Factors Affecting Consumer Behavior in Hospitality Sector during Pandemic: A Case of Saudi Arabia

Abstract

Due to Covid-19, the entire globe is experiencing a health crisis, causing havoc on national economies, including gross domestic product and business growth. Additionally, virtually every business is experiencing a reduction in customer retention and sales. Like other businesses, the hospitality industry is experiencing low customer churn and a drop in consumer loyalty. Unfortunately, little research has been undertaken to understand the factors that influence consumer satisfaction and commitment during a pandemic. This study intends to determine the impact of anxiety, fear of Covid, perceived health risk, and delivery manner on customer satisfaction and loyalty in the Saudi Arabian hotel industry. Data were collected from 260 individuals who stayed at any hotel during the pandemic using a convenience sample and analyzed using Structural Equation Modelling (SEM) using Amos version 18. The study's findings indicated that anxiety, fear of Covid, and perceived health risk harmed consumer satisfaction and loyalty, whereas delivery options positively impacted. In Saudi Arabia's hospitality business, customer enjoyment mediates the relationships between anxiety, fear of Covid, delivery choice, and loyalty, except for perceived health risks. The conclusions of this study are valuable for hotel sector regulators and managers, who should consider these factors while striving to boost customer happiness and loyalty. According to the researcher's knowledge, this is the first study undertaken in Saudi Arabia during the pandemic.