Moderating Effect of Customer Satisfaction on the Relationship Between Assurance Dimension and Performance of Star Rated Hotels in North Rift Region, Kenya

Abstract

The performance of firms, particularly in the hospitality sector like hotels, is critical. It encompasses various dimensions including efficiency, effectiveness, profitability and growth. The hotel sector is a major component and highly competitive in the hospitality industry in offering products and services which have become an important success determinant. The main purpose of this study was to assess moderating effect of customer satisfaction on relationship between assurance dimension and performance of star rated hotels in North Rift Region, Kenya. The study was guided by customer satisfaction theory. Explanatory research design was employed. Target population was 1813 respondents comprising of 1377 customers and 436 hotel staff from 9 star rated hotels in North Rift Region. Stratified sampling technique was used to select hotels and simple random sampling technique was employed to select hotel staff and systematic sampling technique was used to collect data from customers using structured questionnaire. Data was analyzed using statistical package of social sciences (SPSS) Version 25. Inferential statistics such as correlation and regression analysis were performed to test for the study hypotheses. Results revealed that assurance dimension was positively associated with performance of star rated hotels (r=0.856, p<0.01). Also, assurance dimension (β = 0.842, p < 0.05) and customer satisfaction (β = 0.532, p < 0.05) both had positive statistically significant effect on performance of star- rated hotels. Further, results showed that customer satisfaction has positive statistically significant moderating effect on the relationship between assurance dimension and performance of star rated hotels (β = 0.017, p < 0.05). The study concluded that assurance, enhance performance of star rated hotels. The study recommended that there is need for more professional and knowledgeable staff to enhance performance of hotels. There is need to have more attentive staff to meet and exceed customer expectation