Service Quality: A Study of the Luxury Hotels in Malaysia

Pei Mey Lau, Dr. Abdolali Khatibi Akbar, and David Yong Gun Fie
Multimedia University, Cyberjaya, Malaysia

ABSTRACT

Given the increasing competitive phenomenon of the hospitality industry, this research assessed the
expectations and perceptions of service quality in Malaysia’s four- and five-stars hotels by applying a modified
version of the SERVQUAL model. It also examined the relationship between overall satisfaction levels and the five
service quality dimensions, namely reliability, responsiveness, assurance, empathy, and tangibility. The findings
indicated, as a whole that the hotel customers’ perceptions of service quality provided by the hotel industry were
lower than their expectations, and the gaps between customers’ expectations and perceptions were significant.

INTRODUCTION

During 1997 until 2002, the Malaysian economy experienced slower growth as compared to previous years.
This was due to global events such as the September 11 attacks, global economies slowdown, the Bali bombings, the
Severe Acute Respiratory Syndrome (SARS), and bird flu. All this had caused a significant impact on the travel and
tourism industry in Malaysia.

The numbers of inbound and outbound tourists have been decreasing due to an avoidance of travel.
Tourism arrivals to Malaysia dropped from 13.29 million in 2002 to 10.58 million in 2003 (fell by 20.4%). However
this decrease was not as serious as those that were experienced by some of Malaysia’s neighboring countries like
Singapore and Indonesia. This was perhaps due to the aggressive promotional activities by the Malaysia Tourism
Promotion Board (Tourism Malaysia). Tourism Malaysia’s aggressive promotions and the economic relief package
extended by the government to the players in the travel industry enabled the industry to recover quite well. The
promotional efforts of Tourism Malaysia as well as Malaysia’s increasingly strong reputation as a center for
international events, for example the OIC Conference, the F1 Grand Prix, etc., boosted the slow economy and ensure
that the balance of tourism payments still remain positive. Furthermore, due to Bank Negara Malaysia’s policy on
keeping the US$ peg for the past few years, the relatively weaker Malaysian currency has become a positive factor
for inbound tourism, while making outbound tourism more expensive. At the same time, domestic tourism has been
steadily increasing over the period, rising 11% in 2002 to 22.2 million trips. This is because Tourism Malaysia by
carrying out programmes such as Cuti-cuti Malaysia that are aimed at encouraging domestic travel has undoubtedly
contributed to the increase (Malaysia Tourism Promotion Board, 2004).

However, the hospitality industry that was still experiencing severe oversupply and occupancy rates have
been severely affected by the SARS and bird flu crisis. Industry sales grew in 2002 but experienced a drastic
decrease in 2003. The industry was highly competitive especially with the opening of more hotels. The number of
hotels supply has increased 5.7% and the number of hotel rooms supply has increased 4.4% from year 2001 to year
2002 (Malaysia Tourism Promotion Board, 2004). However, the year 2004 began on an encouraging and positive
note. In January, Malaysia saw the arrivals of 1.4 million tourists, which was the highest monthly arrival in the
history of the industry (The Star, 20 March 2004). Furthermore, hotels in Kuala Lumpur recorded an average
occupancy of 61% for January 2004 (The Star, 25 March 2004) and tourist arrivals to Malaysia are expected to
increase by 6.9% to 14.3 million by 2005 (The Star, 20 March 2004).

The main concern for the Malaysian Association of Hotels (MAH) for year 2004 was the issue of
recognition of hotel workers as professionals. The Malaysian Association of Hotels Training and Education Centre
is now working towards promoting regular training and enhancing training programmes for hotel workers so that
they would be recognized as professionals and increase the service quality (The Star, 25 March 2004).

Hotel Classification
Historically, hotel classification systems were formed to ensure safe and reliable lodging and food for
travelers at a time when very few such trustworthy establishments existed. In the past fifty years, hospitality has
reached the status of a mature industry with the unprecedented growth of international tourism. As a result, the focus
of hotel classification systems has shifted from consumer protection to consumer information. Presently,

The Journal of American Academy of Business, Cambridge * Vol. 7 * Num. 2 * September 2005 46
standardization and competitive marketing of hotel services to foreign customers and tourist professionals have
appeared as driving forces for instituting a local or national hotel classification system (WTO and IH&RA, 2004).
According to a research study by World Tourism Organization (WTO) and International Hotel & Restaurant
Association (IH&RA) (2004), the most widely used graphical symbol in hotel classification is the star. The
classification systems are mostly set up by the countries’ governments, and the Tourism Board and establishments
are only consulted. Subsequently, they are adopted into the Tourism Law, the State Constitution or regional
constitutions.

In Malaysia, the official hotel classification system is enforced by Ministry of Culture, Arts and Tourism
Malaysia and it is a mandatory system. It is necessary for a hotel to be classified before it can obtain license/
permission/ registration to operate. The classification authority in Malaysia is a panel set up under the Ministry of
Culture, Arts and Tourism Malaysia, which consists of ministry officials and members from non-governmental
organizations, such as hotel associations, tour operator associations and other relevant government agencies (WTO
and IH&RA, 2004). There are two hotel classification schemes, namely the Star Rating (from one- to five-star), and
the Orchid Rating (from one- to three-orchid). The Ministry of Culture, Arts and Tourism Malaysia introduced the
Orchid Classification Scheme in order to accommodate those hotels such as beds and breakfast, inns, boarding
houses, rest houses and lodging houses, which do not qualify for any Star Rating (Ministry of Culture, Arts and
Tourism Malaysia, no date).

In this research, focus was given to the luxury hotels. Only those hotels rated four-star (4S) or five-star (5S)
were included in the research study.

Influence of Service Quality in Hospitality

King (1995) mentioned that hospitality in the commercial setting is a specific kind of relationship between
individuals, which in this context is the hospitality service provider and customer. In this relationship, the host
understands the needs and wants of the customer, which give pleasure to the customer and enhance his or her well-
being and comfort. The host will deliver with generous and flawless face-to-face interactions. The objective is to
enhance guest satisfaction and develop repeat business.

Kandampully (2000) revealed that service quality is crucial to the success of any service organization. As
the customers participate in the production and consumption of services, they interact closely with various aspects of
the organization. This inside knowledge gives them the opportunity to assess critically the services provided, in
particular the quality of service. Customers will assess service quality by comparing the service they get with the
service they desire. Hence, service quality plays a critical role in adding value to the overall service experience.
Since superior quality is one of the crucial factors within the control of the hospitality service provider, Lee, Barker,
& Kandampully (2003) suggested that enhancing the quality of service at all levels of service delivery has therefore
become mandatory for organization survival.
The purpose of this study is therefore to assess the expectations and the perceptions of service quality
dimensions in Malaysia’s luxury hotels from the hotel customers’ perspective by applying a modified version of the
SERVQUAL model (Parasuraman, Zeithaml, and Berry, 1988). This study has the following objectives: -
ƒ to determine the service-quality attributes that constitute fundamental service-quality dimensions in evaluating hotel
operators;
ƒ to examine and to compare relative importance attached by customers in terms of their expectations and perceptions by
type of hotels (four-star or five-star hotels); and
ƒ to identify the role of service quality towards customer satisfaction in the hospitality industry.

LITERATURE REVIEW

Concept of Service
For the last two decades, economies have experienced an extensive social and economic transformation
globally. One of the most significant of these changes is the increased rate of spending on services. Service
industries are leading the economy. Services lie at the hub of the economic activity of society and are linked closely
with many other sectors of the economy (Kandampully, 2000). Services are not limited to the service industries, for
example, a manufacturer like IBM can be highly involved in the service business. Services are deeds, processes and
performance. The broad definition of services suggested that intangibility as a key factor of deciding whether an
offering is a service (Zeithaml and Bitner, 2003).

The Journal of American Academy of Business, Cambridge * Vol. 7 * Num. 2 * September 2005 47
 Services are generally described in terms of four unique characteristics, namely intangibility, inseparability,
heterogeneity, and perishability. Intangibility can be defined as something that cannot be touched, seen, tasted,
heard, or felt in the same manner in which goods can be sensed (Groth and Dye, 2000). It has been said that
intangibility is the single most important difference between products and services (Santos, 2002). Due to the
intangibility characteristic of services, the firm may find it hard to understand how consumers perceive their service
and evaluate service quality (Parasuraman, Zeithaml, and Berry, 1985).

Services possess the inseparability characteristic since the service provider usually creates or performs the
service at the same time as the full or partial consumption of the service take place. The conversion is highly visible
and it is not possible for the service provider to hide any mistake or quality shortfall. Furthermore, the involvement
of the customer in the delivery process introduces an additional factor, which causes the service providers to have
little or no direct control over the service experience (Ghobadian, Speller, and Jones, 1994). With this condition, the
consumer’s input becomes vital to the quality of service performance (Parasuraman, Zeithaml, and Berry, 1985).
There are high degrees of variability in the performance of services. Services are difficult to standardize, in contrast
to manufactured goods. The quality of a service can vary from producer to producer, from customer to customer,
and from day to day (O’Brien and Deans, 1996). Service providers have to rely heavily on the ability of their staff to
understand the requirements of the customer and react in an appropriate manner (Ghobadian, Speller, and Jones,
1994).

Perishability is a characteristic of services that prevents them from being stored, warehoused, or
inventoried (Lamb, Hair, and McDaneil, 2000). Unlike manufactured goods, it is impossible to have a final check on
quality. It needs to be done right at the first time (Ghobadian, Speller, and Jones, 1994).

Measuring Service Quality Gaps

Lewis (1987) suggested that what can be measured are the differences between the abstractions. So, it is the
logic that if we can measure the difference between expectations and perceptions, which is defined as perceived
quality, therefore we can determine the level of satisfaction. This concept is quite similar with Parasuraman’s (1985)
service quality model, which applied the expectancy-disconfirmation theory. Parasuraman (1985) defined service
quality in ten major dimensions that consumers use in forming expectations about and perceptions of services. In a
later research, Parasuraman (1988) revised and defined the service quality in five dimensions – reliability,
responsiveness, assurance, empathy, and tangibles. The model suggested service quality as the gap between
customer’s expectations (E) and their perception of the service provider’s performance (P). Hence, the service
quality score (Q) can be measured by subtracting customer’s perception score from customer’s expectations score: -

Q=P-E

Lamb, Hair and McDaniel (2000), and Zeithaml and Bitner (2003) have also discussed that there are five
key discrepancies that can influence customer evaluations of service quality: -

ƒ Gap 1 is the gap between customer’s expectations and management’s perceptions of those expectations.
ƒ Gap 2 is the gap between management’s perception of what the customer wants and specifications of service quality.
ƒ Gap 3 is the gap between service quality specifications and delivery of the service.
ƒ Gap 4 is the gap between service delivery and what the organization promises to the customer through external communication.
ƒ Gap 5 is the gap between customers’ service expectations and their perceptions of service performance.
ƒ Therefore, it shows that customers’ expectations towards a specific hotel stay will influence their perceptions, and this will have a
great effect on their satisfaction towards the service they get.

Zeithaml and Bitner (2003) stated that in order to manage service quality, it is important to manage the
gaps between expectations and perceptions on the part of management, employers and customers. The most
important gap (Gap 5) is that between customer’s expectation of service and their perception of the service actually
delivered. Hence by referring to the gap model, it states that a service marketer must close the customer gap (Gap 5).
In order to do so, the service provider must close the four other gaps (Gap 1, 2 3, and 4) within the organization that
inhibit delivery of quality service. Serious action must be taken because how the customers, in these case hotel
customers, perceive the level of service performance that meets their expectations will reflect on the quality of
service provided by the organization.

The Journal of American Academy of Business, Cambridge * Vol. 7 * Num. 2 * September 2005 48
 Expected service
Customer Customer Gap
(Gap 5) Perceived service

Service delivery External

(Gap 4) communications to
(Gap 3) customers
Customer-driven
service designs and
Company standards
(Gap 1) (Gap 2)
Company perceptions of
consumer expectations

Figure 1: Gap Model of Service Quality

(Zeithaml and Bitner, 2003)

According to Lewis (1987), the gaps measurement may be a significant marketing tool. It also has the
advantage of being less abstract, even though not completely. It also considerably eases the task of measuring
service quality.

METHOD

The relevant literature and survey developed by past studies provided the basis for the development of the
close-ended and self-administered questionnaire for this study. After review of the literature, 25 hotel attributes,
instead of the original 22-items SERVQUAL questionnaire (Parasuraman, Zeithaml, and Berry, 1988), were
developed in this modified version of the SERVQUAL questionnaire to identify and analyze the gaps between
expectations and perceptions of hotel customers. A seven-point Likert scale was used in this questionnaire. The
questionnaire comprised four sections. The first section was to measure the respondents’ expectations regarding
service quality in the hotel industry in Malaysia by using the five SERVQUAL service quality dimensions. The
second section was to examine the respondents’ perceptions of service quality actually provided by the hotel they
stayed at in Malaysia, while the third section was to examine the respondents’ overall level of satisfaction with their
hotel stay. The last section was to collect the demographic and traveling characteristics of the respondents.

In this study, the target sample included those travelers who stayed at the five selected luxury hotels in the
Klang Valley between June 2004 and August 2004. For this study, a “hotel customer” is any individual who is a
temporary visitor, staying overnight at the hotel, and involving an exchange of money for services rendered.

A systematic sampling approach, which is a type of random sampling, was used in this research (Zikmund,
2000). The survey procedure was carried out in such a way that every third hotel customers passing through the
check in counter of the hotel was surveyed. One screening question was asked to identify if they have already stayed
at least one night in the hotel. The researcher only proceeded to issue the questionnaire to those who answered in the
affirmative to this question. A small souvenir was given to the respondents who successfully completed the
questionnaire. The token was to encourage the respondents to complete the questionnaire and reduce the rate of
rejected questionnaires due to incomplete information.

With a predefined daily sample of 20 hotel customers, the sample size for this study was 300 respondents.
However only 286 (41.26% from four-star hotels and 58.74% from five-star hotels) were found to be usable, and
were then keyed-in and analyzed using SPSS 11.5.

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 RESULTS AND ANALYSIS
Data Reliability
Dimension of Service Quality Cronbach alpha Dimension of Service Quality Cronbach alpha
(Expectations) (Perceptions)
Reliability .9180 Reliability .9037
Responsiveness .9198 Responsiveness .9232
Assurance .8702 Assurance .8409
Empathy .8699 Empathy .9027
Tangibility .9452 Tangibility .9194
Table 1: Cronbach Alpha Reliability Test Results

Cronbach alpha reliability test was run on the data collected to determine the reliability of data collected.
Results showed that all the values were above 0.80. Nunnally (1978) suggested that the minimum of 0.70 would be
an acceptable level.

Demographic Profile
The sample of respondents contained more males (64 percent) than females (36 percent). The majority (51
percent) of the respondents had an undergraduate education. About 71 percent of the respondents were
professionals, managers and traders/proprietors. The majority (36.7 percent) of respondents were from South East
Asia, other Asia countries (23.6 percent), Europe (14 percent), while the rest of the respondents were from other
countries. About 32 percent of them stayed in the particular hotel for one night, 25.9 percent of the respondents
stayed for two nights, and the rest of the respondents stayed for more than two nights. The majority of the
respondents were traveling for business (26.6 percent) and leisure (26.6 percent).

Comparison of Expectations and Perceptions Among Four- and Five-star Hotels

After an overall view of the respondents as a whole, the comparison of service quality dimensions among
the four- (n = 118) and five-star (n = 168) hotels is discussed in this section, which partially fulfill the second
objective of this study. Just to recapitulate that in this research, 4S and four-star hotels are used interchangeably, and
5S means five-star hotels, and vice versa.

Table 2 shows the descriptive statistics on the dimension of quality for 4S and 5S. It was observed that 5S
constantly scored higher than 4S on all dimensions of expectations and perceptions. On the other hand, the standard
deviations of 4S were constantly higher than 5S for all dimensions of both expectations and perceptions. This
indicates that the 4S sample was more diverse in their views in all dimensions of service quality.

Service Quality E S Min Max P S Min Max Gap

Dimensions Mean Mean (P – E)
Reliability 4S 5.43 .88 3.40 7.00 4.62 .96 1.80 7.00 -.81
5S 6.08 .66 4.60 7.00 5.93 .70 3.20 7.00 -.15
Responsiveness 4S 5.56 .87 3.00 7.00 4.72 1.02 1.67 7.00 -.84
5S 6.18 .68 4.67 7.00 6.10 .77 2.67 7.00 -.08
Assurance 4S 5.59 .96 3.00 7.00 4.68 .98 1.67 7.00 -.91
5S 6.21 .61 4.00 7.00 5.93 .81 3.33 7.00 -.28
Empathy 4S 5.49 .91 3.00 7.00 4.49 1.12 1.67 7.00 -1.00
5S 6.11 .63 4.67 7.00 5.92 .80 3.00 7.00 -.19
Tangibility 4S 5.46 .80 3.45 7.00 4.31 0.85 2.45 6.36 -1.15
5S 6.18 .56 4.55 7.00 5.62 .76 3.45 7.00 -.56
Overall 4S 5.49 .80 3.56 7.00 4.55 .85 2.46 7.00 -.94
5S 6.15 .52 4.83 7.00 5.89 .61 4.07 6.85 -.26
Note: a negative gap indicates that respondents perceived that the service performance did not meet their expectations

Table 2: Descriptive Statistics on the Service Quality Dimensions for the Four-star Hotels (N=118) and Five-star Hotels (N=168)

When comparing the service quality gap (P –E), the gaps of 4S were also constantly higher then 5S for all
dimensions. Both 4S and 5S have the largest gap in the tangibility dimension, which was –1.15 and -.56
respectively. For 5S, the smallest gap was in the responsiveness dimensions (-.08), while the smallest gap for 4S was
in the reliability dimension (-.81). Besides that, the difference between the overall service quality gap for both 4S
and 5S was quite large, which was 0.68. This might indicate that 5S performed much better then the 4S.

The Journal of American Academy of Business, Cambridge * Vol. 7 * Num. 2 * September 2005 50
Reliability
Attributes E S P S Gap t-value *Sig.
Mean Mean (P – E)
Provision of services as promised 4S 5.33 1.06 4.59 1.11 -.74 6.17 .000
5S 6.03 .82 5.86 1.00 -.17 1.93 .055
Dependability in handling 4S 5.52 0.88 4.66 1.11 -.86 6.64 .000
customers’ service problem 5S 6.11 .75 5.97 .86 -.14 1.66 .099
Perform service right at the first time 4S 5.45 0.98 4.68 1.11 -.77 6.21 .000
5S 6.06 .87 5.85 .93 -.21 2.42 .016
Maintaining error-free records 4S 5.40 1.04 4.53 1.26 -.87 5.95 .000
5S .05 .84 .98 .90 -.07 .81 .418
Keep customer informed about when 4S .44 .00 .64 .24 -.80 5.71 .000
the service will be performed 5S .17 .74 .00 95 -.17 1.91 .058
Note: a negative gap indicates that respondents perceived that the service performance did not meet their expectations; *t-test two-tail probability
< 0.05
Table 3: Items Measuring Reliability Dimension for the Four-star Hotels (N=118) and Five-star Hotels (N=168)

From the aspect of the reliability dimension as shown in Table 3, it was observed that 5S constantly scored
higher than 4S on all ratings of expectations and perceptions. For the 4S, respondents assign the highest expectations
on the item of “Dependability in handling customers’ service problem” (mean 5.52), while the respondents assign
the lowest expectations on “Provision of services as promised” (mean 5.33), which was similar with the results of
the respondents as a whole (N = 286). Respondents of the 5S also assign the highest expectations on the item of
“Keep customer informed about when the service will be performed service problem” (mean 6.17), and the lowest
expectations on the item of “Provision of services as promised” (mean 6.03).From the perceived performance point
of view, 4S received the highest rating on the item of “Perform service right at the first time” (mean 4.68), and
received the lowest rating on “Maintaining error-free records” (mean 4.53). However the 5S received the highest
rating on the item of “Keep customer informed about when the service will be performed” (mean 6.00); and
received the lowest rating on “Perform service right at the first time” (mean 5.98), which was the reversed of the
results of the 4S.From the aspect of the service quality gap, the results showed a very clear difference between the
4S and the 5S. For 4S, all the items in the reliability dimensions had significant negative gaps (p = .000; < .05),
which means the 4S did not meet the customers’ expectations in all aspects of reliability dimension. However, for
the 5S, only item “Perform service right at the first time” showed a significant negative gap (gap = -.21; p = .016; <
.05).

Responsiveness
Attributes E S P S Gap t-value *Sig.
Mean Mean (P – E)
Prompt reply to customers 4S 5.51 .98 4.69 1.19 -.82 6.21 .000
5S 6.14 .78 6.01 .88 -.13 1.15 .135
Readiness to respond to 4S 5.58 .92 4.69 1.16 -.89 6.59 .000
customer’s requests 5S 6.15 .73 6.06 .89 -.09 1.19 .237
Willingness to help 4S 5.59 .93 4.78 1.07 -1.11 7.01 .000
customers 5S 6.26 .73 6.23 .83 -.03 .29 .770
Note: a negative gap indicates that respondents perceived that the service performance did not meet their expectations; *t-test two-tail probability
< 0.05
Table 4: Items Measuring Responsiveness Dimension for the Four-star Hotels (N=118) and Five-star Hotels (N=168)

Table 4 shows that from the aspect of the responsiveness dimension, the 5S again constantly scored higher
than the 4S in all ratings of expectations and perceptions. It could be seen in Table 4 that the respondents of the 5S
assign very high expectations to all the items in the responsiveness dimension (all mean scores were above 6 point),
ranging from “Prompt reply to customers” (mean 6.14) to “Willingness to help customers” (mean 6.26). For the 4S,
respondents also assign the highest expectations on “Willingness to help customers” (mean 5.59). From the
perceived performance aspect, both the 4S and the 5S obtained the highest rating on the item of “Willingness to help
customers” (means 4.78 and 6.23 respectively), and the lowest rating on “Prompt reply to customers” (means 4.69
and 6.01 respectively). For the responsiveness dimension, both the 4S and the 5S have negative gaps for all the four
items. However, the negative service quality gaps of the 4S were significantly large (p = 0.000; <. 05), while the
negative gaps of the 5S were not significant (p > 0.05).

The Journal of American Academy of Business, Cambridge * Vol. 7 * Num. 2 * September 2005 51
Assurance
Attributes E S P S Gap t-value *Sig.
Mean Mean (P – E)
Courtesy and friendliness of 4S 5.64 1.11 4.84 1.15 -.80 5.91 .000
staff 5S 6.33 .71 6.32 .71 -.01 .26 .797
Knowledgeable to answer 4S 5.52 1.02 4.59 1.10 -.93 6.96 .000
customers’ request 5S 6.11 .81 5.68 1.23 -.43 4.11 .000
Provision of safe environment 4S 5.59 .99 4.61 1.15 -.98 7.31 .000
and equipment 5S 6.17 .75 5.80 1.06 -.37 4.04 .000
Note: a negative gap indicates that respondents perceived that the service performance did not meet their expectations; *t-test two-tail probability
< 0.05
Table 5: Items Measuring Assurance Dimension for the Four-star Hotels (N=118) and Five-star Hotels (N=168)

From Table 5, it was noted that the 5S also constantly scored higher than the 4S on all ratings of
expectations and perceptions. Respondents from both 4S and 5S rated highest expectations on the same items, which
was “Courtesy and friendliness of staff” (means 5.64 and 6.33 respectively). At the same time, from the perceived
performance aspect, both 4S and 5S obtained the highest rating on the item of “Courtesy and friendliness of staff”
(means 4.84 and 6.32 respectively), and the lowest rating on “Knowledgeable to answer customers’ request” (means
4.59 and 5.68 respectively). The low score on this item for both the 4S and the 5S showed that both type of hotels
should give more training to their staff so that they become more informative and ready to answer the requests and
help the customers. From the service quality gap perspective, all the items in the reliability dimensions for the 4S
have significant negative gaps (p = .000; < .05), which indicate that the 4S did not meet the customers’ expectations
in all aspects of the reliability dimension. For the 5S, there was one item “Courtesy and friendliness of staff” that
showed a negative gap (.06), but the gap was not significant (p = .797; > .05). However, the gaps were significant
for the other two items (p< .05).

Empathy
For the empathy dimension as shown in Table 6, the 5S were noted to receive higher ratings than the 4S for
all the three items. For the 4S, the lowest expectation mean score was 4.46 for the item “Understand the specific
needs of customers”, while the highest expectation mean score was 5.51 for the item “Have customers’ best interest
at heart”. However, for the 5S, the item of “Have customers’ best interest at heart” rated lowest (mean 5.99) for its
expectation mean, while “Personal attention given by staff” rated highest (mean 6.18) for its expectation mean. The
perceptions means for both the 4S and the 5S for the items in the empathy dimension were rated quite low as
compared with the other dimensions discussed earlier. Both groups scored the highest rate for the “Personal
attention given by staff” (means 4.64 and 5.94 respectively), and similarly scored the lowest rate on “Have
customers’ best interest at heart” (means 4.39 and 5.90 respectively). For the empathy dimension, both the 4S and
the 5S have negative gaps for all the three items. However, the negative service quality gaps of the 4S were
significantly large (p = 0.000; <. 05), while the item “Have customers’ best interest at heart” for the 5S was not
significant (p = .250; > 0.05).
Attributes E S P S Gap t-value *Sig.
Mean Mean (P – E)
Personal attention given by 4S 5.49 .95 4.64 1.09 -.68 6.91 .000
staff 5S 6.18 .77 5.94 .90 -.20 3.05 .003
Understand the specific needs 4S 5.46 .98 4.43 1.26 -.83 6.92 .000
of customers 5S 6.17 .78 5.91 1.03 -20 2.94 .004
Have customers’ best interest at 4S 5.51 1.00 4.39 1.38 -.85 7.41 .000
heart 5S 5.99 .78 5.90 .90 -.01 .185 .250
Note: a negative gap indicates that respondents perceived that the service performance did not meet their expectations; *t-test two-tail probability
< 0.05
Table 6: Items Measuring Empathy Dimension for the Four-star Hotels (N=118) and Five-star Hotels (N=168)

Tangibility
Similar with the four dimensions discussed earlier, Table 7 shows that the 5S once again constantly scored
higher than the 4S on all ratings of expectations and perceptions. For the aspect of expectations, respondents from
both the 4S and 5S rated the lowest on the item of “Availability of free Internet access service for customers”
(means 5.19 and 6.03 respectively), indicating that this attributes was the least important as compared with the other
attributes of the tangibility dimension. On the other hand, the item “Quick check in/out” scored the highest
expectations mean (mean 5.68) for the 4S group, while the item “Clean and comfortable room” scored the highest

The Journal of American Academy of Business, Cambridge * Vol. 7 * Num. 2 * September 2005 52
expectations mean (mean 6.32) for the 5S group, and second highest (mean 5.67) for the 4S group. This indicates
that hotel customers will consider “Clean and comfortable room” as a very important aspect.
Attributes E S P S Gap t-value *Sig.
Mean Mean (P – E)
Neat appearance of staff 4S 5.53 1.08 4.87 1.09 -.66 6.25 .000
5S 6.24 .70 5.96 .90 -.28 3.71 .000
Availability of modern looking 4S 5.39 1.09 4.21 1.16 -1.18 9.31 .000
equipment 5S 6.13 .79 5.43 1.22 -.70 6.80 .000
The physical facilities are visually 4S 5.51 1.09 4.22 1.25 -1.29 9.01 .000
appearing 5S 6.15 .76 5.72 1.18 -.43 4.49 .000
Material associated with service are 4S 5.34 1.06 4.25 1.08 -1.09 8.55 .000
visually appearing 5S 6.13 .73 5.74 1.07 -.39 4.22 .000
Availability of adequate fire &first 4S 5.42 1.21 4.13 1.24 -1.29 8.48 .000
aids facilities and instructions 5S 6.16 .85 5.32 1.29 -.84 7.68 .000
Availability of free Internet access 4S 5.19 1.28 3.53 1.39 -1.66 9.71 .000
service for customers 5S 6.03 .97 4.48 1.72 -1.55 10.32 .000
Availability of health care facilities 4S 5.33 1.24 3.92 1.26 -1.41 8.99 .000
5S 6.07 .83 5.23 1.44 -.84 7.30 .000
Easily accessible reservation 4S 5.36 1.04 4.35 1.20 -1.01 7.85 .000
5S 6.18 .76 5.86 1.09 -.32 3.31 .001
Quick check in/out 4S 5.68 1.07 4.73 1.32 -.95 7.39 .000
5S 6.29 .68 6.20 .89 -.09 1.06 .293
Clean and comfortable room 4S 5.67 1.01 4.52 1.39 -1.15 7.77 .000
5S 6.32 .68 6.14 1.07 -.18 1.99 .049
Convenient hotel location 4S 5.62 1.08 4.70 1.08 -.92 7.58 .000
5S 6.23 .85 5.76 1.10 -.47 5.33 .000
Note: a negative gap indicates that respondents perceived that the service performance did not meet their expectations; *t-test two-tail probability
< 0.05
Table 7: Items Measuring Tangibility Dimension for the Four-star Hotels (N=118) and Five-star Hotels (N=168)

In the perception column, it shows that both groups rated lowest for the item of “Availability of free
Internet access service for customers”, whereby the 4S scored 3.53 and the 5S scored 4.48. However, the 4S scored
the highest perception mean on “Neat appearance of staff” (mean 4.87), while the 5S scored the highest perceptions
mean on “Quick check in/out” (mean 6.20). For the tangibility dimension, all the items have negative gaps for both
groups. All the negative gaps for the 4S were significant. However out of the eleven attributes, only one attribute for
the 5S has a negative gap that was not significant (p = .293; > .05). In this situation, both the 4S and the 5S should
put more efforts to improve the tangible aspects in order to improve their service quality.

Comparison of Satisfaction Levels among Four-star Hotels and Five-Star Hotels

Minimum Maximum Mean Std. Deviation
Overall satisfaction levels 4S 2.00 7.00 4.58 1.19
5S 3.00 7.00 5.92 .89
Table 8: Overall Satisfaction Levels of Respondent’s towards the Hotel Stay for the Four-star Hotels (N=118) and Five-star Hotels
(N=168)

Table 8 shows that in general the 5S were doing much better than the 4S in satisfying the customers. The
average mean of satisfaction levels rated by the respondents for the 4S was 4.58, while the average mean rated by
the respondents for the 5S was 5.98. The average mean scored by the 5S was 1.34 point higher than the 4S. Besides
that, the lowest rating (minimum) rated by the 5S respondents (3.00) was also 1.00 point higher than the 4S (2.00).
The t-test results showed that there was a significant difference at the .05 level, between the 4S and the 5S in the
overall customer satisfaction level towards the hotel stay. Although it was not a surprise for five-star hotels to do
better in satisfying customers than the four-star hotels, however the results here showed than the difference was
quite large. Therefore the four-star hotels have to work very hard in improving their service quality in order to
satisfy their customers since they are yet to cross the border of “satisfied”. In general, the respondents for both
groups were rather homogenous in their view concerning the degree of overall satisfaction, this is as reflected in the
small standard deviations (1.91 for 4S; .89 for 5S).

The Journal of American Academy of Business, Cambridge * Vol. 7 * Num. 2 * September 2005 53
Regression Analysis
The Four-star Hotels Model
The regression analysis for the 4S identified three factors of perceived service quality that were significant
in contributing towards overall satisfaction. The three factors were tangibility, empathy, and assurance. The results,
however, indicated that the responsiveness factor and reliability factor were not significant in influencing
respondents’ overall satisfaction levels. The resultes revealed that the estimated coefficients for β0 (constant) is
4.585, β1 (tangibility) is 0.426, β2 (empathy) is 0.374, and β3 (assurance) is (0.235). Therefore the estimated model
is as follow:

Overall satisfaction = 4.585 + 0.426 (tangibility) + 0.374 (empathy) + 0.235 (assurance)

The results show that responsiveness and reliability dimensions were not significant (t = -1.005, p = .317;
and t = 1.034, p = .303) and hence were dropped from the model. The adjusted R2 (.566) suggested that the three
factors (tangibility, empathy, and assurance) explained about 57% of the variance in the levels of customer
satisfaction for the 4S.

The ANOVA table revealed that the F statistics was 31.546 and the p-value was highly significant (.000).
These pointed to the fact that the estimated linear regression model was not equal to zero, and there was a linear
relationship between the dependable variable (overall satisfaction) and the predictor variables (tangibility, empathy,
and assurance).

The Five-star Hotels Model

The regression analysis for the 5S identified tangibility, reliability, and assurance as the three factors of
perceived quality that were significant in contributing towards overall satisfaction. The empathy factor and the
responsiveness factor were not significant in influencing overall satisfaction levels. The results revealed that the
estimated coefficients for β0 (constant) is 5.917, β1 (tangibility) is 0.244, β2 (reliability) is 0.224, and β3
(assurance) is (0.185). Therefore the estimated model is as follow:

Overall satisfaction = 5.991 + 0.244 (tangibility) + 0.224 (reliability + 0.185 (assurance)

The adjusted R2 (.502) suggested that the three factors (tangibility, reliability, and assurance) explained
about 50% of the variance in the levels of customer satisfaction. The ANOVA table revealed that the F statistics is
34.693 and the p-value is highly significant (.000). This pointed to the fact that the estimated linear regression model
is not equal to zero, and there is a linear relationship between the dependable variable (overall satisfaction) and the
predictor variables (tangibility, reliability, and assurance).

DISCUSSIONS AND CONCLUSIONS

The intent of this study was to increase the comprehension of the expectations and perceptions towards
hotel service quality from the hotel customers’ perspective. Besides that, this study also wanted to explore the
relationship between the overall satisfaction and the five SERVQUAL service quality factors in the context of
Malaysia’s luxury hotels.

This study revealed that hotel customers’ perceptions were consistently not meeting their expectations. The
negative Customer Gap (Gap 5) across the attributes suggested that more effort should be put in by the hotel
operators to improve the service quality of the hotel industry in Malaysia. This is inline with Choi and Chu (2000)
statement that success in any business depends on understanding the critical factors that determine customer
satisfaction, and ensuring that the business meets or exceeds customers’ expectations.

For the 4S, the regression model yielded about 57% (adjusted R2 = .566) of the explanatory power in the
overall satisfaction of the customer. The regression model for the 4S sample consisted of three quality factors, which
were tangibility, empathy, and assurance. For the 5S, the regression model yielded about 50% (adjusted R2 = .502)
of the explanatory power in the overall satisfaction of the customer. The regression model for the 5S sample
consisted of three quality factors, which were tangibility, reliability, and assurance.

In general, the two models showed that the tangibility factor is of utmost importance. This is in concurrence
with the findings in previous studies (Wong, Dean, and White, 1999). Furthermore as mentioned by Zeithaml and

The Journal of American Academy of Business, Cambridge * Vol. 7 * Num. 2 * September 2005 54
Bitner (2003), hospitality services where customers visit the establishment to receive the service, should emphasize
tangibles in their strategies.

LIMITATIONS AND SUGGESTIONS FOR FUTURE RESEARCH

This study conducted has several constraints. One of the major limitations is the choice of hotels. Due to
time and resource constraints, the researcher has limited the hotels that were included in this study to four and five-
star hotels in the Klang Valley area and not the whole Malaysia. Hence generalizations to other locations may be
limited, even in similar conditions. There were contextual differences in several factors mainly due to the
background of the respondents. The respondents ranged from different cultures and education backgrounds, different
job environments, and different traveling purposes. These might have contributed towards different perceptions of
service quality. However, it is merely comparative in nature, and the results presented do not reveal the reasons
behind the differences in expectations and perceptions about satisfaction between Malaysian, Asian and non-Asian
customers. Furthermore, due to time, cost and language constraints, the questionnaire could not be translated into
various languages. Only the English language questionnaire was used in this research.

Even though there are some limitations in this study, it has potential value in providing foundation for
future research. There are several opportunities to extend this study and the following are the recommendations that
can be considered in future research.

The study may be replicated in other classes of hotels, such as hotels below four-star, rest houses, and
motels in Malaysia. It may be replicated also in other luxury hotels in other states of Malaysia and the results should
be compared with that of this study to check whether the models proposed in this study is valid. Besides that, further
studies on service quality and satisfaction measurement can focus on the issue of the different socio-demographics
variables towards the impact on service quality dimensions and overall satisfaction levels, for example, gender, age,
level of education, profession, and other economic factors that are relevant. Lastly, besides English, the
questionnaire in further studies should be translated into a few languages, such as Arabic, Mandarin, and Malay.

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