The Role of Customer Values in Increasing Tourist Satisfaction in Gianyar Regency, Bali, Indonesia

Abstract

Customer value has long been believed to be a direct trigger for increased tourist satisfaction, but as a mediating variable, it still needs to be proven further. This paper aims to examine the causal relationship between research variables, as well as to examine the role of customer value as a mediating variable in the relationship between service quality, brand quality, tourism products, customer value, and tourist satisfaction with tourists' objects. The population is tourists who visit tourist sites/destinations in the Gianyar Regency on the island of Bali, Indonesia, and the sample size is 270 respondents, selected through random sampling. Structural equation modeling (SEM), a multivariate statistical analysis technique, is used to analyze the causal relationships between variables. The results show that the model is accepted, and customer value is proven to be a positive mediating variable. The results also show that service quality, brand quality, and tourism products have an effect on customer value. This provides insight into the practical implications for tourism managers to increase the brand quality of tourist attractions as well as increase the professionalism and quality of tour guide services. This, in turn, will increase customer value and increase tourist satisfaction.

1. Introduction

Tourism has boomed in Indonesia in recent years and is one of the main sources of foreign currency earnings. In 2017, the contribution of tourism to GDP amounted to IDR 536.8 trillion, 4.1% of Indonesia’s total GDP. In the same year, tourism provided 12.7 million jobs, representing 10.5% of total employment. In 2018, international arrivals reached 15.8 million, an increase of 12.6% compared to the previous year. In 2017, domestic tourism reached 270.8 million trips growing 2.4% over the previous year. In 2018, these numbers increased to 303.4 million trips, growing a significant 12% (OECD, 2020). In 2019, foreign currency earnings was US$ 27 billion, up about 20% from 2018 which was around US$ 23.8 billion. In fact, it is estimated that in 2020 it will already beat foreign exchange earnings from other industries. The increase in foreign exchange came from the target of 17 million foreign tourists, which in 2020 is believed to increase by 22% compared to the previous year. However, this prediction was not achieved due to the COVID-19 pandemic.

Travel planning and booking site TripAdvisor released the 2020 Traveler’s Choice Awards with one of the categories being Top 25 Destination World. This award is based on ratings and reviews from millions of TripAdvisor users worldwide. Bali was ranked fourth in the category of best destinations in the World 2020 along with London (UK), Paris (France), and Crete (Greece). This is because Bali has been known in the world as a natural and cultural destination that is favored by many tourists (Kumparantravel, 2020).

Bali Island is one of 34 provinces in Indonesia, which is divided into nine regencies and cities. The Bali province has a vision “The vision of the development of regional tourism, namely the realization of quality and tourism culture and sustainable competitiveness based on “Tri Hita Karana” (a traditional philosophy for life on the island of Bali) that is able to encourage regional development and people’s welfare”. The mission of the Bali province is 1) The realization of people-based cultural tourism, 2) The realization of professionalism in tourism management, 3) The realization of good services in the tourism sector. Gianyar Regency has a Vision: “Going forward together for a prosperous and cultured Gianyar, based on Tri Hita Karana/.” Three of the nine Gianyar regency missions are related to tourism, local culture, and the environment (tourism destinations). All regencies/cities in Bali are tourist destinations with different characters and characteristics.

Tourist satisfaction has been considered as the main tool for increasing tourism destination competitiveness in globalization conditions. Tourist satisfaction with a destination is the degree to which a tourist’s assessment of the attributes of that destination exceeds his or her expectations for those attributes. There are several factors that can affect customer satisfaction, namely, product value, service, value, personal value, image, and total customer costs consisting of monetary costs, time costs, labor costs, and thought costs (Kotler 2018). In this paper, tourist satisfaction is influenced by service quality, brand quality, tourism products, and customer value.

In a highly competitive tourism industry, improving service quality to gain a competitive advantage is one of the keys to sustainable cultural heritage tourism management. Tourist satisfaction is recognized as one of the main assessments used by tourists to measure tourism services, while future behavioral intentions are closely related to satisfaction. Expression of satisfaction will result in behavioral responses to recommend, say positive things about the destination, and revisit destinations. Tourist satisfaction is important for successful destination marketing because it influences the choice of destination, the consumption of products and services, and the decision to return. Satisfaction is basically the comparison of the customer’s expectation before and after consumption. Meanwhile, Panjaitan (2020) showed that brand value is the main determinant of tourist satisfaction and loyalty. They also proved that indicators such as comfort, fairness of costs, fun, and benefits make a positive contribution to the destination brand value. Thus, tourism managers must pay attention to and enhance the brand image of tourist destinations that will have the maximum impact on the brand value of the destination, by building brand popularity and competitive advantages that can be used as reasons for tourists to visit tourist destinations.

Therefore, this study was conducted to gain a better understanding of the relationship between service quality, brand quality, tourism products, customer value, and the satisfaction of tourists visiting tourist attractions in Gianyar Regency on the island of Bali, Indonesia. Furthermore, this study examines the role of customer value as a mediating variable in the relationship between service quality, brand quality, tourism products, and tourist satisfaction. The study’s novelty is that the study results can be applied to increase the satisfaction level of tourists visiting tourist destinations in the Gianyar district of Bali.

2. Literature Review and Hypotheses

Tourist satisfaction with tourist destinations is closely related to accommodation, weather, natural environment, social environment, and others. Chi and Qu (2008), stated that tourist satisfaction with tourist destinations is related to travel experiences consisting of accommodation, weather, natural environment, social environment, and others. Hence, tourist satisfaction is the difference between tourist’s expectations and the actual perceived value. Tourist satisfaction is important for successful destination marketing because it influences the choice of destination, the consumption of products and services, and the decision to return. Satisfaction is basically the comparison of the customer’s expectation before and after consumption. Tourist satisfaction is closely related to the quality of tourism products it receives. Tourists who are happy and satisfied tend to behave positively and they will come to visit again. Kotler (2018), stated that the elements in tourist satisfaction consist of (i) Expectations: Goods or services that are in accordance with consumer expectations that will cause consumers to feel satisfied. (ii) Comparison: If the consumer’s actual outcomes exceed expectations, the consumer will be considered as satisfied otherwise if expectations exceed outcomes, the consumer will be dissatisfied (iii) Performance: The consumer’s experience of the actual performance of goods or services when used without being influenced by their expectations. When the actual performance of goods or services is successful, consumers will feel satisfied (iv) Confirmation/disconfirmation: Expectations are confirmed when a consumer receives what he expects. Negative disconfirmation takes place when the product’s actual or objective performance cannot match expectations for it. Positive disconfirmation may occur when objective product performance actually exceeds expectations.

Nguyen Van et al. (2021) showed that two main factors are affecting the satisfaction of tourists in the associated tourism chain in the above regions, namely, (i) tourism resources (cultural beauty in localities in the associated tourism chain, local cuisine in the affiliated travel chain, natural landscapes/local attractions in the linked tourism chain, etc.); and (ii) tourism environment (the climate in localities in the associated tourism chain, the clean and fresh environment in localities in the associated tourism chain, etc.).

2.1. Service Quality, Customer Value, and Tourist Satisfaction

Service quality as perceived by the customer is the degree and direction of the discrepancy between customer service perceptions and expectations. Tourism service quality in an organization is defined in terms of quality of excellence, quality of value, quality of conformity to some extent, and quality is viewed as very important for meeting tourism customer expectations. Moreover, the service quality has a direct impact on customer satisfaction and there is a direct, positive relationship between customer satisfaction and word-of-mouth. If tourists are satisfied with the service received at a tourist attraction, then the tourists will return and even recommend others (word-of-mouth) to visit the same tourist attraction. Therefore, every tourist attraction must start thinking about the importance of better tourist services. Hence, customer service and satisfaction is a vital aspect in surviving and winning the competition in the tourism business.

Lin et al. (2017) proposed a conceptual framework to explain the impacts of professional competencies on service quality and tourist satisfaction. Empirical data were gathered from a large-scale online survey with experienced GPT tourists to test the proposed hypotheses and research model. The empirical results indicated that tour guides’ professional competencies significantly impact service quality and tourist satisfaction, and tour guides’ service quality positively influenced tourist satisfaction.

Maghzi et al. (2011) tried to understand the influence of service quality and customer satisfaction on brand trust for hotel services in Dubai. The results showed that both service quality and customer satisfaction have a positive influence on brand trust. In addition, based on the data analysis, service quality has a higher impact on brand trust compared with customer satisfaction. Kwok et al. (2016), stated that service quality has a positive effect on satisfaction moderated by gender. In addition, the findings showed that service quality was positively associated with satisfaction and the relationship was found to be moderated by gender. Additionally, the findings also showed that service quality perceived by women influenced the satisfaction level greater than that of men in the tourism context. Meanwhile, Purwoko (2015) analyzed whether the quality of service, d customer satisfaction, and loyalty affect the confidence of foreign tourists to visit tourist attractions in East Java. The results of this study were: (1) Quality of service affect the confidence of foreign tourists to visit tourist attraction in East Java, (2) service quality affects customer loyalty of international tourists to visit a tourist attraction in East Java, with confidence as a mediator, (3) service quality influence consumer satisfaction confidence of foreign tourists to visit tourist attraction in East Java, (4) consumer satisfaction affects customer loyalty of international tourists to visit a tourist attraction in East Java with confidence as mediation and ( 5) Confidence affect the loyalty of foreign tourists to visit tourist attraction in East Java.

Rusmahafi and Wulandari (2020) showed that the brand image variable did not significantly influence the customer satisfaction of Bank Muamalat Indonesia, while the variable service quality and customer value had a significant positive effect on customer satisfaction of Bank Muamalat Indonesia. San Martin et al. (2019) showed a strong relationship between service quality and tourist satisfaction. Based on this description, the following hypothesis is put forward:

H1: Service quality has an effect on customer value at tourist objects in Gianyar Regency, Bali.

H2: Service quality has an effect on tourist satisfaction which is mediated by customer value.

2.2. Brand Quality, Customer Value, and Tourist Satisfaction

Brand quality is an important brand characteristic and can be measured by the brand equity dimension (Aaker 1996). If the perceived quality position is strong, then this becomes an advantage that is not easily replaced by competitors. Perceived quality can be defined as the customer’s perception of the overall quality or superiority. of a product or service with respect to its intended purpose, relative to alternatives. According to Keller (2013), “perceived quality can be defined as the customer’s opinion about the overall quality or image of the product or service or the brand itself with respect to its purpose of use as against its alternatives.”

Chepchirchir and Leting (2015) showed that brand quality and brand prestige are positively associated with consumer brand purchase intention. Chen and Myagmarsuren (2011) examined customer loyalty and explored the interrelationships between customer equity variables, namely brand image, company image, relationship quality, and relationship value, and customer loyalty. The findings indicated that brand and company images significantly influence relationship quality, and relationship quality has a significant influence on relationship value. However, customer loyalty is not affected by either dimension of images and relationship quality directly, rather images and relationship quality affect customer loyalty mediated by relationship value.

Giantari et al. (2012) found that perceived value has an effect on word-of-mouth (WOM). Perceived value also affects satisfaction, and satisfaction affects WOM. Satisfaction can mediate the effect of perceived value on WOM. Setiawan et al. (2021) explained that the value of tourist experience and destination image has a positive and significant effect on the strength of tourist engagement. The value of experience and tourist engagement has a positive and significant effect on tourist loyalty. Destination image does not affect tourist loyalty. The strength of tourist engagement mediates the relationship between experience value and destination image, and tourist loyalty. Based on this description, the following hypothesis is put forward:

H3: Brand quality has an effect on customer value in tourism objects in Gianyar Regency, Bali.

H4: Brand quality has an effect on tourist satisfaction which is mediated by customer value.

2.3. Tourism Products, Customer Value, and Tourist Satisfaction

A tourism product is a tangible product and an intangible product, packaged in a single series of trips that can only be enjoyed if the entire series of trips can provide a good experience for people who travel or use the product (Mason, 2003). Tourism products are a combination of goods and services demanded by a tourist during travel to and stay at a destination. These include natural, cultural, and manmade attractions and facilities such as hotels, transport, and ancillary services. The elements of tourism products are an inseparable package, namely: (1) Tourist objects found in tourist destinations attract people to come to visit the area. (2) Facilities needed at the destination, such as accommodation, restaurants, bars, entertainment, and recreation. (3) Transportation that connects the country of origin of tourists with tourist destinations, such as transportation at the destination to tourist objects.

A tourism product is an integrated product arrangement, which consists of tourist objects, tourist attractions, transportation, accommodation, and entertainment where each element is prepared by each company and offered separately (Burkart & Medlik, 1987). Dmitrovi et al. (2009), mentioned that quality, image, value, cost, and risk have an impact on tourist satisfaction. Thong et al. (2019), revealed that culture, carrying capacity, and perceived value, have an impact on tourist satisfaction and eventually leads to the intention to return to the tourist attraction.

Wu et al. (2014) identified the dimensions of experiential quality and investigated the interrelationships between experiential quality, experiential value, experiential satisfaction, theme park image, and revisit intention perceived by theme park visitors. Results revealed that there are 4 primary dimensions and 11 subdimensions of experiential quality perceived by theme park visitors. In addition, the results indicated that physical environment quality is identified as the most primary dimension of experiential quality perceived by theme park visitors. Prayogo et al. (2017) showed that service quality has a positive and significant impact on perceived value and revisit intention. Destination image was found to have a positive and significant impact on perceived value and revisit intention. Based on this description, the following hypothesis is put forward:

H5: Tourism products have an effect on customer value in tourism objects in Gianyar Regency, Bali.

H6: Tourism products have an effect on tourist satisfaction which is mediated by customer value.

2.4. Customer Value and Tourist Satisfaction

Customer value is the perception of what a product or service is worth to a customer versus the possible alternatives. Williams and Soutar (2000) mentioned that customer value is traditionally seen as a trade-off between quality and price, which for many products, is a prominent determinant of purchase intention and repurchase behavior. However, in services, due to their intangible nature, heterogeneity and complexity, this trade-off model is too simplistic with its emphasis on functional value and utility. In service experiences such as tourism, other sociopsychological value elements are likely to play a key role in consumer behavior and decision making.

Waheed and Hassan (2016) examined the customer perceived value associated with guesthouse services in tourism in the local islands of Maldives. The results showed that only functional and emotional values have a positive and significant impact on tourist satisfaction. Only social value has a positive and significant impact on tourists’ intention to revisit. We found tourist satisfaction has a direct positive and significant influence on their intention to revisit. The effect on revisit intention is directly mediated by satisfaction and social value while social value and satisfaction indirectly mediate revisit intention. Meanwhile, Panjaitan and Panjaitan (2021) stated that customer value increases, with increasing customer involvement.

Zhang et al. (2017) presented a model of the influence of customer engagement on stickiness. Empirical results showed that customer engagement has a direct and positive influence on customer stickiness as well as an indirect influence through customer value creation. While Panjaitan et al. (2021), examined the causal relationship between network capability, knowledge creation, innovativeness, competitive aggressiveness, and business performance of private universities. The results showed that the model is accepted, and competitive aggressiveness is proven to be a positive mediating variable in the relationship of network capability, knowledge creation, innovativeness, and business performance. The results also showed that knowledge creation, and innovativeness, have an effect on competitive aggressiveness, while network capability has no effect. Based on this description, the following hypothesis is put forward:

H7: Customer value has an effect on tourist satisfaction at tourist attractions in Gianyar Regency, Bali.

2.5. Research Framework

Based on the literature review and discussion that has been described previously, a research conceptual framework can be developed, which explains the relationship between research variables. Figure 1 shows the relationship between service quality, brand quality, tourism products, customer value, and tourist satisfaction with tourist objects in Gianyar Regency, Bali.

Figure 1: SEM Model Research Framework

3. Research Methods

This research is causal research. Causal research is the investigation of (research into) cause-relationships. To determine causality, variation in the variable presumed to influence the difference in another variable(s) must be detected, and then the variations from the other variable(s) must be calculated The research population is tourists who visit tourist objects in Gianyar Regency, Bali, Indonesia. The analysis technique uses SEM with the help of Amos software. The estimation uses Generalized Least Square Estimation, and the number of samples studied is 270 respondents, obtained from [10 × (22 indicators + 5 variables)], this is in accordance with the provisions of SEM (Hair et al., 2016). The sample is distributed evenly to each tourist attraction in Gianyar Regency, Bali, Indonesia (Table 1).

Table 1: Sample Distribution in 6 Tourist Attractions in Gianyar Regency, Bali (2020)

Source: Gianyar Regency Tourism Office (2020).

The study used a questionnaire instrument where the service quality was measured using 6 indicators adapted from Panjaitan et al. (2019), namely: compliance, assurance, reliability, tangible, empathy, and responsiveness. The brand quality was measured using 4 indicators adapted from Chepchirchir and Leting (2015), namely: convenience, the reasonableness of cost, pleasure, and benefit. Tourism products were measured using 4 indicators adapted from Mason (2003), namely: tourist attraction, amenities, ease of reaching the destination, and facilities and infrastructure. Customer value was measured using 4 indicators adapted from Chahal and Kumari (2012), namely: emotional value, social value, quality/performance value, and price/value of money. Tourist satisfaction was measured using indicators adapted from Dmitrović et al. (2009), namely: perceived quality, perceived value, ticket costs incurred, customer expectations, facilities offered.

4. Results

A total of 300 survey questionnaires were distributed and 274 were collected. Of these, four incorrect responses were excluded, leaving 270 usable. Table 2 shows the demographic information of the respondents.

Table 2: Demographics of Respondents

4.1. Instrument Validity and Reliability Test

From the results of Pearson’s product-moment correlation, it is known that all questionable items in the questionnaire have a significant correlation at an error rate of 5%, so it can be said that all question items are valid. Cronbach Alpha test (α), shows that all research variables are reliable because the alpha coefficient value of each research variable is greater than the standardized (0.6) so that each question item on the measurement instrument can be used. The corrected total correlation item value of all question items is greater than 0.3 (Table 3).

Table 3: Validity and Reliability Test

**Correlation is significant at the 0.01 level (2-tailed).

4.2. Confirmatory Factor Analysis

Table 4 and Figure 2 show the overall results of confirmatory factor analysis on the research measurement model. Construct validity and reliability are two tests to evaluate the ability of the measured variable (manifest) in forming the latent variable. In the table below, all manifests have a loading factor with a probability of less than 0.05, meaning they are significant in forming the latent variable. It is also seen that each latent variable has a critical construct ratio of more than 0.2, which means that it comes from one dimension (unidimensional).

Table 4: Confirmatory Factor Analysis

Figure 2: SEM Analysis Result Path Diagram

4.3. Hypothesis Testing

Hypothesis testing is carried out based on the Probability (Sig) value, and the indirect effect value of the research model is shown in Table 5 and Figure 2.

Table 5: Hypothesis Testing

SQL: Service quality; BRQ: Brand quality; TRM: Tourism products; CVL: Customer value; SAT: Tourist satisfaction; P: Probability.

5. Discussion

Results showed that the test model in this study is able to explain the relationship between service quality, brand quality, tourism products, customer value, and tourist satisfaction with tourism objects in Gianyar Regency, Bali, Indonesia.

The research findings are: service quality has a significant effect on customer value in tourist objects in Gianyar Regency, Bali. This shows that the quality of the service provided by the tour manager has been able to increase customer value in tourism objects. Service quality is a customer assessment (a form of attitude) and is the result of comparisons made by customers about the actual expectations and perceptions of the services they receive. That is, services quality is the extent to which a service meets customers’ needs or expectations. Service quality, which consists of compliance, assurance, reliability, tangible, empathy, and responsiveness was carried out well to encourage increased customer value. If the service quality variable indicators are implemented properly and are continuously enhanced, it is expected that the customer value in tourism objects in Gianyar Bali Regency will increase. The results of the study are in line with the findings of Lin et al. (2017) and Maghzi et al. (2011). The results also show that there is an indirect relationship between service quality and tourist satisfaction through customer value. This shows that customer value is a mediating variable in the relationship between service quality and tourist satisfaction.

Brand quality has a significant effect on customer value in tourist attractions in Gianyar Regency, Bali. This shows that the brand quality of tourist objects is able to encourage increased customer value. The brand quality which consists of comfort, the reasonableness of cost, pleasure, and benefit, if implemented properly and continuously enhanced, will increase customer value in tourist objects. The results also show that there is an indirect relationship between brand quality and tourist satisfaction through customer value. This shows that customer value is a mediating variable in the relationship between brand quality and tourist satisfaction.

Tourism products have a significant effect on customer value in tourist objects in Gianyar Regency, Bali. This shows that the tourism products that are currently owned by Gianyar Regency are able to increase customer value in tourist objects in Gianyar Regency, Bali. Tourism products are all forms of services enjoyed by tourists starting from leaving their place of residence to returning home. The elements of a tourism product which are an inseparable package (tourist objects, facilities, and transportation). Tourism products which consist of tourist attractions, tourist facilities, and services (amenities) or facilities at tourist destinations, ease of reaching tourist destinations (accessibilities destinations), and infrastructure, if implemented properly and continuously improved, it will increase customer value in tourism objects in Gianyar Regency, Bali. The results also show that there is an indirect relationship between tourism products and tourist satisfaction through customer value. This shows that customer value is a mediating variable in the relationship between tourism products and tourist satisfaction.

Customer value has a significant effect on tourist satisfaction in tourist attractions in Gianyar Regency, Bali. This shows that the customer value that tourists have is able to encourage increased tourist satisfaction. Customer value which consists of emotional value, social value, quality/performance value, and price/value of money, if implemented properly and always improved, will increase tourist satisfaction. The results of the study are in accordance with the findings of Waheed and Hassan (2016), Panjaitan and Panjaitan (2021).

Of the three variables (service quality, brand quality, tourism products), which are hypothesized to have an effect on customer value, the dominant variable is service quality. This shows that the service quality of tourism object managers and tour guides is very important to increase customer value in tourist objects. The lowest value of influence on customer value is brand quality, therefore the tour managers must be encouraged to continuously improve the brand quality of tourist objects. This can be done by increasing promotions through advertisements, tourist attractions, improving tourist facilities/infrastructure, and also improving the quality of service and professionalism of tour guides.

6. Conclusion

The results of the study prove that the variability of service quality, brand quality, tourism products, and customer value have an effect on tourist satisfaction. The results prove that customer value is a good mediating variable in the relationship between service quality, brand quality, tourism products, and tourist satisfaction with tourist objects in Gianyar Regency, Bali, Indonesia.

It also proves that service quality is the dominant variable in its influence on customer value.

The implication of the research is that tourism managers should takes efforts to increase the brand quality of tourist objects as well as increase the professionalism and quality of tour guide services. This, in turn, will increase customer value and increase tourist satisfaction. This can be done by developing the ability and professionalism of tour guides by providing additional knowledge about tourism through short courses. Brand quality can be improved by aggressively promoting tourist objects, and complementing facilities/infrastructure that supports tourists’ comfort. Future research is suggested to investigate further the role of customer value as a mediating variable for other variables that have not been included in this study. In particular, it is recommended to review the role of customer value as a moderating variable.