Abstract
Under the STR/CoStar Chain-Scale Classification, mid-scale hotels, (Anguera-Torrell & Nicolau, 2023; Hodari & Raub, 2024), account for 39.38% of the UK hotel market (Mordor Intelligence, 2025). The UK Hospitality Workforce Commission (2023) shows the sector contributed over £130 billion to the economy and supported about 3.2 million jobs. Despite their strategic importance, this segment faces challenges from inconsistent service delivery, limited frontline responsiveness, and misalignment between expectations and performance. These issues reflect gaps between service standards and actual guest experience (Chan, Harrington & Song, 2022; Baum et al., 2023).
While continuous improvement (CI) approaches such as Lean, Kaizen, and TQM are implemented by hotel leaders in mitigating these challenges, these approaches have helped strengthen internal efficiency and standardisation within their processes, but their translation into guest experiences has received limited attention. These gaps show that operational efficiency alone is insufficient to create experiential value for guests (Hodari & Raub, 2024; Shin et al., 2024). Although SERVQUAL advanced service quality knowledge by prioritising customer-perceived over operational quality (Parasuraman, Zeithaml & Berry, 1985), it still primarily focuses on cognitive evaluations of reliability and efficiency in the delivery process. The emergence of the GEMS framework explains guest perception captured in sensory, emotional, and cognitive guest responses that shape these experiences (Gentile, Spiller & Noci, 2007); however, experiential outcomes alone do not provide an explanation for the processes that produce these outcomes and as such are not sufficient in explaining a balanced service ecosystem (Anderson, 2025; Chen & Ling, 2025).
This study addresses this by positioning CI as a strategic organisational capability, supported by the Resource-based View theory. It emphasises customer-focused continuous routines that enable these hotels to optimally utilise their resources and processes to secure sustainable competitive advantage (Barney et al., 2021; Monteiro, 2024).
This study aims to examine how guests in UK mid-scale hotels perceive organisational improvement capabilities, how these perceptions influence their service experiences and whether service delivery mediates the relationship between Customer-Focused Continuous Improvement capability and guest experience.
Integrating organisational capability, service delivery, and experiential outcomes, the study introduces an integrated CI–SERVQUAL–GEMS framework that demonstrates how continuous improvement enhances service delivery quality, shapes diverse guest experience outcomes, and contributes to service ecosystem knowledge .The research advances Resource-Based View (RBV) learning by conceptualising CI as an organisational capability and provides actionable insights for managers aiming to achieve strong, unique positions in dynamic hospitality markets.