refers to caring and individualized attention provided to customers.

SERVQUAL has provided a framework of service quality but the cultural factors were

not considered. Thus, it is critical to incorporate cultural factors in identifying dimensions of

service quality (Winsted, 1997). Based on SERVQUAL theory, Winsted (1999) studied the

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culture of two different countries – Japan and the U.S. – in order to identify how the

cultural differences influence the customers’ service quality evaluation. In this study the

following dimensions of service quality: authenticity, caring, perceived control, courtesy,

formality and friendliness were identified.

1.3 MARKET TRUTHS ABOUT THE LUXURY HOTEL INDUSTRY

The luxury Star Hotels segment can be divided as follows: luxury major, luxury

exclusive, and upper upscale (The World Luxury Index, 2013). The most recently

updated statistics by the World Luxury Index (2016) revealed that luxury exclusives

embrace the largest market share, accounting for 40.5 per cent of luxury Hotel

worldwide. Upper upscale stays in the second place, with a share of 38.0 per cent, and

luxury majors were ranked the last at 21.4 per cent. Nevertheless, although at the second

place, upper upscale captured 75 per cent of total global interest and yet is stagnated at

1.1 per cent, whereas the luxury major was found as the fastest growing category, at

12.1 per cent. Luxury exclusives have also seen a growth of 5.6 per cent in their total

global interest. Meanwhile, the index states that the top 50 most sought-after Star Hotels

brands can be cross-referred with the aforementioned results. Such upper upscale Star

Hotels brands as Hilton, Westin, and Embassy Suites accounted for the bulk of Hotels in

the list.

1.4 IMPORTANCE OF THE STUDY

The growing significance of managerial proficiency in the Star Hotel industry

made possible innovations in the marketing decisions. Today, the services that are planned,

controlled, automated and audited focus on maintaining and controlling the quality.

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The concept of total quality management is found to gain an important place in the

marketing management of Hotels. The inclusion of modern amenities and facilities in the

Star Hotel service is made possible by the leading Star Hotel chains which have been

opening new doors for innovation and competition. It is against this background that the

Star Hotel companies, of late, need world-class professional excellence.

The Nilgiris district is attracting a lot of foreign tourists as well as domestic

tourists. There is also a big contingent of floating population who come to the city for

work and stay here for a period ranging from three months to one year. It would be

worthwhile to assess the quality of service provided by the existing Hotels to the tourists,

and the scope of this study is to assess and examine the perceptions of the guests of the

Hotel regarding the quality of the hospitality and to demonstrate ways by which these

Hotels can make qualitative improvements in service. The study makes an attempt to

explain the reality and perception and suggest for improvement in service quality of the

Star Hotels in the Nilgiris district.

1.5 STATEMENT OF THE PROBLEM

The Nilgiris district is one of the most sought-after tourist spots in Tamilnadu and

that attracts foreign and domestic tourists. There is an opinion that if the district needs to

attract more tourists then it must offer better boarding and lodging facilities. Considering

these aspects and the hotel accommodation available in the Nilgiris district, an attempt is

made to understand the visitor’s expectations and perception about the quality of

hospitality industry in this district.

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 The following are the research questions that stimulated the researcher to conduct

the present study.

Is there any link between personal factors of respondents of Star Hotels and

service rendered in The Nilgiris District?

1. What are the factors influencing the utilization of services provided by Star Hotels

to the customers?

2. How does the Customer Satisfaction level reflect on the stability of Star Hotels of

the Nilgiris district?

3. What are the problems faced by the customers of Star Hotels in the Nilgiris

District?

4. What is the gap between the Perception and Expectation of Service Quality of the

Star Hotel customers in the Nilgiris District?

1.6 SCOPE OF THE STUDY

The Nilgiris district is attracting a lot of foreign tourists as well as domestic

tourists. There is also a big contingent of floating population who come to the city for

work and stay for a period ranging from three months to one year. It would be

worthwhile to assess the quality of service provided by the existing Hotels to the tourists.

This study is also established to assess and examine the perceptions of the guests at the

Hotel with regard to the quality of hospitality and also to demonstrate ways by which

these Hotels can make qualitative improvements in services. The Study is focused to

learn the kind of services provided by the Star Hotel industry in the Nilgiris district and

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also the marketing mix of services and the customer satisfaction on the Star Hotel

industries in the Nilgiris district. The study focuses on service quality aspects of selected

25 Hotels in the Nilgiris district at all levels, including small, medium and top.

1.7 OBJECTIVES OF THE STUDY

1. To analyze the relationship between demographic profile of the respondents and

services rendered by Star Hotels of the Nilgiris District.

2. To analyze the factors influencing the utilization of Star Hotel services in the Nilgiris

District.

3. To study the level of satisfaction of the customers towards Service Quality of Star

Hotels in the Nilgiris District.

4. To study the problems faced by the customers towards Star Hotel services in the

Nilgiris District.

5. To assess customers’ perceptions and expectations of service quality among Star

Hotels in the Nilgiris District.

1.8 HYPOTHESES OF THE STUDY

In the light of the objectives set, the following Null Hypotheses have been

framed.

1. There is no significant association between demographic profile of the respondents

and opinion about Service rendered by Star Hotels of the Nilgiris district.

2. Service quality dimensions do not positively influence customer satisfaction towards

Star Hotels.
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3. There is no significant association between demographic profile and level of

satisfaction of the customers towards Service Quality of Star Hotels in the Nilgiris District.

4. There is no significant gap between customers’ perceptions and expectations of

service quality provided by Star Hotels.

1.9 RESEARCH METHODOLOGY

The research study was confined to the Nilgiris district. Hence, the overview of

the study may not hold good for the entire universe. A study of a representative sample of

general users can vary and the findings of this study are applicable to the general people.

525 customers were taken as respondents for the study from the Nilgiris district.

The study does not include the entire Star Hotels of the Nilgiris district. Only 3 Star,

4 Star and 5 Star Hotels are taken for the study. This study specifies the opinion on

consumer services in Star Hotels, and the opinion of consumers may not be true at all the

times. The respondents were chosen from all around the district, and thus the sample

selection was done randomly and may not represent the entire population.

1.9.1 Sources of Data

In tune with the objectives of the study the researcher depended on both primary

and secondary data. The primary data have been collected from customers visiting Star

Hotels in the Nilgiris district, with the help of an Interview Schedule. The Interview Schedule

prepared was lucid so that the respondents can understand easily and give their opinion freely

and aptly. Consumers were consulted before finalizing the interview schedule. The study

involves the primary data which were collected from 525 respondents, who have been

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enjoying their services in Star Hotels. The secondary data have been drawn from different

sources like newspapers, magazines, journals, books, websites, pamphlets, etc.

1.9.2 Pre-Test and Pilot Study

Interview schedules were used as a major tool to collect first-hand information from

the sample respondents. The interview schedule was prepared and administered. Field survey

technique was adopted to collect information from Star Hotel customers in the Nilgirs

district. It has been pre-tested by interviewing fifty customers in different Star Hotels. Based

on the responses from the customers and the experience gained from the pilot study the

interview schedule has been modified to administer for the study.

1.9.3 Sample Selected for the Study

The Scope of the study is to examine customer services at different Star Hotels in

the Nilgiris District. A study of this nature required the selection of a suitable place.

The respondents for this study are selected from the Nilgiris District. The study

examines collection of primary data from the Star Hotel customers and secondary data

from various sources. To prepare the list of Star Hotels in the Nilgiris District, the researcher

approached the Tamilnadu Tourism board and obtained the adequate information.

The researcher was interested in studying the Hotel industry as it is the second

highest end of revenue generating industry in Tamilnadu. The customers of star hotels are

the highest revenue generators of the entire nation. Hence, the researcher decided to

select the star category hotels for the study, Systematic random sampling method was

adopted and 525 respondents were confined to gather data and proceed with the research.

The researcher conducted the survey for 6 months from June 2015 to December 2015.

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 TABLE 1.1

DETAILS OF SAMPLE TAKEN FOR THE STUDY

Average no. Total

Star Name of the Rooms Sample
S.No. of checkouts/ Sample
Category Hotel available given/day
day collected

1. 5 Star Taj Savoy

40 20 4 65
Hotel, Ooty

2. 5 Star Fernhill Palace,

19 10 2 30
Ooty

3. 4 Star Hotel Gem

95 45 9 135
Park, Ooty

4. 3 Star Fortune Resort-

Sullivan Court, 67 30 6 95
Ooty

5. 3 Star Hotel Monarch,

63 33 7 105
Ooty

6. 3 Star The Gateway

32 15 3 50
Hotel, Coonoor

7. 3 Star Ponmari
Residency, 36 18 3 45
Ooty

Total 352 171 34 525

Source: Primary data

1.9.4 Sample Design

The primary objective of the study is to examine the Marketing Practices and

Service Quality of Star Hotels with Special Reference to the Nilgiris District. The sample

for the study was collected from five hundred and twenty-five customers of Star Hotels in

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the Nilgiris district. Data was collected particularly at the time of checkout and the pilot

study was conducted. Systematic Random Sampling method was adopted for the sample

collection.

1.9.5 Data Collection Method

Although there is a wide range of techniques for collecting primary data,

interview schedules were chosen because they are the most popular method of data

collection in social and business survey (Chisnall, 1997). Riley et al. (2000) supported

that the questionnaires provide three advantages, which are flexibility, speed and cost and

is the cheapest way to obtain people’s opinion on a subject. Thus, the primary data to be

collected by using a personally administrated interview schedule was chosen as the

anonymity of the respondent will be high, a high response rate is assured, it is less

expensive, and doubts can be clarified on the spot.

Area of Study: The geographical area of this research refers to the Nilgiris district.

Seven popular Star Hotels (3 Star, 4 Star and 5 Star Hotels) of the Nilgiris District have

been considered for the study.

Period of Study: This research is executed for a period of 3 years and the primary data

was collected for 6 months, from June 2015 to December 2015.

Sample Size: The sample units considered for this research are the customers of the Star

Hotels in the Nilgiris district. The total numbers of rooms available in these hotels are

352 and the average number of checkouts per day is 171. Systematic Random Sampling

method was adopted for the sample collection and the sample was collected from 525

customers.

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1.9.6 Statistical Tools Used for Analysis

The primary data had been collected from the customers of the Star Hotels at the time

of checkout and was sorted, classified, edited and tabulated in a proper format and the data

was analyzed by deploying appropriate statistical tools. The statistical test were conducted at

5 per cent and level of significance. The following statistical tools were used: Chi-square test,

Analysis of variance, Factor Analysis, Path Analysis, t- test, Friedman Test (Rank

analysis) and Multiple Regression.

1.9.7 Test of Reliability

Cronbach’s alpha was utilized to ensure consistency of the data surveyed. The

questions pertain to (A) and (B). Reliability analysis has been conducted by collecting

data from hundred sample respondents during the pilot study. The reliability statistics of

Cronbach’s alpha were calculated and the results are detailed in the table below:

TABLE 1. 2

RELIABILITY

Cronbach's
S.No. Factors
Alpha

Overall satisfaction about sightseeing facilities provided by

1. 0.787
Star Hotels in the Nilgiris district

2. Customer satisfaction in hotel service 0.900

3. SERVQUAL model 0.842

The scale is found to be reliable with Cronbach’s alpha values above 0.70.

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1.9.8 Construct Validity

The KMO and Bartlett’s test were used to test the appropriateness of the factor

model. The results of KMO showed a score of 0.771 for overall satisfaction about

sightseeing in the Nilgiris district, 0.854 for customer satisfaction in hotel service quality

and 0.902 for servqual model. All the scores are greater than 0.5 which suggests that the

data is adequate for factor analysis. Bartlett’s test for sphericity is used to test whether the

correlations between all the variables are zero.

TABLE 1. 3

KMO AND BARTLETT’S TEST

Overall satisfaction
KMO and Bartlett’s on sightseeing Customer satisfaction Servqual
Test facility in the in hotel service model
Nilgiris district

KMO 0.771 0.854 0.902

Chi-Square 3124.32 5641.36 6298.64

Bartlett’s
test of P-Value 0.000* 0.000* 0.000*
sphericity
S/NS S S S

S-Significant *P<0.01

The above table shows the significance level (P<0.01) for all the attributes of the

sectors. As the value of test statistics and the associated significance level is so small, it

appears that the correlation matrix is not an identity matrix that there exist correlations

between the variables.

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1.10 CONCEPT AND DEFINITION

Marketing - According to W.J. Stanton, “Marketing is a total system of business

activities designed to plan, price, promote and distribute want-satisfying goods and

services to present and potential customers”

Hotel - Hotel is a place where a traveller can receive food and shelter, provided he can

pay for it. It is also known as the accommodation industry and hospitality industry. Here

hotel represents only boarding and lodging hotels.

Motels - A hotel intended primarily for those travelling by car, usually, with easy access

from rooms to an area for cars. Motel= mo (tor) + (ho) tel.

Boarding - The provision of regular meals when one stays somewhere, in return for

payment or services.

Suite - A single room with a drawing room, bedroom and there may be a dressing room

with colour TV (DVD player), STD facility, refrigerator, fruits and chocolates.

Commercial Hotels - Commercial hotels cater mainly to business clients and usually

offer room service, coffee-shop, dining room, cocktail lounge, laundry and valet service

as well as access to computers and fax services.

Conference Centres - Conference centres are designed to specifically provide meeting

space. They provide all services and equipment necessary to handle conventions.

Economy Hotels - Economy hotels provide a limited service and are known for clean

rooms at low prices, meeting just the basic needs of travellers.

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Suite or All-Suite Hotel - Suite or all-suite Hotels are hotels which offer spacious layout

and design. Business people favour such setting that provides workspace and

entertainment arena along with separate bedroom.

Residential Hotels - Residential Hotels used to be very popular. A typical residential

hotel offers long-term accommodations.

Resort Hotels - Resort Hotels are the planned destination of guests, usually vacationers.

This is because resorts are located at the ocean or in the mountains away from inner cities.

Resort hotels may offer any form of entertainment to keep their guests happy and busy.

Inns - These are smaller in size and ideal for people travelling on a small budget.

Lodging - Lodges are collective structures in which people are housed temporarily.

Check-in - Registration formalities made, on arrival at the hotel.

Check-out - Departure formalities made, before leaving the hotel.

Single Room - A single room should consist of a bed measuring 39” x11” with branded

mattress, pillows and attached bathroom.

Double Room - A double room should consist of a bed of 51” x 81” and attractively decorated.

Double room is suitable for accommodating one or two people. The sizes vary depending on

the establishment, but they are not usually large or expansive like a suite would be.

1.11 LIMITATIONS OF THE STUDY

The research study was confined to the Nilgiris district. Hence, the overview of

the study may not hold good for the entire universe. A study of a representative sample of

general users can vary. The findings of this study are applicable to the general people.
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525 customers were considered as respondents for the study. The study is not made for

the specific Star Hotel that the study covers. It does not include the entire Star Hotels of

the Nilgiris district. Only 3 Star, 4 Star and 5 Star Hotels are taken for the study.

This study specified the opinion of customer services in Star Hotels, and the opinion of

customer may not be fair all the time. The customers are widely scattered around the

district and so the sample selection was done randomly and it may not represent the entire

population.

The limitations that have been a hindrance to the study are as follows.

 This study is restricted to only 3 Star, 4 Star and 5 Star Hotels in the The Nilgiris

District of Tamilnadu.

 Some of the respondents were reluctant to answer a few questions.

 A few Star Hotel managements were also not ready to give all the details of the

visiting tourists and the services provided by them.

1.12 CHAPTER SCHEME

This study is proposed to be analyzed and will be presented in five chapters

Chapter I: Introduction and Design of the Study -This chapter is introductory in

nature and deals with statement of the problem, scope, objectives,

methodology and limitations of the study.

Chapter II: Review of Literature - This chapter reviews elaborately and presents the

previous studies made in the relevant area.

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Chapter III: An Overview of Service Quality and Star Hotels in the Nilgiris

District - This chapter gives an overview of the Star Hotels and the

various services provided by them and also considers the study area.

Chapter IV: Analysis and Interpretation - This chapter presents the analysis and the

interpretations relating to the data collected from customers of Star Hotels

in the Nilgiris district.

Chapter V: Findings, Suggestions and Conclusion - This chapter is the summation

of findings and offers suggestions for improving the services of the Star

Hotels in the Nilgiris district. A sound innovation has been made to sort

out the problems and inconvenience of service sector.

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