Good for Us? Good for Me? Government Intervention for Sustainability and Service Quality

Abstract

Korean government’s recent policy prohibits lodging properties from offering disposable hotel amenities including shampoo, soaps, and toothbrushes. Lodging businesses in Korea have been forced to either remove amenities or offer substitutes. Government policies for social and environmental sustainability often force businesses to cease existing services and offer substitutes, which is likely to harm service quality and customer satisfaction. Therefore, the business needs to understand how customers respond to such interventions and possible service quality declines. This study examines whether and how types of substitutes (i.e., perfect substitutes, imperfect substitutes, and no substitutes) that a hotel provides to comply with the government sustainability policy influence customers’ policy acceptance and customer satisfaction with the service. We also propose that the influence of substitute types on customer satisfaction and policy acceptance be moderated by the communication messages of the hotel. More specifically, we employ regulatory focus theory to develop the communication message frame, namely prevention hope and promotion hope. Our results show that consumers offered perfect substitutes have greater policy acceptance and higher satisfaction than those offered imperfect substitutes and no substitutes. Interestingly, however, no significant differences in satisfaction and policy acceptance are found between imperfect substitutes and no substitute groups. In terms of communication messages, a message with a promotion hope frame is more effective than a prevention hope message to improve the satisfaction of the incomplete substitute group, while no significant differences in satisfaction between the two message frames are found for perfect substitutes and no substitute groups. With the findings, we provide meaningful insights into how businesses respond to government intervention for sustainability and offer useful managerial implications.