Reduce customer variability and improve service quality - The case of hotel industry

Abstract

The present study defines customers’ uncertainty and variations as ‘customer variability’, and it is systematically categorized into six types; ‘arrival variability’, ‘request variability’, ‘explanation variability’, ‘capability variability’, ‘effort variability’, and ‘variability in subjective preference’. The study also organises the strategic actions that can be adopted to reduce the adverse effects of the six kinds of customer variability, which are divided into four categories; ‘classic accommodation’, ‘classic reduction’, ‘low-cost accommodation’, and ‘uncompromised reduction’.

This research then conducts an empirical study to investigate the implementation and effectiveness of these strategic actions for the hotel industry in Taiwan. From the analytic results, it can be found that the hotels favour the use of ‘classic accommodation’ actions to overcome customer variability. Most of the strategic actions belonging to the other three categories are relatively neglected by the hospitality industry, but there are of potentially effective actions to overcome the customer variability. The study concludes that hotels need to pay more attention to these neglected actions in order to reduce the adverse affect on service quality caused by customer variability, and then raise the customer loyalty.