The Service Recovery Paradox. Does It Really Exist?

By Simon Hudson Endowed Chair in Tourism and Hospitality, University of South Carolina | March 31, 2013

Service delivery failure is likely to occur at some point in time for organizations in the hospitality industry. Though it is unlikely that businesses can eliminate all service failures, they can learn to respond effectively to failures once they do occur, and this response is often referred to as service recovery, defined as the process by which a company attempts to rectify a service delivery failure. One study of hotel customers found that their level of satisfaction and lasting impression of a hotel is based first and foremost on what happens when something goes wrong. Mostly, customers accept that mistakes happen; the problem begins when there is no strategy in place to rectify the situation easily.

Some researchers have suggested that customers who are dissatisfied, but experience a high level of excellent service recovery, may ultimately be even more satisfied and more likely to repurchase than those who were satisfied in the first place. This idea has become known as the service recovery paradox (see Figure 1). There are somewhat mixed opinions on whether a recovery paradox exists, but customer complaints about defective services may represent an opportunity for the company to improve its image and perceived quality, since it permits the company to make a positive correction or to resolve the complaint.

alt text

Despite the significance of the tourism and hospitality sector both economically and as a source of customer complaints, there has been little research that explicitly addresses complaining behavior and service recovery. Research that does exist is relatively recent and still evolving. Research in the tour operating sector has found that even when a firm recovers effectively from a service failure, satisfaction is not guaranteed, which is at variance with results reported by other researchers. In a study that tested the recovery paradox for airline passengers, researchers found that customer satisfaction was lower after service failure and recovery than in the case of error-free service.

A study of service failure and recovery in the UK hotel industry found that guests who were satisfied with the hotel’s response to their problems, were much more likely to return than those who were not satisfied with recovery efforts. And a study in Asia looking at the impact of critical incidents of service failures and recovery efforts in a hotel, found that only complete resolution results in repeat patronage, while partial resolution and unresolved service failures served as a deterrent to the guest’s return patronage. And another survey of 613 hotel guests found that guests’ overall satisfaction and intention to revisit were much higher when they believed that service failure was unstable and recovery was stable.

The hotel industry involves a high degree of interaction between employees and consumers and so provides many opportunities for service failures to occur. Customers’ perceptions of their experience, the so-called “moments of truth”, play a major role in determining customer satisfaction and future purchase decisions. The quality of service encounters is frequently determined by the actions of front-line staff, whose experience and commitment may be limited and whose attitudes may vary from one encounter to another. Therefore, the relationship between service recovery and the different dimensions of quality perceived by customers is a topic that needs more attention.

Coming up in February 2018...

Social Media: Engagement is Key

There are currently 2.3 billion active users of social media networks and savvy hotel operators have incorporated social media into their marketing mix. There are a few Goliath channels on which one must have a presence (Facebook & Twitter) but there are also several newer upstart channels (Instagram, Snapchat &WeChat, for example) that merit consideration. With its 1.86 billion users, Facebook is a dominant platform where operators can drive brand awareness, facilitate bookings, offer incentives and collect sought-after reviews. Twitter's 284 million users generate 500 million tweets per day, and operators can use its platform for lead generation, building loyalty, and guest interaction. Instagram was originally a small photo-sharing site but it has blown up into a massive photo and video channel. The site can be used to post photos of the hotel property, as well as creating Instagram Stories - personal videos that disappear from the channel after 24 hours. In this regard, Instagram and Snapchat are now in direct competition. WeChat is a Chinese company whose aim is to be the App for Everything - instant messaging, social media, shopping and payment services - all in a single platform. In addition to these channels, blogging continues to be a popular method to establish leadership, enhance reputations, and engage with customers in a direct and personal way. The key to effective use of all social media is to find out where your customers are and then, to the fullest extent possible, engage with them on a personal level. This engagement is what creates a personal connection and sustains brand loyalty. The February Hotel Business Review will explore these issues and examine how some hotels are successfully integrating social media into their operations.