Effects of human resource management on hotel performance using structural equation modeling

The hotel industry is the largest and most rapidly growing industry in Jordan. Hotel management regularly seeks directions that enable them to sustain their competitive position. This study, therefore, investigates the impact of human resource management (HRM) practices, service quality, employee satisfaction, employee loyalty, customer satisfaction and customer loyalty on hotel performance in Jordan and then examines the relationships between these factors. A conceptual model is developed by proposing eleven hypotheses. Data are collected via a distributed survey to three-, four- and five-star Jordanian hotels. A total of 52 hotels in Amman responded to the questionnaires pooling 52 HR managers, 52 sales managers, 236 employees and 311 customers. The model is examined using structural equation modeling. The main results indicate that HRM practices, service quality, employee satisfaction, employee loyalty, customer satisfaction and customer loyalty have a positive influence on the improvement of hotel performance in financial and innovation domains. In conclusion, the methodology applied to measure the performance of hotel industry provides valuable information to top management and decision makers in Jordan regarding main factors that improve hotel performance and sharpen its competitive strength.