Research in service recovery has attracted serious attention in the recent past. However, very limited research has focused on making service recovery from customer and expert perspectives simultaneously. This study aims to bridge this gap by adopting a Quality Function Deployment (QFD) approach that integrate Analytic Network Process (ANP) method. Among five major groups of service failure in the hotel, customers perceived the highest important ranking on “Guestroom” (EV=0.289), followed by “Arrival, Billing and Departure” (EV=0.271), “Restaurant, Food and Beverage” (EV=0.197), “Staff” (EV=0.152) and “Facilities and Other services (EV) =0.091. In term of service recovery, the results show that, the most effective action is “Immediately correct problem” with the percentage priority of 19.8 percent. The next effective recovery is “Apology” with 19.5 percent. The rest of the actions in descending order of effectiveness are following: Replacement (12.1%); Discount (9.9%); Managerial intervention (9.6%); Explanation (9.3%); Do nothing (9.1%); Upgrade/ change room (6%) and the last one Free additional service (4.7%).
For the correlation between service recovery solutions that appear in the roof of House of Quality (HOQ). From hotel manager’s point of view, when solving problem, to raise the effectiveness of recovery actions, hotel need to combine at least to actions. The action of “Apology” often accompanies with other compensations especially intangible compensation such as “Explanation”, “Immediately correct problem”, “Managerial intervention”, “Replacement” and “Do nothing”. Because in this situation, customers are more satisfied with the reaction of the apology from staff with smile and good attitude and other accompanied actions. In relation with action of “Do nothing”, “Apology” “Explanation” can accompanies with. For example, the failure is related to the behavior of staff, no compensation more effective than “Apology”.

ABSTRACT I
ACKNOWLEDGEMENT III
TABLE OF CONTENTS IV
LIST OF TABLES VII
LIST OF FIGURES IX
CHAPTER ONE INTRODUCTION 1
1.1 Research Background. 1
1.2 Research Motivation. 4
1.3 Research Objectives and Contribution. 6
1.4 Research Project and Scope of the Study. 7
1.5 Research Procedure. 8
1.6 Research Structure. 9
CHAPTER TWO LITERATURE REVIEW 11
2.1 Service Failure. 11
2.1.1 Types of Service Failures. 11
2.1.2 Consequence of Service Failures. 13
2.2 Service Recovery. 13
2.2.1 Definition of Service Recovery. 13
2.2.2 Importance of Service Recovery. 14
2.2.3 Service Recovery Strategy. 15
2.3 Customer Satisfaction with Service Recovery. 17
2.4. Instrument of SERVQUAL. 18
2.5 Theoretical Background. 20
2.5.1 Model of Service Quality. 20
2.5.2 Justice Theory. 22
2.5.3 Double Deviation Paradox. 25
2.5.4 Quality Function Deployment (QFD). 26
2.5.5 Analytic Network Process (ANP). 27
CHAPTER THREE RESEARCH DESIGN AND METHODOLOGY 29
3.1 Research Framework. 29
3.2 Research Design. 31
3.2.1 Interview Design. 31
3.2.2 Questionnaire Design. 32
3.3 Sampling Plan. 33
3.4 Research Methodology. 34
3.4.1 Quality Function Deployment (QFD). 34
3.4.2 Analytic Network Process (ANP). 36
3.4.3 QFD Combines with ANP and ANP Computation. 41
CHAPTER FOUR RESEARCH RESULTS AND DISCUSSIONS 45
4.1 Respondent Information. 45
4.2 Summary of Service Failure and Recovery Strategy. 46
4.2.1 Summary of Service Failure Categories. 47
4.2.2 Summary of Service Recovery Strategies. 49
4.3 QFD and ANP Computation. 50
4.3.1 Overall of Service Failure. 50
4.3.2 Sub-group of Service Failure. 52
4.3.3 Service Recovery Solution with Respect to Service Failure. 58
4.3.4 Service Recovery Solutions with Respect to Themselves. 61
4.3.5 Overall Score and Ranking of QFD. 64
CHAPTER FIVE CONCLUSION AND RECOMMENDATION 66
5.1 Research Conclusions. 66
5.2 Theoretical and Managerial Implications. 69
5.3 Limitations and Suggestions for Future Research. 71
REFERENCES 73
APPENDICES 82
Appendix 1: Interview Questions. 82
Appendix 2: ANP Questionnaire for Customer. 86
Appendix 3: Matching Service Recovery with Service Failures by Using QFD. 95
Appendix 4: Relationship among Service Recovery by Using QFD. 97
Appendix 5: ANP Questionnaire for Expert. 98
Appendix 6: Response Form the Student. 112

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