Impact of Servicescape on the Perceived Service Quality in the Hotel Industry: An Empirical Analysis By PLS-SEM Algorithm

Abstract

Services, which play a vital role in the global and Sri Lankan economies, face many challenges in maintaining a consistent service quality compared to manufacturing firms. Even though the SERVQUAL model is widely used to measure service quality, its generalised structure has limited its applicability to specific industry contexts. This has led to the development of industry-specific service quality models such as HOLSERV. However, the role of the servicescape and its impact on perceived service quality are inadequately explored, as are the interdependencies among HOLSERV service quality dimensions. The current study is expected to address this gap by examining the direct impact of the servicescape on perceived service quality and the mediating role of intangible factors in the hotel industry in Galle, Sri Lanka. The study adopts a positivist philosophy and a deductive, quantitative approach, collecting data from 110 hotel visitors using a structured survey questionnaire with a 7-point Likert scale, and analysing the data using PLS-SEM and SPSS. The findings of the study showcase that servicescape has a significant positive effect on service quality and strongly influences intangible factors, which in turn significantly affect service quality, confirming a partial mediation effect, with the model demonstrating substantial explanatory power. This study contributes to the existing body of knowledge by clarifying the role of servicescape in an industry-specific service quality model. Further, the mediating role of intangible factors is highlighted, suggesting that high investments in both the servicescape and employee performance are needed to enhance overall service quality