Does the look matter? The impact of casino servicescape on gaming customer satisfaction, intention to revisit, and desire to stay

International Journal of Hospitality Management 30 (2011) 558–567

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International Journal of Hospitality Management journal homepage: www.elsevier.com/locate/ijhosman

Does the look matter? The impact of casino servicescape on gaming customer satisfaction, intention to revisit, and desire to stay Long W. Lam 1 , Ka Wai Chan ∗ , Davis Fong 2 , Freda Lo University of Macau, Macau

a r t i c l e Keywords: Servicescape Casinos Macau Gaming

i n f o

a b s t r a c t Despite huge investment made by casinos on their physical structures, little has been know if physical environment actually affects psychological responses of gaming customers. This paper explores how dimensions of servicescape influence customer satisfaction and behavioral intentions in the casino environment. Using Bitner’s model of physical surroundings, we hypothesized how ambience, navigation, seating comfort, interior decor, and cleanliness affected cognitive and affective satisfaction of gaming customers. We further proposed that gaming customer satisfaction would affect their desire to stay and intention to revisit. Data from 513 gaming customers of Macau offered support to most of our hypotheses. Implications for research and managerial practices were also discussed. © 2010 Elsevier Ltd. All rights reserved.

1. Introduction In Las Vegas, casinos have invested billions of dollars in improving the look of their physical surrounding. Mega casino resorts with exotic themes have become the industry standard in competing for customer attention. The same trend is apparent in Macau and Singapore. For example, Wynn Macau opened a USD1.2 billion casino resort in Macau during 2006. MGM Grand Paradise Macau and the Venetian Macau spent USD1.25 billion and USD2.4 billion, respectively, on capital expenditure in 2007, and Resort World Sentosa opened a USD4.5 billion integrated resort during 2010 in Singapore. Yet despite the size of these huge investments, there is little evidence of whether the physical look of casinos actually increases the satisfaction of gamblers. It is thus worthwhile to assess whether the environment really plays such an important role in determining the satisfaction of gaming customers by enhancing their intention to revisit and desire to stay in the casino. The physical environment of a facility is referred as the servicescape (e.g. Bitner, 1992). This servicescape is essentially the built environment, and constitutes the man-made, physical surroundings rather than the natural or social environment of a facility (Bitner, 1992). Servicescapes can be decomposed into two important aspects: spatial layout and functionality, and elements related

∗ Corresponding author at: Department of Management and Marketing, University of Macau, Av. Padre Tomas Pereira, Taipa, Macao. Tel.: +853 83978889; fax: +853 838320. E-mail addresses: [email protected] (L.W. Lam), [email protected] (K.W. Chan), [email protected] (D. Fong). 1 Tel.: +853 83978883. 2 Tel.: +853 83978889. 0278-4319/$ – see front matter © 2010 Elsevier Ltd. All rights reserved. doi:10.1016/j.ijhm.2010.10.003

to aesthetic appeal. Bitner (1992) suggested that spatial layout and functionality were the ways in which seats, aisles, hallways and walkways, food service lines, restrooms, and entrances and exits are designed and arranged. Aesthetic appeal, in contrast, refers to the surrounding external environment, architectural design, facility upkeep and cleanliness, signage, and other physical elements that customers view in a given area. In addition to these visual cues, Lin (2004) shows that auditory (e.g. music) and olfactory (e.g. odor) cues also affect the patron’s appraisal of the service environment. Hirsch (1995) in particular reveals a connection between odor and mood among gamblers. Servicescapes are particularly important in leisure service settings (Bitner, 1992; Wakefield and Blodgett, 1994, 1996, 1999) because the consumption of leisure services is driven by hedonic motives. The physical environment influences the consumption experience and plays an important role in generating excitement in leisure settings. Wakefield and Blodgett (1994) suggested that servicescapes are particularly important when customers are likely to stay in a facility for an extended period. They further argued that customer reactions to the tangible physical environment tend to be more emotional than cognitive. For these reasons, it is important to evaluate the role of the servicescape in the casino and hospitality context. O’Neill (1992) reasoned that the longer customers stay in a leisure facility, the more money they will spend. This explains why casinos are willing to spend a huge amount of money on their servicescapes to encourage gamblers to stay longer on the premises. However, previous research on servicescape satisfaction has not looked specifically at the casino context. With the exception of Lucas’ (2003) study, we know very little about whether and how casino servicescapes affect gaming customer satisfaction. The

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purpose of this study is thus to determine whether the physical environment of a casino increases gaming customer satisfaction. The remainder of this paper is structured as follows. In the next section, we review the literature on the servicescape and customer satisfaction. We then propose our conceptual model, which argues that the servicescape dimensions of ambience, navigation, seating comfort, interior decor, and cleanliness affect gaming customer satisfaction. The model also suggests that gaming customers who are satisfied will stay longer and be more likely to revisit a casino. We tested our hypotheses on a sample of 513 gaming customers in Macau. The results are described and discussed at the end of the paper.

2. Literature review Given that services are a consumption experience, the servicescape is thought to be very influential in communicating a firm’s image and purpose to its customers, thereby affecting customer satisfaction. Bitner (1992) and Wakefield and Blodgett (1994, 1996, 1999) suggested that the servicescape has a significant effect on customer satisfaction in the leisure context. In particular, Wakefield and Blodgett (1994) argued that the longer the time that customers need to spend inside a business facility when the service provided is a leisure service, the more important the role of the environment in affecting customer satisfaction. Francoeur (1992) suggested that cleanliness, interior décor, and overall lighting levels are important attributes of a desirable physical environment. Lucas (2003) argued that in the casino context, ambient factors, layout navigation, cleanliness, interior décor, and seating comfort are the major components determining satisfaction with the servicescape. According to Treadwell (2005), visual design elements should stimulate customer attention, appeal to the sense of logic, generate further trust and affection, persuade customers to submit, and create emotional connections. Empirical studies have shown that customers respond both cognitively and emotionally to the physical environment (Lin, 2004; Kim and Moon, 2009). The servicescape also affects crowding and the degree of customer involvement. Perceived crowding is the feeling of being confined, cramped, or restricted due to the physical surroundings (Eroglu and Machleit, 1990; Hui and Bateson, 1991). In general, consumers who feel too crowded will experience less excitement and perceive the servicescape to be of low quality, which will reduce their satisfaction. Involvement refers to ongoing interest in a product or service. When consumers are strongly involved with a leisure service, they may become more excited about the servicescape and more likely to want to return to that environment in the future. Wakefield and Blodgett (1994) stated that crowding and involvement affect the degree of excitement experienced in leisure settings, and ultimately influence the level of customer satisfaction. In the casino context, the chance of winning is a gaming customer’s perception of the number of opportunities to win. In other words, it is the feeling of luck that customers have in a particular casino. According to Mayer et al. (1998), chance of winning plays a key role in determining the level of gaming customer satisfaction. Obviously, the greater the chances of winning, the greater the customer satisfaction will be. Although the chance of winning is an objective estimate of probability, a gambler’s perception of control varies. Gamblers tend to overestimate their own influence over games and attribute losses to external factors (Gadboury and Ladouceur, 1989; Wagenaar, 1988). When gamblers believe that they have a greater chance of winning due to greater perceived control in the casino, they will be more satisfied. There is some evidence that the physical environment has an impact on a customer’s perceived control (Hui and Bateson, 1991).

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When customers are satisfied with the services or products provided, they tend to display positive behavioral intentions and responses, such as customer loyalty and repatronage. Satisfaction is the essential ingredient for the emergence of customer loyalty (Oliver, 1999). Wakefield and Blodgett (1994, 1996, 1999), Lucas (2003) and Kim and Moon (2009) found from studies conducted in a leisure context that customers tend to revisit when they are satisfied with the environment. However, when customers experience anger and dissatisfaction, negative behavioral responses such as switching to another service provider may occur. In addition to intention to revisit, positive customer satisfaction also enhances customers’ desire to stay in a service area (Lucas, 2003; Wakefield and Blodgett, 1996; Bitner, 1992). Customers of leisure services stay longer in a facility when they are satisfied with the servicescape and the quality of service provided. According to O’Neill (1992), the longer the time customers stay in a facility, the more money they spend. Thus, hospitality providers are motivated to encourage their customers to stay longer in their facilities. Although many people gamble for fun and pleasure, a small group of gamblers may progress to engage in disordered gambling behaviors. The engagement of problem gambling is due to the change of motivation from enjoyment, excitement and socialization to preoccupation with winning money and recovering losses (Griffiths, 2008). Unfortunately the latter set of motivations also influences gambler’s duration of stay and willingness to revisit a casino. Prior research shows that the proportion of addicted gamblers is relatively small and has been estimated to be around 0.2–2.1% of the adult population (LaPlante et al., 2008). 3. Theoretical model and hypotheses This study is a continuation of Bitner’s (1992) work on the important influence of the servicescape on customer satisfaction and individual behavior, and examines how the servicescape of a casino environment affects gambler satisfaction. Fig. 1 shows our conceptual model, which is based on the work of Bitner (1992) and Wakefield and Blodgett (1996). The servicescape factors of casinos include ambient conditions, navigation, seating comfort, interior décor, and cleanliness. These servicescape factors are hypothesized to affect cognitive and affective gaming customer satisfaction. Oliver (1993) and Cronin et al. (2000) points out that the bases of customer satisfaction can be separated into the cognitive and affective components due to two reasons. First, customers are thought of making prior expectation before consumption, and positive cognitive satisfaction is resulted from actual product performance meeting or exceeding such expectation (Oliver, 1993; Tse and Wilton, 1988; Spreng et al., 1996; Zhang et al., 2009). Following these prior studies, we define cognitive satisfaction as gambler’s evaluation of whether the casino meets his or her expectations (Lucas, 2003). If gamblers are cognitively satisfied with a particular casino, then they are more likely to believe that the service quality is adequate and that their choice of casino was correct. Second, Oliver (1993) Cronin et al. (2000) also suggested that customers will respond affectively to a product or service in addition to making cognitive judgments due to the positive and negative emotions during consumption. Lin (2004) also suggests that patrons may react affectively first before making cognitive judgment of the servicescape environment. When customers experience positive emotions, they feel satisfied, whereas negative emotions will result in dissatisfaction (Westnrook and Oliver, 1991). Thus, we define affective satisfaction as gambler’s positive emotional state, which varies in intensity from strong to weak, after visiting a particular casino (Giese and Cote, 2000; Phillips and Baumgartner, 2002). Gamblers who are affectively satisfied are likely to describe their gaming experience as pleasurable and exciting, rather than frustrating and enraging.

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Servicescape Dimensions

Customer Satisfaction

Approach/Avoidance Intentions

Ambience

Navigation Cognitive satisfaction

Desire to stay

Affective satisfaction

Intention to revisit

Seating Comfort

Interior décor

Cleanliness

Fig. 1. Conceptual model of servicescape dimensions of casinos.

Our model also suggests that gaming customers who are satisfied with the physical environment of casinos will respond with either approach or avoidance behavior in terms of desire to stay and intention to revisit. Similar to other leisure facilities, casinos will benefit if gamblers exhibit a stronger desire to stay and a greater intention to revisit.

change their quality perception and hence their satisfaction (Ha and Jang, in press). In a casino, customers are more likely to be satisfied with the services consumed when the ambience conveys the implicit image that the dealers are well trained and knowledgeable about the games. Thus, it is likely that ambience affects both the affective and the cognitive satisfaction of gaming customers. Overall, we offer the following hypotheses.

3.1. Ambience

H1a . Ambience affects the cognitive satisfaction of gaming customers.

Ambience refers to the environmental conditions of a surrounding area, including temperature, lighting, noise, music, and scent. Ambient conditions have been identified by many authors as significant factors affecting individual responses to the environment due to their influence on the fives human senses (Bitner, 1992; Darley and Gilbert, 1985; Morin et al., 2007; Teeters et al., 1995; Hirsch, 1995; Goodwin and Ross, 1992; Johnson et al., 2004). Milliman (1982,1986) and Smith and Curnow (1966) found that lighting, music tempo, and volume affected consumer behavior in restaurant and retail stores. Hirsch (1995) discovered that ambient aromas had an impact on consumer behavior. According to Teeters et al. (1995), the quality of air may influence customer comfort in a casino environment, and poor indoor-air quality leads to reduced worker productivity and negative health effects for employees. Wan (2010) found that second-hand smoke had a poor impact on the air quality of casinos. A positive ambience can make gamblers feel better about staying in a service area, resulting in higher affective satisfaction. For example, gamblers will feel physically uncomfortable if the servicescape is too cold or too hot, and the air quality is too poor. Customers experiencing pleasant feelings in an environment tend to stay longer, which is obviously a desirable situation for casinos. The longer people stay in the casino, the more bets they place, which according to the laws of probability should increase the chance of winning of the service provider. Prior research also shows that ambience in terms of background music can also impact the mood of consumers (Lin, 2004). Studies on slot machines provide more evidence that visual and auditory features can arouse excitement on gamblers (Lucas, 2003). Ambient conditions can also influence satisfaction in cognitive terms. According to Bitner (1992), ambience sends a signal to customers that a place provides superior service. For instance, pleasant lighting and soft music may send implicit cues to customers that a facility is of a high class. It has been found that before customers actually experience employee services and food in restaurants, perceived atmosphere plays a significant moderating role that can

H1b . Ambience affects the affective satisfaction of gaming customers. 3.2. Navigation Navigation is the degree of ease associated with passing negotiating an environment, and is related to what Bitner (1992) referred to as the spatial layout and functionality of the servicescape. Spatial layout refers to the ways in which machines, equipment, furnitures, and other physical objects are arranged, the size and shape of those objects, and the spatial relationships among them. Functionality refers to the physical ability of these objects to improve service performance and the accomplishment of organizational goals. Navigation, or spatial layout, has been shown by many empirical studies (Lucas, 2003; Wakefield and Blodgett, 1996) to be a significant factor determining the perceived quality of the servicescape. Its effects are particularly salient in self-service settings (Bitner, 1992). Spatial layout and functionality also affect consumer density because they affect the traffic flow of patrons. According to Hui and Bateson (1991), consumer density determines perceived control and crowding, which in turn affect consumer emotions and eventually behavior. As has been stated, people who feel crowded perceive the servicescape to be of low quality and their excitement is reduced. However, people expect different levels of consumer density in different service settings. For example, they are likely to feel more excited when there are more people in casinos, pubs, and other entertainment environments, whereas the opposite is the case for banks, law firms, and similar service areas. Nevertheless, overcrowded environments in general reduce customer excitement and satisfaction with the servicescape. When people are more satisfied with the spatial layout and functionality of the servicescape, they will tend to browse the service area and stay longer. Navigation inside the casino affects the affective satisfaction of customers through its influence on perceived control and environ-

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mental crowding. Crowding affects how gamblers negotiate the servicescape to find their favorite games, which is why a somewhat crowded environment may create a sense of excitement among gamblers. Gamblers prefer to have a sense of perceived control in the casino, and navigation directly influences this factor. Thus, navigation should influence the affective satisfaction of gaming customers. Navigation and spatial layout is also associated with space. In general, customers tend to associate spacious facilities as better places to consume services (Wakefield and Blodgett, 1996). Lin (2004) argues that ceiling heights affect spatial perception of patrons such that gamblers are more likely to associate casino of high ceilings to be more spacious. Spaces in casinos are further affected by the layout in terms of how the tables and slot machines are arranged (Lucas, 2003). Thus well-navigated casinos with spacious appearances also create better image and impression among gamblers, thus enhancing their cognitive satisfaction. We thus suggest the following hypotheses. H2a . Navigation affects the cognitive satisfaction of gaming customers. H2b . Navigation affects the affective satisfaction of gaming customers. 3.3. Seating comfort Seating comfort refers to the level of physical comfort derived from the seating quality. It is affected both by the physical seat itself and by the space between seats (Wakefield and Blodgett, 1996). Seating comfort is an important issue for customers who spend extended period of time sitting at a facility to consume a service. The design of seat padding and backrests, the materials used for seat fabric have been found to affect users’ comfort level (Branton and Grayson, 1967; Floyd and Ward, 1969; Obourne, 1987). Several authors have studied the effect of seating comfort on servicescape quality and customer satisfaction. According to Bitner (1992), seating comfort is related to the spatial layout and functionality of the physical surroundings, and is particularly important in service encounter environments. However, Wakefield and Blodgett (1996) found that the effect of seating comfort on perceived quality of servicescape was non-significant in a casino sample, which they attributed to the fact that casino patrons are apt to be more mobile. In contrast, Lucas (2003) found that the seating comfort in a casino had a positive influence on servicescape satisfaction ratings. Casinos that provide better seating quality are likely to be perceived by their customers to be of higher quality and to offer higher quality services. Seating comfort as a servicescape dimension represents a form of nonverbal communication between the servicescape and customers (Broadbent et al., 1980; Rapport, 1982), such that customer evaluation of service provider will be affected accordingly (Bitner, 1992). Customers are likely to categorize casino with comfortable seats as providing better services, which increases their cognitive satisfaction with the physical environment. Seating comfort is particularly salient for patrons who need to sit for long hours in order to enjoy the service or entertainment (Wakefield and Blodgett, 1996). When people feel comfortable sitting in a service area, they will undoubtedly consider their experiences to be more pleasurable. The spaces between seats also affect affective perception of customers. If seats are too crowded in casinos, gamblers are likely to experience discomfort (Lucas, 2003). When gamblers are forced to seat too close to each others, they may also experience diminishing control on the environment due to overcrowding (Wakefield and Blodgett, 1996). Unlike patrons of shopping malls but similar to theatergoers, gamblers normally spend several hours in the area and thus prefer to sit down and

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gamble. Therefore, seating comfort is likely to be important in casinos in terms of affective customer satisfaction. We thus suggest the following hypotheses. H3a . Seating comfort affects the cognitive satisfaction of gaming customers. H3b . Seating comfort affects the affective satisfaction of gaming customers. 3.4. Interior décor Interior decor, including signs, symbols, and artifacts, can serve as a tool to convey both implicit and explicit signals and communicate information about a place to users or customers (Becker, 1977, 1981; Davis, 1984; Wener, 1985). According to Ruesch and Kees (1956), Golledge (1987), and Bitner (1992) signs, symbols, and artifacts are particularly important because they affect first impression among customers and serve as tools of differentiation. The services that casinos provide are more or less likely the same, and thus it is particularly important for them to create a distinct image that differentiates them from competitors. During their first visit, customers often use extrinsic cues to infer the service quality provided (Zeithaml, 1981). Since services are intangible, Lin (2004) states that customers will need to rely on tangible elements to make judgment and evaluation in the hospitality industry. Therefore, when the servicescape is well decorated and the artifacts are of high quality, customers are more likely to categorize the place as high-class and as providing superior service quality, and may feel greater prestige in consuming services there. Hence, interior décor affects cognitive satisfaction (Nguyen, 2006). Interior decor such as signs and symbols also carry affective purposes. If signs and symbols are properly designed, then they can reduce perceived crowding by customers and increase their sense of control (Wener and Kaminoff, 1982). Other artifacts such as artwork, floor and ceiling coverings, and objects displayed on the wall, can convey symbolic and aesthetic meaning and send implicit cues to customers about the norms of a venue. By following the norms implied by interior decoration, customers will experience more control of the environment. High-quality decoration may reduce the poor social image of casinos, which may make gamblers feel more pleasurable inside the facilities. Prior research shows properly designed colors and artifacts can also arouse mood and attention of patrons within a service facility (Bellizzi and Hite, 1992; Clynes, 1977; Kotler, 1973–1974). Consequently signs, symbols, and artifacts may influence the affective satisfaction of gaming customers. We thus propose the following hypotheses. H4a . Interior décor affects the cognitive satisfaction of gaming customers. H4b . Interior décor affects the affective satisfaction of gaming customers. 3.5. Cleanliness Cleanliness can be divided into two aspects: pre-event preparation and ongoing cleanup (Wakefield and Blodgett, 1996). In addition to cleaning up an area before the arrival of customers, a service setting should be continuously monitored to ensure its cleanliness throughout opening hours. As casinos have a constant inflow of customers who stay for relatively long periods, ongoing cleanup operations are essential in maintaining the servicescape and customer satisfaction. Cleanliness is especially important for both customers’ cognitive and affective satisfaction in those industries where they spend several hours in the leisure setting (Wakefield and Blodgett, 1996).

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People generally feel more comfortable staying in a clean environment, and thus cleanliness clearly affects how long they will stay in a service area and their affective satisfaction. In terms of cognitive satisfaction, a clean and tidy environment conceptually creates an image of professional and superior service (Gary and Sansolo, 1993). Cleanliness may thus serve to improve the poor social image of gambling, as a clean environment signifies that socially acceptable services are being provided. This implicit image will in turn affect customers’ cognitive satisfaction when consuming the services in that servicescape. H5a . Cleanliness affects the cognitive satisfaction of gaming customers. H5b . Cleanliness affects the affective satisfaction of gaming customers. 3.6. Gaming customer satisfaction and approach/avoidance intention According to Bitner (1992), customers respond to a service with either approach or avoidance behavior, depending on their level of satisfaction with the service provider. In general, people approach when they are satisfied and avoid when they are dissatisfied. Approach behavior includes attraction, staying longer, exploration, and spending money. Homburg et al. (2005) asserted that customer satisfaction has a strong and positive impact on willingness to pay. Kim and Moon (2009) found that feelings of pleasure affected customer’s revisit intention in theme restaurants. Wakefield and Blodgett (1996) also showed that greater satisfaction lengthens time of stay and increases repatronage intention to revisit. In a casino sample, they found that satisfaction with the servicescape had a consistently stronger effect on customers’ desire to stay than on their repatronage intention to revisit. This leads to the following hypotheses. H6a . The cognitive satisfaction of gaming customers affects their desire to stay. H6b . The affective satisfaction of gaming customers affects their desire to stay. H7a . The cognitive satisfaction of gaming customers affects their intention to revisit. H7b . The affective satisfaction of gaming customers affects their intention to revisit. 4. Research methodology 4.1. Sampling and data collection procedure The research hypotheses were tested with data collected through intercept surveys conducted at casinos in Macau during November and December 2006. Macau is one of the largest gaming cities in the world, and is thus an appropriate context in which to test our hypotheses. As of the third quarter of 2006, there were 22 casinos operating in Macau. The environment of foreign-owned casinos with a Westernstyle tends to follow David Kranes’ principle of design, whereas the locally owned casinos with an Eastern-style are decorated according to the Friedman design template (Finlay et al., 2006). Kranes encouraged spacious servicescapes that create an atmosphere of comfort, freedom, and vitality. A better environment encourages gaming customers to stay longer in the casino, which increases the gaming revenue. Friedman, in contrast, discouraged a focus on décor. He suggested that casinos should be small with a compact layout and low ceilings, based on the idea that with fewer disturbances, gaming customers focus on gambling and place more bets.

The presence of these two contrasting styles in Macau’s casinos thus provides a good context to assess whether the servicescape of casinos affects the satisfaction of gaming customers. To gather the opinions of gambling customers about the two styles of casinos in Macau, gamblers from five casinos, including Hotel Lisboa, New Century Greek Mythology, Golden Dragon, Sands Macau, and Wynn Macau, were targeted. Hotel Lisboa, New Century Greek Mythology, and Golden Dragon are classified as locally owned casinos with an Eastern-style, and are operated by the SJM Group. Sands Macau and Wynn Macau are foreign-owned casinos with a Western-style, and are operated by Venetian Macau and Wynn Resorts Macau, respectively. Research teams were dispatched to the five casinos to collect data from gamblers through questionnaires. To minimize the disturbance to casinos and gamblers, the surveys were conducted in the shuttle buses run by the casinos after the respondents had departed from the respective casino. Casino shuttle buses also provided several advantages for our study. Since we conducted the survey in the bus immediately after the gamblers visited the casino, we ensure that the gamblers have sufficient interaction with the casino’s physical environment and are able recall their experiences immediately. The bus ride averages around 15–30 min between the casino and the gambler’s target destination. Respondents are more likely to agree to participate in our survey during the bus ride. This duration allows ample time for respondents to answer our survey. Of the 1514 respondents approached, 543 agreed to complete the survey. As 30 respondents indicated that they were nongamblers, the effective sample size was reduced to 513 cases, giving a 34% response rate. Of the respondents, 55% were males and 45% were females; 13% were Macau citizens and 87% were tourists from other countries such as mainland China (60%), Hong Kong (22%), Taiwan (3%), and other foreign countries (2%). In terms of age range, 18% of the respondents were aged between 18 and 24, 14% were between 25 and 29, 19% were between 30 and 34, 14% were between 35 and 39, 11% were between 40 and 44, 10% were between 45 and 49, 12% were 50 or above, and the remaining 2% did not indicate their age.

4.2. Measures The responses were recorded on a five-point Likert scale that ranged from “completely agree” to “completely disagree.” Servicescape dimensions. We used Lucas’ (2003) scale to ask how satisfied customers were with the five servicescape dimensions of casinos. On this scale, seating comfort was measured in terms of seat back, elbowroom, distance in front, comfort, and ease of getting in and out. Ambience was measured in terms of coin sound, machine sound, music, lighting, temperature, and smokiness. Interior décor was measured in terms of color, electric signs, wall treatment, floor treatment, and overall attractiveness. Cleanliness was measured in terms of casino chips, ashtrays, ceiling, the screens of slot machines, employee dress and appearance, and overall cleanliness. Navigation was measured by sight lines, aisle width, signs and directions, ease of locating casino tables and slots, number of casino tables and slots, and distance between ceiling and floor distance. The Cronbach’s alphas for these five dimensions were 0.88, 0.82, 0.91, 0.90, and 0.84 respectively, surpassing the acceptance level of 0.70. Cognitive customer satisfaction. We used the three-item scale developed by Cronin et al. (2000) and adapted it for the casino context. The three items were “my choice to visit this casino was a wise one,” “I think I did the right thing in visiting this casino,” and “this facility is exactly what is needed for gambling.” The Cronbach’s alpha for cognitive customer satisfaction was 0.82.

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Table 1 Regression analysis of the effect of the hypothesized variables on the cognitive and affective satisfaction of gaming customers. Cognitive customer satisfaction

Affective customer satisfaction

Models

Model 1

Model 2

Model 3

Model 4

Control variables Gaming result satisfaction Gender Age Bet outcome

0.404*** 0.013 0.077 0.089

0.231*** −0.011 0.091* 0.121*

0.341**** 0.036 0.087 0.081

0.199**** −0.002 0.072 0.143**

Hypothesized variables Servicescape: Ambience Servicescape: Navigation Servicescape: Seating comfort Servicescape: Interior décor Servicescape: Cleanliness Df F Adjusted R2 Adjusted R2

0.115* 0.18** 0.105 0.069 0.173** 4/375 26.528*** 0.212

9/330 31.585*** 0.448 0.236

0.03 0.17** 0.157** 0.208*** 0.107 4/376 18.904*** 0.159

9/331 32.572*** 0.455 0.296

Standardized regression coefficients are reported. Two-tailed tests of all hypothesized relationships. * p < 0.05. ** p < 0.01. *** p < 0.001.

Affective customer satisfaction. This was measured by the threeitem scale proposed by Seiders et al. (2005), with an additional item from Spreng et al. (1996). The four items were “I am pleased with the overall service at this casino,” “gambling at this casino is a delightful experience,” “I am completely satisfied with the gambling experience,” and “I am frustrated with the services provided in the casino” (reverse coded). Cronbach’s alpha was 0.79. Intention to revisit. We adapted the two-item scale developed by Seiders et al. (2005) to evaluate customer intention to revisit the same casino. The items included “I will gamble at this casino in the future” and “I will continue gambling at this casino.” Cronbach’s alpha was 0.90. Desire to stay. This was measured by the number of hours that gaming customers stayed at the casino with the statement “How long did you stay in the casino?” Control variables. Four variables were added to control for their possible effects on gaming customer satisfaction. The satisfaction of casino gamblers is easily influenced by their satisfaction with bet outcomes and the overall gaming result. As it is difficult to obtain data on bet outcomes in dollar amounts, the respondents were asked to describe the bet outcome in terms winning or losing on a scale of 1–5. This variable was coded as positive for winning and negative for losing, so that the satisfaction level with the bet outcome ranged from −5 (bet outcome considered to be very negative) to +5 (bet outcome considered to be very positive). Satisfaction with the overall gaming result was measured by one item: “I am satisfied with the gaming result.” In addition to these two variables, we also controlled for the gender and age of gamblers. 5. Research findings Hierarchical multiple regression was used to analyze the data using ordinary least square (OLS) method. Since the primary purpose of this paper is to assess the direct impact of servicescape on gambler satisfaction, we used multiple regression instead of structural equation modeling. In performing hierarchical multiple regression, we first entered the control variables in the regression equation. We then entered the servicescape dimensions to test their effects on cognitive and affective customer satisfaction. Doing so also allows us to estimate the additional variance explained on customer satisfaction. Histograms of residuals show a normal distribution, suggesting the use of OLS method is appropriate (Neter

et al., 1989). The regression results with standardized beta coefficients are shown in Table 1. Hypotheses 1a and 1b predict that ambience affects both the cognitive and the affective satisfaction of gaming customers. As can be seen from Models 2 and 4 in Table 1, ambience had a positive effect on the cognitive satisfaction of gaming customers (ˇ = 0.115, p < 0.05), but its effect on affective customer satisfaction was not statistically significant (ˇ = 0.03, p = n.s.). Thus, H1a is supported but H1b receives no support. Hypotheses 2a and 2b predict that navigation affects both the cognitive and affective satisfaction of gaming customers. In Table 1, Models 2 and 4 show that navigation had a significantly positive association with both the cognitive (ˇ = 0.18, p < 0.01) and the affective satisfaction (ˇ = 0.17, p < 0.01) of gaming customers. Thus, both H2a and H2b are supported. Hypotheses 3a and 3b predict that seating comfort affects both the cognitive and the affective satisfaction of gaming customers. Models 2 and 4 of Table 1 show that seating comfort had no significant influence on cognitive satisfaction (ˇ = 0.105, p = n.s.), but did have a positive and significant effect on affective satisfaction (ˇ = 0.157, p < 0.01). Hence, H3a is not supported but H3b is confirmed. Hypotheses 4a and 4b predict that interior décor affects the cognitive and affective satisfaction of gaming customers. The results of Models 2 and 4 in Table 1 show that interior décor had a strongly significant effect on affective satisfaction (ˇ = 0.208, p < 0.001) but no significant effect on cognitive satisfaction (ˇ = 0.069, p = n.s.). Thus, H4a is not supported, but H4b receives strong support. Hypotheses 5a and 5b predict that cleanliness affects both the cognitive and affective satisfaction of gaming customers. Models 2 and 4 in Table 1 show that cleanliness was significantly related to the cognitive satisfaction of gaming customers (ˇ = 0.173, p < 0.01), but had no significant influence on their affective satisfaction (ˇ = 0.107, p = n.s.). Thus, the results support H5a but not H5b . Overall servicescape dimensions of casinos show significant impact on gambler’s cognitive and affective satisfaction. More importantly, change of adjusted R-square shows that servicescape dimensions account for almost an additional 24% variance for cognitive and an additional 30% variance for affective satisfaction. Hypotheses 6a and 6b further predict that the cognitive and affective satisfaction of gaming customers affect their desire to stay in a casino. According to Models 2 and 4 in Table 2, there were

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Table 2 Regression analysis of the effect of the cognitive and affective satisfaction of gaming customers on desire to stay and intention to revisit. Desire to stay

Intention to revisit

Model

Model 1

Model 2

Model 3

Model 4

Model 5

Model 6

Model 7

Model 8

Control variables Gaming result satisfaction Gender Age Bet outcome

−0.136* 0.114* 0.183*** 0.058

−0.15* 0.115* 0.178** 0.052

−0.136* 0.114* 0.183*** 0.058

−0.165** 0.111* 0.174** 0.047

0.243*** −0.052 0.11* 0.043

0.000 −0.062 0.063 −0.032

0.243*** −0.052 0.11* 0.043

0.052 −0.074 0.063 0.000

Hypothesized variables Cognitive customer satisfaction Affective customer satisfaction Df F Adjusted R2 Adjusted R2

0.644***

0.036

0.556***

0.092 4/377 5.505*** 0.045

5/373 4.43** 0.043 −0.002

4/377 5.505*** 0.045

5/374 4.897*** 0.049 0.004

4/365 8.728*** 0.077

5/362 51.083*** 0.406 0.329

4/365 8.728*** 0.077

5/364 38.338*** 0.336 0.259

Standardized regression coefficients are reported. Two-tailed test of all hypothesized relationships. * p < 0.05. ** p < 0.01. *** p < 0.001.

no relationships between the cognitive or affective satisfaction of gaming customers and their desire to stay in a casino (ˇ = 0.036 and 0.092, p = n.s.). In other words, neither H6a nor H6b is supported. Hypotheses 7a and 7b predict that the cognitive and affective satisfaction of gaming customers affects their intention to revisit a casino. The results of Models 6 and 8 in Table 2 show that both the cognitive (ˇ = 0.644, p < 0.001) and the affective satisfaction (ˇ = 0.556, p < 0.001) of gaming customers have a strongly significant effect on the intention to revisit a casino. Thus, both H7a and H7b are strongly supported. 6. Discussion In this study, we evaluate whether certain dimensions of the servicescape of casinos affect the satisfaction of gaming customers. Overall, we find that after controlling for betting outcomes and the overall gaming result, customers are more satisfied when they gamble in an attractive physical environment. Their level of satisfaction also affects their intention to revisit the same casinos. This study makes several noteworthy contributions to the literature. As our literature review indicates, little research has examined the effects of the casino servicescape on both the cognitive and affective satisfaction of gaming customers (Lucas, 2003; Wakefield and Blodgett, 1996). For example, Finlay et al. (2006) evaluate the impact of casino’s physical environment from a macro design point of view but their study focuses only on the emotional consequences of gamblers. Other research on gambling environments also does not consider the impact on gambler’s satisfaction (Hirsch, 1995; Stark et al., 1982). Our study thus contributes to the literature by examining servicescape dimensions in the casino context and evaluating both the cognitive and affective consequences on gamblers. We are able to broaden the scope of Bitner’s (1992) model into the gaming context by showing how physical environment of casinos affect gambler’s desire to revisit. Specifically, our findings show that the five servicescape dimensions have different impacts on the cognitive and affective satisfaction of customers. Navigation, ambience, and cleanliness are significant predictors of cognitive satisfaction. Navigation also has strong effects on affective satisfaction, but ambience and cleanliness do not. Instead, seating comfort and interior decor are more significant predictors on affective satisfaction. Although our results indicate that desire to stay is not a function of gaming customer satisfaction, gamblers who were more satisfied showed a greater intention to revisit. Interestingly, we found

that both cognitive and affective satisfaction are positively associated with intention to revisit. Cognitive satisfaction is the gambler’s evaluation whether the casino experience has met his/her expectation. Gamblers are more likely to return to the same casino that meets or surpasses their expectations. Affective satisfaction on the other hand is about the gambler’s feelings of positive emotions. Our finding shows that gamblers will return to the same casino that they find pleasurable and enjoyable. These results provide empirical evidence that investment in a casino’s physical environment may benefit casino operators. Our study also clarifies a previous competing finding on seating comfort. In Wakefield and Blodgett’s (1996) study, seating comfort had an insignificant affect on the perceived servicescape quality in casinos, whereas Bitner (1992) argued that seating comfort does influence servicescape satisfaction. We found that seating comfort affects affective but not cognitive satisfaction. By separating gaming satisfaction into cognitive and affect components, our study explains these different conclusions on seating comfort. Our finding suggests that seating comfort and arrangement affects pleasure and perceived control due to crowding. In addition to these contributions, other results are worthy of attention. First, we find that the ambience of a casino significantly affects the cognitive satisfaction of gaming customers. Good ambient conditions send implicit cues to gaming customers that the casino is of high quality, and suggests that their choice of casino was correct. However, the ambient conditions of casinos did not influence the affective satisfaction of the respondents. This is rather a surprising finding as prior research shows that ambient factors (e.g. temperature, lighting, smell) should have strong impact on people’s physiological and emotional state (e.g. pleasure, arousal) (Lin, 2004; Hirsch, 1995; Stark et al., 1982). The correlation between ambience and gambler’s satisfaction is actually very significant (r = 0.48 and 0.47 for cognitive and affective satisfaction respectively; p < 0.01), but the impact of ambience on affective satisfaction disappears in multiple regression analysis. Our speculation is that perhaps compared with other servicescape dimensions, the marginal effect of ambience on affective satisfaction is relatively small. Therefore after controlling for significant factors such as navigation, seating comfort, and interior decor, the impact of ambience on affective satisfaction becomes insignificant (see Table 1). Since this interpretation is rather speculative, we suggest future research to look deeper into emotional responses of gamblers (e.g. pleasure, arousal, dominance) and examine if there are differential impacts of servicescape dimensions on these emotions.

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Second, our findings show that navigation strongly influences both the cognitive and the affective satisfaction of gaming customers. When the machinery, equipment, and furnishings are arranged well, customers can browse the service area more easily. This improves the overall image of casinos and increases the confidence of gamblers that they have come to the right casino. Similarly, when the spatial layout and functionality of the servicescape are well designed, customers can better navigate the service area and have greater perceived control over the environment. This may lead them to experience more pleasure in the casino, which increases their level of affective satisfaction. Third, we find that seating comfort had no significant effect on the cognitive satisfaction of gaming customers. As many casinos in Macau offer good seating, it would be difficult to convince gamblers they are in an excellent facility simply by improving the seating comfort. Nevertheless, seating comfort does appear to have a significant influence on affective gaming satisfaction, perhaps due to the importance of the perceived control of gaming customers over the physical environment. When the seating quality is better, customers feel more comfortable sitting at gaming tables due to a higher level of perceived control. Fourth, interior décor did not influence the cognitive satisfaction of gaming customers. We suspect that gamblers may pay more attention to how the casino tables and slots are arranged (i.e., navigation), and are less concerned with the signs and symbols inside casinos. Thus, good interior décor alone does no send an implicit cue to gaming customers that the casino is providing better services than others. However, interior décor does appear to have a substantial effect on the affective satisfaction of gaming customers. There could be several reasons for this finding. When the environment is well decorated with attractive artifacts, customers will be attracted to the service area and will be more willing to stay in the casino. When the signs and symbols in the servicescape are well presented, gaming customers have better information about the area, which enhances their perceived control. A well-decorated casino may also reduce the poor social image of gambling. These factors may make gamblers feel less guilty and more inclined to stay in a casino. Fifth, our analyses show that cleanliness has a significant influence on the cognitive satisfaction of gaming customers. This outcome indicates that a clean environment can create a good impression of professional and high-quality services, thus suggesting to gamblers they have received good service quality. However, cleanliness had no significant effect on the affective satisfaction of gaming customers. In other words, gamblers do not necessarily feel more pleasure in patronizing a very clean casino environment. Finally, our results show that servicescape satisfaction affects gamblers’ intention to revisit but not their desire to stay. There could be several reasons for this finding. According to statistics reported by the government of Macau, the average length of stay of tourists is 1.1 nights. Gamblers may want to visit different casinos during their short stay, and due to time pressures may prefer to stay for a shorter period in each casino. This may explain why time spent in the casino was not affected by servicescape satisfaction. Further, as Macau is a relatively small city, many of the casinos are either within walking distance or are just a short travel distance from each other, which means that gamblers can switch casinos easily. Our analyses show that satisfaction with the serviceescape strongly influences whether a gambler will return to a casino. 6.1. Managerial implications Our results suggest that the “look” of casino does matter such that casino operators should consider improving their servicescapes in satisfying and drawing more customers. On the other hand, improvement of servicescapes also requires substantial investment from casino operators so that careful financial analyses

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are necessary. Our study shows that when casino operators consider opening a new facility, they should follow Kranes rather than Friedman’s principle during the design stage. Friedman suggests designing casinos that are more compact with low ceiling, and layouts that are difficult to navigate in order to entice gamblers to explore more within the facilities. However such design is also more stressful and will lower the gambler’s need of restoration (Finlay et al., 2006). Krane on the other hand emphasizes more spacious, orderly, informative, and coherent design. Although gamblers will explore less in Krane’s casinos, they will feel more comfortable and more able to recover from stress due to repeated gambling (Finlay et al., 2006). Our research findings are largely supportive of Krane’s rather than Friedman’s design principles. To create an atmosphere of comfort, freedom, and vitality advocated by Krane, casino operators should invest more on navigation, ambience, and interior decor when building new casinos. Such physical environment relaxes patrons from stress due to gambling, and encourages them to return to the same facilities, which increases gaming revenue. For established casinos, it will be more difficult to redesign the entire servicescape areas unless the operators are willing to halt their businesses for an extended period of time. Under this circumstance, managers should still pay attention to casino navigation because it is relatively easy to redesign the arrangement of machinery, equipment, and seating, and the spatial relationships among them. As spatial layout can strongly affect consumer density, the ease with which customers negotiate the service area, and their perceived control over and level of excitement in the environment, managers should arrange the seating, machinery, and furnishings to generate a low level of crowding to arouse customer excitement. Casinos are sometimes viewed as sinful businesses. The results of this study suggest that cleanliness and ambience are important contributors to generating a positive casino environment, and may improve the traditionally poor social image of gambling. For established casinos, managers should thus hire more workers to clean the casino, both during pre-event preparation and as an ongoing operation. As casinos are closed areas and more people smoke in this environment, it is quite difficult to control the air quality and temperature unless the casinos are completely re-designed. To overcome this problem, managers should buy more equipment to control air quality. Other ambient conditions, such as lighting, music, and scent, also play a key role in giving customers a better image of a casino. For established casinos, managers should thus rearrange flashing lighting, exciting music, and nice scents in the casino environment. Although seating comfort and interior décor have a less instrumental effect on customer cognitive evaluations of casinos, they still influence their emotional experience. Managers therefore should consider providing comfortable seats and sufficient signs in their facilities. 6.2. Limitations and areas of future research This study has several limitations. First, the survey was conducted in casino shuttle buses, and there may have been a time gap between the respondent’s casino visit and the interview. Ideally, the questionnaires would have been conducted inside the casino so that respondents are within the direct contact with the casino’s physical environment. Therefore future research should look into the possibility to first measure gambler’s first-hand experience with various dimensions of servicescape environment and then collect their satisfaction responses afterwards. Second, there was no single question that asked the gaming customers to rate their desire to stay in the casino. Instead, in the data analysis the number of hours that customers stayed in the casino was used to examine this factor. However, this may have captured

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the actual rather than the intended period of stay. Future research should thus adopt a better measure of the desire to stay. Third, the opinions of the gaming customers toward the servicescape and their satisfaction with and intention to revisit the casino were asked at the same time in the cross-sectional design. To establish causality, future research should first measure the casino servicescape at time 1, and customer satisfaction and intention to revisit at time 2. Fourth, we only examine servicescape dimensions based on Bitner’s (1992) model. Work conducted by Lin (2004) and Hirsch (1995) suggest that auditory and olfactory cues are also important elements of casino’s physical environment. Future research should look into the role of these sensational factors when gamblers evaluate the casino’s environment (Lin, 2004; Spangenberg et al., 1996; Griffiths, 2008). Fifth, our study did not distinguish between leisure and addictive gamblers. The proportion of additive gamblers is considered to be small so that its influence on our findings will be considered to be minimal. One study shows that in China, addictive gamblers make up about 2.5–4.0% of the adult population (Loo et al., 2008). As discussed previously, motivations of gambling are different among leisure gamblers and future research should attempt to develop models in explaining if and how physical environment will influence behaviors of addictive gamblers. Sixth, recent research has suggested the important role of staff in the research of servicescape. For example, Cockrill et al. (2008) showed that customers have frequent interaction with staff in betting shops, and such interaction can have important impact of the perception of service environment. Companies such as Nordstrom, Ritz-Carlton, and Harrah’s Entertainment also recognized the importance of front-line staff when dealing with customers (Pfeffer, 1994; Metters et al., 2006; Delong and Vijayaraghavan, 2002). Prior research refers interaction between customers and employees as social (as opposed to physical) aspect of the servicescape environment (Cockrill et al., 2008; Martin and Pranter, 1989; Arnould and Price, 1993). Research on interaction between front-line staff and customers offers strong evidence supporting the important role of employee in customer satisfaction (Lam and Lau, 2008; Schneider et al., 1998; Hartline and Ferrell, 1996). To better understand the influence of physical environment of casinos, we believe more empirical studies can be done to evaluate the interaction between the physical and social aspect of the servicescape environment. Finally, the study was conducted among casinos in Macau, a place in which the dominant culture is Chinese. According to Hofstede and his colleagues (e.g. Hofstede and Bond, 1988), Chinese culture is characterized by power distance, collectivism, and uncertainty avoidance. Such cultural characteristics may have influenced our finding. For example, due to uncertainty avoidance, gamblers may prefer servicescape designs that give them more control. To better understand the impact of the servicescape, future research should explore casino sites outside of Macau or non-gaming facilities (e.g. hotels) under another cultural context.

7. Conclusion This study finds that the casino servicescape has a significant influence on the cognitive and affective satisfaction of gaming customers in Macau, which in turn affects their intention to revisit. Repurchase intention is essential for the survival of every business, and it is suggested that expenditure on the casino servicescape is worthwhile. The findings also indicate that, in contrast to Friedman’s approach, Kranes’ design template, which emphasizes an atmosphere of comfort, freedom, and vitality, is more suitable for

casinos. Gaming is a leisure service that is enjoyed by customers, and they should be encouraged to feel pleasure rather than stress when visiting a casino. If customers feel freer and more comfortable, then they will develop a better impression of a casino and their level of satisfaction with the services offered will increase. Acknowledgement This research has been supported by the research funding from the Institute for the Study of Commercial Gaming of the University of Macau. Appendix A. Survey questionnaire items Servicescape dimensions (Lucas, 2003) —Please indicate the degree of satisfaction of each item Ambience 1. Coin sound when winning in slot machines 2. Sound effect of slot machines 3. Background music 4. Lighting 5. Temperature 6. Air quality Navigation 1. Sight lines 2. Aisle width 3. Signs/directions 4. Ease of locating machines/casino tables 5. Number of machines/casino tables 6. Ceiling height Seating comfort 1. Seat back 2. Elbow room 3. Distance from table 4. Overall comfortableness 5. Easy in and out Interior decor 1. Background colors 2. Electric signs design 3. Wall treatment design 4. Floor treatment design 5. Overall design attractiveness Cleanliness 1. Coins 3. Ashtrays 3. Ceiling 4. Machine screens 5. Employees appearance 6. Overall cleanliness Cognitive customer satisfaction (Cronin et al., 2000) 1. My choice to visit this casino was a wise one 2. I think I did the right thing in visiting this casino 3. This facility is exactly what is needed for gambling Affective customer satisfaction (Seiders et al., 2005; Spreng et al., 1996) 1. I am pleased with the overall service at this casino 2. Gambling at this casino is a delightful experience 3. I am completely satisfied with the gambling experience 4. I am frustrated with the services provided in the casino (reverse coded) Intention to revisit (Seiders et al., 2005) 1. I will gamble at this casino in the future 2. I will continue gambling at this casino Desire to stay 1. How long did you stay in this casino? Note: All items were measured on a 5-point Likert scale from (1 = strongly dissatisfied/disagree) to (5 = strongly satisfied/agree).

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