CHAPTER ONEINTRODUCTIONBackground to the StudyDue to increasing global market competition, many hospitality firms are facing challenges in acquiring and retaining customers (Ganesh, Arnold and Raynolds, 2000). Studies after study reveals that service quality raises customers satisfaction and by extension company’s performance comes as a result of quality service delivery. Most establishments nowadays place emphasis on quality as witnessed by the rise in the number of businesses earning quality awards such as the ISO awards. The service industry has not been left behind and the hospitality industry has produced world renowned establishments via quality awards.Service sector has increasingly been considered as an important sector, contributing a considerable percentage of country’s GDP especially those of advanced nations (Akbaba, 2006; Jensen, 2011; Petri et al. 2012). The share of service sector contributing to output and employment is also growing, which is confirmed by Soubbotina (2004). The rapid development of the service industries in the 21th century and the inevitable rise in competition between rival companies have resulted in an increasing need for service providers to identify service quality gap in the market in order to improve service provision, retain customers and create new customers. This encourages firms to search for competitive advantages through placing more emphasis on the quality of their products—either goods and/or services. Firms that achieve high levels of service quality tend to realize high levels of customer satisfaction and sustainable competitive advantage (Guo et al., 2008).Quality service has contributed significantly to firms’ market shares, greater return on investment and lower production costs (Mueller and Bedwell, 1993; Phillips et al., 1983; Reichheld and Sasser, 1990), higher profitability (Gundersen et al., 1996) and customer satisfaction (Oliver, 1997). Providing quality service improves satisfaction of customers and this is believed to lead to the increased customer loyalty to the firm, repeat purchases of the same products, and long-term relationship commitment. Service quality has become an important research topic because of its perceived relationship to costs (Crosby, 1984), customer satisfaction (Bolton and Drew, 1991), customer retention and positive word-of-mouth communications (Reichheld and Sasser, 1990).

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