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Tourism industry of Penang

Question:

Discuss the factors and customers satisfaction of budget hotel customers in penang, malaysia.
 

The state of Penang is situated on the north-west coastline of Malaysia and is home to major civilizations of the region that has attracted tourists from across the globe for decades. The natural beauty and culture of the place have attracted tourists for centuries and is still one of the most favoured holiday destinations of the tourists. Apart from culture and natural beauty, mouth-watering food and architecture of the place has always astonished people. The place, its people and businesses have perfectly blended themselves into the modern culture keeping intact its heritage and traditions. Technological advancements have been used and implemented by the tourism industry in such a manner that has brought about a boom in the industry with more and more tourists visiting the place every year. The tourism industry of Penang has perfectly aligned itself with the objectives of the country to promote and establish Malaysia as the most favoured tourism destination of Asia (Jaafar & Sukarno, 2011). The results are evident from the statistics provided by the government in their portal “Tourism Malaysia”. According to the overall statistics published by the government, Malaysia had 25.7 million arrivals in the year 2015 with a total receipt of 69.1 billion MYR from tourism (Samah et al., 2015). These significant figures have increased over the year and show a rising trend.

Several factors have resulted in the increase of visitors to the country. Apart from the natural beauty of the place, certain places of Penang have historical importance. Recently, George Town was declared to be a heritage site by the UNESCO and visitors have stated to pour in. On this backdrop, it can be said that there is a close link between tourism and the hospitality industry. Tourism is cannot be complete without people having a place to stay while they visit a place. In essence, the growth and sustainability of the tourism industry is largely dependent on the kind of hotels that are available in the place of tourism. As the inflow of visitors increased, a need was felt to accommodate them in a much efficient manner. This resulted in an increase in the number of hotels in Penang. The increase was in both luxury hotels such as the Hard Rock Hotel, Tune Hotel, Cititeland many more as well as in budget hotels such as Rasa Motel Penang, Value Inn and others. With an increase in the nature of demand of the customers, a shift has occurred from luxury hotels to budget hotels. In the last few years, it has been seen that there is a rise in demand for mid-market budget hotels by the customers and as a result, competition has increased in this segment of the hotel industry of Penang. These budget hotels have proved themselves to be a key contributor to the hotel industry in Penang over the years (Mola & Jusoh, 2011). By providing quality services and a wide customer base, these hotels have opened up new avenues for the hotel industry of the region. These hotels have been successful in creating customer loyalty by providing the required services to its customers in an effective manner. The nature and extent of the services rendered to the tourists by the hotel staffs influence the quantum of customer satisfaction. Customer satisfaction is one of the most important objectives of an organisation. The manner in which customer relationship is built determines how much a customer is satisfied with the services rendered by the hotel.

Shift to budget hotels in Penang

In light of globalisation of the world economy, the service industry is actively playing a pivotal role in the growth and development of the entire region. Tourism has become an important trade category that is fetching a substantial amount of revenue and is contributing towards the overall GDP of the country (Goh, 2015). The growth of the tourism industry is dependent on the state of the hotel industry. Penang is no exception. With the natural and historic beauty of the place, it has become one of the most favourable tourist attractions in south Asia. With this increase in the tourist inflow, a change has taken place in the hotel and hospitality industry. People are now favouring budget hotels over luxurious and expensive ones. With the quality of services rendered in these hotels being of superior quality, the industry is able to build a loyal customer base for itself. Much research has been carried on the status of the hotel industry and on customer satisfaction in Penang (Goh, 2015). However, not much has been done with respect to this niche class of budget hotels that now play a pivotal role in the development and growth of the entire industry. Building of customer satisfaction is a key factor of success. Customer retention by building customer loyalty has always been an important objective of every business organisation. On this backdrop, the research intends to bring out the factors and the element of customer satisfaction with respect to budget hotels in the area of Penang. 

SMBH also known as Small and Medium Budget Hotel operators play a vital role to aid the tourism industry success. As mentioned earlier, the nature and quality of services rendered has become an important area of focus for budget hotel owners.  Thus, it is important that service lenders understand perceptions and customer expectations as well as the factors that influence their satisfaction and provide services accordingly (Abdu Bakori, Samdin & Hassan, 2012). The reason for this research was to study the perception of customer about the marketing mix 7P's, customer loyalty and customer satisfaction of budget hotels. Even though customers are not expected to understand these technical terms to their fullest extent, their viewpoints are very important to formulate industry standards. In order to have a proper understanding of customer taste, preferences and demand, organisations are required to undertake extensive research work. While conducting the research, it is imperative to segment the targeted customer into different classes based on specific characteristics that are unique.

A significant classification is in the form of national and international visitors (Mun, 2016). This classification will help the hotels to formulate strategies differently for each group and to maximise revenue. The primary significance of this study is to focus on the marketing activities of such budget hotels that ultimately lead to their success in gaining customer loyalty and satisfaction. It is the responsibility of the marketing manager to devise proper strategies to attract more and more customers for the hotel. As the importance of these budget hotels has increased significantly, the government shall take effective steps to reward these hotels by re-evaluating their criteria for awarding stars to these hotels depending upon the nature and quality of services rendered by them (Keshavarz & Ali, 2015). Therefore, the significance of the study lies on finding out the elements that influence satisfaction of customers who avail services of budget hotels.

Importance of customer relationship and loyalty

The hospitality industry is similar to other industries and is characterized by a high level of competition among the industry participants. Each budget hotel has to counter a twofold competition – with big and luxurious hotels and with other budget hotels. In order to achieve success, these budget hotels have to price their services in the most competitive manner so that customers are attracted. This is a significant factor as every customer looks for an affordable price in the first place (Poku, Zakari & Soali, 2013). It is very transparent that the hotel market is highly competitive, just like any other organization that markets a product in a competitive market, competing for the income of consumer disposable, it should be aware of the quality problems. This is important, especially in the situation of the hotel in which there is reduced clear price competition, but centres more on problems of image, service, facilities and the provision quality. Hotels have therefore, enhanced their service quality in order to stay ambitious. Business activities between enterprises become more frequent with the constant development of the Malaysian economy. Moreover, the Malaysian tourist market too becomes more and more energetic.

A new hotel - state budget catering to the demands of new customer, it has been supposed to have good potential development, which turns to be one of the high spots of investment. Because of the high competition between budget hotels and the reason to get sustainable competitive benefit a tough battle for customer resource is opened. The central point of this competition falls mainly on the "customers", the budget hotel that has satisfied customers and finally won the trust of customers, it has had the beneficial tool to win this smokeless war (Abdullah, 2015). As the situation becomes tough, hotel owners are trying to gain customer confidence and customer loyalty by providing effective services to them. This in turn increases customer satisfaction. Therefore, it has become essential that hotel owners focus their attention to effective marketing activities. Satisfaction towards goods and integrated service marketing mingle is expected to influence the customer's decision of a patient for enabling the same service in time to come. Also, customer satisfaction is called the business competition success which is the particular's perception of the performance of the relation service to expectations. In the hotel industry, customer bond is also highly essential. It is often shaped by practical experience of the customer during the stay in the hotel.   

References

Abdu Bakori, K., Samdin, Z., & Hassan, H. (2012). Hotels involvement in sustainable tourism practices in Klang Valley, Malaysia. International Journal of Economics and Management, 6(1), 21-34.

Ali, F., & Amin, M. (2014). The influence of physical environment on emotions, customer satisfaction and behavioural intentions in Chinese resort hotel industry. Journal for Global Business Advancement, 7(3), 249-266.

Alvesson, M. & Sandberg, J. (2012). Constructing research questions.

Amin, M., Yahya, Z., Ismayatim, W.F.A., Nasharuddin, S.Z. and Kassim, E., 2013. Service quality dimension and customer satisfaction: An empirical study in the Malaysian hotel industry. Services Marketing Quarterly, 34(2), pp.115-125.

Anderson, E. W., & Sullivan, M. W. (2013). The antecedents and consequences of customer satisfaction for firms. Marketing science, 12(2), 125-143.

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