Factors Affecting Customer Satisfaction Towards Luxury Hotel Among Young Adults in Klang Valley

Abstract

Tourism industry is always the major contributor to gross domestic products (GDP) in all the countries around the world. Globally, travel and tourism directly contribute approximately USD$4.7 trillion to GDP in 2020 (Lock, 2021). Tourism industry contributed 5.9 percent to the GDP of Malaysia as tourism is among the largest industries in Malaysia (Hirschmann, 2021a). Tourism industry has direct impact the hotel industry. When the tourism industry is growing aggressively, it will directly boost the business of the hotel industry. According to the 2019 Malaysia Hotel Industry Survey of Operations (2019), it shows that there is 70.2% occupancy for the luxury hotels in Malaysia in 2018. The hotel industry in Malaysia has been experiencing a massive growth before year 2020. According to the data of Tourism Malaysia, the number of hotel rooms grew to 308,210 in 2018, which is with a growth of over 80% (Poh, 2019). In 2019, there are over 700,000 hotels and resorts in the globe (Condorferries, 2021). The statistics also shows that there are over 4,400 luxury hotels with 4 and 5-star worldwide (Condorferries, 2021).

However, because of the Covid-19 outbreak, the hotel industry has undergone massive losses and few luxury hotels were being shut down due to low occupancy resulting from international travel ban and movement restriction in Malaysia (Zunaira, 2021). Although the Covid-19 had led to an aggressive decrease to the hotel industry, the occupancy has risen from around 25-30% to 55-60% a few months ago due to the recovery stage of Covid-19 (Baggonkar, 2021). According to Baggonkar (2021), the occupancy of luxury hotels had a significant increase till 31 July 2021.  Most youngsters are now love travelling and pursuing of staying in the luxury hotel as they like to enrich their life experiences (Site Minder, 2021). As there is a growing trend of enjoying exclusivity, it caused the growth of luxury hotels around the world.

Most luxury hotels are still able to sustain because of the high level of loyalty and satisfaction of the customers. In reality, customer satisfaction is the key driver that will affect the hotel business performance (Ghaith, Mutia & Zukime, 2018 in citing Markovic & Raspor, 2010). High customer contentment will lead to high customer loyalty and intention of repurchase, thus, increase the hotel profitability (Ghaith, Mutia & Zukime, 2018). Hence, the factors influencing customer satisfaction towards luxury hotels is considered as a highly important issue for hotel industry. Customer satisfaction is the vital element that brings the business to be successful. When customers are satisfied, their repurchase or revisit intention will be increased. Hence, it will bring the continuous increase of profitability for the hotel as well. When the luxury hotel provides personalization service to their guests, it will lead to higher customer satisfaction.