COMPENSATION IN SERVICE RECOVERY AND CUSTOMER LOYALTY IN THE HOSPITALITY INDUSTRY IN KENYA

The increased competition in the hospitality industry has forced hotel proprietors to continuously search for competitive advantages, with service quality being the single most important differentiating factor.This competition and perpetual differences between the customers and the service providers leading to service failures, service recovery is an important strategy to reduce the dissonance with customers.In Kenya the hospitality industry has been characterized by poor service quality which threatens their long-term survival, thus the need for the research in order to come up with innovative strategies to improve service quality.This study used a survey approach guided by cross-sectional research design.The study was guided by compensation as the independent variable and customer loyalty as the dependent variable.The study found out that compensation has a significant influence on customer loyalty.The study recommended International Journal of Economics, Commerce and Management, United Kingdom Licensed under Creative Common Page 849that since service failure in inevitable in the hospitality industry, proprietors should come up with strategies to encourage customers to voice their complaints and use such information as a learning tool for improving service quality and also create a set of knowledge that will be used for continuous innovation and strategic growth of their enterprises.