Does customer-based destination brand equity help customers forgive firm service failure in a tourist ecosystem? An investigation through explanatory sequential mixed-method design

Abstract

Purpose

This study seeks to examine the buffering effect of the brand equity of a destination on the customer responses to a service failure of the hotel/restaurant industry, which represents an important constituent of the tourism ecosystem. In this regard, a destination brand is viewed from the prism of customer-based brand equity as the “differential effect of destination brand knowledge on the responses of the customers to the marketing of the destination”. The stimulus-organism-response framework is used to investigate the role of forgiveness as the affective mechanism linking the stimulus of customer-based destination brand equity (CBDBE) and customer reactions to adversarial service firm performance such as switchover intentions and recommendation intentions.

Design

The study utilizes a robust explanatory sequential mixed-method design. In the first stage, the conceptual model was tested empirically through Partial Least Squares-Structural Equation Modelling (PLS-SEM) using online questionnaires containing an inventory of 33 scale items. Data was collected from 400 tourists visiting the valley using convenience sampling. The second stage helped gain further insights into the validity of survey research (Study 1) through 40 semi-structured qualitative interviews (Study 2) analysed thematically using NVivo 14.

Findings

The overall findings of Study 1 revealed that service firms belonging to the tourism ecosystem can indeed rely on the brand equity of the destination to ameliorate the negative consequences of service failure such as switchover intentions by leveraging the positively-valanced construct of forgiveness of the customer. However, the moderating impact of service failure severity weakens the buffering effect found through the customer-based destination brand equity (CBDBE) and forgiveness linkage. Therefore, this advantage of the destination's brand equity ceases to exist in the case of severe service failures. Additionally, while forgiveness decreases the impact of switchover intentions, it fails to translate into customer intentions to recommend the firm to others. In fact, the findings reveal that even though insignificant, the recommendation intentions were negative despite the consumer's forgiveness of the service breakdown. Furthermore, the researchers identified 38 thematic codes through qualitative research to reinforce the findings of empirical research.

Originality/value

The study is the first to examine customer-based destination brand equity as an antecedent to post service failure customer reactions. In fact, the study makes a dual contribution to the field of service failure/recovery in the hospitality industry by examining brand equity not merely for its conditional effects but going beyond, to assess its role as an antecedent. Additionally, it makes a strong case for macro investigations whereby, service ecosystems such as destinations offer benefits to enhance micro efficiency and effectiveness of firms. It represents a maiden attempt to leverage mixed-methodology to validate and refine the proposed conceptual model.