The Mediating Effect of Perceived Value on the Relationship between Service Encounter Quality and Satisfaction: Evidence from Luxury Town Hotels in Kenya

The main objective of this study was to determine the mediating effect of perceived value on the relationship between service encounter quality and customer satisfaction. The study was anchored on the value percept theory and the service encounter needs theory. Literature from preceding correlated studies was used to develop a conceptual model and hypotheses which were tested using statistical techniques. The study employed a descriptive cross sectional research design. Sampling was done using stratified random technique and a sample of 376 hotel guests was used in the study; a response of 350 (95%) was attained. A pilot study was conducted and reliability of the research tool was tested using Cronbach alpha test, validity tests were also carried out to check whether the tools measure what they were intended to. Four parametric tests; multi-collinearity, normality, heteroscedasticity and linearity of data were done to check the appropriateness and accuracy of the data. Data analysis was done using descriptive statistics, factor analysis, correlations and regression. Results showed that the influence of service encounter quality on customer satisfaction was partially mediated by perceived value and that there was a direct relationship between service encounter quality and customer satisfaction Customers expect that a service is performed right without errors the very first time, therefore, the hotel management must ensure their staff are competent and that other facilities that enhance guests experience like neatness, timely service, modern fixtures meet guest expectations. It was recommended that policy makers and management of hotels in Kenya should improve on service encounter quality and actively pay attention to guests’ expectations. Future research can also be directed at other hotels with lower star ratings as well as the unclassified hotels.