THE 10th ISLAMIC BANKING, ACCOUNTING AND FINANCE INTERNATIONAL CONFERENCE 2022 (iBAF 2022)

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THE 10th ISLAMIC BANKING, ACCOUNTING AND FINANCE INTERNATIONAL CONFERENCE 2022

(iBAF 2022)

Sustainable Service Quality in Muslim-Friendly Hospitality Services (MFHS) Industry

Muhamad Azrin Nazri

Faculty of Economics and Muamalat, Universiti Sains Islam Malaysia (USIM), Bandar Baru Nilai, 71800 Nilai, Negeri Sembilan Malaysia

Tel: + 606 797 8737 E-mail: [email protected]

Azreen Jihan Che Mohd Hashim

Sumaiyah Abd Aziz

Nor Asiah Omar

Faculty of Economics & Management, Universiti Kebangsaan Malaysia (UKM), 43600 Bangi, Selangor Malaysia e-mail: [email protected]

Abstract

The growing hospitality industry poses more challenges to competition that leads towards the importance of expanding customer base. One of the segments in the industry is Halal tourism which is tremendously developing. The sector should realize the importance of being aware of Muslim market’ needs and religious sensitivities by offering them quality products and services. Providing sustainable quality services is indispensable for the success of companies in the long run and enable them towards strong positioning strategy in the context of Muslim Friendly Hospitality Services (MFHS) companies. Although service quality is one of the most researched area in marketing because of its impact on success factors but most service quality measurement models have been developed in a western context and may not be suitable for generalizing to non-western, particularly Islamic contexts. Despite the awareness of importance on sustainable service quality, only few studies on sustainable service quality appear in the literature. Therefore, the research’s main objectives are to investigate factors of sustainable service quality in influencing satisfaction and loyalty in MFHS sector in Malaysia. The interview and survey will be adopted. The SPSS and SEM AMOS will be used for data analysis. The findings will be prepared and reported.

Keywords: Sustainable Service Quality (SSQ); Satisfaction; Loyalty; Muslim Friendly Hospitality Industry (MFHS)

1. Introduction

The hospitality industry is growing which cause more challenges to competition that leads towards the importance of expanding customer base (Jeaheng et al., 2020). Basically, the hospitality industry covers food and beverages, travel and tourism, lodging, and recreation. Global tourism sector has few sub-segments to meet the demand of tourists coming from different background. Several scholars viewed that having sub segment in the market has resolved the issue of stiff competition in meeting the tourists’ demands (Olya & Al-ansi, 2018). Halal tourism becomes one of the segments which is tremendously growing that created more competition in the market (Arasli et al., 2021. Accordingly, Global Muslim Travel Index GMTI (2018) has shown a total of approximately 130 million travelers every year indicating the importance of Muslim market globally (Jeaheng et al., 2020).

According to Vargas-Sanchez & Moral-Moral (2019) Muslim population is expected to be around 26 percent of world’s population in the next ten year, it shows the Muslim market should not be ignored. Thus, it is important to be aware of Muslim market’ needs and religious sensitivities by offering them appropriate products and services

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(Han et al., 2019). In recent years, many hotels are serving specific halal products and offering halal services to attract Muslim tourists (Al-Ansi, Olya, & Han, 2019). Malaysia is becoming one of the countries that promote Muslim-friendly hospitality services (MFHS) which covers both hospitality and tourism industry (Aziz, 2019).

Service quality is the tourists’ assessment and evaluation towards the expected service that is important in the hospitality industry (Irama & Abror, 2019). If the industry fails to provide quality services, customers turn to other goals (Sparks & Westgate, 2002). Generally, service quality is one of the most researched area in marketing study (Ahmad et al., 2019; Ali et al., 2018) because of its impact on success factors for example customer satisfaction (Lee et al., 2019). However, most service quality measurement models (Brady and Cronin, 2001; Gro ̈nroos, 1984; Parasuraman et al., 1988) have been developed in a western context and may not be suitable for generalizing to non-western and particularly Islamic contexts because of the differences in culture (Lari et al., 2019).

Accordingly, providing quality services is indispensable for the success of service providers in the long run (Owen et al., 2001), and enable companies to differentiate themselves by maintaining higher quality sustainably (Kotler et al., 2001).

Stamenkov and Dika (2015) exerted that a sustainable service quality is the capacity to provide uninterrupted services with exceptional sustainable quality over a long period of time. Despite the awareness of importance on this topic, only few studies on sustainable service quality appear in the literature (Stamenkov & Dika, 2015). In addition, the behavior and response of Muslim guests toward staying and experiencing the services offered by Muslim-friendly hotels remains largely unexplored ((Jeaheng et al., 2020). Thus, the research on service quality in Muslim-friendly hotels is growing and there are calls for additional research on the topic (Jeaheng et al., 2020) due to literature on the topic remains scarce (Suhartanto et al., 2020).

Therefore, this research will contribute towards the body of knowledge by filling up the gaps discussed above.

Specifically, this research will offer a framework of sustainable service quality model for Muslim friendly hospitality services (MFHS) standard in Malaysia.

1.1 Summary of Research Gaps

1. The importance of being aware of Muslim market’ needs and religious sensitivities by offering them appropriate products and services.

2. Service quality is one of the most researched area in marketing study (because of its impact on success factors.

However, most service quality measurement models have been developed in a western context and may not be suitable for generalizing to non-western and particularly Islamic contexts because of the differences in culture.

3. Providing quality services is indispensable for the success of service providers in the long run and enable companies to differentiate themselves by maintaining higher quality sustainably

4. Despite the awareness of importance on sustainable service quality, only few studies on sustainable service quality appear in the literature.

5. The research on service quality in Muslim-friendly hotels is growing and there are calls for additional research on the topic due to literature on the topic remains scarce.

2. Literature Review.

2.1 Muslim Friendly Hospitality Services (MFHS).

According to The Muslim Friendly Hospitality Services (MFHS) standard (MS2610:2015), the Muslim friendly hospitality services are Shariah guided requirement for tourism industry players in setting up an assurance system to preserve the integrity of products and services provided for Muslim travelers. This Malaysian Standard is developed with the aim to ensure that products and services provided for Muslim travelers are in accordance with the Shariah principles. The objectives of the standard are:

a) to enhance the ability of an organization or individual to produce and/or manage Muslim friendly tourism products and services that meet the Shariah principles.

b) to preserve and protect the integrity of Muslim friendly tourism products and services through effective application of the standard.

c) to enhance customer satisfaction by meeting customer requirements.

The standard covers guidelines and requirements for managing tourism facilities, products, and services for Muslim travellers in accommodation premises, tour packages and tourist guides.

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2.2 Sustainable Service Quality (SSQ).

Quality service has been understood as an ambiguous concept where majority scholars have conflicting views to define the concept (Van Hoof, 2002). One of prominent scholars in service research has described service as a collection of acts that occur in the relationship between the guest and the organization’s staff, products and other physical resources, systems and/or setups demonstrating the service provider and possibly containing other guests, where all these acts’ objectives are to help customers’ daily activities (Grönroos, 2006). In addition, service quality establishes the organization’s trustworthiness in the eyes of the guests and the survival of organization’s rely on its level of service offered to the customers (Malik et al., 2020). Other than that, service quality is recognized as an important component that help an organization and offer new opportunities (Ali et al., 2015). For hotels, the primary indicators of quality service may be hygiene, protection, and the attitude of the staff (Jeaheng et al., 2020).

Furthermore, many studies have recognized Muslim-friendly tourism also discussed the “prospects” and

“challenges” of its development in several perspectives (Henderson, 2016; Wardi et al., 2018).

Stamenkov and Dika (2015) exerted that a sustainable service quality is the capacity to provide uninterrupted services with exceptional sustainable quality over a long period of time. Despite the awareness of importance on this topic, only few studies on sustainable service quality appear in the literature (Stamenkov & Dika, 2015). In addition, the behavior and response of Muslim guests toward staying and experiencing the services offered by Muslim-friendly hotels remains largely unexplored ((Jeaheng et al., 2020). Salleh (2016) exerted that the impact of sustainability to the services implementation and consequently towards the quality of services. The author even viewed that the success of product in the market rely on meeting functional requirements and sustainability.

Moreover, products compete based on its price, functions, diversity as well as sustainability.

2.3 Satisfaction.

Satisfaction is defined by as the fulfilment of the customer’s desire arising out of the customer’s aspiration to own or utilize a service (Oliver, 1997). Satisfaction is the resulting feeling or the judgment that the customer makes when they get a specific level of enjoyment and pleasure from the features of a product or the service itself (Hadi et al., 2019). Satisfaction has been implied as customer’s appraisal of a service vis-à-vis clients’ needs and expectations so as to judge whether that service has fulfilled their needs and expectations (Zeithaml & Bitner, 2003). Many scholars exerted the quality of service is the most prominent factor of satisfaction (Brady et al., 2002).

2.4 Customer Loyalty.

Customer loyalty is defined as a client’s commitment based on a very positive outlook to a brand, a service provider, or a particular sales outlet (Sheth et al., 2004). As a result, there will be regular and recurring purchasing of the product and service. Prominent scholars have set the pattern by elaborating the major indicators of customer loyalty which is repeat purchase denotes that customer displays preference to the purchase of a particular service;

retention which signifies sticking to the brand and resistance to change despite negative influence or perception of the product or service; and referral which implies recommending and providing reference to others for the purchase of specific products and services ((Kotler & Keller, 2006).

2.5 Perceived Risk.

Sweeney et al., (1999) define perceived risk as the subjective expectation of a loss that include financial and performance risk. They further exerted that Each risk dimension can be viewed as an expectation of a future cost that contributes to a good’s perceived value for money at the time of purchase. Other scholars believe that different types of perceived risk influence decisions of tourists to participate in tourism such as medical tourism (Wang, 2012). The perceived risk is a major determinant of tourism trade because it tends to influence tourists’ choice of destinations (Ractham et al., 2015). The perceived value of the consumer can be improved provided that companies able reduce their perceived risk to their consumer at the same time higher quality product and services are delivered (Sweeney et al., 1999). Given the concept of risk, a moderator effect on the relationship between various variables in consumer behavior can be identified (Habibi & Rasoolimanesh, 2020). Based on this argument, perceived risk is proposed as moderator in the model.

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3. Theories

3.1. Expectancy Disconfirmation Theory (Oliver, 1980)

According to review by Oh & Kim (2017), most research in hospitality and tourism between 2000 – 2015 adopted expectancy disconfirmation theory. This theory is to predict that customers make in advance of consumption act as a standard against which customers measure the firm’s performance. The theory plays an important role in discussing customer satisfaction. The higher expectation of actual performance the customers have, the greater the degree of disconfirmation that may happen and this causes a lower satisfaction.

3.2. Apostle Model developed by Jones & Sasser (1995)

The theory hypothesized an arrangement of a link between customer satisfaction and customer loyalty. Under this arrangement, customers are categorized under four distinct categories:

• Loyalist/apostle (high satisfaction ± high loyalty)

• Defector/terrorist (low satisfaction ± low loyalty)

• Mercenary (high satisfaction ± low loyalty)

• Hostage (low satisfaction ± high loyalty).

Consequently, customer satisfaction under this arrangement was used as a driver of customer loyalty.

4. Hypothesis

H1: Service staf has a positive influence on customers’ satisfaction with MFHS service company H2: Facilities has a positive influence on customers’ satisfaction with MFHS service company

H3: Physical environment has a positive influence on customers’ satisfaction with MFHS service company H4: Halal food and beverages has a positive influence on customers’ satisfaction with MFHS service company H5: Ground transfer has a positive influence on customers’ satisfaction with MFHS service company

H6: Accommodation has a positive influence on customers’ satisfaction with MFHS service company H7: Perceived price has a positive influence on customers’ satisfaction with MFHS service company

H8: Sustainable service quality (SSQ) has a positive influence on customers’ satisfaction with MFHS service company

H9: Customer satisfaction has a positive influence on customers’ loyalty with MFHS service company H10: Perceived risk moderates the relationship of service staf and customer satisfaction.

H11: Perceived risk moderates the relationship of facilities and customer satisfaction.

H12: Perceived risk moderates the relationship of physical environment and customer satisfaction.

H13: Perceived risk moderates the relationship of halal food and beverages and customer satisfaction.

H14: Perceived risk moderates the relationship of ground transfer and customer satisfaction.

H15: Perceived risk moderates the relationship of accommodation and customer satisfaction.

H16: Perceived risk moderates the relationship of perceived price and customer satisfaction.

H17: Perceived risk moderates the relationship of sustainable service quality (SSQ) and customer satisfaction.

5. Research Design

Based on the objectives of the research, this study will adopt a multi-method research design. At the first stage of the research, a qualitative research design using an in-depth interview will be applied to explicate the response of consumers. Then, the cross-sectional survey research design using self-administered questionnaires will be applied.

6. Population and Sampling

Research survey questionnaire will be constructed and tested. Target population focuses on consumers who consume services from Muslim Friendly Hospitality Services (MFHS) certified companies in Malaysia. Sampling will be selected by using purposive sampling method. Only customers who have experienced of consuming services from MFHS service companies will be chosen as the research sample. This is because they have the experience of using the services before and will provide information and feedbacks regarding their expectation

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Federal Territories are selected because the areas become the economic centres for the country and many sectors including tourism is located there.

7. Measurement Items

Generally, all construct measures in the literature will be directly employed but necessary modification and adaptation will be made for any unsuitable items to suit the local context and purpose of study (Gu et al., 2008).

Only scales that have reliability coefficient of Cronbach Alpha above the acceptable level of 0.7 or item factor loading above 0.5 will be employed as suggested by Nunally (1978). In addition, this study will adopt 5-point Likert scale because it is more reliable and can produce interval data that provides a greater volume of data than other scales (Cooper and Schindler, 2006).

The employee service quality construct will be adapted and adopted from Brady & Cronin (2001), Parasuraman et al., (1988) and Alhelalat et al., (2017). Scales for facilities, food and beverages come from Albattat et al., (2018). Perceived price comes from Eid & El-Gohary (2015) and Ryu & Han (2010). Measurement scales for facilities and physical environment will be adopted and adapted from Battour et al., (2014, 2017); Eid & El- Gohary (2015) and Oh (1999). The SSQ scale will be adapted from Parasuraman et al. (1988) [30] and Muhammad et al. 2016 [6] with some modification. Scales for customer satisfaction come from Oliver, (1980) and Susskind et al., (2003). Loyalty scales come from Oliver (1997) and perceived risk by Wang (2016). In addition, MS 2016:2015 will also be referred to for the scales for instance ground transfer.

8. Data Analysis

Qualitative data will be analyzed to generate an insight into the research problem and to assist in the interpretation of the quantitative results. Quantitative data analysis will be done according to two-step approach:

(1) estimating the measurement model; (2) analyzing the model and estimating path coefficient. The analysis will be done by using SPSS and SEM AMOS. SPSS is for data entry and basic analysis. SEM AMOS if for model development and hypothesis analysis.

9. Conclusion

This research will offer several contributions in terms of empirical, theoretical, and managerial. Empirically, several constructs will be examined namely service staff, facilities, physical environment, halal food and beverages, ground transfer, perceived price, and service quality In addition, the role of perceived risk as moderating variable will also be examined. Theoretically, Expectancy Disconfirmation Theory by Oliver (1980) and Apostle Model developed by Jones & Sasser (1995) will be applied. Managerially, the findings of research will benefit the hospitality industry particularly Muslim Friendly Hotel in terms of various aspects of business to focus on to satisfy customers. However, this research is cross sectional study and within the context of Muslim Friendly Hotels in Malaysia. Future study can apply qualitative method and longitudinal research to discover more information about the industry.

Acknowledgements

This research work was supported by USIM Research Grant no: PPPI/FEM/0122/USIM/12022.

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