Antecedents of Guest Loyalty in Virtual Hotel Operator

Ivo Novitaningtyas, Dian Marlina Verawati, Shinta Ratnawati, Hanung Eka Atmaja, and Nuwun

Priyono

Faculty of Economy, Universitas Tidar, Magelang, Indonesia

hanung.ekaatmaja@untidar.ac.id, nuwunpriyono@untidar.ac.id

Keywords: Guest Loyalty, Guest Satisfaction, Service Quality, E-Service Quality, Image

Abstract: The objective of this research is to examine the effect of service quality, e-service quality, and image on guest

loyalty with guest satisfaction as a mediator at Virtual Hotel Operator (VHO). This research implements a

quantitative research approach by developing a questionnaire to get primary data from 100 respondents as

samples. The population in this study were guests who had stayed at RedDoorz (VHO) accommodations more

than once. The convenience sampling method is used in this research. Data were analyzed by Structural

Equation Model (SEM) with AMOS. The results show that service quality and also image has a positive effect

on guest loyalty, but not significant. Then, e-service quality has a positive and significant effect on guest

loyalty. The results also show that guest satisfaction has a mediating effect on the relationship between service

quality toward guest loyalty, e-service quality toward guest loyalty, and image toward guest loyalty.

1 INTRODUCTION

Industrial Revolution 4.0 develops in all fields, which

are marked by the usage of the internet (IoT) (Savitri,

2019). It is also developed in the hotel and

accommodation industry. This industry uses the

online reservation system, e-marketing, and Virtual

Hotel Operator (VHO) as the consequent of internet

development (Agustina, 2019).

The concept of Virtual Hotel Operator (VHO) had

been implementing in Indonesia since 2015. VHO is

a company that helps hotel owners, especially budget

hotels, to manage and sell their products online.

Usually, they will use the standards set by the VHO

company. Based on this condition, VHO is predicted

to be a threat or competitor for the accommodation

industry. Nevertheless, the results of previous

research stated that the development of VHO in

Indonesia was not a threat but rather an innovation

(Widiastuti & Susilowardhani, 2016).

The development of VHO in Indonesia has a

positive impact not only for the partners but also for

consumers. Positive impacts felt by VHO partners

include expanding market reach, being promoted

continuously, becoming a solution for budget hotel

that does not have an online reservation system yet,

improving relationships with Online Travel Agents,

helping budget hotels to provide service based on

standards needed by guests, and increasing income

(Widiastuti & Susilowardhani, 2016). Then, VHO

becomes a choice for certain guests who have

characteristics such as tend to reduce travel costs by

using low-cost accommodation to medium (budget

hotels), have high mobility, prefer standard facilities

such as clean, comfortable, and safe than luxury

hotels, and often use the internet (Teng, 2010).

RedDoorz is a VHO company. RedDoorz had

been operating in Indonesia since July 2015. The

company focus on offering affordable

accommodation with good quality by its slogan, the

best affordable accommodation. This company

collaborates with many accommodation service

providers with a total of 1000 properties (200.000

rooms). This company also operates in Vietnam,

Singapore, and the Philippines. Thus, it is expected to

be sustainable.

Loyalty is the key for a company to be sustainable.

Companies should realize those loyal customers are

valuable assets. Furthermore, previous research about

the accommodation industry said that customer

loyalty is a determinant for companies to become

successful and sustainable (Al-Msallam, 2015; Al-

Msallam & Alhaddad, 2016; Keshavarz & Ali, 2015;

Liat & Lew, 2015; Poku, Zakari, & Soali, 2013).

Guest loyalty will lead to repurchase intentions,

willingness to recommend, and tell positive things

Novitaningtyas, I., Verawati, D., Ratnawati, S., Atmaja, H. and Priyono, N.

Antecedents of Guest Loyalty in Virtual Hotel Operator.

DOI: 10.5220/0009958800490056

In Proceedings of the International Conference of Business, Economy, Entrepreneurship and Management (ICBEEM 2019), pages 49-56

ISBN: 978-989-758-471-8

about the company to potential consumers

(Keshavarz & Ali, 2015). Thus, the existence of

RedDoorz as a VHO will remain to sustain if it has

loyal guests.

Previous research stated that service quality,

image, and guest satisfaction become antecedents of

guest loyalty. Service quality has a positive and

significant effect on guest loyalty (Djamereng et al.,

2019; Fathi & Esfahani, 2017; Rahma, 2015).

Moreover, service quality becomes variable with the

most significant effect (Liat & Lew, 2015).

Nevertheless, other research stated that the effect is

not significant (Suhartanto & Noor, 2013). Beside of

service quality, RedDoorz also offers service by

online (reservation and payment system). It also

needs to be measured how they affect guest loyalty.

The electronic service quality (e-service quality) also

proved as the antecedent of loyalty (Coker, 2013;

Husain, 2017).

The image has a positive and significant effect on

guest loyalty (Djamereng et al., 2019; Singh, Singh,

& Vij, 2018). Image is produced through the results

of promotions or advertisements by companies and

consists of 2 dimensions (attribute and holistic)

(Lahap et al., 2016). Other researcher stated that

image has a positive effect on guest loyalty, but not

significant (Fathi & Esfahani, 2017).

Furthermore, guest satisfaction has a positive

effect on guest loyalty in the accommodation

industry. This variable also has a mediator role in the

relationship between service quality and guest loyalty

(Djamereng et al., 2019; Keshavarz & Ali, 2015). In

the relationship between e-service quality and guest

loyalty, this variable also becomes a mediator

(Dharmesti & Nugroho, 2012). Then, it is also proved

in the relationship between image and guest loyalty

(Novitaningtyas, 2017).

The relationship between these variables has been

widely proven by previous researchers, such as

homestays, or star hotels but has never been done at

VHO. This research considers e-service quality as

one of the antecedents for guest loyalty based on the

criteria of VHO. It is necessary to identify what

factors influence guest loyalty. Thus, the result will

help VHO to increase their service quality, e-service

quality, and company image in order to make guest

satisfied and loyal so that the company will remain

sustain.

2 LITERATURE REVIEW

2.1 Service Quality

Service quality becomes the main product for the

service company as well as the accommodation

company. It becomes a strength to compete with the

competitor. Service quality defines as how well the

needs, desires, and expectations from guests are met

by the services provided (Ismail et al., 2016). Service

quality becomes a factor that affects guest satisfaction

and loyalty in the accommodation industry

(Djamereng et al., 2019; Keshavarz & Ali, 2015).

Moreover, it is also proved to be the most significant

effect if compare with other variables (Liat & Lew,

2015). On the other hand, the effect proved that not

significant (Suhartanto & Noor, 2013). Then,

SERVQUAL, which is consists of tangible,

reliability, responsiveness, assurance, and empathy,

becomes the basis for measuring service quality

(Poku et al., 2013; Schiffman & Kanuk, 2008).

2.2 E-Service Quality

E-service quality is an electronically service quality

based on the internet. It is explained as one of the

antecedents for consumer loyalty who buys products

or services by the online system (Husain, 2017). It

relates to the quality of services provided by

producers to consumers starting from the process of

finding information and evaluating choices,

determining the products, and post-purchase services

or product consumption (Dharmesti & Nugroho,

2012). This variable has a positive effect on guest

loyalty (Husain, 2017). Moreover, e-service quality

also has a positive effect on guest satisfaction (Coker,

2013).

2.3 Image

Image is a picture inside the minds of consumers

about the product based on the impression that arises

due to the promotion and advertising (Al-Msallam,

2015; Lahap et al., 2016). An image consists of the

attribute dimension and the holistic dimension (Lahap

et al., 2016). An image has a positive effect on guest

loyalty and guest satisfaction (Djamereng et al., 2019;

Novitaningtyas, 2017; Singh et al., 2018). In the

hospitality industry, a good image will increase guest

satisfaction. A good image not only increases guest

satisfaction but also increase guest loyalty.

ICBEEM 2019 - International Conference on Business, Economy, Entrepreneurship and Management

2.4 Guest Satisfaction

Satisfaction defines as consumer feelings because of

the comparison between their expectations and

performance perceived by them after consuming

products or services (Kotler & Keller, 2009). In the

accommodation industry, satisfaction becomes a

factor that affecting loyalty (Djamereng et al., 2019;

Liat & Lew, 2015; Panda & Zagade, 2017). This

variable also becomes the most dominant factor

(Mulyana & Prayetno, 2018). Moreover, it is also

proved that satisfaction has a mediating role in loyalty

(Keshavarz & Ali, 2015).

2.5 Guest Loyalty

The companies should have a loyal customer and

manage the relationship with them. Loyalty defines

as consumers' commitment to become loyal toward

product or service by doing re-purchase in the future,

although there are other products which are the

potential to encourage the consumer to switch (Kotler

& Keller, 2009). The loyal consumer has a

willingness to re-purchase, to recommend, and to tell

positive things (Al-Msallam & Alhaddad, 2016).

Previous research proves that service quality, image,

and satisfaction have a positive effect toward loyalty

(Djamereng et al., 2019; Keshavarz & Ali, 2015).

3 RESEARCH METHOD

This research implements a quantitative research

approach by developing a questionnaire to test the

model and hypothesis. The population in this research

are guests who had stayed at one of the

accommodations at RedDoorz (VHO) more than

once. This research uses the convenience sampling

method by getting the most accessible respondents to

provide information (Suhartanto, 2014). The samples

are 100 respondents who fulfill the sample size for an

infinite population (Ghozali, 2017; Marhadi,

Sulistyowati, & Nursanti, 2014; Sekaran, 2003).

Structural Equation Model (SEM) is used in this

research to test various models and relationship

among a set of variables. The measurement model of

the variables uses the Confirmatory Factor Analysis

(CFA). The path coefficient is used to estimate the

effect of each independent variable toward the

dependent variable. Sobel test is used to test the

mediation effect (Ghozali, 2017). The variables

examined in this study are Service Quality (SQ), E-

Service Quality (ESQ), Image (I), Guest Satisfaction

(GS), and also Guest Loyalty (GL). Therefore, the

research model is provided as follow:

Figure 1: Research Model.

4 RESULT

Respondent characteristics are described based on

their gender, age, level of education, profession, level

of income per month, and overnight motivation. The

result shows that the number of female respondents

higher than male respondents. Of the 100

respondents, there are 60 female respondents and 40

male respondents. The majority of respondents are

21-30 years old (67%), the rest are 31-40 years old

(17%), 11-20 years old (13%), and 41-50 years old

(3%). Based on the level of education, there are some

respondents graduated from college (50% bachelor,

26% diploma, and 5% have the master of degree),

followed by 11% from senior high school, 4% from

elementary school, and 4% from junior high school.

Then, 45% of respondents work as a private

employee, 31% as an entrepreneur, 17% as a student,

and 7% as a Government employee. Based on their

level of income, 57% of respondents have income

more than IDR 2.500.000, 30% of respondents have

income between IDR 1.500.000-IDR 2.500.000, and

only 13% of respondents have income under IDR

1.500.000. Moreover, their overnight motivations

divide by three criteria (leisure and pleasure, MICE,

and education activities). The result shows that 58%

of respondents have leisure and pleasure motivation,

41% have MICE motivation, and only 1% respondent

has education activities as a motivation.

Moreover, the confirmatory factor analysis result

shows that all of the criteria are fulfilled. The value of

the loading factor is more than 0,50, according to the

suggested criteria for convergent validity (Ghozali,

2017). Then, the AVE value is more than 0,50, and

the CR value also meets the recommended minimum

value, which is more than 0,60 (Ghozali, 2017).

Based on that, the result meets construct reliability.

Antecedents of Guest Loyalty in Virtual Hotel Operator

Furthermore, criteria for discriminant validity is also

fulfilled because of the AVE square root values are

higher than the correlations between other constructs

(Ghozali, 2017).

The full model structural result shows that the

value of Chi-Square is 0,000, and the value of GFI is

1,000. This result indicates that criteria for the

goodness of fit are fulfilled. It is because of the GFI

value that indicates if value 1,000 is the perfect fit

(Ghozali, 2017; Widarjono, 2015). Moreover, Chi-

Square value shows result 0,000 that support

statement for the goodness of fit, which is says if the

smaller the value, the better (Ghozali, 2017). Based

on that, the structural model of this research fulfills

the criteria for the goodness of fit.

Table 1: Respondent Characteristics.

Characteristic

Total

Percentage

Gender

Male

40%

Female

60%

Age

0-10 years old

11-20 years old

13%

21-30 years old

67%

31-40 years old

17%

41-50 years old

Education background

Elementary School

Junior High School

Senior High School

11%

Diploma degree

26%

Bachelor degree

50%

Master degree

Profession

Student

17%

Government Employee

Private Employee

45%

Entrepreneur

31%

Retiree

Level of Income

< IDR 1.500.000

13%

IDR 1.500.000-2.500.000

30%

> IDR 2.500.000

57%

Overnight Motivation

Leisure and pleasure

58 %

MICE

41%

Education Activities

Table 2: Measurement Model Estimation.

Variable

Item

Loading Factor

AVE

Service Quality

SQ1.1

0,803

0,640

0,936

SQ1.2

0,672

SQ.13

0,668

SQ2.1

0,713

SQ2.2

0,760

SQ2.3

0,902

SQ3.1

0,963

SQ3.2

0,925

SQ3.3

0,964

SQ4.1

0,938

SQ4.2

0,576

SQ.43

0,610

SQ5.1

0,850

SQ5.2

0,868

SQ5.3

0,621

Variable

Item

Loading Factor

AVE

E-Service Quality

ESQ1.1

0,874

0,615

0,854

ICBEEM 2019 - International Conference on Business, Economy, Entrepreneurship and Management

ESQ1.2

0,918

ESQ2.1

0,874

ESQ2.2

0,762

ESQ3.1

0,640

ESQ3.2

0,572

Image

I1.1

0,893

0,806

0,909

I1.2

0,849

I1.3

0,876

I1.4

0,875

I1.5

0,938

I1.6

0,893

I2.1

0,911

I2.2

0,914

I2.3

0,952

I2.4

0,872

Guest Satisfaction

GS1

0,913

0,820

0,750

GS2

0,938

GS3

0,864

Guest Loyalty

GL1

0,806

0,803

0,749

GL2

0,938

GL3

0,938

Table 3: Correlation between Variables and Square Root AVE.

Variables

Service Quality

E-Service

Quality

Image

Guest

Satisfaction

Guest

Loyalty

Service Quality

0,800

E-Service

Quality

0,000

0,784

Image

0,000

0,898

Guest

Satisfaction

0,341

0,272

0,417

0,906

Guest Loyalty

0,148

0,179

0,120

0,547

0,896

Figure 2: Full Model Structural.

Antecedents of Guest Loyalty in Virtual Hotel Operator

Table 4: Path Coefficients.

The path coefficient result shows that service

quality has a positive and significant effect on guest

satisfaction. This result supports previous research

(Djamereng et al., 2019; Keshavarz & Ali, 2015;

Minh et al., 2015; Rahma, 2015). Thus, the higher

quality of service from VHO through indicators from

tangible, reliability, responsiveness, assurance, and

empathy will increase guest satisfaction.

The result shows that e-service quality has a

positive and significant effect on guest satisfaction.

This result consistent with previous findings that said

e-service quality has a positive effect on guest

satisfaction (Coker, 2013; Dharmesti & Nugroho,

2012; Husain, 2017). Based on the result, if the e-

service provides by VHO has very high quality, it

tends to increase guest satisfaction.

In a relationship between image and guest

satisfaction, the result shows that the effect is positive

and significant. It supports previous findings that the

image has a positive and significant effect on guest

satisfaction (Al-Msallam, 2015; Djamereng et al.,

2019; Lahap et al., 2016). This result shows that a

better image from VHO will give an impact to

increase guest satisfaction.

Moreover, guest satisfaction has a positive and

significant effect on guest loyalty. That result

supports previous findings from many researchers

(Al-Msallam, 2015; Al-Msallam & Alhaddad, 2016;

Fathi & Esfahani, 2017; Keshavarz & Ali, 2015; Liat

& Lew, 2015; Rahma, 2015; Suhartanto & Noor,

2013). The coefficient value is 0,547, which is higher

than the coefficient value from other variables toward

guest loyalty. Thus, the result supports the previous

finding, which is stated that satisfaction is the most

dominant variable affecting loyalty (Mulyana &

Prayetno, 2018). From the result above, if VHO can

make their guests feel satisfied, it tends to increase

their loyalty to VHO. Therefore, loyal guests will be

potential repeater guests. Besides that, they intend to

recommend and say positive things about the product.

That condition will give benefit to the company.

Result also shows that service quality has a

positive effect on guest loyalty but not significant.

That result does not match with the previous finding

that stated the effect of service quality on guest

loyalty is the most significant (Liat & Lew, 2015).

Even though the result supports the previous finding

that stated the effect is not significant (Suhartanto &

Noor, 2013).

The effect of e-service quality on guest loyalty

show results positive and significant. This result

supports previous researchers that stated the same

findings with this research (Coker, 2013; Husain,

2017). Thus, if the e-service provides by VHO has

very high quality, it tends to increase guest loyalty.

Furthermore, the result shows that the image has

a positive effect on guest loyalty, but the effect is not

significant. This result supports the previous finding

that stated the effect of the image toward loyalty in

the accommodation or hospitality industry is not

significant (Fathi & Esfahani, 2017). On the contrary,

the result does not support the previous finding that

stated if the effect is significant (Djamereng et al.,

2019; Singh et al., 2018).

Table 5: Sobel Test.

Path

Sobel Test

Statistic

Result

SQ -> GS -> GL

3,45636082

Significant

E-SQ -> GS -> GL

2,74260690

Significant

I -> GS -> GL

3,82319162

Significant

Moreover, this research uses the Sobel Test to

examines the mediating effect. In the relationship

between service quality, guest satisfaction, and guest

loyalty, the result shows that the Sobel test statistic

value is 3,45636082. This value is higher than the t-

table 1,96 (5%). Based on the result, guest satisfaction

proves as a mediator between service quality and

guest loyalty. The effect is positive and significant.

Thus, the result supports previous researchers that

found that service quality has a positive and

significant effect on guest loyalty with guest

satisfaction as a mediator (Djamereng et al., 2019;

Keshavarz & Ali, 2015). Thus, the service provides

by VHO will increase guest satisfaction. Then, if the

guest satisfied, they will be loyal guests.

Result of the Sobel test statistic for the

relationship between e-service quality, guest

satisfaction, and guest loyalty is 2,74260690. It is

higher than the t-table 1,96 (5%). The result shows

that e-service quality has a positive and significant

effect on guest loyalty with guest satisfaction as a

mediating variable. The result supports previous

findings of a mediating role of satisfaction for the

Path

Coefficient

Probability

Result

SQ -> GS

0,341

***

Significant

ESQ -> GS

0,272

0,002

Significant

I -> GS

0,417

***

Significant

GS -> GL

0,547

***

Significant

SQ -> GL

0,148

0,057

Not

Significant

ESQ -> GL

0,179

0,028

Significant

I -> GL

0,120

0,154

Not

Significant

*** (< 0,000)

ICBEEM 2019 - International Conference on Business, Economy, Entrepreneurship and Management

relationship between e-service quality and loyalty

(Coker, 2013; Husain, 2017). Based on that result, e-

service provides by VHO will increase guest

satisfaction and after that, will increase guest loyalty

as the impact.

In the relationship between image, guest

satisfaction, and guest loyalty, the result shows that

the Sobel test statistic is 3,82319162. It means the t-

statistic is higher than the t-table 1,96 (5%). Based on

the result, the image has a positive and significant

effect on guest loyalty with guest satisfaction as a

mediator. This result supports the previous finding of

the mediating role of guest satisfaction in the

hospitality industry (Novitaningtyas, 2017). Thus, the

better image of VHO will increase guest satisfaction

and also will give effect to increase guest loyalty.

5 CONCLUSION

The results of this study indicate that service quality

and the image has a positive effect on guest loyalty,

but the effect is not significant. Besides that, e-service

quality has a positive and significant effect on guest

loyalty. The results show a positive and significant

effect on the relationship between the independent

variables such as service quality, e-service quality,

and image with guest satisfaction as a mediating

variable. Thus, service quality has a positive and

significant effect on guest satisfaction, e-service

quality has a positive and significant effect on guest

satisfaction, and image also has a positive and

significant effect on guest satisfaction.

Moreover, guest satisfaction is proved that this

variable has a mediating role. Guest satisfaction

mediates the relationship between service quality and

guest loyalty. Then, guest satisfaction also has a

mediating role in the relationship between e-service

quality and guest loyalty. Besides that, the mediating

role is also proved in the relationship between image

and guest loyalty.

Based on the results, VHO should consider

service quality, e-service quality, image, and guest

satisfaction as the factors that will increase guest

loyalty. Moreover, VHO should increase the quality

of its service and e-service to make its guests

satisfied. Other than that, VHO needs to create the

best image to make its guests satisfied. Thus, if the

guest feels satisfied, it tends to increase their loyalty

to VHO. Loyal guests will give benefit from the VHO

because they will be potential repeater guests.

Besides that, they intend to recommend and say

positive things about the product.

ACKNOWLEDGMENTS

The author gratefully acknowledges the support from

RedDoorz’s guests as the respondents, and also for

the RedDoorz’s management who already give

administrative support for this research.

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