Does uncertain demand affect service quality?. (April 2015)

• Record Type: Journal Article
• Authors: Chen, Chiang-Ming; Chiu, Hsien-Hung; Chi, Yan-Ping; Wu, Sou-Chein
• Is Part Of: International journal of hospitality management. Volume 46(2015)
• Page Start: 76
• Page End: 78
• Publication Date: 2015-04
• Subjects: Uncertain demand -- Capital–labor ratio -- Service quality -- Hotel industry; Hotel management -- Periodicals; Restaurant management -- Periodicals; Food service management -- Periodicals; Hôtels -- Gestion -- Périodiques; Restaurants -- Gestion -- Périodiques; Services alimentaires -- Gestion -- Périodiques; Food service management; Hotel management; Restaurant management; Periodicals; 647.94
• DOI: 10.1016/j.ijhm.2015.01.013
• Languages: English
• ISSNs: 0278-4319

Abstract

Abstract: The purpose of this article is to investigate the impact of demand uncertainty on labor intensity as well as service quality. Theoretical predictions are mixed: on the one hand, risk aversion leads hotels to choose a lower level of capital in response to demand uncertainty, thereby leading to higher labor intensity; on the other hand, the demand-enhancing benefit of service quality may be weakened due to demand uncertainty, thereby leading to a lower service quality decision. Using the data of international tourist hotels in Taiwan, this article shows that demand uncertainty leads to a positive impact on hotels' labor intensity. In addition, hotels located in markets with a higher degree of concentration, having more diversified revenue sources, or belonging to hotel chains also tend to exhibit higher labor intensity.