Can Service Recovery Help When Service Failures Occur?

Article excerpt

This article reports on research conducted using the Critical Incident Technique to explore the nature of service failure and associated service recovery strategies used in hotels. Using a questionnaire-based approach, data were collected in hotels in both the UK and China; in total some 79 separate incidents were collected. Using a classificatory schema derived both from previous research and the incidents collected in this study, it has been possible to explore the relationships between service failure and service recovery. The findings show that hotels need to clarify their policies and procedures with regard to service recovery if they are going to be successful in turning the dissatisfaction deriving from a service failure into the possibility of customer retention. Even with clear recovery strategies, the research suggests that only half of customers experiencing a service failure of any type will return to the same hotel.


With increasing competition at all levels of the hospitality industry, managers are increasingly aware of the importance of keeping existing customers as well as winning new ones. Despite efforts to deliver consistent service to their customers, due to the nature of service operations it would appear that breakdowns in the delivery of service or service failures (Spreng, Harrell, & Mackoy, 1995) are inevitable (Hart, Heskett, & Sasser, 1990).

While service failures may be inevitable, losing customers following these failures is not. Service recovery actions can be taken that may repair all or some of the damage done. The customer's final perception of the quality of the service provider will be affected by the number and seriousness of the problems they encounter and how these problems are handled by the operation (Colgate & Norris, 2001). Indeed there are some claims that customers may rate the encounter more favourably after a failure has been corrected than if the transaction had been correctly performed the first time (Kelley & Davis, 1994).

On the other hand, service failures that are not properly recovered can result in a decline in customer confidence, lost customers, negative word-of-mouth, potential negative publicity, employee dissatisfaction and the direct costs or reperforming the service (Berry & Parasuraman, 1992; Lewis & Clacher, 2001).

To satisfy customers, hotel companies must both provide good products and deliver excellent service. Although the standard of the physical facilities and equipment that hotels provide has been seen to improve over the last few years, there is a widely-held belief that it is the level of service provided that distinguishes successful hotels from unsuccessful or mediocre ones (Morrison, 1996).

Purpose and Objectives

The purpose of the research reported here was first to identify and classify service failures occurring within the hotel context and to assess customers' perceptions of the seriousness of these failures and their effect on customer satisfaction.

The second objective was to identify and classify the recovery strategies that had been used to redress the service failures encountered and to assess the effect of these strategies on customers' subsequent satisfaction and intended purchase behaviours.

The relationships between these key variables were also to be investigated and tested.

Data Collection

The research methodology chosen to achieve these objectives was the Critical Incident Technique (CIT), first developed by Flanagan (1954) and since widely used and supported as suitable, effective and reliable for this type of research (Lockwood & Gilbert, 1999).

For the purposes of this study, a questionnaire-based approach was adopted. This approach has advantages in terms of the level of detail that can be collected along with simplifying and standardising the data collection process. However, the response rate for such questionnaires delivered by mail is known to be low (Lockwood & Gilbert, 1999) and so the questionnaires were delivered by hand. …