Star power: the effect of star rating on service recovery in the hotel industry

Abstract

Purpose This study investigated distributive justice (DJ), procedural justice (PJ) and interactional justice (IJ) in the recovery of service in the hotel industry as well as their effects on post-recovery satisfaction and the subsequent behavior of customers. This study also sought to elucidate the moderating effects of star ratings on these influences. Design/methodology/approach A field experiment design with 424 consumers using structural equation modeling was adopted to test the study hypotheses. Findings DJ, PJ and IJ were all shown to have a significantly positive effect on post-recovery satisfaction, which in turn has a significantly positive effect on customer loyalty and significantly negative effect on customer defection. Analysis on the moderating effects of star ratings also revealed that the relationship between DJ and post-recovery satisfaction during recovery efforts is stronger for hotels with higher star ratings than for hotels with lower star ratings. During recovery, post-recovery satisfaction was shown to be more effective in reducing customer defection from hotels with lower star ratings than from hotels with higher star ratings. Practical implications This study provides a reference by which hotels can match their service recovery mechanism to their star rating to retain customers and increase customer loyalty in the event of service failure. Originality/value This study confirms the importance of IJ in the service recovery processes in the hotel industry and provides verification that the star rating of a hotel plays a crucial role as a moderator between recovery effort and recovery effectiveness.

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