Evaluating stability of the performance‐satisfaction relationship across selected lodging market segments

Abstract

Abstract Purpose – The purpose of this paper is to illustrate new methods of examining structural differences among segmented markets beyond comparing merely univariate variable mean scores, so as to help marketers and researchers gain better insights into segment differences for meaningful strategy development. Design/methodology/approach – A comprehensive dataset covering various lodging market segments was constructed from Tripadvisor.com. The data then were sorted into lodging customer segments by star rating, type of operation, and level of price charged. Structural equation modeling with the −2 log‐likelihood difference test was conducted to illustrate how effectively the differences, if any, of market segments could be assessed in contrast to the traditional mean‐score comparison approach. Findings – Guest satisfaction was influenced by the same performance variable to the same magnitude and direction across different lodging segments examined. Such stability in the amount of influence of performance on guest satisfaction was true even in the fact that the variable mean scores were significantly different across the market segments. Research limitations/implications – The traditional approach to examining segment differences via univariate mean scores could be one set of results, while the effect‐based difference assessments in this paper resulted in another. Developing marketing strategies based on the effect‐based segment differences, as illustrated in this paper, is considered more effective than the traditional mean‐based approach. One limitation of this paper could be use of a secondary dataset with limited scope of the model employed for an illustrative purpose. Another limitation is that the sample characteristics are unknown due to the nature of a secondary dataset. The examination of the market segments was also limited to those based on only three popular variables. Originality/value – The paper is a fresh attempt to examine market segment differences through the effect of one variable on another. The paper advances the methods of hospitality and tourism research for examining segment differences beyond the traditional univariate mean‐based examination approach. The methodological illustration is applicable to a vast majority of different theoretical frameworks known in the hospitality and tourism field. Use of the assessment method illustrated in this paper also requires future market segmentation studies to rely more on theories than data.

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