Satisfaction in Determining Customer Loyalty in the Restaurant Industry The Roles of the Physical Environment, Price Perception, and Customer

Figure 2

Results of Structural Equation Model

Décor &

Artifacts

(

ξ1)

Ambient

Conditions

(

ξ3)

Customer

Satisfaction

(

η2)

Customer

Loyalty

(

η3)

Spatial

Layout

(

ξ2)

Price

Perception

(

η1)

.54**(6.40)

.29** (3.69)

.27** (3.60)

.33** (4.06)

.06 (1.03)

.12 (1.78)

.24* (2.08)

.56** (5.06)

Standardized solution 

(t-value)

Supported

.56**(5.11)

Not supported

*p 

< .05. **p < .01.

 at UNIV OF CONNECTICUT on January 4, 2014

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502    JOURNAL OF HOSPITALITY & TOURISM RESEARCH

indicated that customer satisfaction level increases when price is considered rea-

sonable.  The  three  components  of  physical  environments  and  price  perception 

explained 70% of the variance in customer satisfaction.

Finally,  the  direct  effect  of  price  perception  and  customer  satisfaction  on 

customer loyalty was statistically significant (Hypothesis 8, 

β

31

 

= .24, t = 2.08, 

p 

< .05; Hypothesis 9, β

32

 

= .56, t = 5.06, p < .01), supporting Hypotheses 8 and 

9. This result was consistent with previous findings that price perception and 

satisfaction  are  significant  predictors  of  customer  loyalty  (Bolton  &  Lemon, 

1999; Ranaweera & Neely, 2003; Varki & Colgate, 2001). Both price perception 

and satisfaction accounted for 59% of the total variance of customer loyalty.