Customer loyalty in the Chinese travel agency industry: A comprehensive hierarchical modelling approach : A thesis submitted in partial fulfilment of the requirements for the Degree of Doctor of Philosophy at Lincoln University

Abstract

The global travel and tourism industry was on a rising trend prior to COVID-19. The World Travel and Tourism Council (2021) announced that the travel and tourism industry was fast-growing and contributed one-tenth of the global GDP before the COVID-19 pandemic. Studies into the traditional travel agency industry are sparse, as several services marketing researchers have expressed their concern over the uncertain future of traditional travel agencies in the travel and tourism industry. However, the travel agency industry has not been eliminated from the tourism distribution channel as predicted. On the contrary, the number of travel agencies in China has steadily expanded over the last decade, rising from 23,690 companies in 2011 to 38,943 in 2019. This study uses a comprehensive hierarchical modelling approach as a framework to: (1) identify the primary dimensions of service quality; (2) analyse the interrelationships between the five marketing constructs (service quality, customer perceived value, customer satisfaction, brand image, and customer loyalty); and (3) examine the effect of demographic factors in influencing customers’ perceptions of interrelationships between these five marketing constructs. The survey was conducted in four shopping mall complexes in Beijing and Shanghai. A total of 481 questionnaires were collected from the 1st to the 20th of December, 2017. The participants were customers who were over 18 years old and those who had booked travel using a travel agency in the past year. The data analysis techniques employed in this study were exploratory factor analysis, confirmatory factor analysis, and structural equation modelling. The research results confirm that four primary dimensions for conceptualising and measuring service quality in the Chinese travel agency industry are: interaction quality, physical environment quality, technical quality, and outcome quality. Interaction quality is the most important primary dimension compared to the other three primary dimensions for overall service quality performance. In addition, brand image is the only construct that has a direct and positive impact on customer loyalty. However, service quality and customer perceived value are also found to have an indirect impact on customer loyalty, and these impacts are mediated by the construct of customer satisfaction. The empirical results also confirm that three important indicators of travel agency customer satisfaction in China are: service quality, customer perceived value, and brand image. Finally, the research results reveal that customers from different demographic backgrounds (gender, age, marital status, and income level) do perceive the interrelationships between marketing constructs differently. This study adds to the body of knowledge on services marketing literature by conceptualising service quality and examining the interrelationship between five marketing constructs in China’s travel agency industry using a single conceptual research model. The findings from the statistical results provide valuable information for travel agency managers to establish and execute successful marketing strategies and tactics for them to compete in the fiercely competitive marketplace.