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

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.,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).,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.,Despite the large amount of research on market orientation, research on the hospitality sector has been conducted mainly 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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