The hotel industry is one of the pillars of Malaysia's tourism industry. Hotels in the suburban areas in Malaysia are growing at a tremendous rate because the state governments are implementing initiatives to develop the tourism attractions in these places. At the same time, the hotels are faced with intense competition among themselves. Most of these hotels struggle to survive in the industry by doing various ways to attract visitors. Consequently, in recent years, the country's tourism industry has shown increasing volume of tourists coming to the suburban (rural) areas. There is a difference between the tourism activities in suburban (rural) areas and the large city. International and local tourists flock the former to discover nature-based tourism. Moreover, tourists can learn about the local culture; understand the suburban ecosystem and sustainable lifestyle; and experience the food, particularly the "local food" culture (Akin, Shaw and Spartz 2015). It appears that there are no studies done to investigate the service quality of the hotels located in suburban areas. Hence, it would be interesting to study service quality, customer satisfaction and behavioural intentions of the hotels located in suburban, underdeveloped areas. The outcome of those studies would obviously benefit the hotel industry in this country and other countries as well with regards to the suburban, underdeveloped areas.

According to Ardahaey (2011), an increase in the number of visitors can lead to an increase in business revenues. This is because the higher the number of visitors, the higher will be their spending. While the tourists who come to stay in the hotels might contribute to the revenue of the hotels, their presence also provides a positive impact on the income of the local inhabitants. In this regard, it is of utmost importance that the hotels provide quality services and accommodation because these aspects may influence the guest or customer satisfaction (Rahman 2012). The evidences provided by past studies suggest that service quality is related to customer satisfaction (Parasuraman et al. 1994; Cronin and Taylor 1992; Bitner et al. 1990) and customer loyalty (Kandampully et al. 2011; Caruana 2002). A satisfied customer has a positive effect on an organization in terms of profitability, repeat purchases, brand loyalty and positive word of mouth (Angelova and Zekiri 2011). Thus, hotel operators must focus on providing a reasonable level of service quality that meets customer needs. Importantly, this is to avoid the negative impacts of lower service quality. For instance, a hotel business that lacks service quality may face issues such as negative customer satisfaction, lack of customer loyalty and lower competitive advantage (Dedeoglu and Demirer 2015).

Therefore, service quality is considered to be one of the keys of organizational success. This means that delivering the best possible quality of service to customers is a winning strategy. An excellent level of service will not only result in enhanced profits, but also energizes the employees to perform to their full potential to meet the challenges faced by the business. By providing quality services, hotels can achieve customer confidence and thereby gain competitive advantage (Gunarathne 2014). According to Rao and Sahu (2013), hotel operators are now focusing to a greater extent on maintaining quality standards as this has the obvious advantage of meeting the basic needs and expectations of customers. Competition among hotels to attract and retain customers is intense, so it goes without saying that customers are less likely to return to a hotel if it fails to meet their service quality expectations (Rauch et al. 2015) regardless of the price they paid for. So, customer satisfaction as a result of quality services that are provided is critically important to hotel operators because it may directly influence customer loyalty and retention. With that, the objectives of the study are twofold: First, to examine the relationship between service quality and customer satisfaction of the hotels in suburban areas and secondly, to assess the effect of customer satisfaction on behavioural intentions. What follows next is a brief discussion of the relevant literature particularly with respect to the dependent and independent variables that are of interest to the researcher, and also for developing the research hypotheses.

2.1. Service quality

Service quality has emerged as an important element in the hotel industry for decades. In this relation, it is essential that service providers understand customer expectations and perceptions as well as factors that influence their evaluation of and satisfaction with the services that are provided to them (Mola and Jusoh 2011). Meanwhile, service quality concentrates on how to meet customers’ expectations as mentioned earlier. Customers’ expectations consist of a variety of service attributes. It is these attributes that contribute to their purchase intention and perception of service quality (Mamilla et al. 2013; Markovic and Raspor 2010). Next, a customer’s perception of the quality of a service received is traditionally measured after they have consumed the service (Rahman 2012). In the context of the hotel industry, the benefits or attributes of service quality include increased customer satisfaction; and positive effects on customer behavioural intentions such as loyalty, retention and positive word of mouth; as well as increased profitability for the provider of the service (Taylan et al. 2014; Ladhari 2009; Akbaba 2006). Coincidently, Ravichandran et al. (2010) examined the influence of perceived service quality on customer satisfaction and they concluded that an increase in service quality can contribute to customer satisfaction. Additionally, Siddique et al. (2013) measured the service quality of five-star hotels in Bangladesh from the customer perspective and found that the service quality of these hotels is highly dependent on attributes such as physical appearance; food quality; interior decoration; the security system; customized services; and behaviour of employees. More importantly, all of these attributes have an impact on fulfilling customer satisfaction.

The following sub-sections discussed about the elements being studied in service quality:

2.1.1. Employee behaviour

Hotels have become more competitive in recent years so much so that now, they not only have attractive rooms to entice customers. They also provide ‘high-quality staff’, regarded as one of the amenities of the hotel (Rao and Sahu 2013). Undeniably, employees play an integral role in service delivery as they also have an influence on customers’ perceptions of service quality. This adds up to give customers’ overall satisfaction with a service (Gazzol et al. 2013). In this relation, Turkay and Sengul (2014) concentrated on identifying hotel employee behaviours that have a significant influence on customer satisfaction. They identified three most significant positive employee behaviours, namely ‘being polite and cheerful’; ‘making the customer feels special’; and ‘being knowledgeable enough to respond to questions’. In addition, customers are satisfied when employees dress neat and have well-groomed appearance; are enthusiastic with their work; and give courteous greetings and expressions of friendliness (Kuo and Hsiao 2013). Additionally, Caber and Albayrak (2014) highlighted that staff attributes such as politeness and friendliness are important for enhancing customer satisfaction because they fulfil the customers’ demand for a friendly and polite service. Based on the above rationale, the following hypothesis was formulated:

H1: There is a positive relationship between employee behaviour and customer satisfaction.

2.1.2. Room amenities

Travellers consider room quality to be a factor that most influences their willingness to pay for an economy hotel. Coincidently, room amenities have been suggested as the most important attribute that creates value for customers (Zhang et al. 2011; Dube and Renaghan 2000). Moreover, a clean room and leisure amenities seem to be a prime way to deliver relaxation and pleasure to customers (Xu and Chan 2010). Additionally, Dortyol et al. (2014) described the attractiveness and décor of a room as a primary dimension that impacts positively on guest satisfaction and their decision to recommend the hotel to others. Next, Karunaratne and Jayawardena (2010) examined the major factors that contribute to customer satisfaction. They found that the size of the room and quality of the furniture were given highest scores as they influence customers’ expectations and perceptions. Interestingly, it was also revealed in studies that a quiet room is one of the key attributes of service quality as it has been shown to lead to a high level of satisfaction among customers (Ho et al. 2014; Nash et al. 2006). Thus, a standard type hotel should attempt to provide such. Additionally, Carev (2008) indicated that room attributes such as room amenities, comfort and other room accessories have increased customer satisfaction. This implies that such attributes play an important role in terms of customers’ decision to repeat staying in the hotel, recommend the hotel to others and this also indicates loyalty towards the hotel. Based on the above rationale, the following hypothesis was developed:

H2: There is a positive relationship between room amenities and customer satisfaction.

2.1.3. Physical evidence

Another variable that plays a significant role in influencing customer satisfaction is physical evidences (Suki 2013; Kumar et al. 2010). This refers to the physical appearance of and the facilities provided by the hotel. Specifically, Markovic and Jankovic (2013) found that physically, the appearance of hotel facilities, and equipment and communication materials have resulted in significant and positive effect on overall customer satisfaction for the Croatian hotel industry. Meanwhile, Millar and Baloglu (2008) concluded that customer is more likely to favour hotels that are green or environmentally friendly. In addition, cleanliness has been identified as an important criterion when judging about service quality. All these said that the physical environment plays a significant role in service delivery (Zemke et al. 2015; Barber et al. 2011). Following that, the following hypothesis was developed:

H3: There is a positive relationship between physical evidence and customer satisfaction.

2.1.4. Food quality

Hotel customers often consider restaurant services when choosing a hotel. This refers to the quality of meals, and friendly and professional services. They contribute in terms of customers’ choice of their restaurant in hotels (Kapera 2015; Giritlioglu et al., 2014). Specifically, food and beverage service can affect customers both mentally and physically by providing them with happiness and satisfaction during the consumption (Pimonsompong 2007). Next, Al-Tit (2015) found that food quality has positive influence on customer satisfaction. Additionally, Gupta and Srivastava (2011) identified ‘taste and variety of food’, ‘service flexibility of waiters/waitresses’ and ‘environment of restaurant’ as key variables that restaurants in hotels need to consider to satisfy customers. Similarly, Naseem et al. (2011) found that taste and variety of food have an impact on customers’ happiness and satisfaction. Importantly, the hygiene of food preparation constitutes a critical factor in the provision of quality service in the food and beverage department. This quality assurance can strengthen customers’ confidence (Lazari and Kanellopoulos 2007). In light of the above, the following hypothesis was formulated:

H4: There is a positive relationship between food quality and customer satisfaction.

2.2. Customer satisfaction

In order to achieve customer satisfaction, an organization needs to provide goods and services that accommodate specific levels of perceived value of customers. For example, customers are satisfied when their perception of service quality matches their expectations. They also feel contented when the value of the service they receive matches the price they pay for the service (Lu et al. 2015; Wicks and Roethlein 2009). In order to operate a hotel successfully so that it gives customers a satisfying experience, hotel managers need to understand what customers want and how they assess hotel service quality (Olorunniwo et al. 2006). According to past studies, customer satisfaction has become an important factor in assessing organizational performance; and is also considered the baseline for standard of performance; as well as a possible standard of excellence for any business (Omar et al. 2015; Ho et al. 2014). Specifically, customer satisfaction can be assessed in terms of interest; enjoyment; surprise; anger; wise choice; and doing the right thing. This variable is very important for the service industry as customer satisfaction has been proven to be the main point in measuring service quality (Horvath and Michalkova 2012; Cronin et al. 2000).

2.3. Behavioural intentions

Should there exists a positive relationship between customer satisfaction and behavioural intentions in the hotel and hospitality sector is important because of the positive impact that such a relationship brings to profitability (Han et al. 2010; Ryu et al. 2010; Han and Back 2008). A good example is repeat business. Next, Edwin and Sheryl (2013) concluded that by gaining an understanding of customer attitudes through measuring their level of satisfaction gives the service provider a better chance of influencing consumer behaviours. Additionally, Yee, Yeung and Cheng (2009) found that customer satisfaction is highly significant as that can result in customer loyalty. One reference to quote is by Siddiqi (2011) who showed that service quality attributes are positively related to customer satisfaction and in turn this customer satisfaction is positively related to customer loyalty. Usually, a satisfied hotel customer uses word of mouth to recommend the hotel to others. By returning to stay in the same hotel and others whom have been influenced stay in the hotel, these contribute to profitability in more than one way (Petzer and Mackay 2014). Next, Chang et al. (2014) investigated tourists’ behavioural intentions on those who stay overnight in green hotels. Their results revealed a positive relationship between customer satisfaction and behavioural intentions. Additionally, Berezina et al. (2012) found that satisfaction, revisit intention and word of mouth all have significant impact on customer perceptions of service quality. The above rationale led to the development of the fifth and final hypothesis:

H5: There is a positive relationship between customer satisfaction and behavioural intentions.

Figure 1 below depicts the theoretical framework illustrating the relationships between the variables. The story of the relationships was based on a review of the relevant literature.

Figure 1:

Theoretical framework of the study

Source: Own literature search

3.1. Sampling process and population

As mentioned earlier, the main aim of this research was to investigate the influence of service quality on customer satisfaction in hotels located in local suburban areas. One of the local suburbs that is becoming increasingly popular among tourists is Temerloh, located in the state of Pahang. Temerloh, which is the second largest town in Pahang, is popular for its patin fish, an expensive freshwater catfish. The target population comprises customers who visitthe hotels in Temerloh. The sample was extracted from the customers of two hotels in Temerloh. The hotels were Hotel Seri Malaysia and Hotel Jelai. These hotels were selected because they offer the services that were being studied and most of the local tourists choose these hotels when they stay in Temerloh. Questionnaires were administered to the target respondents who were selected based on the simple random sampling technique. The questionnaires were administered during the peak seasons and school/public holidays (from November to December). The hotel operators were contacted in advance to obtain their permission and acquire a list of the respondents. Next, the enumerators contacted the respondents based on the list provided by the hotels. Most of the respondents comprised frequent customers who choose the hotel when they come to Temerloh, Pahang. Consent was also obtained from the respondents before they answered the questionnaire. The survey instrument contained 30 items. According to Garson (2008), there should be at least ten cases for each item in a survey instrument. For this purpose, 300 respondents were invited to participate in the survey. Past researchers (e.g. Muzaffar 2015; Marnburg and Luo 2014; Shah 2012) have also adopted this method in defining their sample size.

3.2. Data collection

The source of data collected was primary via self-administered questionnaires distributed to 300 respondents in Hotel Seri Malaysia and Hotel Jelai in Temerloh. The outcome was 275 completed and useable questionnaires collected. This equates to a response rate of 92%.

3.3. Measurement

Six constructs measured in this study were obtained from the literature search. The constructs were employee behaviour, room amenities, physical evidence, food quality, customer satisfaction and behavioural intentions. Each construct contained five items. Table 1 illustrates the measures of each construct. The respondents were asked to score each item by using a seven-point Likert-type scale, which ranged from (1) ‘strongly disagree’ to (7) ‘strongly agree’. Only the construct of satisfaction was measured by using different anchors, ranging from (1) ‘extremely dissatisfied’ to (7) ‘extremely satisfied’.

The statistical software SPSS version 20.0 was used to analyse the data of this study. The following are the outcomes of the analysis.

4.1. Descriptive analysis

Of the 275 respondents, 108 were male (39.3%) and 167 were female (60.7%). The majority of the respondents (39.6%) have ages between 25 and 34 years old. However, the respondents aged 55 and above formed the smallest proportion (4.4%) of the sample. Table 2 presents the full results of the descriptive analysis.

It can be seen from Table 2 that 57% of the respondents were Malay, while 26.5% were Chinese and 15.6% were Indian. Most of the respondents were married (68.4%). As for the education level, a majority had a polytechnic degree (53.5%), while the next largest grouping had a diploma or bachelor’s degree (32%) degree. Only a small minority had a Master’s or PhD degree (1.8%). The remainder (12.7%) had secondary school qualification. As for the occupation of the respondents, 129 (46.9%) were employed in the private sector, 62 (22.5%) were working in the government sector (22.5%) and 35 (12.7) were self-employed.

4.2. Exploratory factor analysis

Table 3 illustrates the outcomes of the exploratory factor analysis and reliability analysis of each variable. An exploratory factor analysis was performed on all the 30 items in the questionnaire. For this purpose, the principal component analysis with varimax rotation was applied. Thereafter, the result of Kaiser-Meyer-Olkin (KMO) was 0.811 with eigenvalues greater than 1, as depicted in Table 3. The six constructs were extracted; they accounted for 70 percent of the total variance explained.

A reliability analysis was also undertaken to assess whether the scale used in the questionnaire was reliable (Hair et al. 1998). The scale is deemed to be reliable if the repeated measurements of each variable produce consistent results (Malhotra 2004). The Cronbach’s alpha is a popular measure of reliability that can be used to determine the extent of whether the questionnaire items can be treated as a single latent construct. The norm is a value of 0.6 for reliability is considered adequate for a survey instrument (Hair et al. 2006; Malhotra 2007).

Based on Table 3, it can be observed that all the constructs have a Cronbach’s alpha of above 0.7. Thus, it can be concluded that the items in the questionnaire are reliable. This means that the questionnaire was suitable to be used as the survey instrument (Hair et al. 2006).

4.3. Correlation analysis

Table 4 illustrates the outcomes of the correlation analysis using Pearson’s correlation coefficient. The analysis was conducted to analyse the positive and negative correlations between constructs (Egghe and Leydesdorff, 2009).

The results showed that the correlations among all the constructs were significant. In conformity with many researchers (e.g. Weston et al., 2014; Paul, Justin, and Nigel, 2012; Philo et al., 2010), the following scale of magnitude was used to interpret the magnitude of the correlation coefficients: < 0.1, trivial; > 0.1–0.3, small; 0.3–0.5, moderate; 0.5–0.7, large; 0.7–0.9, very large; and 0.9–1.0, nearly perfect. Therefore, the constructs were considered to be highly correlated, while some of them were moderately correlated.

4.5. Regression analysis

Table 5 illustrates the outcomes of the multiple regression analysis (R²) involving the relationship between service quality (employee behaviour, room amenities, physical evidence and food quality) and customer satisfaction.

From Table 5, it can be seen that the R square was 0.339, which means that 33.9% of customer satisfaction was explained by service quality. Moreover, the R square value and adjusted R square value were almost similar (the adjusted R square decreases by only 0.010 points). This shows that the regression model has very good explanatory power in relation to the dependent variable (Markovic and Jankovic 2013). It can also be seen that three out of the four independent variables significantly influenced customer satisfaction. The food quality dimension (β =0.217, p < 0.05) had the highest statistically significant coefficient value. Therefore, this was the most important independent variable as it produced the highest impact on customer satisfaction. Past research study as Al-Tit (2015) also found that food quality has a positive influence on customer satisfaction. The next most important variable that was also statistically significant in relation to customer satisfaction was employee behaviour (β = 0.198, p < 0.05), followed by room amenities (β =0.157, p < 0.05). In contrast, the variable physical evidence produced the smallest impact on customer satisfaction and it was also not statistically significant (β =0.116, p > 0.05). This result was similar with that reported in several previous studies (i.e. Minh et al. 2015; Tuan and Linh 2014) that physical evidence does not significantly influence customer satisfaction. Table 6 illustrates the outcomes of the simple regression analysis (R²) involving the relationship between customer satisfaction and behavioural intentions.

The outcomes of Table 6 show that 46.5% of customer satisfaction was explained by behavioural intentions. The R square value and adjusted R square value were also almost similar to each other (adjusted R square decreases by only 0.002 points). This shows that this regression model also had good explanatory power. Customer satisfaction was statistically significant in terms of its influence on customers’ behavioural intentions (β = 0.732, p < 0.05). Thus the result of this coefficient regression analysis showed that customer satisfaction was an important dimension effecting customers’ behavioural intentions.

4.6. Hypotheses testing

The hypotheses were tested based on the results of the coefficient regression analyses presented in Tables 5 and 6. A summary of the results of the hypotheses testing was provided in Table 7. Hypotheses H1, H2 and H4 posited that employee behaviour, room amenities and food quality each had a positive relationship with customer satisfaction. Hypothesis H3 was rejected indicating a non-significant relationship between physical evidence and customer satisfaction. Meanwhile, H5 proposed a positive relationship between customer satisfaction and behavioural intentions, and the analysis supported this proposition.

The outcomes of the analysis indicated that the dimension that mostly influenced customer satisfaction was food quality. This dimension of service quality produced the highest beta value compared to the other dimensions. This result was similar to Al-Tit (2015) who also found food quality to have a great influence on customer satisfaction. In that same study, food quality was one of the most important factors in terms of achieving higher levels of customer satisfaction. Other past researchers (Haghighi et al. 2012; Lombard 2009) have also produced similar results. This means that hotels are capable of improving their customer satisfaction level considerably if they performed better in the area of food quality. Therefore, hotel operators should focus on delivering food and beverage services that can make customers feel happy and satisfied.

Next, employee behaviour was the dimension that produced the second strongest positive impact on customer satisfaction. This finding was in conformity with Kattara et al. (2015), who also concluded that employee behaviours had greatly effected customer satisfaction. Additionally, Turkay and Sengul (2014) also identified employee behaviour as important and significant to enhance customer satisfaction. Since the results showed that employee behaviour was the second most important service quality dimension and it also significantly influenced customer satisfaction, hotel operators should concentrate on developing their human resources in order for them to excel in performance. This is critical because a customer’s perception of the service quality delivered by an employee during service delivery has been found to affect the customer’s overall satisfaction with the service (Gazzol et al. 2013). Another service quality dimension that produced a positive influence on customer satisfaction was room amenities. In the context of the study, room amenities refer to comfortableness; room size; and quality room furnishings and facilities. This results produced by this dimension was similar to that reported by Seo (2012), whom also identified room-related attributes to be of concern to the customers in China because they really influence their satisfaction. The experience they had while staying in a hotel room had effected their perception of overall service quality. Additionally, Carev (2008) explained that customers usually find their hotel rooms enjoyable when there are room amenities such as comfort and other room accessories. Moreover, it is a fact as mentioned earlier that a hotel room is an important element that determines whether a customer decides to return to the same hotel; recommend it to others; and by him or her repeating to stay in the same hotel demonstrates loyalty to the hotel. Therefore, hotel operators should not overlook the importance of room quality. As an example, they can improve the performance of the housekeeping department to enhance the room quality. In this way, customers are assured to better enjoy their room experience more. This view is similar with that of Mazumder and Hasan (2014), whom have also identified housekeeping as one of the important factors to determine the levels of customer satisfaction and customer loyalty.

In contrast, the physical evidence dimension of service quality produced a non-significant impact on customer satisfaction. In similarity, Tuan and Linh (2014) also found that the physical evidence of a hotel was not significantly related to customer satisfaction. This implies that an idea of having a higher quantity of physical evidence of value as that can lead to a higher value of customer satisfaction can be rejected. Furthermore, a similar result was reported by Minh et al. (2015), whom concluded that customers do not regard the physical evidence of a hotel as a differentiation factor when they make a decision to stay in a particular hotel. Nonetheless, other past studies such as Al-Rasheed (2014), Suki (2013), Hossain (2012) and Kumar et al. (2010) found physical evidence to be one of the significant factors effecting customer satisfaction. Those researchers indicated that physical evidences such as furniture, physical facilities and equipment play a significant role in influencing customer satisfaction. Therefore, hotel operators should not completely ignore this dimension of service quality in their business operations.

In relation to this study, customer satisfaction has been found to be significant influenced by behavioural intentions. This implies increasing customer satisfaction as important because it can influence positive behavioural intentions to be realised such as customer loyalty and positive word of mouth. Customers who are satisfied with the services can influence their behavioural intentions to be realised such as customer retention (Al-Tit 2015), customer loyalty (Auka 2012) and positive word of mouth (Jan and Abdullah 2013). Therefore, it is very important for hotel operators to persuade their customers to stay in their hotels by convincing them of the provision of quality services. When customers have a good impression of the hotel, this will influence them to revisit and spread good news about the hotel.

Knowledge of the relationship between service quality and customer satisfaction can help managers to overcome the challenges of improving service quality in the hotel industry (Gunarathne 2014). As such, this study has contributed to the body of theoretical knowledge with regards to the relationship between service quality and customer satisfaction in hotels located in local suburban areas. This study examined to what extent each of the four dimensions of service quality (employee behaviour, room amenities, physical evidences and food quality) affects customer evaluation of the service quality of two hotels located in suburban Temerloh of Pahang in Peninsular Malaysia. The findings predicted food quality as the highest factor outcome of service quality evaluation by customers upon the two local hotels in Temerloh. This was followed by employee behaviour and then room amenities. The findings also identified physical evidences as one service quality dimension that did not produce significant influence on customer satisfaction. Based on the outcomes of the analyses, it is recommended that hotel operators in suburban areas need to concentrate on how to increase or maintain customer satisfaction as this factor can eventually stimulate positive behavioural intentions to be realisable, such as customer loyalty and positive word of mouth. As a conclusion, knowing how customers perceive service quality and being able to measure service quality can benefit in terms of managing hotel services in suburban areas. By acquiring the means to measure service quality, this can help the hotel management to obtain reliable data that can be used to monitor and improve service quality on a consistent manner. This enables hotel operators to gain a better understanding of how the respective service quality dimensions affect customer satisfaction. This skill alone can create a blue ocean for the hotel operators, which is an effective competitive advantage.

This study has been constrained by limitations such as focusing on only two local suburban hotels in Temerloh (i.e., Hotel Seri Malaysia Temerloh and Hotel Jelai). While the recommendations are particularly applicable to these hotels, other hotels located in other suburban areas can still apply them as they also provide general information on ways to improve the quality of hospitality services. Future research needs to be conducted to determine the effects of other service quality dimensions on customer happiness and satisfaction. This research can be carried out in different localities because the results may differ according to state or city.