The Hong Kong Polytechnic University. Tourism Service Quality Index. Tourist Satisfaction Index and

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1 The Hong Kong Polytechnic University Tourism Service Quality Index Tourist Satisfaction Index and 16

2 Foreword Over the past three years, the Hong Kong tourism industry has suffered from negative social, economic and political effects. The city s image as one of the world s most popular tourist destinations and its number of international visitors were adversely affected, with total visitor arrivals decreased by 2.5% from 14 to 15. The negative growth of the inbound market was maintained and the number of visitor arrivals further declined by 4.5% from 15 to 16. It is the first time for Hong Kong to suffer a continuous decrease in the last two decades. The tourism industry must rethink its strategies to regain visitors confidence in Hong Kong as an international destination and to seek methods for attracting repeat visitors from not only mainland China but also around the world. The Hong Kong Polytechnic University s Tourist Satisfaction Index and Tourism Service Quality Index (PolyU TSI and TSQI) aim to provide barometers that measure tourist satisfaction and tourism service quality for Hong Kong. Using the PolyU TSI and TSQI frameworks, it is believed that sustainable tourism can be achieved by helping tourism stakeholders to better understand their competitiveness and abilities in delivering highquality experiences to tourists. The frameworks of these indices are also designed to build comprehensive measurements for evaluating destination competitiveness over time and across the tourism-related sectors. They are valuable tools that help tourism stakeholders to improve through definite objectives. The indices will also help the public sector in Hong Kong with the formulation of policies that enhance Hong Kong s attractiveness as an international destination. The Hong Kong Polytechnic University s School of Hotel and Tourism Management is committed to bringing cutting-edge research to business practices, thereby addressing the global challenges that the tourism industry faces. The PolyU TSI has been adopted by an increasing number of tourist destinations, including Singapore and Macau in 1, China s Guangdong Province in 12 and Australia in 14. It is hoped that increasing numbers of destinations will consider using the two-index frameworks to measure destination competitiveness based on tourist satisfaction and service quality. Professor Kaye Chon Dean and Chair Professor Walter Kwok Foundation Professor in International Hospitality Management School of Hotel and Tourism Management The Hong Kong Polytechnic University

3 Research Team Principal Investigators Professor Haiyan Song Associate Dean and Chair Professor Mr and Mrs Chan Chak Fu Professor in International Tourism School of Hotel and Tourism Management The Hong Kong Polytechnic University, Hong Kong SAR, China Professor Kaye Chon Dean and Chair Professor Walter Kwok Foundation Professor in International Hospitality Management School of Hotel and Tourism Management The Hong Kong Polytechnic University, Hong Kong SAR, China Research Team Dr Anyu Liu Postdoctoral Fellow School of Hotel and Tourism Management The Hong Kong Polytechnic University, Hong Kong SAR, China Dr Markus Schuckert Assistant Professor School of Hotel and Tourism Management The Hong Kong Polytechnic University, Hong Kong SAR, China Ms Jie Zhao Research Associate School of Hotel and Tourism Management The Hong Kong Polytechnic University, Hong Kong SAR, China

4 International Consultants Professor Gang Li Professor of Tourism Economics and Director of International Relations, School of Hospitality and Tourism Management, University of Surrey, UK Dr Robert van der Veen Research Fellow, Department of Marketing, Faculty of Business, Oxford Brookes University, UK Dr Jason Chen Lecturer in Tourism and Events Management, School of Hospitality and Tourism Management, University of Surrey, UK Dr Yong Chen Assistant Professor of Tourism Economics and Marketing, Ecole hôtelière de Lausanne, Switzerland

5 Executive Summary The 16 Hong Kong Tourist Satisfaction Index (TSI) and Tourism Service Quality Index (TSQI) show general increases compared with the 15 results, with both indices rising by.31 and.65 points, respectively. In 16, the tourism industry underwent some turbulence caused by various social and political issues in 14 and 15. Transportation, restaurants and attractions were among the tourist sectors affected. The 16 PolyU TSI was 75.2 on a scale of to 1, an increase from in 15. This slight increase suggests that tourists were generally more satisfied with the tourism services in Hong Kong than tourists interviewed in 15, although the level of satisfaction varied across the source markets. Consistent with the PolyU TSI over the past seven years (9 to 15), the American market scored the highest (8.64) whilst the markets of Japan and Korea expressed the lowest satisfaction (66.84). The sectoral-level indices maintained a stable trend in 16 that the scores of transportation (78.19), immigration (76.77) and attractions (75.4) are higher than the scores of hotels (74.3), retail shops (73.24) and restaurants (72.4). The 16 PolyU TSQI was 75.87, an increase from in 15. At the market level, the 16 tourism service quality indices of mainland China and Australia, New Zealand and the Pacific markets scored lower than their 15 counterparts. Furthermore, the index ranking for each market has changed. The Americas scored highest (81.92), followed by Europe, Africa and the Middle East (78.31), Australia, New Zealand and the Pacific (77.96), Taiwan and Macau (75.8), South and Southeast Asia (75.29), mainland China (74.45) and Japan and Korea (66.55). As for the six tourism service sectors, an even fluctuation between increases and decreases was observed. Transportation ranked highest with an increased TSQI of 78.69, followed by immigration (77.55), hotels (75.92) and retail shops (73.9). The remaining two sectors experienced drops, with attractions and restaurants scoring and 73.67, respectively.

6 Table of Contents List of Figures 7 Highlights 1 PolyU Tourist Satisfaction Index 12 1 Introduction 12 2 Methodology Sectoral-Level Tourist Satisfaction Index Overall Tourist Satisfaction Index Calculation of Tourist Satisfaction Index 15 3 PolyU Tourist Satisfaction Index 16 4 Tourist Satisfaction Indices by Source Market Overall Tourist Satisfaction Indices by Source Market Americas 4.3 Australia, New Zealand and the Pacific Europe, Africa and the Middle East Japan and Korea Mainland China South and Southeast Asia Taiwan and Macau 26 5 Tourist Satisfaction Indices by Service Sector Overall Tourist Satisfaction Indices by Service Sector Attractions Hotels Immigration Restaurants Retail Shops Transportation 34 PolyU Tourism Service Quality Index 35 1 Introduction 35 2 Methodology Service Quality: Theory Service Quality: Models Tourism Service Quality Index: Computations 39

7 Table of Contents (cont d) 3 PolyU Tourism Service Quality Index 4 4 Tourism Service Quality Indices by Source Market Overall Tourism Service Quality Indices by Source Market Americas Australia, New Zealand and the Pacific Europe, Africa and the Middle East Japan and Korea Mainland China South and Southeast Asia Taiwan and Macau 48 5 Tourism Service Quality Indices by Service Sector Overall Tourism Service Quality Indices by Service Sector Attractions Hotels Immigration Restaurants Retail Shops Transportation 55 6 Comparison of Tourism Service Quality Index and Tourist Satisfaction Index 56 Conclusion 58 Bibliographies 59 Glossary 61 Acknowledgements 63

8 List of Figures Figure 1 Sectoral-Level Model of Tourist Satisfaction Index 13 Figure 2 Aggregation Model of Tourist Satisfaction Index 14 Figure 3 PolyU Tourist Satisfaction Index (9 16) 16 Figure 4 PolyU Tourist Satisfaction Index Weights of Figure 5 PolyU Tourist Satisfaction Index Weights (9 16) 17 Figure 6 Overall Tourist Satisfaction Index by Source Market 18 Figure 7 Variations from Average Tourist Satisfaction Index by Source Market 19 Figure 8 Tourist Satisfaction Index Americas Figure 9 Tourist Satisfaction Index Weights Americas Figure 1 Tourist Satisfaction Index Australia, New Zealand and the Pacific 21 Figure 11 Tourist Satisfaction Index Weights Australia, New Zealand and the Pacific 21 Figure 12 Tourist Satisfaction Index Europe, Africa and the Middle East 22 Figure 13 Tourist Satisfaction Index Weights Europe, Africa and the Middle East 22 Figure 14 Tourist Satisfaction Index Japan and Korea 23 Figure 15 Tourist Satisfaction Index Weights Japan and Korea 23 Figure 16 Tourist Satisfaction Index Mainland China 24 Figure 17 Tourist Satisfaction Index Weights Mainland China 24 Figure 18 Tourist Satisfaction Index South and Southeast Asia 25 Figure 19 Tourist Satisfaction Index Weights South and Southeast Asia 25 Figure Tourist Satisfaction Index Taiwan and Macau 26 Figure 21 Tourist Satisfaction Index Weights Taiwan and Macau 26 Figure 22 Overall Tourist Satisfaction Index by Service Sector 27 Figure 23 Variations from Average Tourist Satisfaction Index by Service Sector 28 Figure 24 Tourist Satisfaction Index Attractions 29 Figure 25 Tourist Satisfaction Index Sample Distribution Attractions 29 Figure 26 Tourist Satisfaction Index Hotels 3 Figure 27 Tourist Satisfaction Index Sample Distribution Hotels 3 Figure 28 Tourist Satisfaction Index Immigration 31 Figure 29 Tourist Satisfaction Index Sample Distribution Immigration 31 Figure 3 Tourist Satisfaction Index Restaurants 32 Figure 31 Tourist Satisfaction Index Sample Distribution Restaurants 32

9 List of Figures (cont d) Figure 32 Tourist Satisfaction Index Retail Shops 33 Figure 33 Tourist Satisfaction Index Sample Distribution Retail Shops 33 Figure 34 Tourist Satisfaction Index Transportation 34 Figure 35 Tourist Satisfaction Index Sample Distribution Transportation 34 Figure 36 Sectoral-Level Model of Tourism Service Quality Index 37 Figure 37 Aggregation Model of Tourism Service Quality Index 38 Figure 38 PolyU Tourism Service Quality (12 16) 4 Figure 39 PolyU Tourism Service Quality Index Weights of 16 4 Figure 4 Overall Tourism Service Quality Index by Source Market 41 Figure 41 Tourism Service Quality Index Americas 42 Figure 42 Tourism Service Quality Index Weights Americas 42 Figure 43 Tourism Service Quality Index Australia, New Zealand and the Pacific 43 Figure 44 Tourism Service Quality Index Weights Australia, New Zealand and the Pacific 43 Figure 45 Tourism Service Quality Index Europe, Africa and the Middle East 44 Figure 46 Tourism Service Quality Index Weights Europe, Africa and the Middle East 44 Figure 47 Tourism Service Quality Index Japan and Korea 45 Figure 48 Tourism Service Quality Index Weights Japan and Korea 45 Figure 49 Tourism Service Quality Index Mainland China 46 Figure 5 Tourism Service Quality Index Weights Mainland China 46 Figure 51 Tourism Service Quality Index South and Southeast Asia 47 Figure 52 Tourism Service Quality Index Weights South and Southeast Asia 47 Figure 53 Tourism Service Quality Index Taiwan and Macau 48 Figure 54 Tourism Service Quality Index Weights Taiwan and Macau 48 Figure 55 Overall Tourism Service Quality Index by Service Sector 49 Figure 56 Tourism Service Quality Index Attractions 5 Figure 57 Tourism Service Quality Index Sample Distribution Attractions 5 Figure 58 Tourism Service Quality Index Hotels 51 Figure 59 Tourism Service Quality Index Sample Distribution Hotels 51 Figure 6 Tourism Service Quality Index Immigration 52 Figure 61 Tourism Service Quality Index Sample Distribution Immigration 52 Figure 62 Tourism Service Quality Index Restaurants 53

10 Figure 63 Tourism Service Quality Index Sample Distribution Restaurants 53 Figure 64 Tourism Service Quality Index Retail Shops 54 Figure 65 Tourism Service Quality Index Sample Distribution Retail Shops 54 Figure 66 Tourism Service Quality Index Transportation 55 Figure 67 Tourism Service Quality Index Sample Distribution Transportation 55 Figure 68 Overall Tourism Service Quality Index and Tourist Satisfaction Index by Source Market 56 Figure 69 Overall Tourism Service Quality Index and Tourist Satisfaction Index by Service Sector 57

11 Highlights 16 PolyU Tourist Satisfaction Index (TSI) and Tourism Service Quality Index (TSQI) Hong Kong PolyU Tourist Satisfaction Index : 75.2 PolyU Tourism Service Quality Index : Americas Europe, Africa & the Middle East Mainland China Japan & Korea Taiwan & Macau South & Southeast Asia Australia, New Zealand & the Pacific PolyU Tourist Satisfaction Index PolyU Tourism Service Quality Index 1 The Hong Kong Polytechnic University

12 Where We Approached Tourists in Hong Kong A : Hong Kong International Airport B : China Ferry Terminal C : Hong Kong Macau Ferry Terminal D : Hong Kong Cultural Centre E : Wong Tai Sin Temple E A B D C Tourism-Related Services We Evaluated Attractions Hotels Immigration Restaurants Retail Shops Transportation Sample Size by Source Market Source Market N % Americas Australia, New Zealand & the Pacific Europe, Africa & the Middle East Japan & Korea Mainland China South & Southeast Asia Taiwan & Macau Total 2,628 1 Visitor Profile 5.4% of the visitors were male 51.4% of the visitors were between 16 and 35 years old 81.% of the visitors had college/university or higher degrees 35.7% were first-time visitors 83.9% of the visitors were taking independent travellers School of Hotel and Tourism Management 11

13 PolyU Tourist Satisfaction Index PolyU Tourist Satisfaction Index 1 Introduction The 16 PolyU Tourist Satisfaction Index (TSI) is the eighth release of the index since its launch in 9. Six tourism-related service sectors in Hong Kong were evaluated, including attractions, hotels, immigration, restaurants, retail shops and transportation. The tourists surveyed were from seven broad source markets: (1) the Americas, (2) Australia, New Zealand and the Pacific, (3) Europe, Africa and the Middle East, (4) Japan and Korea, (5) mainland China, (6) South and Southeast Asia and (7) Taiwan and Macau. The 16 PolyU Tourist Satisfaction Survey was conducted from early October to the end of November, with 2,628 valid responses collected. 56 single TSIs were calculated to evaluate Hong Kong as a tourist destination: seven overall indices at the market level, six at the sectoral level, one at the destination level and 42 sub-indices measuring tourist satisfaction and scored by tourists from each of the seven source markets for each of the six service sectors. In addition, the TSIs from 9 to 16 are compared to track the dynamics of tourist satisfaction at various levels over time. 2 Methodology The PolyU TSI framework consists of two stages of satisfaction evaluation: a sectoral level and a destination level. The sectoral-level satisfaction evaluation is based on a sound theoretical framework of tourist behaviour, and the destination-level satisfaction evaluation is derived from an innovative aggregation scheme. This twostage framework is comprehensive, as it establishes a link between sectoral and overall tourist satisfaction. Robustness is introduced by leveraging the estimation procedure for the structural equation model and the weighting scheme using confirmatory factor analysis. 2.1 Sectoral-Level Tourist Satisfaction Index The PolyU TSI model builds on the expectancy disconfirmation framework that has been widely applied in consumer and tourist satisfaction research (Chan et al., 3). Developed by Oliver (198), the expectancy disconfirmation framework comprises four interactive elements: expectation, perceived performance, disconfirmation and satisfaction. Underlying this framework is a proposition that consumers develop expectations of a product or service before purchasing it and then compare the actual performance of the product or service with their expectations. As such, a consumer s satisfaction is his/her evaluation of the perceived discrepancy between his/ her prior expectations of a product or service and his/her perceived performance of the product or service after consumption (Churchill & Surprenant, 1982; Halstead, Hartman, & Schmidt, 1994). 12 The Hong Kong Polytechnic University

14 PolyU Tourist Satisfaction Index In addition, the literature concludes that customer satisfaction depends on the value of the product or service, which in turn relies on the price paid (De Ruyter, Bloemer, & Peeters, 1997; Rust & Oliver, 1994). According to Hirschman s (197) exit-voice theory, when consumers are dissatisfied, they usually choose either to exit (switch to a competitor) or voice their complaints for compensation. As a customer s satisfaction increases, his/ her intention to complain decreases and his/her loyalty towards the product or service increases. The model for sectoral-level tourist satisfaction evaluation is a structural equation model in which tourists satisfaction is evaluated with relevant antecedents and consequences that explain tourist behaviour, from purchasing to consuming a product or service (Figure 1). Figure 1 Sectoral-Level Model of Tourist Satisfaction Index Intention to complain to employees Intention to complain to others Overall performance Customisations Reliability Perceived Performance Complaint Intentions Assessed Value Tourist Satisfaction Overall satisfaction Comparison with expectations Comparison with ideal Price given quality Quality given price Overall expectations Customisations Reliability Expectations Revisit intentions Recommendation to others Loyalty The TSI, which incorporates multiple dimensions of the satisfaction determinants, is more effective in tourist satisfaction assessment (Yoon & Uysal, 5). Furthermore, recent customer satisfaction studies have concluded that satisfaction is a latent construct that cannot be directly measured (Fornell, 1992). This corresponds with other studies that show that multi-item scales are significantly more reliable than single-item scales (Conner & Sparks, 1996). As such, tourist satisfaction is measured as a latent variable associated with three indicators: overall satisfaction, comparison with expectations and comparison with ideal. The construct of tourist satisfaction, combined with the other five constructs (perceived performance, expectations, assessed value, complaints and loyalty), forms a theoretical framework for assessing tourist satisfaction. School of Hotel and Tourism Management 13

15 PolyU Tourist Satisfaction Index 2.2 Overall Tourist Satisfaction Index The TSI model is applied to six tourism-related service sectors in Hong Kong attractions, hotels, immigration, restaurants, retail shops and transportation for each of the city s seven source markets. TSIs at the sectoral level are directly comparable because each sector is measured by the same set of dimensions and indicators. The TSIs for the six service sectors are derived first and obtained from the sectoral-level model. Then, the overall TSI is calculated based on the sectoral-level indices. A weighting scheme for estimating the overall TSI is determined by a second-order confirmatory measurement model (Figure 2). The factor loadings indicate the contributions of the sectoral-level tourist satisfaction to the overall tourist satisfaction and hence are adopted as the weights for calculating the overall TSI. Figure 2 Aggregation Model of Tourist Satisfaction Index Attractions Hotels Overall Satisfaction Immigration Restaurants Aggregate Service Satisfaction Overall Destination Satisfaction Comparison with Expectations Retail Shops Comparison with Ideal Transportation Given the weights obtained from the second-order confirmatory factor analysis, the aggregation has a strong scientific basis, which in turn guarantees the robustness of the overall tourist satisfaction estimation. Furthermore, the overall TSI is calculated based on the sectoral-level indices using an innovative weighting scheme that is determined through the tourists own evaluation. As a result, areas of the public service sector, such as immigration, can be included in the calculation of the overall TSI. The inclusion of this sector would not be possible if the expenditure allocations among different products and services were used as weights, which is a common practice in aggregating customer satisfaction indices. 14 The Hong Kong Polytechnic University

16 PolyU Tourist Satisfaction Index 2.3 Calculation of Tourist Satisfaction Index By including formative measures, a component-based approach known as partial least squares is used to estimate the sectoral-level models using the SmartPLS programme (Ringle, Wende, & Will, 5). The TSI at the sectoral level is first calculated using the model-implied factor loadings ω η31, ω η32 and ω η33, representing the weights of the three tourist satisfaction indicators, including overall satisfaction (y 31 ), comparison with expectations (y 32 ) and comparison with ideal (y 33 ), respectively (Song, van der Veen, Li, & Chen, 12). The formula for calculating the sectoral-level TSIs is expressed as follows: ω η31 y 31 +ω η32 y 32 +ω η33 y 33 Sectoral TSI = 1. ω η31 +ω η32 +ω η33 The TSI of a particular service sector equals the weighted average of the means of its three tourist satisfaction indicators multiplied by a scaling constant of 1. Thus, each TSI is scaled on a comparable range of to 1. The higher the tourists average scoring on the satisfaction indicators, the higher the sectoral-level TSIs. The overall TSI is subsequently aggregated based on the six sectoral-level TSIs (TSI 1, TSI 2, TSI 3, TSI 4, TSI 5 and TSI 6 ) and the six factor loadings (γ 1, γ 2, γ 3, γ 4, γ 5 and γ 6 ), which are derived from the aggregation model. The overall TSI is calculated using the following formula: γ 1 TSI 1 +γ 2 TSI 2 +γ 3 TSI 3 +γ 4 TSI 4 +γ 5 TSI 5 +γ 6 TSI 6 Overall TSI = γ 1 +γ 2 +γ 3 +γ 4 +γ 5 +γ 6. School of Hotel and Tourism Management 15

17 PolyU Tourist Satisfaction Index 3 PolyU Tourist Satisfaction Index The 16 PolyU TSI was 75.2 on a scale of to 1, a slight increase of.31 points from in 15. Figure 3 PolyU Tourist Satisfaction Index (9 16) The PolyU TSI is a weighted average of the six service sectoral indices, indicating their respective contributions to the overall index. In 16, the largest contributor to the overall index was the attractions sector (27.65%), followed by immigration (17.8%), restaurants (17.56%), transportation (14.4%), hotels (13.68%) and retail shops (9.28%). Figure 4 PolyU Tourist Satisfaction Index Weights of % Attractions 27.65% 9.28% Hotels Immigration 17.56% 13.68% Restaurants Retail Shops 17.8% Transportation 16 The Hong Kong Polytechnic University

18 PolyU Tourist Satisfaction Index Compared with 15, the contribution of attractions decreased by 5%. However, its contribution of 27.65% was much higher than the other five sectors. The contributions of the immigration and transportation sectors both declined by 1%. Meanwhile, those of the hotels, restaurants and retail shops increased, accounting from 9.28% to 17.56% of the overall satisfaction index in 16. Figure 5 PolyU Tourist Satisfaction Index Weights (9 16) % Attractions Hotels Immigration Restaurants Retail Shops Transportation School of Hotel and Tourism Management 17

19 PolyU Tourist Satisfaction Index 4 Tourist Satisfaction Indices by Source Market 4.1 Overall Tourist Satisfaction Indices by Source Market Of the seven source markets, the Americas had the highest TSI of 8.64, increasing.47 points from 8.17 in 15. This was followed by Europe, Africa and the Middle East with a score of 78.4, increasing 2.74 points from 75.3 in 15. Australia, New Zealand and the Pacific ranked third with a score of 77.43, representing a continuous drop of.94 points from in 15. South and Southeast Asia ranked fourth with a score of 74.59, down.23 points from in 15. Taiwan and Macau ranked fifth with a score of 74.4, up 1.35 points from in 15. Mainland China ranked sixth with a score of 73.51, decreasing.7 points from in 15. Japan and Korea increased by.55, but still ranked seventh, reaching in 16. Figure 6 Overall Tourist Satisfaction Index by Source Market Americas Europe, Africa & the Middle East Australia, New Zealand & the Pacific South & Southeast Asia Taiwan & Macau Mainland China Japan & Korea The Hong Kong Polytechnic University

20 PolyU Tourist Satisfaction Index Over the 9 16 period, the Americas had, on average, the highest TSI of 8. a value that remained relatively stable, fluctuating slightly between and 1.27 points around the average. Australia, New Zealand and the Pacific averaged 78.56, which was 1.13 points higher than the market s 16 score of Europe, Africa and the Middle East averaged 76.66, which was 1.38 points lower than the market s 16 score of South and Southeast Asia averaged 74.36, fluctuating significantly more than 3 points below and above the average. Mainland China remained stable at on average, with slight fluctuations over the period. Taiwan and Macau averaged 7.84, which was 3. points lower than the market s 16 score of Japan and Korea had the lowest TSI of on average, around points less than that of the Americas. In 16, the indices of five source markets exceeded their corresponding average scores except Australia, New Zealand and the Pacific. Figure 7 Variations from Average Tourist Satisfaction Index by Source Market Americas Europe, Africa & the Middle East Mainland China Australia, New Zealand & the Pacific South & Southeast Asia Japan & Korea Taiwan & Macau School of Hotel and Tourism Management 19

21 PolyU Tourist Satisfaction Index 4.2 Americas The Americas highest TSI of was in transportation, followed by immigration (82.63), attractions (8.55), restaurants (78.44), retail shops (78.16) and hotels (79.36). Compared with 15, the Americas recorded the largest increase of 5.1 points in hotels and the largest drop of 1.99 points in transportation. Figure 8 Tourist Satisfaction Index Americas Transportation Immigration Attractions Restaurants Retail Shops Hotels Looking at the service sector contributions to the TSI of the Americas, the restaurants sector contributed the most (22.63%), followed by hotels (.16%), transportation (19.74%), immigration (19.7%), attractions (12.76%) and retail shops (5.1%). Figure 9 Tourist Satisfaction Index Weights Americas 12.76% 19.74% Attractions 5.1%.16% Hotels Immigration 22.63% 19.7% Restaurants Retail Shops Transportation The Hong Kong Polytechnic University

22 PolyU Tourist Satisfaction Index 4.3 Australia, New Zealand and the Pacific Australia, New Zealand and the Pacific s highest TSI of was in transportation, followed by immigration (79.46), attractions (76.96), hotels (76.51), restaurants (75.72) and retail shops (74.6). Compared with 15, all sectors suffered a decline except hotels with an increase of.57. The market recorded a decrease of 3.96 points in restaurants, followed by transportation (2.71), attractions (2.67), immigration (.46) and retail shops (.). Figure 1 Tourist Satisfaction Index Australia, New Zealand and the Pacific Transportation Immigration Attractions Hotels Restaurants Retail Shops Looking at the service sector contributions to the TSI of Australia, New Zealand and the Pacific, the hotels sector contributed the most (22.85%), followed by immigration (18.43%), retail shops (17.4%), transportation (15.42%), restaurants (13.57%) and attractions (12.16%). Figure 11 Tourist Satisfaction Index Weights Australia, New Zealand and the Pacific 15.42% 12.16% Attractions 17.4% 22.85% Hotels Immigration Restaurants 13.75% 18.43% Retail Shops Transportation School of Hotel and Tourism Management 21

23 PolyU Tourist Satisfaction Index 4.4 Europe, Africa and the Middle East Europe, Africa and the Middle East s highest TSI of was in transportation, followed by immigration (8.6), attractions (78.1), restaurants (75.52), hotels (75.24) and retail shops (74.5). Compared with 15, this source market recorded an improvement of 4.79 points in hotels, followed by retail shops (3.64), immigration (1.52), attractions (1.33), transportation (.87) and restaurants (.19). Figure 12 Tourist Satisfaction Index Europe, Africa and the Middle East Transportation Immigration Attractions Restaurants Hotels Retail Shops Looking at the service sector contributions to the TSI of Europe, Africa and the Middle East, the attractions sector contributed the most (31.25%), followed by hotels (18.9%), transportation (17.51%), immigration (12.26%), restaurants (1.17%) and retail shops (9.91%). Figure 13 Tourist Satisfaction Index Weights Europe, Africa and the Middle East 9.91% 17.51% 31.25% Attractions Hotels Immigration 1.17% 12.26% 18.9% Restaurants Retail Shops Transportation 22 The Hong Kong Polytechnic University

24 PolyU Tourist Satisfaction Index 4.5 Japan and Korea Japan and Korea s highest TSI of was in hotels, followed by transportation (69.6), attractions (66.98), immigration (66.84), retail shops (65.29) and restaurants (64.7). Compared with 15, the scores for Japan and Korea increased in four service sectors, from 4.15 points (immigration) to 1.3 points (transportation), in addition to decreases of 1.8 points in retail shops and.94 points in attractions. Figure 14 Tourist Satisfaction Index Japan and Korea Hotels Transportation Attractions Immigration Retail Shops Restaurants Looking at the service sector contributions to the TSI of Japan and Korea, the attractions sector contributed the most (51.55%), followed by immigration (17.99%), restaurants (13.35%), hotels (7.14%), transportation (5.51%), and retail shops (4.47%). Figure 15 Tourist Satisfaction Index Weights Japan and Korea 13.35% 5.51% 4.47% Attractions Hotels 51.55% Immigration 17.99% 7.14% Restaurants Retail Shops Transportation School of Hotel and Tourism Management 23

25 PolyU Tourist Satisfaction Index 4.6 Mainland China Mainland China s highest TSI of 76.1 was in transportation, followed by immigration (74.75), attractions (74.51), retail shops (73.42), restaurants (71.42) and hotels (7.98). Compared with 15, mainland China recorded the largest decline in hotels (1.45), followed by transportation (1.14), restaurants (.9) and retail shops (.65), in addition to increases of 1.37 points in immigration and.15 points in attractions, respectively. Figure 16 Tourist Satisfaction Index Mainland China Transportation Immigration Attractions Retail Shops Restaurants Hotels Looking at the service sector contributions to the TSI of mainland China, the attractions sector contributed the most (34.7%), followed by retail shops (24.15%), restaurants (.68%), immigration (7.12%), transportation (7.4%) and hotels (6.31%). Figure 17 Tourist Satisfaction Index Weights Mainland China 7.4% Attractions 24.15%.68% 34.7% 6.31% 7.12% Hotels Immigration Restaurants Retail Shops Transportation 24 The Hong Kong Polytechnic University

26 PolyU Tourist Satisfaction Index 4.7 South and Southeast Asia South and Southeast Asia s highest TSI of was in transportation, followed by immigration (77.32), attractions (75.43), retail shops (74.7), hotels (73.27) and restaurants (71.25). Compared with 15, the scores increased in five service sectors, including hotels (3.83), transportation (3.34), retail shops (2.8), attractions (.75) and immigration (.62), and a decrease of 1.3 was recorded in the restaurants sector. Figure 18 Tourist Satisfaction Index South and Southeast Asia Transportation Immigration Attractions Retail Shops Hotels Restaurants Looking at the service sector contributions to the TSI of South and Southeast Asia, the attractions sector contributed the most (38.74%), followed by restaurants (22.77%), hotels (12.75%), immigration (11.15%), retail shops (7.73%) and transportation (6.86%). Figure 19 Tourist Satisfaction Index Weights South and Southeast Asia 6.86% 7.73% 22.77% 38.74% Attractions Hotels Immigration Restaurants 11.15% 12.75% Retail Shops Transportation School of Hotel and Tourism Management 25

27 PolyU Tourist Satisfaction Index 4.8 Taiwan and Macau Taiwan and Macau s highest TSI of 77. was in immigration, followed by transportation (74.9), hotels (73.63), attractions (72.74), retail shops (72.3) and restaurants (7.43). Taiwan and Macau recorded score increases in three sectors compared with 15, including immigration (5.39), retail shops (1.) and attractions (.22). There were drops in restaurants (1.78), hotels (1.6) and transportation (1.44). Figure Tourist Satisfaction Index Taiwan and Macau Immigration Transportation Hotels Attractions Retail Shops Restaurants Looking at the service sector contributions to the TSI of Taiwan and Macau, the immigration sector contributed the most (32.6%), followed by retail shops (15.86%), restaurants (15.38%), attractions (14.24%), transportation (1.97%) and hotels (1.94%). Figure 21 Tourist Satisfaction Index Weights Taiwan and Macau 15.86% 15.38% 1.97% 14.24% 32.6% 1.94% Attractions Hotels Immigration Restaurants Retail Shops Transportation 26 The Hong Kong Polytechnic University

28 PolyU Tourist Satisfaction Index 5 Tourist Satisfaction Indices by Service Sector 5.1 Overall Tourist Satisfaction Indices by Service Sector Of the six service sectors, the transportation sector ranked the highest with a TSI of 78.19, a decrease of.38 points from in 15. Immigration ranked second with a TSI of 76.77, an increase of 1.82 points from in 15. Attractions ranked third with a TSI of 75.4, a drop of. points from in 15. Hotels ranked fourth with a TSI of 74.3, an increase of 2.17 points from 15. Retail shops ranked fifth with a TSI of 73.24, an increase of.46 points from in 15. Restaurants ranked last with a TSI of 72.4, a drop of.17 points from in 15. Figure 22 Overall Tourist Satisfaction Index by Service Sector Transportation Immigration Attractions Hotels Retail Shops Restaurants School of Hotel and Tourism Management 27

29 PolyU Tourist Satisfaction Index Over the 9 16 period, transportation ranked highest with an average TSI of that fluctuated within -.51 points below or.49 above the average. Immigration had an average TSI of that fluctuated between and 2.31 points around the average. Attractions had an average TSI of that fluctuated between and 3.62 points around the average. Hotels had an average TSI of 72.7 that fluctuated between and 1.96 points around the average. Retail shops had an average TSI of that fluctuated between and 2.1 points around the average. Restaurants had an average TSI of 7.67 that fluctuated between -4.6 and 2.69 points around the average. The indices for immigration, hotels, retail shops and restaurants in 16 were greater than the average for the 9 16 period, whereas the scores of transportation and attractions were smaller. Figure 23 Variations from Average Tourist Satisfaction Index by Service Sector Transportation Immigration Attractions Hotels Retail Shops Restaurants 28 The Hong Kong Polytechnic University

30 PolyU Tourist Satisfaction Index 5.2 Attractions The attractions sector received the highest TSI of 8.55 from the Americas, followed by Europe, Africa and the Middle East (78.1), Australia, New Zealand and the Pacific (76.96), South and Southeast Asia (75.43), mainland China (74.51), Taiwan and Macau (72.74) and Japan and Korea (66.98). Compared with 15, the improvement of satisfaction in attractions emerged in Europe, Africa and the Middle East (1.33), South and Southeast Asia (.75), mainland China (.15) and Taiwan and Macau (.18). The remaining source markets experienced decreases, ranging between 2.67 points (Australia, New Zealand and the Pacific) and.24 points (Americas). Figure 24 Tourist Satisfaction Index Attractions Americas Europe, Africa & the Middle East Australia, New Zealand & the Pacific South & Southeast Asia Mainland China Taiwan & Macau Japan & Korea In relation to the sample distribution of the seven source markets, the top market was mainland China, which accounted for 18.48%. The other source markets ranged between 12.63% and 14.58%. Figure 25 Tourist Satisfaction Index Sample Distribution Attractions 13.66% 12.63% 14.58% 13.66% Americas Australia, New Zealand & the Pacific Europe, Africa & the Middle East Japan & Korea 18.48% 13.89% 13.9% Mainland China South & Southeast Asia Taiwan & Macau School of Hotel and Tourism Management 29

31 PolyU Tourist Satisfaction Index 5.3 Hotels The hotels sector received the highest TSI of from Australia, New Zealand and the Pacific, followed by the Americas (76.51), Europe, Africa and the Middle East (75.24), Taiwan and Macau (73.63), South and Southeast Asia (73.27), mainland China (7.98) and Japan and Korea (69.92). Compared with 15, the hotels sector increased the most in Europe, Africa and the Middle East (4.79 points) and decreased the most in Taiwan and Macau (1.6 points). Figure 26 Tourist Satisfaction Index Hotels Australia, New Zealand & the Pacific Americas Europe, Africa & the Middle East Taiwan & Macau South & Southeast Asia Mainland China Japan & Korea In relation to the sample distribution of the seven source markets, the top market was mainland China, which accounted for 18.68%. The other source markets ranged between 12.88% and 14.4%. Figure 27 Tourist Satisfaction Index Sample Distribution Hotels 13.11% 14.4% Americas 12.88% 13.23% Australia, New Zealand & the Pacific Europe, Africa & the Middle East 18.68% 14.4% 14.4% Japan & Korea Mainland China South & Southeast Asia Taiwan & Macau 3 The Hong Kong Polytechnic University

32 PolyU Tourist Satisfaction Index 5.4 Immigration Immigration received the highest TSI of from the Americas, followed by Europe, Africa and the Middle East (8.6), Australia, New Zealand and the Pacific (79.46), South and Southeast Asia (77.32), Taiwan and Macau (77.), mainland China (74.75) and Japan and Korea (66.84). Compared with 15, the immigration sector in all the source markets enjoyed increases between.62 (South and Southeast Asia) and 5.39 (Taiwan and Macau) except Australia, New Zealand and the Pacific which suffered a decline (.46 points). Figure 28 Tourist Satisfaction Index Immigration Americas Europe, Africa & the Middle East Australia, New Zealand & the Pacific South & Southeast Asia Taiwan & Macau Mainland China Japan & Korea In relation to the sample distribution of the seven source markets, mainland China accounted for 18.21%, followed by the Americas, which accounted for 15.8%. The other source markets ranged between 12.4% and 14.3%. Figure 29 Tourist Satisfaction Index Sample Distribution Immigration 14.3% 12.51% 15.8% 12.4% Americas Australia, New Zealand & the Pacific Europe, Africa & the Middle East 18.21% 13.52% 13.97% Japan & Korea Mainland China South & Southeast Asia Taiwan & Macau School of Hotel and Tourism Management 31

33 PolyU Tourist Satisfaction Index 5.5 Restaurants Restaurants received the highest TSI of from Australia, New Zealand and the Pacific, followed by the Americas (75.72), Europe, Africa and the Middle East (75.52), mainland China (71.42), South and Southeast Asia (71.25), Taiwan and Macau (7.43) and Japan and Korea (64.7). Compared with 15, the restaurants sector suffered a decrease in all markets except Europe, Africa and the Middle East and Japan and Korea. Figure 3 Tourist Satisfaction Index Restaurants Australia, New Zealand & the Pacific Americas Europe, Africa & the Middle East Mainland China South & Southeast Asia Taiwan & Macau Japan & Korea In relation to the sample distribution of the seven source markets, mainland China accounted for 19%, and Europe, Africa and the Middle East accounted for 14.45%. The other source markets ranged between 13% and 14%. Figure 31 Tourist Satisfaction Index Sample Distribution Restaurants 13.5% 13.29% 13.4% 13.17% Americas Australia, New Zealand & the Pacific Europe, Africa & the Middle East Japan & Korea 19.% 13.64% 14.45% Mainland China South & Southeast Asia Taiwan & Macau 32 The Hong Kong Polytechnic University

34 PolyU Tourist Satisfaction Index 5.6 Retail Shops The retail shops sector received the highest TSI of from the Americas, followed by Australia, New Zealand and the Pacific (74.6), Europe, Africa and the Middle East (74.5) South and Southeast Asia (74.7), mainland China (73.42), Taiwan and Macau (72.3) and Japan and Korea (65.29). Compared with 15, the retail shops sector increased the most in Europe, Africa and the Middle East (3.64 points) and decreased the most in Japan and Korea (1.8 points). Figure 32 Tourist Satisfaction Index Retail Shops Americas Australia, New Zealand & the Pacific Europe, Africa & the Middle East South & Southeast Asia Mainland China Taiwan & Macau Japan & Korea In relation to the sample distribution of the seven source markets, the top two markets were mainland China (18.25%) and the Americas (15.76%). The other source markets ranged between 12.47% and 14.74%. Figure 33 Tourist Satisfaction Index Sample Distribution Retail Shops 14.74% 12.47% 15.76% 12.93% Americas Australia, New Zealand & the Pacific Europe, Africa & the Middle East Japan & Korea 18.25% 12.93% 12.93% Mainland China South & Southeast Asia Taiwan & Macau School of Hotel and Tourism Management 33

35 PolyU Tourist Satisfaction Index 5.7 Transportation The transportation sector received the highest TSI of from the Americas, followed by Europe, Africa and the Middle East (83.16), Australia, New Zealand and the Pacific (81.48), South and Southeast Asia (79.49), mainland China (76.1), Taiwan and Macau (74.9) and Japan and Korea (69.6). Compared with 15, the transportation sector increased most in South and Southeast Asia (3.34 points) and decreased most in Australia, New Zealand and the Pacific (2.71 points). Figure 34 Tourist Satisfaction Index Transportation Americas Europe, Africa & the Middle East Australia, New Zealand & the Pacific South & Southeast Asia Mainland China Taiwan & Macau Japan & Korea In relation to the sample distribution of the seven source markets, the largest market was mainland China, accounting for 18.13% market share. The other source markets ranged between 12.5% and 14.86%. Figure 35 Tourist Satisfaction Index Sample Distribution Transportation 13.6% 12.5% 14.53% 13.18% Americas Australia, New Zealand & the Pacific Europe, Africa & the Middle East Japan & Korea 18.13% 14.86% 13.74% Mainland China South & Southeast Asia Taiwan & Macau 34 The Hong Kong Polytechnic University

36 PolyU Tourism Service Quality Index PolyU Tourism Service Quality Index 1 Introduction The PolyU Tourism Service Quality Index (TSQI), launched in 12, measures the tourism service performance of Hong Kong. Given the conclusion of the literature that service quality is an antecedent of customer satisfaction, improving service quality should be a means of boosting customer satisfaction. However, high service quality does not necessarily lead to high customer satisfaction, as the latter can be affected by factors beyond the service providers control. Unlike customer satisfaction, which is deeply grounded in consumer psychology, service quality is a state of mind that customers obtain after consuming a service. Despite consumers involvement in evaluating a service, service quality is by nature external. Although customer satisfaction is aroused by and based on a service, it is internally bound for individual consumers. The research design underlying the PolyU TSQI resembles that of the PolyU Tourist Satisfaction Index (TSI). The TSQI builds on the models developed by Parasuraman, Zeithaml and Berry (1985) and Brady and Cronin (1). Tourism service quality comprises three constructs: interaction quality, service scape quality and outcome quality (Brady & Cronin, 1; Grönroos, 1984). Similar to the TSI, the TSQI evaluates the service quality of the six tourism-related service sectors, including the attractions, hotels, immigration, restaurants, retail shops and transportation sectors. The tourists surveyed hail from the seven broad source markets, including (1) the Americas, (2) Australia, New Zealand and the Pacific, (3) Europe, Africa and the Middle East, (4) Japan and Korea, (5) mainland China, (6) South and Southeast Asia, and (7) Taiwan and Macau. The 16 PolyU Tourism Service Quality Survey was conducted alongside the tourist satisfaction survey from 3 October to 3 November, with 2,628 valid responses collected. School of Hotel and Tourism Management 35

37 PolyU Tourism Service Quality Index 2 Methodology 2.1 Service Quality: Theory A service is an outcome with a process delineating how it is produced, delivered and consumed. The process by which the outcome is fulfilled fundamentally distinguishes a service from a manufacturing good or an agricultural product. It is natural to measure the quality of a manufacturing good or an agricultural product simply by measuring its ultimate outcome, usability or duration in short, its performance. However, it is inadequate to measure the quality of a service simply by measuring its outcome. Indeed, how a service is produced (process) is equally as important as a service being an outcome (result) itself. This remains the fundamental rationale for modelling and measuring service quality by first articulating the difference between a service and other products. In this sense, the literature identifies four characteristics of a service inseparability of production and consumption, intangibility, perishability and heterogeneity that describe not only the outcome but also the process of the service (Brady & Cronin, 1; Parasuraman, Zeithaml, & Berry, 1985). One of the fundamental elements describing a process is the interaction between producers and consumers, that is, the inseparability of production and consumption as an important attribute of a service. A service incorporates consumers involvement as an important input. Thus, the literature explicitly suggests that measuring service quality is not possible without considering the perspectives of both consumers and producers (Brady & Cronin, 1; Parasuraman et al., 1985). A review of service quality models, including the Nordic model (Grönroos, 1984) and SERVQUAL model (Parasuraman et al., 1985), reveals that consumers perceptions and expectations are critical in measuring service quality. More precisely, the foundation of service quality lies in the disconfirmation that describes consumers perceived discrepancy between their prior expectations and perceived performance of a service (Churchill & Surprenant, 1982). Service quality theories can be traced back to two seminal models. One is the Nordic model, developed by Grönroos (1984), who argues that service quality consists of three fundamental dimensions: technical quality, functional quality and image quality. The other is the American model, also known as the SERVQUAL model, developed by Parasuraman et al. (1985), who identify five gaps between consumers and producers and between producers themselves in delivering a service. These two models follow a two-part research paradigm for modelling service quality. First, service quality can be measured by, or is a function of, the difference between consumers expectations and perceptions of a service. Second, a service can be decomposed into different attributes of either an outcome or a process, each of which can be measured to form an integrated service quality. For a comprehensive literature review related to these service quality models, please refer to Seth, Deshmukh and Vrat (5). 36 The Hong Kong Polytechnic University

38 PolyU Tourism Service Quality Index 2.2 Service Quality: Models There are two types of service quality models: a management framework that determines how service quality is managed by examining the service delivery process (Parasuraman et al., 1985) and a measurement model that explains how service quality is perceived by consumers and its influences (Grönroos, 1984). By nature, a management framework is descriptive while a measurement model is explanatory. A service quality index that is grounded in measures rather than management must be calculated. From a theoretical perspective, the service quality index model should be explanatory, the constructs can be operationalised and the model can be tested. This raises two fundamental questions: what aspect of a service should be measured, and how? The first question seeks to define a service, and the second seeks to reveal how service quality can be explained theoretically. The service quality index model builds on the Brady-Cronin model, which in turn is an integration of the Nordic and SERVQUAL models (Brady & Cronin, 1; Grönroos, 1984). Given its virtue of parsimony and ease of use, the service quality index model is developed by modifying two aspects of the Brady-Cronin model (Figure 36). First, the nine sub-dimensions at the second hierarchical level must be dropped, as one sub-dimension for each quality facet can also capture the aspects of quality. This modification also leads to an appreciated simplification model for the service quality index. Specifically, the interaction quality is measured by the sub-dimension of behaviour on the two quality dimensions. The physical environment quality is measured by the sub-dimension of ambient conditions, and the outcome quality is measured by tangibles as the only sub-dimension. Second, the physical environment quality is replaced with service scape quality without changing its indicators. Figure 36 Sectoral-Level Model of Tourism Service Quality Index Service that satisfies my needs Provision of excellent services Service Quality Interaction Quality Servicescape Quality Outcome Quality Experience of interactions Quality of interactions The best physical environment Highly rated physical environment Excellent experience Good feelings School of Hotel and Tourism Management 37

39 PolyU Tourism Service Quality Index Figure 37 Aggregation Model of Tourism Service Quality Index Attractions Hotels Overall Satisfaction Immigration Restaurants Aggregate Service Quality Overall Destination Satisfaction Comparison with Expectations Retail Shops Comparison with Ideal Transportation In addition to the sectoral-level service quality model, an aggregation model is developed to calculate the overall service quality index (Figure 37). This model is modified from the aggregation model for the TSI (Figure 2). As service quality and customer satisfaction are conceptually consistent, a number of studies, especially those dealing with service quality measures, treat service quality as an antecedent of customer satisfaction (Anderson & Fornell, ; Fornell et al., 1996). These studies include the American Customer Satisfaction Index (ACSI) model, in which perceived quality is one of the three antecedents of customer satisfaction in addition to customer expectation and perceived value. However, Iacobucci, Ostrom and Grayson (1995) argue that service quality and customer satisfaction are theoretically distinct because they have different antecedents. It can be concluded that service quality and customer satisfaction are theoretically related, yet distinct. They are related because studies have arrived at a consensus that service quality is an antecedent of customer satisfaction. This means that improving service quality is a precondition for increasing customer satisfaction. However, high service quality does not necessarily lead to high customer satisfaction, which is affected by other factors that may be beyond the service providers control. They are distinct because service quality tends to be an evaluation of a given object, that is, service. In this sense, service quality is no more than product performance, as in manufacturing; indeed, despite consumers involvement in evaluating a service, service quality is by nature external. Customer satisfaction is essentially a state of mind that, when relating to an outside object such as a service, acts as a proxy of service quality measurement. It is therefore not surprising that customer satisfaction is the consequence of service quality. 38 The Hong Kong Polytechnic University

40 PolyU Tourism Service Quality Index 2.3 Tourism Service Quality Index: Computations The TSQI is calculated by aggregating the means of the two indicators of tourism service quality weighted by their factor loadings. This approach, which was originally proposed by Chan et al. (3), has been used to calculate the PolyU TSI since 9 (Song et al., 12). In the calculation, partial least squares is used to estimate the value of each construct by the weighted aggregate values of its indicators, where the weights are the factor loadings for reflective indicators and regression coefficients for formative indicators after rescaling (Chin, 1998; Fornell & Cha, 1994). Hence, the two estimated unstandardised weights (if unstandardised measurements are used) ω' η31 andω' η32 of the two service quality indicators service that satisfies my needs ( y' 31 ) and excellent service provision ( y' 32 ) are used to estimate the sectoral-level TSQIs. The formula is as follows: ω' η31 y' 31 +ω' η32 y' 32 Sectoral TSQI = 1. ω' η31 +ω' η32 The TSQI for a particular service sector equals the weighted average of the mean values of the two service quality indicators multiplied by a scaling constant of ten. Thus, each TSQI is scaled on a comparable range of to 1 (Song et al., 12). The TSQIs are calculated at three levels: market-sectoral, market/sectoral and destination. The market-sectoral level is the most basic level, from which the indices of the other two levels are derived. It incorporates 42 sub-indices, each representing the index of one of the six service sectors evaluated by one of the seven source markets. The market/sectoral level index incorporates seven overall indices at the market level and six overall indices at the sectoral level. The market-level index is based on the six market-sectoral level indices. The weighting scheme of the six sectors is determined by a second-order confirmatory measurement model (Figure 37). The factor loadings indicate the contributions of sectoral service quality to the overall TSQI and hence are adopted as the weights for obtaining the overall TSQI. Given the objective weights obtained from second-order confirmatory factor analysis, the aggregation has a strong scientific basis that guarantees the robustness of the overall service quality estimation. The overall index is calculated based on sectoral-level indices using a weighting scheme determined by the tourists own evaluations. Thus, the overall TSQI is aggregated based on the six sectorallevel service quality indices (TSQI 1, TSQI 2, TSQI 3, TSQI 4, TSQI 5 and TSQI 6 ) weighted by the corresponding factor loadings (γ' 1, γ' 2, γ' 3, γ' 4, γ' 5 and γ' 6 ) derived from the aggregation model: γ' 1 TSQI 1 +γ' 2 TSQI 2 +γ' 3 TSQI 3 +γ' 4 TSQI 4 +γ' 5 TSQI 5 +γ' 6 TSQI 6 Overall TSQI = γ' 1 +γ' 2 +γ' 3 +γ' 4 +γ' 5 +γ' 6. School of Hotel and Tourism Management 39

41 PolyU Tourism Service Quality Index 3 PolyU Tourism Service Quality Index The 16 PolyU TSQI was on a scale of to 1, an increase of.65 points from in 15. This index is a weighted average of the six sectoral-level tourism service quality indices, representing the overall tourism service quality of Hong Kong. Figure 38 PolyU Tourism Service Quality Index (12 16) The restaurants and attractions sectors were the largest two contributors to this index, accounting for 23.22% and 23.7%, respectively. The immigration sector contributed another 21.27%, followed by transportation (13.53%), hotels (12.82%) and retail shops (6.1%). Figure 39 PolyU Tourism Service Quality Index Weights of % 6.1% 23.22% 23.7% 12.82% Attractions Hotels Immigration Restaurants 21.27% Retail Shops Transportation 4 The Hong Kong Polytechnic University

42 PolyU Tourism Service Quality Index 4 Tourism Service Quality Indices by Source Market 4.1 Overall Tourism Service Quality Indices by Source Market In 16, the Americas achieved the highest TSQI of 81.92, an increase of 1.8 points from 15. Europe, Africa and the Middle East ranked second with a score of 78.31, an expansion of 3.38 points from in 15. Australia, New Zealand and the Pacific ranked third with a score of 77.96, a decrease of 2.4 points from 8. in 15. Taiwan and Macau ranked fourth with a score of 75.8, an increase of 3.16 points from in 15. South and Southeast Asia ranked fifth with a score of 75.29, an improvement of 1.46 points from in 15. Mainland China ranked sixth with a score of 74.45, a decline of 1.19 points from in 15. Japan and Korea ranked last with a score of 66.55, a growth of 1.28 points from in 15. Figure 4 Overall Tourism Service Quality Index by Source Market Americas Europe, Africa & the Middle East Australia, New Zealand & the Pacific Taiwan & Macau South & Southeast Asia Mainland China Japan & Korea School of Hotel and Tourism Management 41

43 PolyU Tourism Service Quality Index 4.2 Americas In 16, the Americas had the highest TSQI of in transportation, followed by immigration (83.48), attractions (81.47), hotels (81.3), restaurants (79.9), and retail shops (79.2). Figure 41 Tourism Service Quality Index Americas Transportation Immigration Attractions Hotels Restaurants Retail Shops Looking at the service sector contributions to the TSQI of the Americas, the restaurants sector contributed the most (22.35%), followed by attractions (.46%), transportation (19.89%), immigration (18.88%), hotels (14.89%) and retail shops (3.53%). Figure 42 Tourism Service Quality Index Weights Americas 3.53% 19.89% 22.35%.46% 18.88% 14.89% Attractions Hotels Immigration Restaurants Retail Shops Transportation 42 The Hong Kong Polytechnic University

44 PolyU Tourism Service Quality Index 4.3 Australia, New Zealand and the Pacific In 16, Australia, New Zealand and the Pacific attained the highest TSQI of in transportation, followed by immigration (8.13), hotels (78.7), attractions (76.49), restaurants (76.29) and retail shops (74.87). Figure 43 Tourism Service Quality Index Australia, New Zealand and the Pacific Transportation Immigration Hotels Attractions Restaurants Retail Shops Looking at the service sector contributions to the TSQI of Australia, New Zealand and the Pacific, the hotels sector contributed the most (24.62%), followed by immigration (.88%), restaurants (19.82%), retail shops (14.72%), transportation (12.91%) and attractions (7.5%). Figure 44 Tourism Service Quality Index Weights Australia, New Zealand and the Pacific 12.91% 7.5% Attractions 14.72% 19.82%.88% 24.62% Hotels Immigration Restaurants Retail Shops Transportation School of Hotel and Tourism Management 43

45 PolyU Tourism Service Quality Index 4.4 Europe, Africa and the Middle East In 16, Europe, Africa and the Middle East scored the highest TSQI of in transportation, followed by immigration (8.41), attractions (78.43), hotels (76.83), restaurants (76.79) and retail shops (74.99). Figure 45 Tourism Service Quality Index Europe, Africa and the Middle East Transportation Immigration Attractions Hotels Restaurants Retail Shops Looking at the service sector contributions to the TSQI of Europe, Africa and the Middle East, the attractions sector contributed the most (27.%), followed by hotels (23.52%), restaurants (17.49%), immigration (14.28%), transportation (1.41%) and retail shops (7.9%). Figure 46 Tourism Service Quality Index Weights Europe, Africa and the Middle East 1.41% 7.9% 17.49% 27.% Attractions Hotels Immigration Restaurants 14.28% 23.52% Retail Shops Transportation 44 The Hong Kong Polytechnic University

46 PolyU Tourism Service Quality Index 4.5 Japan and Korea In 16, Japan and Korea had the highest TSQI of 7.13 in hotels, followed by transportation (69.16), immigration (66.86), attractions (66.36), retail shops (64.88) and restaurants (64.28). Figure 47 Tourism Service Quality Index Japan and Korea Hotels Transportation Immigration Attractions Retail Shops Restaurants Looking at the service sector contributions to the TSQI of Japan and Korea, the attractions sector contributed the most (41.18%), followed by immigration (28.49%), restaurants (14.25%), transportation (6.82%), hotels (6.53%) and retail shops (2.74%). Figure 48 Tourism Service Quality Index Weights Japan and Korea 14.25% 6.82% 2.74% 41.18% Attractions Hotels Immigration 28.49% 6.53% Restaurants Retail Shops Transportation School of Hotel and Tourism Management 45

47 PolyU Tourism Service Quality Index 4.6 Mainland China In 16, mainland China had the highest TSQI of in transportation, followed by immigration (76.), retail shops (75.1), attractions (74.66), hotels (74.25) and restaurants (73.9). Figure 49 Tourism Service Quality Index Mainland China Transportation Immigration Retail Shops Attractions Hotels Restaurants Looking at the service sector contributions to the TSQI of mainland China, restaurants contributed the most (35.3%), followed by retail shops (21.63%), attractions (.1%), immigration (13.1%), hotels (6.36%) and transportation (3.77%). Figure 5 Tourism Service Quality Index Weights Mainland China 3.77%.1% 21.63% 6.36% Attractions Hotels Immigration 35.3% 13.1% Restaurants Retail Shops Transportation 46 The Hong Kong Polytechnic University

48 PolyU Tourism Service Quality Index 4.7 South and Southeast Asia In 16, South and Southeast Asia achieved the highest TSQI of in transportation, followed by immigration (78.5), hotels (75.5), attractions (74.98), retail shops (74.11) and restaurants (72.42). Figure 51 Tourism Service Quality Index South and Southeast Asia Transportation Immigration Hotels Attractions Retail Shops Restaurants Looking at the service sector contributions to the TSQI of South and Southeast Asia, the attractions sector contributed the most (31.88%), followed by restaurants (25.97%), immigration (.37%), hotels (9.84%), transportation (8.1%) and retail shops (3.92%). Figure 52 Tourism Service Quality Index Weights South and Southeast Asia 8.1% 3.92% 25.97%.37% 31.88% 9.84% Attractions Hotels Immigration Restaurants Retail Shops Transportation School of Hotel and Tourism Management 47

49 PolyU Tourism Service Quality Index 4.8 Taiwan and Macau In 16, Taiwan and Macau recorded the highest TSQI of in immigration, followed by transportation (77.7), hotels (75.76), attractions (75.7), retail shops (73.71) and restaurants (72.86). Figure 53 Tourism Service Quality Index Taiwan and Macau Immigration Transportation Hotels Attractions Retail Shops Restaurants Looking at the service sector contributions to the TSQI of Taiwan and Macau, the restaurants sector contributed the most (29.34%), followed by immigration (27.6%), transportation (.86%), hotels (1.44%), attractions (8.55%) and retail shops (3.74%). Figure 54 Tourism Service Quality Index Weights Taiwan and Macau 3.74%.86% 29.34% 8.55% 1.44% 27.6% Attractions Hotels Immigration Restaurants Retail Shops Transportation 48 The Hong Kong Polytechnic University