Abstract:
The long-term viability and success of any organization depends mainly upon how well it
understands and effectively meets customers’ requirements. Total quality management is one of
the process which is a customer-oriented and aims for continuous improvement of business
operations. This study is conducted to assess the effect of total quality management practice on
customer retention in hotel industries in Ambo town. Mixed research design was applied and the
simple random probability sampling was used to select respondents for data collection. To do
the study, cross sectional survey was conducted through questionnaires from employees of the
selected hotels .Descriptive statistics such as mean and percentage was used to assess the total
quality management implementation level and customer retention status and multiple regression
models was used to examine the effect of total quality management practice on customer
retention in hotel industries and the result of the study reveals that both total quality
management practice and customer retention in hotel industries at Ambo town found at low
level. The results of regression analysis, by employing seven total quality management
dimensions used to examine the extent of the effect of total quality management practice on
customer retention, reveals five (5) dimension(continuous improvement, leadership commitment,
supply quality management, customer focus and training of employees) have significant effect on
customer retention. To enhance the customer retention levels in hotel industries, the management
of the hotels needs to work more on the total quality management aspects.
