International Journal of Hospitality Management 52 (2016) 13–23

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International Journal of Hospitality Management

journal homepage: www.elsevier.com/locate/ijhosman

Exploring customer experience with budget hotels: Dimensionality

and satisfaction
Lianping Ren a,b,∗ , Hanqin Qiu c , Peilai Wang d , Pearl M.C. Lin c
a
Macau University of Science and Technology, Macau, China
b
The Institute for Tourism Studies, Macau, China
c
The Hong Kong Polytechnic University, Hong Kong, China
d
Shanghai Institute of Tourism, Shanghai, China

a r t i c l e i n f o a b s t r a c t

Article history: The budget hotel sector in China has rapidly developed in the past decade. However, very little is known
Received 15 October 2014 about consumer behavior in this sector. This exploratory study addresses this knowledge gap by adopting
Received in revised form a mixed method of in-depth interviews and questionnaire survey. It specifically aims to explore the
12 September 2015
dimensionality of customer experience with budget hotels and to further examine the influencing factors
Accepted 15 September 2015
for customer satisfaction. The results of exploratory factor analysis reveal four factors or dimensions
Available online 25 September 2015
of customer experience, namely, tangible and sensorial experience, staff aspect, aesthetic perception,
and location. Multiple regression analysis shows that these four factors significantly influence customer
Keywords:
Customer experience
satisfaction in a positive manner.
Satisfaction © 2015 Elsevier Ltd. All rights reserved.
Budget hotel
Dimensionality

1. Research background
The budget hotel sector worldwide has a shorter development
history in comparison with the full-service hotel sector. Accord-
ing to Gilbert and Lockwood (1990), budget hotels in the United
States started with the opening of the first Motel 6 (room only, $6
per night) in California in 1963, and budget hotels have expanded
since 1970. Budget hotels around the world have rapidly devel-
oped in recent decades. Such development has been attributed to
changes in consumer attitudes, lifestyles, and values (Fiorentino,
1995), growing number of domestic travelers, developing economy
and maturity of the hotel industry (Ruetz and Marvel, 2011), and
other factors.
Budget hotels in China started with the opening of the first Jin-
jiang Inn in Shanghai in 1997. Since its establishment, the budget
hotel sector has been developing at an unprecedented rate. Accord-
ing to Inntie (2012), 8313 budget hotels exist in China as of the first
quarter of 2012, which accounted for 15.11% of the total number of
hotels in the country. Fig. 1 shows the growth of budget hotels in
China since 2000.
∗ Corresponding author. Tel.: +853 8598 1251.
E-mail addresses: rlp770512@hotmail.com, everen@ift.edu.mo
(L. Ren), Hanqin.zhang.qiu@polyu.edu.hk (H. Qiu), wangpeilai@126.com (P. Wang),
Pearl.lin@polyu.edu.hk (P.M.C. Lin).
Fig. 1 illustrates the growth of budget hotels in China from 2000
to 2012. In 2000, the number of budget hotels was only 23. Rapid
development occurred after 2004. The growth rate peaked from
2005 to 2007, and remained high even during the financial cri-
sis in 2008. Over the past 12 years, the number of budget hotels
had grown to 8313, with 837,220 available rooms, up until the first
quarter of 2012. According to the most recent statistics, the num-
ber of budget hotels has further increased to more than 12,000,
with over 500 different budget hotel brands (Inntie, 2014). Among
all of the budget hotels in China, branded budget hotels develop
considerably faster than unbranded ones. According to the offi-
cial websites of leading budget hotel chains in China, Home Inns
alone had more than 3000 hotels in over 330 cities across the coun-
try by the end of 2014 (Home Inns Official Website, 2015). The
Huazhu Hotel Group has more than 2000 hotels in 280 cities in
China (Huazhu Official Website, 2015).
The development of budget hotels in China has expanded the
range of choices available for the customers in the marketplace,
thus intensifying the competition. As Meyer and Schwager (2007)
point out, customer experience is more relevant in the current soci-
ety, in which consumers have more choices than they used to. For
consumers, the selection of hotel products depends on their experi-
ence. Prior research has proved that behavioral intention is largely
influenced by the satisfaction of customers (e.g., Clemes et al., 2011;
Cronin et al., 2000), which, in turn, is influenced by their expe-
rience (e.g., Chen and Chen, 2010; Zins, 2002). Although a good

http://dx.doi.org/10.1016/j.ijhm.2015.09.009
0278-4319/© 2015 Elsevier Ltd. All rights reserved.
14 L. Ren et al. / International Journal of Hospitality Management 52 (2016) 13–23
9000
8000
7000
6000
5000 Number of Hotels
4000
3000
Number of rooms
2000
(hundred)
1000
0 experience is a subjective perception that is felt from within. It
2012Q1
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
Fig. 1. Growth of budget hotels in China from 2000 to the first quarter of 2012 (Data
source: Inntie, 2012).
number of studies have focused on customer experience, service
quality, and customer satisfaction in the full-service hotel sector,
the budget hotel sector has been rarely explored. Therefore, under-
standing the experiences of customers of budget hotels that induce
satisfaction or dissatisfaction is vital to win the market. This
idea has also prompted the exploration of antecedent factors that
engender positive customer experiences with budget hotels.
The examination of the holistic experience of consumers has
intensified as indicated by the term “experience economy” (Pine
and Gilmore, 1998, 2011). However, prior studies on budget hotels
have been primarily attribute-based. For example, location, price,
quality, simple design (Justus, 1991), and membership (Nash et al.,
2006) are perceived to be important attributes. By contrast, accord-
ing to the experiential view, more dimensions underline customer
experiences (e.g., Knutson et al., 2009). This observation is another
rationale to explore the potential dimensionality of customer expe-
rience with budget hotels.
Therefore, this study aims to fill the knowledge gap by
addressing the following research objectives:
(1) What factors influence customer experience with budget hotels
in China?
(2) What are the underlying dimensions of customer experience
with budget hotels?
(3) How do the identified dimensions influence customer satisfac-
tion?
Studying the context of China is based on the rapidly developing
budget hotel sector in the country. In addition, several domestic and
international hoteliers target Chinese customers, who comprise the
largest potential market of budget hotels (Ruetz and Marvel, 2011).
Thus, the results of the present study will provide hoteliers with
significant insights.
2. Literature review
2.1. Nature of experience
The importance of “experience” in creating competitive advan-
tage is fully discussed by Pine and Gilmore (1998, 2011), Schmitt
(2003), Verhoef et al. (2009), Shaw (2005), and other experts.
“Experience,” which refers to the new economic value or the
fourth offering, after commodity, good, and service, is the new
engine of economic growth for organizations (Pine and Gilmore,
1998, 2011). The proper management of customer experience can
turn customers into advocates, upon which long-term competitive
advantage and profitability can be achieved (Smith and Wheeler,
2002).
Definitions of experience differ depending on the situations and
grounds for experience. Carbone and Haeckel (2005) refer to expe-
rience as takeaway impressions that customers have when they
encounter products, services, and businesses. According to Meyer
and Schwager (2007: 118), “customer experience is the internal
and subjective response customers have to any direct or indirect
contact with a company.” For Shaw, “Customer Experience is an
interaction between an organization and a customer. It is a blend
of an organization’s physical performance, the senses stimulated,
and emotions evoked, each intuitively measured against Customer
Expectations across all moments of contact” (Shaw, 2005: 51). Thus,
also relies heavily on consumption context. Furthermore, interac-
tions with human or physical elements are important in shaping
the customer experience.
Various studies in hospitality and tourism settings have
attempted to understand the dimensions of experience. A number
of definitions for experience have been provided; at the same time,
dimensionality approaches to experience have been proposed. For
example, Hemmington (2007) identified the five dimensions of
hospitality experience, namely, host–guest relationship, generos-
ity, theater and performance, numerous small surprises, and safety
and security. Knutson et al. (2009) also studied hospitality set-
ting and identified the four dimensions of customer experience,
namely, environment, accessibility, driving benefit, and incentive.
Walls (2013) presented two broad dimensions, namely, physical
environment and human interaction. At the micro level, customer
experience is influenced by the sensory effects of sight, sound,
touch, smell, and taste (e.g., Shaw, 2005; Pine and Gilmore, 2011;
Schimitt and Simonson, 1997). However, most of the aforemen-
tioned dimensionalities are based on luxury or full-service hotel
settings, or other service settings, and thus may not apply in the
budget hotel sector.
2.2. Budget hotel and customer experience
Based on our knowledge, a unanimous definition for budget
hotels is lacking. According to Gilbert and Lockwood (1990: 21),
a budget hotel is “a limited service lodging establishment offer-
ing the benefit of good value for money in standardized modern
accommodation and offering quality as good as hotels of a higher
star grading but where rates are 25–30% cheaper than average mar-
ket area rates.” Senior and Morphew (1990) defined budget hotels
as strategically located and characterized by a low tariff struc-
ture, a minimum range of facilities, a limited range of services, and
new/modular construction. In a more detailed fashion, the defini-
tion proposed by Ruetz and Marvel (2011: 100) attempts to set a
standard, “. . .zero to two-three-star hotels, normally with a min-
imum of 50 rooms, and branded by a major chain. Such hotels
typically have a standardized ‘cookie-cutter’ appearance, and offer
a systematized, no-frills service format, e.g., limited food and bev-
erage and meeting facilities.”
Other terms resemble the concept of budget hotels. For exam-
ple, according to Senior and Morphew (1990), the label “budget
hotel” is similar to “economy hotel” in the United States and France.
Rogerson (2011: 349) defined “limited service hotels” as follows:
“The limited service hotel tends to be smaller than the full-service
hotel, ranging between 100 and 200 rooms and importantly incor-
porates fewer ancillary spaces such as meeting rooms, lobby space
and restaurants.” This definition is also similar to the meaning of
budget hotels. In China, both “budget hotel” and “economy hotel”
are translated to “jingjixingjiudian,” which shows that the two
terms do not significantly differ conceptually in the market con-
text of China. Such usage of terms that match “budget hotels” with
“economy hotels” is evident in the work of Cai (2004).
Further categorization of budget hotels is also seen from lit-
erature. Senior and Morphew (1990) noted the tiering of budget
hotels in different markets, including the United States, the United
Kingdom, and France, based on different criteria. Fiorentino (1995)
also examined “tiering,” while discussing the tailor-made nature of
 L. Ren et al. / International Journal of Hospitality Management 52 (2016) 13–23
different types of budget hotels based on customer needs. There-
fore, a “budget hotel” is not a fixed concept, but a broad term.
This study adopts the definition provided by Li (2008). Hence,
a budget hotel has limited service, low cost, basic accommodation
service (e.g., guestroom, or guestroom + breakfast), and the price of
the guestroom normally does not exceed 350 RBM. Although this
definition was made in 2008, the price range for the budget hotels
in China has not changed significantly.
Literature on budget hotels has primarily focused on the strate-
gic efforts of creating budget hotels (e.g., Fiorentino, 1995; Senior
and Morphew, 1990; Huang and Chathoth, 2011), development of
this hotel sector in particular markets (e.g., Gilbert and Lockwood,
1990; Ruetz and Marvel, 2011; Rogerson, 2011; Chan and Ni, 2011),
and success factors for budget hotels (e.g., Brotherton, 2004; Hua
et al., 2009; Zhang et al., 2013). Fewer studies have focused on
customer satisfaction and customer experience for budget accom-
modations. Table 1 lists prior studies on budget hotels, with key
findings presented.
The nature of budget hotels determines the prerequisites
for the survival and development of this hotel sector in the
competitive market. Providing no-frills accommodations with no-
frills service and creating value for money are top priorities
for this business. The successful story of “Microtel” resembles
the idea of budget hotels and provides several insights. Certain
factors, such as site selection, good price and value, quality assur-
ance, and personal and simple design, have contributed to the
huge success of Microtel (Justus, 1991). Fiorentino (1995) argued
that common strategic efforts, which include branded product
concept, value for money, and consistency, would become com-
petitive strategies for budget hotels. In their empirical research
on budget travelers in Scotland, Nash et al. (2006) indicated that
good price, location, and membership are the most important
factors that influence customer choices. Moreover, cleanliness,
value for money, and presence of self-catering facilities are
considered the most important features of budget accommoda-
tions.
Clemes et al. (2011) examined customer satisfaction with
motels. Their study is included for reference because the nature
of the motel product is budgetary. Similar to budget hotels, motels
principally provide limited service hotel products (Clemes et al.,
2011). According to Gilbert and Lockwood (1990), the budget hotel
sector started with Motel 6 in the United States, which indicates
the product nature of motels. However, motels differ from reg-
ular budget hotels in the manner in which motels usually could
be accessed via outdoor parking spaces (Clemes et al., 2011).
Clemes et al. (2011) proposed three primary dimensions that influ-
ence customer experience in the motel sector. These dimensions
are interaction, physical environment, and outcome quality, with
value/price construct as the moderating factor between service
quality and customer satisfaction. The results of this study iden-
tified 10 sub-dimensions that influence the satisfaction of motel
customers, namely, staff professionalism, accuracy of reservation,
tangibles, cleanliness and comfort, noise level, parking, security,
accuracy of billing, location, and pleasant stay. Moreover, this study
determined that emotional factors, such as a pleasant stay, comfort,
and sense of security, are also important, in addition to the basic
attributes of the hotels.
Within the context of China, Zhang et al. (2008) explored the
dimensions of brand experience with economy hotels (in China,
budget hotels and economy hotels mean the same thing) by inter-
viewing 15 economy hotel managers and executives. The authors
identified three major dimensions that influence brand experi-
ence for budget hotel guests. These dimensions, namely, theme and
activities, social interactions, and physical environment, influence
the cognitive, affective, and behavioral aspects of guests. Ren et al.
(2015) explored customer satisfaction through online comments,
15
and reported that customers in China primarily focus on guestroom
features, such as cleanliness of the room, room size, shower room,
facility, quietness, etc. Location and staff service have also attracted
some attention.
The above literature review shows that the core idea of bud-
get hotels is no-frills cost, no-frills service and products, at no-frills
price (e.g., Ruetz and Marvel, 2011). However, another stream of
research argues that budget hotels should not merely rely on cheap
prices and convenient locations. As this hotel sector develops,
service quality will be eventually the differentiator and competi-
tive advantage among budget hotels (Senior and Morphew, 1990).
Brotherton (2004) investigated the success factors for budget hotels
through a quantitative analysis of 239 survey questionnaires in the
United Kingdom. The study identified seven dimensions; customer
service emerged on top, and was followed by core product, strate-
gic control, hygiene and quality, consistency, pricing, and location.
The 11 value dimensions identified by Brothernton are inclusive
and reflect the holistic nature of customer experience with bud-
get hotels. In the context of China, the work of Hua et al. (2009)
also reveals the fact that service quality is the primary concern for
budget hotel customers.
2.3. Customer satisfaction
Customer satisfaction has been at the heart of market study for a
relatively long time due to its essential status for the survival of cor-
porate (Pizam and Ellis, 1999). The benefits of customer satisfaction
include favorable behavioral intentions and inexpensive promotion
of current services (Pizam and Ellis, 1999). Yüksel and Yuksel (2001)
summarized two types of satisfaction definitions into outcome-
and process-oriented. Outcome-oriented definitions of satisfaction
emphasize the end-state, whereas process-oriented definitions
focus on the entire experience process. A plethora of theories
exists on customer satisfaction. The comprehensive review of the-
ories of Pizam and Ellis (1999) on customer satisfaction identified
nine theories, namely, expectancy disconfirmation, assimilation or
cognitive dissonance, contrast, assimilation–contrast, equity, attri-
bution, and three other theories.
Although a few studies have investigated customer satisfaction
with budget hotels, studies on full-service and other hotel sectors
abound. Hotel studies have traditionally attempted to understand
customer satisfaction through the customer perception of service
quality. According to Ekinci (2002), two schools of thoughts domi-
nate service quality, namely, North American and Nordic European.
The North American is represented by SERVQUAL, which is a five-
factor model developed by Parasuraman et al. (1985, 1988, 1991)
and is probably the most extensively applied instrument in the
service industry. The five dimensions under the SERVQUAL scale
include reliability, responsiveness, assurance, empathy, and tangi-
bles. The gap between expectation and perception induces either
satisfaction or dissatisfaction. Applying SERVQUAL in the hotel
industry, we can determine a few instruments developed specif-
ically to measure the perceived service qualities and satisfaction
of hotel customers. Examples include LODGSERV (Knutson et al.,
1990) and Lodging quality index (LQI) (Getty and Gettly, 2003). Both
instruments have been developed based on SERVQUAL, and have
been empirically applied and tested. However, these instruments
do not have as much popularity as SERVQUAL.
Another school of thought on service quality, as indicated by
Ekinci (2002), is Nordic European. This school of thought is based
on expectancy–disconfirmation theory, and centers on the idea of
expectation. According to this theory, satisfaction derives from a
comparison between expectation and perception; the latter engen-
ders either confirmation of expectation or disconfirmation. In other
words, customers feel satisfied when their perception meets or
exceeds their expectations.
16 L. Ren et al. / International Journal of Hospitality Management 52 (2016) 13–23

Table 1
Prior studies on budget hotels.

Ref. Article title Key points

Brotherton (2004)
Cai (2004)
Chan and Ni (2011)
Fiorentino (1995)
Gilbert and Lockwood (1990)
Hua et al. (2009)
Huang and Chathoth (2011)
Nash et al. (2006)
Rogerson (2011)
Ren et al. (2015)
Ruetz and Marvel (2011)
Senior and Morphew (1990)
Zhang et al. (2008)
Zhang et al. (2013)
Critical success factors in UK budget hotel
operations
State-owned economy and budget hotels
in China—from commodity to brand
Growth of budget hotels in China:
antecedents and future
Budget hotels: Not just minor hospitality
products
Budget hotels: The USA, France and UK
compared
Critical success factors and customer
expectation in budget hotel segment: a
case study of China
Leasing as a modal choice in China’s
company-run budget hotels
An investigation into customer satisfaction
levels in the budget accommodation sector
in Scotland
The limited service hotel in South Africa:
the growth of city lodge
Understanding customer satisfaction with
budget hotels through online comments:
Evidence from Home Inns in China
Budget hotels: low cost concepts in the US,
Europe and Asia
Competitive strategies in the budget hotel
sector
Dimensions in building brand experience
for economy hotels: a case of emerging
market
What contributes to the success of Home
Inns in China?
Critical success factors for budget hotels in the United Kingdom
include value for money, consistency, hygiene and cleanliness,
location, quality, staff, security, etc.
The major problem identified is the ownership, along with three other
issues of market segmentation, product differentiation and brand
development
Factors, such as government policy support, increased disposable
income, favorable market demand, lower investment, and faster
return contributed to the development of budget hotels in China
The strategies discussed include branded product concept, value for
money, and ability to deliver consistency
This article describes the development of budget hotels in the United
States, France, and the United Kingdom
Customers are primarily concerned with service quality issues
By contrast, for industry professionals, government authority, and
hotel investors, physical product, service quality, price, promotion, and
location are deemed to be more important
Leasing has been the most preferred mode of expansion by Chinese
company-run budget hotels
Speed of expansion and cost effectiveness are the two most important
factors for the adoption of leasing as the expansion mode in China
Good price, good location, and membership are important selection
criteria;
Cleanliness, value for money, and presence of self-catering facilities
are considered to be the most important attributes
Through the case study of the emergence and growth of City Lodge
Hotels, the development of the limited service hotel in South Africa is
presented and discussed
Guestroom attributes, such as cleanliness, room size, bathroom
quality, soundproofing of rooms, and quality of the facilities, have
attracted most comments
Location, convenience, and accessibility as well as staff service have
also attracted a considerable number of comments
Low-cost strategy by budget hotel chains in the United States, Europe,
and Asia
Development of budget hotels in the US, Europe and Asia, up until 2010
The concept of service quality is becoming more important
Expansion is facilitated by the franchise system that many companies
operate
Long-term strategies: segmentation, differentiation, and service
quality
The study identifies three dimensions of budget hotel brand
experience—theme and activities, physical environment, and social
interactions
The critical success factors for Home Inns are people,
timing/contextual factors, strategic choices, managerial and
operational efficiency, performance/product, and culture.

However, using service quality as the predicting factor for
customer satisfaction has its limitations, because service qual-
ity is normally tested via a cognitive evaluation of the identified
attributes of the hotel service and products. Customer satisfaction
in the hotel context depends on total experience during hotel stay
(Pizam and Ellis, 1999), which is composed of physical product, staff
performance, environment and atmosphere, and evokes cognitive
and emotive evaluation. Therefore, using the holistic experience of
customers to predict or understand customer satisfaction is a more
scientific approach.
Existing literature does not generate an agreed method of mea-
surement for the construct of customer satisfaction. However,
considering product type, which is a budget hotel, and contextual
factors, such as a budget hotel being a new concept studied in China,
a more straightforward approach of measurement to understand
the level of customer satisfaction with budget hotels is adopted for
this study.
3. Research design and process
The study comprised two major stages, namely, (1) item
development and (2) questionnaire survey. Given the lack of a
readily usable scale to measure customer experience with bud-
get hotels, the study initially attempted to develop measurement
items through literature review and interviews with budget hotel
customers. Thirty-nine items were identified and developed, and
subsequently included in the questionnaire.
To understand the dimensionality of customer experience with
budget hotels and the impact of these dimensions on customer
satisfaction, statistical analyses were adopted, including mainly
exploratory factor analysis (EFA) and multiple regression analysis.
The EFA was applied to identify the potential dimensionality of cus-
tomer experience. Multiple regression analysis was further utilized
to examine how the identified dimensions of customer experience
influence their satisfaction with budget hotels.
3.1. Item development
The measurement scale to be developed is for the holistic expe-
rience of customers with budget hotels. Prior hotel experience
studies have focused primarily on full-service hotel sectors; thus,
the applicability of the scales to budget hotels is uncertain. Scale
development for the construct of customer experience with bud-
get hotels followed key steps recommended by Churchill (1979):
 L. Ren et al. / International Journal of Hospitality Management 52 (2016) 13–23
specifying the domain of construct, generating sample items, and
purifying items through statistical tests. Specifying the domain
of construct was achieved through a comprehensive review of
literature, including studies on budget hotels and other hotel sec-
tors. Item generation was achieved via both literature review and
interviews with budget hotel customers, which are elaborated
below.
3.2. Generating items through literature
To generate sample items, as well as to obtain a generic overview
of the construct under study, a comprehensive round of literature
reviews was conducted. This review included literature on budget
hotels, hotel experience, customer satisfaction with budget hotels,
service quality in the budget hotel sector, a few key articles on
the full-service hotel sector, as well as studies on general cus-
tomer experiences. The searching process involved the following
sequence:
1. Literature on customer experience, satisfaction, behavioral
intentional, perceived service quality in the budget hotel sector,
or closely related hotel products, such as motels, was initially
reviewed. The following studies are included in Table 1: Nash
et al. (2006), Zhang et al. (2008), Ren et al. (2015), Brotherton
(2004), Clemes et al. (2011), and Hua et al. (2009).
This part of literature generated the following items that are
closely related to the attributes of budget hotels. These items
serve as important cues that the customers draw on:
(a) Room attribute-related items include design, cleanliness,
size of the room, color, brightness of the room, quietness,
odor, temperature, facility, layout, shower room, amenity,
comfortable bed, etc.;
(b) Staff-related items, such as politeness of the staff, welcom-
ing attitude, communication, responsiveness, facilitation in
reservation, check-in, check-out, and information provision;
(c) Location-related items, such as convenience and accessibil-
ity; and
(d) Emotion-related items, such as feeling safe in the hotel, hav-
ing a memorable experience, feeling pleasant, etc.
2. Given that the number of the aforementioned studies is small,
the research team proceeded one step further to examine lit-
erature on other hotel sectors, which might be of reference,
especially those related to the Chinese context, such as Gu and
Ryan (2008). Studies on customer satisfaction have also been
referenced, such as Sim et al. (2006), which approached cus-
tomer satisfaction via a more holistic approach of customer
perception. Aside from confirming the importance of the items
identified in literature on budget hotels, a few new items were
added, such as quality of food, relaxation perceived, homey envi-
ronment, surrounding environment of the hotel, etc.
3. Having adopted the experiential view to understand customer
satisfaction, this study also reviewed important concepts on
customer experience, including Bitner’s service escape concept
(1992). A few items were further included to the stock, such as
signage. Moreover, these experience-related studies further con-
firmed the importance of the items identified through Steps 1
and 2.
The items generated from the preceding literature review were
kept in stock, and were to be verified by interviews with budget
hotel customers.
3.3. Interviews
To fully understand customers’ holistic experiences with bud-
get hotels and to verify the items identified in literature, 28
17
customers (please see Table 2 for the profiles of the interview-
ees) were approached for interviews from August to September
2013. Convenience sampling and snowball sampling strategies
were adopted for the selection of interviewees. The selection of
interviewees was based on the following two basic criteria: (1)
active budget hotel patrons (i.e., guests who usually indicate bud-
get hotel as their first choice when they travel, and guests who have
stayed in budget hotels during the past six months by the time the
interview occurred), and (2) Chinese nationality, considering that
one of the goals of this study was to provide implications to hote-
liers that target Chinese customers. Most respondents claimed that
a budget hotel was their first choice when they traveled. Two inter-
viewees stated that a budget hotel was their first choice when they
needed to bear the cost themselves.
Semi-structured interviews were conducted in this study, which
enabled participants to answer the questions liberally and the
researcher could keep the participants on track (Morse and
Niehaus, 2009). Questions asked principally covered the following
areas:
(1) Recall of the customers’ experience with their stay in budget
hotels and overall evaluation of their experience.
(2) Cues that the customers draw upon when they recall and eval-
uate their experience.
(3) Perceptions, feelings, and emotions that customers had during
their stay.
The interviews were conducted in places where the interview-
ees were comfortable with, which were mostly in the hotel lobby
where the customers stayed or in cafés near the hotels. Most of
the interviews lasted from 25 to 65 min, although the majority was
roughly 30 to 35 min. The interviews conducted in the lobby of
the hotels were typically shorter, whereas the ones conducted in
cafés near the hotels were longer, probably due to the fact that
the interviewees were willing to talk when they were comfortably
seated, accompanied by coffee and other drinks. The interviews
continued until the research team observed saturation (i.e., no new
information was provided by the interviewees). The language used
during interviews was Chinese, although the respondents occasion-
ally used English words.
The aforementioned interviews were recorded with a digital
device with the consent of the interviewees. The interviews were
transcribed verbatim immediately after the meeting. Transcripts
were subsequently translated into English for coding. The lead
author translated the transcripts. To ensure consistency and accu-
racy of the translation, back translation was adopted by another
researcher in the team. The coding process was facilitated by
NVivo software Version 10, which is a software that systemati-
cally handles textual data. During the NVivo coding process, the
node generation was based on frequency of items mentioned by
the interviewees. Below is an example of how node was generated.
I like the hotel. The location was good [1], and the room was
clean [2].
Two nodes were generated from the above sentence—good loca-
tion, and cleanliness of the room.
Table 3 below shows the items derived from interviews and
frequency of the items.
As the above table shows, customers paid more attention to
the basic elements of their accommodation experience with bud-
get hotels, such as cleanliness, quietness, location, and some basic
comfort such as comfortable shower and comfortable bed, although
many other attributes/items had also been touched upon. Com-
ments such as the following examples were typically heard from
the interviewees:
18 L. Ren et al. / International Journal of Hospitality Management 52 (2016) 13–23

Table 2
Demographic profiles of the interviewees.

No. Age G Annual income (RMB) Occupation Place of residence Date of interview

1 24 M 60,000 Tour guide Chong Qing Aug. 3, 2013

2 23 F 50,000 Office clerk Chong Qing Aug. 3, 2013
3 25 F N/A Graduate student Liao Ning Aug. 3, 2013
4 25 F 120,000 Customer service Zhejiang Aug. 3, 2013
5 43 F 10,000 Teacher Ningbo Aug. 13, 2013
6 29 F 60,000 Teacher Ningbo Aug. 13, 2013
7 48 M 70,000 Teacher Ningbo Aug. 16, 2013
8 36 F 300,000 Company owner Zhejiang Aug. 12, 2013
9 23 F 70,000 Freelancer Zhejiang Aug. 14, 2013
10 25 F 20,000 Tour leader Ningbo Aug. 30, 2013
11 42 M 150,000 Manager Fu Jian Aug. 20, 2013
12 37 F 100,000 Teacher Jiangsu Aug. 15, 2013
13 38 M 100,000 Salesman Shanghai Aug. 16, 2013
14 45 F 350,000 Company owner Ningbo Aug. 13, 2013
15 29 F 130,000 Doctoral student Shenzhen Sept. 15, 2013
16 30 M 130,000 Doctoral student Shenzhen Sept. 15, 2013
17 38 M 120,000 Manager (Chemical company) Suzhou Aug. 28, 2013
18 42 M 120,000 Freelancer Shenzhen Aug. 30, 2013
19 39 F 150,000 Manager Shenzhen Aug. 30, 2013
20 40 M 100,000 Technician Ningbo Aug. 12, 2013
21 30 M 10,000 Supervisor in design company Zhejiang Aug. 26, 2013
22 27 F 120,000 Civil servant Shanghai Aug. 27, 2013
23 29 F 110,000 Project supervisor Zhejiang Aug. 27, 2013
24 24 M 40,000 Company worker Zhejiang Aug. 27, 2013
25 27 M 50,000 Company clerk Zhejiang Aug. 28, 2013
26 25 M 50,000 Design company clerk Zhejiang Aug. 28, 2013
27 28 F 50,000 Office clerk Shanghai Aug. 29, 2013
28 38 M 200,000 Consultant Beijing Aug. 29, 2013

First of all, it has to be clean, both the bedroom and the shower
room.
Well, I would first consider location. If the location is not good,
I would not choose the hotel.
I like Hotel ABC. The bed is more comfortable. The shower is not
too bad.
We stayed in EFG hotel. But that was not a good experience. It
was too noisy. The sound proofing of the room was not good. I
could hear people talking next door.
Many of the above items concur with those identified in
literature, while a few other items pertaining to the concept
of budget hotels, such as whether the hotel provides break-
fast or not, which is not normally an issue with the full-service
hotel sector. Thus, new items, especially those unique to budget
hotels, were added to the list in this manner. Table 4 shows the
items developed from literature review and in-depth interviews.
Having these two sources for item development serves as a
triangulation.
Altogether, 39 items were generated in this manner. These
items covered most aspects of hotel experience, from the tangible
attributes of hotel rooms to intangible attributes such as interactive
experiences with service staff. The feelings, perceptions, emotions,
and experiences of customers were identified and itemized. The
entire accommodation process could be reflected through items,
such as reservation, check-in, and check-out. Out of 39 items, 35
were found in literature, whereas the remaining four (i.e., Wi-
Fi speed, taste of breakfast, maintenance of shower facility, and
homey environment) were less discussed in previous studies.
The above table incorporates a consolidated list of budget
hotel experience cues or attributes that lead to customers’ evalu-
ation of their accommodation. Majority of the items were found
both in literature and interview results. Generating items in
this manner helps lay a solid foundation for next step of the
research—questionnaire survey.

Table 3
Items and frequencies of customer experience derived from interviews.

Items Frequency Items Frequency

Cleanliness of the room 65 Size of the room 18

Cleanliness in the shower room 60 Taste of the breakfast 16
Convenient location 58 Shower room amenity 15
Quietness 43 Color combination 12
Comfortable shower 42 The staff is approachable 12
Comfortable bed 35 Feeling at home 10
Room facility 28 Memorable experience 10
WIFI 28 Interior design 8
Polite staff 27 Room temperature 7
Disturbance free 26 Staff providing sufficient information 6
Safety 24 Exterior visual effect 6
Maintenance of the shower-room 24 Brightness of the room 6
Responsiveness of the staff 23 Feeling welcomed 5
Food quality 22 Smooth communication with staff 4
Smooth check-in and check-out 22 Surrounding area of the hotel is beautiful 4
Smooth reservation 21 Layout 3
The surrounding area provides supermarkets, restaurants, and other facilities 20 Social interaction with the staff 2
Homey environment 18 Signage 2
Pleasant stay 18 Feeling relaxed 2
 L. Ren et al. / International Journal of Hospitality Management 52 (2016) 13–23 19

Table 4
Customer experience items developed from literature review and interviews.

Items derived from literature Literature (examples) Interview

and/or interviews
√
1 Exterior visual effect Bitner (1992), Sim et al. (2006), Clemes et al. (2011)
√
2 Interior design Wu and Liang (2009), Sim et al. (2006), Clemes et al.
(2011), Zhang et al. (2008)
√
3 Color combination Sim et al. (2006), Wu and Liang (2009), Zhang et al.
(2008)
√
4 Comfortable bed Clemes et al. (2011), Gu and Ryan (2008)
√
5 Bright room Clemes et al. (2011), Wu and Liang (2009)
√
6 Size of the room Gu and Ryan (2008), Ren et al. (2015), Zhang et al.
(2008)
√
7 Cleanliness of the room Brotherton (2004), Nash et al. (2006), Wu and Liang
(2009)
√
8 Quietness/noise-free Bitner (1992), Clemes et al. (2011), Inntie (2009)
9 Odor Bitner (1992), Zhang et al. (2008) –
√
10 Temperature Wu and Liang (2009), Bitner (1992), Clemes et al.
(2011), Zhang et al. (2008)
√
11 Room facility (e.g., TV and air-con, Internet) Clemes et al. (2011), Ren et al. (2015), Zhang et al.
(2008)
√
12 Wi-Fi –
√
13 Signage Bitner (1992)
√
14 Disturbance-free Clemes et al. (2011)
15 Layout Bitner (1992), Zhang et al. (2008)
√
16 Comfortable shower Clemes et al. (2011), Ren et al. (2015)
√
17 Cleanliness in the shower room Clemes et al. (2011), Gu and Ryan (2008), Ren et al.
(2015)
√
18 Adequate shower room amenities Gu and Ryan (2008), Sim et al. (2006)
√
19 Maintenance of shower room –
√
20 Taste of breakfast –
√
21 Food quality (other than breakfast) Gu and Ryan (2008)
√
22 Feel welcomed Brotherton (2004); Clemes et al. (2011), Sim et al.
(2006)
√
23 Polite staff Clemes et al. (2011), Sim et al. (2006)
√
24 I feel comfortable communicating with the staff Sim et al. (2006)
√
25 The staff is approachable Sim et al. (2006)
√
26 My check-in and check-out processes are smooth Clemes et al. (2011)
√
27 The staff responds to my requests in a timely manner Sim et al. (2006), Clemes et al. (2011)
√
28 Social interactions with staff are comfortable Zhang et al. (2008)
√
29 The staff provides information I need Clemes et al. (2011), Knutson et al. (1993)
√
30 Smooth reservation Clemes et al. (2011), Brotherton (2004)
√
31 The location of the hotel is convenient Nash et al. (2006), Sim et al. (2006), Clemes et al.
(2011), Brotherton (2004), Hua et al. (2009), Gu and
Ryan (2008)
√
32 The surrounding environment of the hotel is good Knutson et al. (2009)
√
33 The overall environment of this hotel is homey –
√
34 The surrounding area of the hotel provides Sim et al. (2006), Clemes et al. (2011)
supermarkets, restaurants, and other amenities
√
35 I feel at home in this hotel Sim et al. (2006)
√
36 I feel relaxed in this hotel Sim et al. (2006)
√
37 My stay in this hotel has been pleasant; I enjoyed my Sim et al. (2006), Clemes et al. (2011)
stay in this hotel
√
38 The overall experience has been good and memorable Sim et al. (2006), Clemes et al. (2011)
√
39 I feel safe in this hotel Brotherton (2004), Sim et al. (2006), Clemes et al.
(2011)

3.4. Design of the questionnaire
These 39 items developed from literature review and interviews
with budget hotel customers were included in the survey question-
naire. Three items of customer satisfaction (i.e., overall satisfaction,
right decision, needs met) were also included in the questionnaire.
The three items were adopted from Clemes et al. (2011), whose
reliability and validity have been tested repeatedly (Cronin et al.,
2000; Clemes et al., 2011). Demographic items, including gender,
age, marital status, occupation, education background, and income
level, were included in the questionnaire. A seven-point Likert
scale was adopted for the questionnaire, and the questions were
designed in agreement format. A dozen trials of questionnaire fill-
ing were conducted by both budget hotel customers and scholars
familiar with this topic. Feedback was invited, and adjustments
were made regarding the accuracy of the wording and logic of the
questions based on the feedback.
To ask respondents to effectively recall their accommodation
experience, only interviewees who had stayed in budget hotels
in the past six months were invited to fill in the question-
naires. The questionnaires were distributed outside the budget
hotels, shopping malls, and supermarkets in more developed
cities in China, including Shanghai, Beijing, Shenzhen, Hangzhou,
and Ningbo. The rationale for selecting these cities for question-
naire survey was that these cities are relatively more developed
and have a greater variety of budget hotels. In addition, more
travelers are in these cities, either for business or leisure pur-
poses. Incentives in the form of coffee coupons were offered to
invite respondents. More than 400 budget hotel customers were
approached and invited to participate in the questionnaire survey,
and 205 questionnaires were filled out, which generated a response
rate of nearly 50%. This sampling size was proved to be ade-
quate via statistical analysis, which is explained in the subsequent
section.
20 L. Ren et al. / International Journal of Hospitality Management 52 (2016) 13–23

Table 5 The first factor incorporated the tangible and sensorial percep-
Demographic profiles of questionnaire respondents (N = 205).
tions dimensions and explained 42.8% of the total variance with
Demographic variables Descriptions Percentage (%) eigenvalue of 7.3. This factor consisted of seven items, which were
Gender Male 28.4 the most basic attributes of budget hotels. These items were clean-
Female 55.5 liness of the guest room, quietness of the room, smell, comfortable
Missing 16.1 temperature, comfortable shower facility, clean shower room, and
Age <24 23.8 good maintenance of the shower room.
25–34 49.0 Factor 2 reflected the budget hotel customers’ interactional and
35–44 17.4 relational experience with service staff. This factor included per-
45–54 6.5
ceptional items, such as feeling welcomed, smooth communication,
>55 2.6
Missing 0.6
pleasant interaction, staff responding to requests in a timely man-
ner, and staff providing information required correctly. This factor
Marital status Married 39.4
explained 11.8% of the total variance, with an eigenvalue of 2.0.
Unmarried 47.1
Missing 12.3 The third factor signified the visual aesthetic perception of
respondents toward the budget hotels they had patronized. Three
Occupation Company admin/manager 16.1
Salesperson 10.3
items loaded on this factor, namely, external visual appeal, internal
Teacher 18.7 visual appeal, and color combination. This factor explained 7.2% of
Student 2.6 the total variance, with an eigenvalue of 1.2.
Clerk 34.2 The final factor pertained to the location, and consisted of two
Technician 1.9
items, namely, convenient location and nearby facilities. This factor
Professional 2.6
Freelancer 4.5 explained merely 6.5% of the total variance, and the eigenvalue was
Civil servant 7.7 1.1.
Others 0.6 The preceding dimensionality of customer experience with bud-
Missing 0.6 get hotels proved that experience is a holistic perception, which
Education College 32.3 draws upon various cues and not simply a few core attributes. This
University 33.5 result supported the idea proposed by advocates of the experien-
Graduate or above 22.6
tial views, such as Shaw (2005) and Meyer and Schwager (2007).
High school, vocational school, and 9.0
others
However, the dimensionality of experience with budget hotels dif-
Missing 2.6 fers from that of full-service hotel sectors identified by previous
researchers (e.g., Knutson et al., 2009).
Income (annual, RMB) <10,000 8.4
10,001–40,000 25.2 With budget hotel experience dimensionality, the results of the
40,001–70,000 36.8 current study confirmed the two aspects of dimensionality pro-
70,001–100,000 14.2 posed by Zhang et al. (2008), namely, physical environment and
>100,001 12.3 social interaction. However the third dimension, theme and activ-
Missing 3.2
ities, was not verified.
The above dimension exploration with budget hotel experi-
ence has generated four distinctive dimensions—tangible-sensorial
4. Results and analysis experience, staff relational/interactional experience, aesthetic per-
ception, and location. These four dimensions have reflected the
Table 5 illustrates the demographic profiles of the questionnaire nature of budget hotel experience.
respondents. Of the 205 respondents, more than half were female
(55.5%). The age range of the respondents is more toward young,
with over 70% under 34 years old. The marital status of the respon- 4.2. Customer experience and satisfaction
dents is toward a balanced distribution between married and
unmarried (or not revealed). The occupations of the respondents To examine the influence of customer experience on satisfac-
are mostly first-line staff, including company clerks and adminis- tion, multiple regression analysis was applied using the forced
trative staff, salespersons, school teachers, and civil servants. Most entry method. The four customer experience factors were the inde-
respondents are well-educated, with nearly 90% of them possess- pendent variables, and satisfaction (three items, namely, overall
ing college or above education qualifications. The income level of satisfaction, right decision, needs met) was the dependent variable.
the respondents is mostly below 100,000 RMB annually. Table 7 presents the regression results. The F-ratio was 64.5
(p < 0.000), which indicated that the regression analysis was sta-
tistically significant overall. The R2 was 0.648, and the adjusted R2
4.1. Dimension exploration was 0.638, which suggested that the four predicting variables can
account for more than 60% of variance in the dependent variable
To explore the underlying dimensions of customer experience (customer satisfaction).
with budget hotels, EFA was performed using principal component All four factors were significant in predicting the dependent
analysis with varimax rotation. The Kaiser–Mayer–Olkin (KMO) variable at the 0.05 level. A positive relationship between the
was 0.870 (p < 0.05), which indicated adequate sampling. The anal- four independent variables and the level of customer satisfaction
ysis generated four factors (17 items) with eigenvalues above 1.0. existed. The regression model emerged as follows:
These factors explained approximately 68.2% of the total variance.
The range of communalities was from 0.52 to 0.84, which sug- Y = 0.130 + 0.500X1 + 0.283X2 + 0.121X3 + 0.113X4 + e,
gested that the four factors explained the variance of the original
variables. Factor loadings for the four factors were above 0.5. Cron- In the above model, Y is the customer satisfaction, X1 is the
bach’s alphas for all four factors were above 7.0, which indicated tangible–sensorial experience, X2 is the staff relational and interac-
good internal consistency among the variables. Table 6 shows the tional experience, X3 is the aesthetic perception, X4 is the location,
detailed results of the EFA analysis. e is the error.
 L. Ren et al. / International Journal of Hospitality Management 52 (2016) 13–23 21

Table 6
EFA: dimensionality of customer experience (CE).

Dimensions and items Cronbach’s alpha Communalities Factor loading Item-to-total correlation Eigenvalue Variance explained (%)

CE 1 tangible–sensorial experience 0.873 7.277 42.807

Cleanliness 0.713 0.812 0.704
Smell 0.603 0.744 0.637
Shower room cleanliness 0.616 0.712 0.704
Quietness 0.522 0.661 0.602
Temperature 0.577 0.651 0.650
Comfortable shower 0.540 0.609 0.652
Maintenance 0.571 0.531 0.645

CE 2 staff relational/interactional experience 0.895 2.001 11.769

Staff communication 0.836 0.894 0.822
Staff interaction 0.787 0.830 0.790
Staff responsiveness 0.741 0.777 0.730
Information provision 0.687 0.735 0.720
Welcomed by staff 0.623 0.658 0.657

CE 3 aesthetic perception 0.821 1.227 7.216

External visual appealing 0.705 0.801 0.585
Internal visual appealing 0.792 0.789 0.749
Color combination 0.753 0.768 0.704
CE 4 location 0.714 1.097 6.454
Nearby facilities 0.770 0.831 0.560
Convenient location 0.765 0.820 0.560

Note: KMO: 0.870; Chi-Square: 1438.226; Sig. 0.000; Total variance explained: 68.246%.

Table 7
Regression results.

Model Unstandardized coefficients Standardized coefficients t Sig.

B Std. Error Beta

(Constant) 0.130 0.323 0.402 0.688

Tangibles and sensorial 0.500 0.076 0.457 6.585 0.000
Staff 0.283 0.064 0.276 4.408 0.000
Aesthetic 0.121 0.056 0.131 2.140 0.034
Location 0.113 0.051 0.124 2.222 0.028
F 68.461
R2 0.648
Adjusted R2 0.638
Sig 0.000

Note: Dependent variable: customer satisfaction.

The above regression analysis result has further verified that
the four dimensions derived from the factor analysis captures the
customers’ evaluation of their experience with budget hotel accom-
modation. These four dimensions lead to customers’ satisfaction
with the hotels.
The aforementioned findings indicated that the basic elements
of accommodation were important for customer experience with
budget hotels. These basic elements included mostly physical and
tangible attributes of the hotels, namely, cleanliness, smell, quiet-
ness, shower, temperature, maintenance, and other basic comfort
attributes. This finding is different from most prior studies on other
hotel sectors, in which no such scrutiny on such basic attributes was
reported. However, the results do not imply that these elements are
unimportant for full-service or luxury hotel sectors. The rationale
behind the outcome is that these attributes do not raise such level of
attention in full-service and luxury hotel sectors. These areas often
do not go wrong in non-budget hotels. However, for budget hotels,
in which cost and staffing are minimized, the quality of the basic
elements that are important for accommodation is of primary con-
cern for customers. Moreover, this finding supplements the results
from previous research, such as Clemes et al. (2011), whose find-
ings suggest that cleanliness and comfort, noise level, and security
matter for the customers.
Such scrutiny of accommodation details can probably be
attributed to the rapid development of the budget hotel sector in
China. This hotel sector has only experienced less than 15 years of
development history in China. However, this short period has seen
an underestimated number of 12,000 budget hotels in the coun-
try (Inntie, 2014). Rapid expansion has been one of the aims for
numerous budget hotel chains such as Home Inns (Zhang et al.,
2013). When hotel chains are too occupied by rapid expansion, the
quality of basic details is often neglected. Recent social media has
reported a few anecdotal quality incidents in budget hotels, which
also reflect the concerns of mass travelers.
Basic elements, such as smell and quietness, do reflect the fact
that the customer experience draws upon sensorial perceptions,
which confirms the importance of sensorial experience proposed
by researchers such as Shaw (2005). The importance of aesthetic
perception and its impact on customer satisfaction from the pre-
ceding findings have again manifested that the five senses have
an important role in shaping customer experience with budget
hotels. This view is different from prior studies on budget hotels
(e.g., Brotherton, 2004), in which the aesthetic aspect is seldom
discussed.
The aforementioned findings also confirm the importance of
staff for budget hotels. Although literature has suggested that cost
saving is one of the major features of budget hotels, customers in
China emphasize human touch, which is reflected by staff attitude
and service. Customers did not demand a high-profile service style,
but a simple greeting and smile went a long way in establishing
a harmonious atmosphere. Basic staff facilitation during accom-
modation, such as providing information and handling questions
from customers, is also important. Both interview data and statis-
tical results (EFA and regression analysis) have shown that staff
22 L. Ren et al. / International Journal of Hospitality Management 52 (2016) 13–23
service is an important dimension to account for customer experi-
ence with budget hotels in China. This finding is in line with prior
studies, such as the findings of Zhang et al. (2008) on the staff inter-
action and facilitation dimension of budget hotel experience. This
view has also echoed the assertion of advocates for better service
quality by prior studies, such as Brotherton (2004).
Although researchers expect location to be one of the most
important factors (e.g., Brotherton, 2004; Nash et al., 2006; Clemes
et al., 2011), the results of the present study indicated that the loca-
tion factor only accounted for a small amount of the customers’
accommodation experience with budget hotels. A possible expla-
nation for this outcome (as evidenced by interview data) is that
location is an important factor that influences customer choice of
budget hotels. However, once customers are in the hotel or when
they recall their experience after accommodation, the location is
less recalled. One of the interviewees said, “Location is important
when we were considering which hotel to select, but once we are
there, even if we chose a hotel with less ideal location, we did it
mostly because we wanted a good rate, and the issue of location
is less evident.” Another explanation is that the number of budget
hotels, especially the branded ones, is large, and despite significant
geographic coverage in the cities, customers did not experience
difficulty in finding hotels around their destinations.
5. Conclusion and implications
The study established 39 items for customer experience through
literature review and in-depth interviews. The questionnaire sur-
vey was conducted among more than 200 budget hotel customers.
Exploratory factor analysis was performed to examine the underly-
ing dimensionality of customer experience with budget hotels. The
analysis generated four dimensions, namely, tangible–sensorial
experience, staff relational/interactional experience, aesthetic per-
ception, and location. The influencing power of each dimension
over customer satisfaction was further tested via regression analy-
sis. Result indicated that all four factors had a positive relationship
with the dependent variable, customer satisfaction.
Both EFA and multiple regression analysis indicated that the
largest dimension of customer experience, which influenced cus-
tomer satisfaction, was the tangible and sensorial dimension. Seven
items represented the basic elements of accommodation experi-
ence. Therefore, the attributes of hotel rooms, such as cleanliness,
quietness, and comfortable shower, together with comfortable
room temperature and odorless environment, should be ensured.
The attitude of the staff, aesthetic aspect of hotels, and location are
also important factors for budget hotel customers.
The finding are in contrast with the design of the SERVQUAL
instrument, in which four dimensions pertain to staff service qual-
ity and only one dimension is about the tangible product. For
budget hotel customers, tangible and sensorial perception is the
most important dimension, although human elements cannot be
neglected.
The implication drawn from this study is that budget hotel
developers and operators should be well aware that budget hotel
customers scrutinize the very basic attributes of guest rooms. A
clean and quiet room with basic comfort should be ensured for
customers. Although customers do not request high standards of
professionalism of the service staff, they do appreciate polite and
responsive communication. The aesthetic effect or visual appeal of
hotels remains important for budget hotels, although many would
argue against it. Finally, location is the starting point for the choice
of many budget hotel customers. Strategically, location is of vital
importance for the budget hotel business.
In addition to the aforementioned implications, certain actions
should be undertaken. The budget hotel sector continues to
maintain its momentum as a result of the fast expansion in China.
Although rapid expansion and geographic occupation are impor-
tant for budget hotel chains (Zhang et al., 2013), these businesses
should maintain quality. Rigorous quality assurance programs need
to be implemented and SOPs (standard operation procedures)
should be strictly followed. The success story of Home Inns (Zhang
et al., 2013) could be well referenced in this regard.
6. Limitations and future research
The study is exploratory in nature. The research target is deter-
mined on the basis of convenient selection instead of systematic
sampling. Future research will target more systematically selected
respondents, and further statistical analysis such as confirmatory
factor analysis will be applied to verify the research results. The
measurement scale will be further validated with data from a larger
round of surveys. In addition, a more sophisticated statistical anal-
ysis could be applied to test the relationship among customer
experience, satisfaction, and possibly, perceived value, as well as
behavioral intentions.
Acknowledgements
This study was partially funded by the Zhejiang University
and the Hong Kong Polytechnic University International Executive
Development Center Fund.
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