Furong Yang

Composition of the Jury

Abstract

In the hospitality industry, service failures are almost inevitable. To limit undesirable consequences, researchers and practitioners have focused on the effectiveness of compensation in the event of failure. Despite the existence of various research models, customer behaviors such as relationship termination or the spread of negative word-of-mouth, even after recovery efforts, remain poorly understood. To answer the research question, "In the hospitality sector in China, to what extent can satisfaction after service compensation be explained by attributions and (dis)confirmation of expectations?", this thesis proposes a conceptual model based on attribution theory, the expectancy-confirmation paradigm, and justice theory. It relies on two key concepts: attribution and compensation expectations. It presents five hypotheses grouped into three sets of relationships: (1) the influence of service failure on customer attribution, the influence of customer attribution on compensation expectations, and the influence of service failure on compensation expectations; (2) the influence of the difference between customer compensation expectations and actual compensation on post-compensation customer satisfaction; and (3) the influence of post-compensation customer satisfaction on behavioral intentions. Next, based on the matching hypothesis, we explore the relationship between the type of service failure and the type of customer compensation expectation, and we find a certain discrepancy between compensation expectations and what is actually received. To achieve our research objectives, we targeted customers who reported having one or more negative experiences with a hotel in the past six months. Using an online questionnaire, we collected 318 valid responses and analyzed the data with SPSS 25.0. The results show that (1) customer attribution of service failure significantly influences the effects of service failure on compensation expectations; (2) the difference between compensation expectations and actual compensation affects post-compensation satisfaction; (3) post-compensation customer satisfaction influences behavioral intentions; (4) the types of compensation expectations are influenced by the type of failure; and (5) the compensation actually received differs from the expected compensation, primarily due to hotels not providing adequate compensation or customers receiving unwanted compensation. This discrepancy affects the effectiveness of compensation and post-compensation customer satisfaction. These findings will enable marketing researchers and hospitality industry practitioners to better understand the role of customer attribution and compensation expectations following service failure, as well as the service compensation process. Consequently, they could develop and implement more localized and effective marketing strategies in the Chinese market.

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