Service guarantee redress options in a hotel environment

Unconditional service guarantees are a popular marketing tool in the hotel industry worldwide. They promise total satisfaction and guests are free to invoke the guarantee whenever they are dissatisfied. While many hotels offer “money-back” compensation following guarantee invocation, others vary the payout depending on the severity of the service failure and still others will only compensate the customer if the problem leading to invocation of the guarantee cannot be fixed. To the researcher’s knowledge, the influence of compensation and fix (i.e., taking action to resolve the problem) on consumers’ perceptions of distributive justice has not been examined previously in a service guarantee context. This paper begins to address this gap by presenting a conceptual model and related propositions, arguing that redress (compensation and fix) is an important predictor of consumers’ perceptions of distributive justice, and that this relationship is moderated by service failure severity.