Service Quality, Innovation, and Cost Efficiency as Drivers of Hotel Performance in Tamil Nadu

Abstract

This study examines how service quality, innovation, and cost efficiency drive hotel performance in Tamil Nadu.We use a cross-sectional design with data from hotels across metro and non-metro locations and across different star levels and ownership types for our analysis.Drivers are measured using clear survey items, and performance is obtained from hotel records and online dashboards, including occupancy, average daily rate, revenue per available room, profit per available room, and guest ratings.Simple tools were applied, including descriptive statistics, correlation, and regression.Mediation was tested to determine whether customer satisfaction and online reputation passed the effects of the drivers on performance.The results show that service quality has the strongest and most consistent link to performance, innovation adds meaningful gains, and cost efficiency secures profit.Customer satisfaction has a large share of the service quality effect, and online reputation has a large share of the innovation effect.Chain, metro, and higher-star hotels show higher average performance.This study offers a clear action plan for managers. Lift service basics first, add focused digital innovations next, and then lock in gains through energy and process control.