Assessing the relationship between market orientation and business performance in the hotel industry – the mediating role of service quality

CITATION

Sampaio, C., & Rodrigues, R. (2019) Assessing the relationship between market orientation and business performance in the hotel industry – the mediating role of service quality, Journal of Knowledge Management, 23(4), 644-663

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ABSTRACT
Purpose – This study aims to explore the nature of the relationship between market orientation and
business performance in the Portuguese hotel industry and to evaluate the mediating role of service
quality in this relationship.
Design/methodology/approach – A literature analysis on market orientation, service quality and hotel
business performance was conducted. The structural model was developed, and the measurement
scales’ items were generated. Working data were obtained by sending a survey to Portuguese hotel
managers. A purification process was conducted, and the convergent and discriminant validity, as well
the reliability, of the measurement models were assessed. The structural model was tested by
conducting a path analysis, as well by evaluating the coefficient of determination (R2) and the predictive
relevance indicator (Q2).
Findings – Research results show that market orientation has a positive direct effect on business
performance. Moreover, results indicate that market orientation effects on business performance are
mediated throughout the hotels’ ability to provide service quality.
Originality/value – Despite the large amount of research on market orientation, research on the
hospitality sector has been conductedmainly using tools developed for the manufacturing and consumer
goods sectors. On the other hand, little has been done to explore the nature of the mediating effect of
service quality on the relationship between market orientation and business performance in the hotel
industry. Moreover, despite the contribution of the tourism industry to the Portuguese gross domestic
product, research on the hotel industry is scarce.



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