_______________________________________________________________SERVICE QUALITY AND CUSTOMER RELATIONSHIP MANAGEMENT AFFECTING CUSTOMER RETENTION OF LONG-STAY TRAVELERS IN THE THAI TOURISM INDUSTRY: A SEM APPROACH Author: Tawinunt, Kanjana; Phimonsathien, Theppara; Fongsuwan, Wanno ProQuest document linkAbstract: This study is concerned with the development and internal consistency checking of a structural equation model for investigating direct and indirect factors associated with service quality, customer relationship management and its impact on customer retention with long-stay residents and tourists in the domestic Thai travel industry. Using data derived from the research, the researchers hope to help drive market opportunity strategies which help gain an advantage edge while elaborating management skills. Additionally, this study is concerned with the analysis of how to develop capacity in the market, while minimizing marketing and operational costs within the Thai travel industry. Better responsiveness to the needs and buying habits contributes to management strategic planning, which builds up the standards giving the traveler a better customer satisfaction. If the traveler is excited about the service quality, a strong foundation for future relationships can be created helping with the retention of first-time travelers as well as achieving new and returning tourists through word-of-mouth advertising and referrals.

Full text: HeadnoteThis study is concerned with the development and internal consistency checking of a structural equation model for investigating direct and indirect factors associated with service quality, customer relationship management and its impact on customer retention with long-stay residents and tourists in the domestic Thai travel industry. Using data derived from the research, the researchers hope to help drive market opportunity strategies which help gain an advantage edge while elaborating management skills. Additionally, this study is concerned with the analysis of how to develop capacity in the market while minimizing marketing and operational costs within the Thai travel industry. Better responsiveness to the needs and buying habits contributes to management strategic planning which builds up the standards giving the traveler a better customer satisfaction. If the traveler is excited about the service quality, a strong foundation for future relationships can be created helping with the retention of first-time travelers as well as achieving new and returning tourists through word-of-mouth advertising and referrals. Therefore, with applied diligence to the above variables, Thailand's tourism industry can effectively and efficiently sustain and grow for both today and the future. Keywords: Service quality, Customer relationship management, Customer retention, Thai tourism industry, SEM approach. (ProQuest: ... denotes formulae omitted.) Introduction In March 2015, the Tourism Authority of Thailand (TAT) stated that the number of foreign tourists to Thailand would reach 28 million in 2015, generating an estimated THB 1.35 trillion (US$ 42 billion) in revenue, up from 24.77 million visitors in 2014 (Bangkok Post, 2015). The UNWTO (2014) stated in its most recent annual report that despite occasional shocks, international tourist arrivals have shown virtually uninterrupted growth - from 25 million in 1950 to 278 million in 1980, 528 million in 1995 to 1.1 billion in 2013. International tourist arrivals worldwide are expected to increase by 3.3% a year from 2010 to 2030 to reach 1.8 billion by 2030. By UNWTO region, prospects for 2014 are strongest for Asia and the Pacific (5% to 6%), International tourism receipts reached US$ 1.159 trillion worldwide in 2013, up from US$ 1.078 trillion in 2012, making tourism the world's largest service industry. Globally, tourism generates approximately 266 million jobs, is 9.5 percent of the world gross domestic product (GDP), and is a US$7 trillion (THB 32.5 trillion) industry (The Nation, 2015b). It is therefore easy to understand how the tourism industry is vital to Thailand's economy and its effect on Thai society. Many officials believe that tourism is a fast track to economic growth, requiring less investment than other capital intensive industries creating an important source of foreign exchange, job creation and wealth distribution throughout the country. With Thailand's date with destiny looming large on the horizon with the AEC (ASEAN Economic Community) integration date of late 2015, Thailand is looking to its' ASEAN (Association of Southeast Asian Nations) and Asian neighbors to offset losses from more traditional markets from the West. This strategy appears to be working. In 2013, ASEAN visitors to Thailand reached 7.28 million, up 15% from the year before. They accounted for 27.4% of total foreign tourists. The number of tourists from Indonesia rose 32% to 594,251, Malaysia surged 19% to 3 million, Singapore was up 14.95% to 955,468, and Vietnam rose to 17% to 725,057. TAT research showed there are 7.74 million high-end travelers from these four ASEAN nations: 2.38 million from in Indonesia, 2.28 million in Malaysia, 2.71 million in Singapore and 370,000 million in Vietnam. It was additionally projected that revenues from these 4 nations represented THB 1.3 billion in 2014 (Bangkok Post, 2014). This is consistent with the yearly report on global tourism published by the UNWTO (United Nations World Tourism Organization) (UNWTO, 2014) which stated that "Thailand entered the top 10 arrivals ranking at number 10, climbing an amazing five positions, while it moved up two places to 7thin the ranking by tourism receipts". China has also played a large role in increasing Thai tourism numbers with China being the number one source of tourists who come to Thailand. During the 2015 Chinese New Year, more than 300,000 Chinese visited Thailand, representing a growth of 49 per cent [year on year], spending THB 6.9 billion, or an increase of 5 per cent Spending an average of THB 22,600 per person per trip (The Nation, 2015). And according to the UNWTO (2014), China has consolidated its position as the number one tourism source market in the world, spending US$ 129 billion on international tourism. In this environment of continued expansion and growth of global and Thai tourism is the fact that many developed nations are growing older. With this, comes the opportunity for Thailand to open its doors and welcome these aging populations and to focus on mechanisms to offer long-stay, wellness and medical tourism which often involves lengthy recovery times. In the United States, data shows that in 2012 that some 65.2 million 'baby boomers' were alive and well. These senior citizens are from the group born between 1946 to 1964 after WWII, which are the 19 years usually referred to as the "baby boom" with the baby-boom age group (ages 50 to 68 in 2014) growing to 76.4 million in 2012, if immigrants are included in the count. These 76.4 million baby boomers represent 28% of the estimated 2012 U.S. population of 314 million (PRB, 2014). In the United Nations (UN, 2013) most recent report on global aging, some interesting facts and trends were brought out. Amongst these were: 1. Population ageing is taking place in nearly all the countries of the world. The global share of older people (aged 60 years or over) increased from 9.2 per cent in 1990 to 11.7 percent in 2013 and will continue to grow as a proportion of the world population, reaching 21.1 percent by 2050 with most developed countries already have aged populations. 2. Globally, the number of older persons (aged 60 years or over) is expected to more than double, from 841 million people in 2013 to more than 2 billion in 2050. Older persons are projected to exceed the number of children for the first time in 2047. 3. Population ageing has major social and economic consequences. The old-age support ratios (number of working-age adults per older person in the population) are already low in the more developed regions and in some developing countries. 4. Older persons can increasingly live independently (alone or with their spouse only), and in most countries, they support themselves financially with their own labor earnings, income from their assets, and through public transfers. In most countries with pertinent data, older persons make net financial contributions to younger family members until rather advanced ages. 5. The older population is itself ageing. Globally, the share of older persons aged 80 years or over (the "oldest old") within the older population was 14 per cent in 2013 and is projected to reach 19 % in 2050. If this projection is realized, there will be 392 million persons aged 80 years or over by 2050, more than three times the present. 6. Life expectancy at birth is projected to continue to rise in the coming decades in all major regions of the world. Life expectancy was 65 years in 1950 in the more developed regions compared to only 42 years in the less developed regions in the same year. By 2010-2015, it is estimated to be 78 years in the more developed regions and 68 years in the less developed regions. Thailand officials do seem to understand these numbers and how these individuals can contribute to Thailand economic growth as the new government's tourism minister met with the head of the Japan Long Stay Foundation and discussed measures to boost the number of Japanese extending their stays in Thailand. Potential measures include extending visas from one year to 10 years and allowing property and other assets to be transferred to Thailand. Currently, 58,143 Japanese are living in the Kingdom (The Nation, 2015). Another component of Long-stay tourism is medical tourism which Thailand's KasikornBank's Research Centre says is a significant revenue earner that should generate THB 100 billion in revenue in 2015up 10.0-15.0 percent YoY with even more increases in store after AEC integration. Research suggests that international 'medical tourists' and expatriate patients will play an important role in bolstering income at Thai private hospitals and expect that the number of medical treatments provided to them by Thai private hospitals will reach 2.81 million during 2015, up 10.2 percent YoY. Major international medical tourist markets include Myanmar, Japan, the Middle East and Europe (US$ 3.125 billion dollars) (Kasikorn Research Centre, 2015). Turning to the Europe Union, in Table 1 the population 65 or older is depicted with each country ranging between the Netherlands at the lowest with 13.6% to the highest, Italy with 17.8%. Germany and the U.K. each have 16% of their respective populations at 65 or older, both huge markets for Thailand's long-stay and wellness tourism industry. In a survey conducted by Callan and Bowman,(2000) the desired attributes of selecting a hotel or judging its quality were examined using 104 mature British travelers, which ranked their importance on 38 separate characteristics. From the survey, the respondents had high expectations of hotel service quality placing greater emphasis on value for money than on actual price or discounting alone. The findings highlighted the importance placed on service staff attitude and behavior. Leisure facilities were found to be relatively unimportant, but certain mature-specific attributes pertaining to mobility limitations were found to be salient to an important proportion of respondents. Significant differences were identified according to gender, age and retirement status, indicating that the mature market is heterogeneous. In similar research by Gokovali et al. (2007), the researchers studied 39 variables and found 16 components that have a large impact on the length of stay during a summer holiday. More specifically, nationality, education, income, experience, familiarity and daily spending are among those as the major determinants of the length to stay. An increase or decrease in such variables is accompanied by a significant increase or decrease in the length of stay. Menezes et al. (2008) examined the determinants of the length of stay of tourists in the Azores. It was found that socio-demographic profiles, such as nationality and trip attributes, such as repeat visitation rates and type of flight, are important determinants. In addition, destination image and attitudes regarding environmental initiatives also influence the length of stay. In particular, the results suggested that marketing strategies which promote the Azores for its nature, landscape, remoteness and weather may increase length of stay, whereas cultural heritage has the opposite effect. Something Thailand needs to consider as it imitates its new '2015 Discovery Thainess' campaign (TAT, 2015). Other data suggests that there is a shortage of skilled workers plaguing Thailand's hotel industry, which needs an estimated 100,000 new staff each year. Even with up to 40,000 students graduating and joining the tourism industry each year, the supply cannot support the burgeoning sector. Given the vast and ever increasing potential of Long-stay tourism to the Thai economy and its present and growing importance to the Thai economy, the researchers determined the following research parameters and concepts: Research Objectives 1. To study both the direct and indirect effects and overall influence of variables that affect retention in the Long-stay tourism industry and its effect on Thailand's tourism industry 2. To develop a structural equation model whose purpose is to conduct confirmatory factor analysis test models of relationships between the latent variables and the measured variables which are indicators of common factors. For this study, this includes Service Quality, Customer Relationship Management and Customer Retention in the Long-stay Thai tourism industry and its effect on Thailand's tourism industry. Literature Review Customer Retention It has often been said that, "the easiest way to keep your customers is to not lose them." The average business loses around 20 percent of its customers annually simply by failing to attend to customer relationships. In some industries this leakage is as high as 80 percent. The cost, in either case, is staggering, but few businesses truly understand the implications. Research by Brink &Berndt (2008)backs this up by stating "high-quality customer service is paramount to improving relationships with customers, and an enhanced relationship with one's customers can ultimately lead to greater customer retention, customer loyalty and more importantly, profitability". These factors form part of the 'servicescape', which is the physical evidence that enterprises need to provide the customer as cues for its service quality, as customers often rely on tangible cues or physical evidence to evaluate service (Zeithaml et al., 2009; Brink and Berndt, 2008). Businesses today have shifted their strategic focus from emphasizing customer acquisition (i.e. targeting switchers) to emphasizing customer retention (i.e. targeting stayers) with the objective of creating sustainable and mutually beneficial relationships (Peng and Wang, ^^^^). This is consistent with Menon and O'Connor(^^^^^^ which said that keeping customers is a long term relationship and Segoro (^^^^^^ which found that service quality and its relationship with customer satisfaction is positively correlated. Additionally, the perception of customers with the quality of service and customer relations has a positive and direct influence on customer loyalty. One of the most widely accepted notions in consumer behavior is that word-of-mouth (WOM) communication plays an important role in shaping the target-consumers' attitudes and behaviors (Roy et al., 2008) which is because WOM is regarded as providing more reliable and trustworthy advice, and personal contacts are generally able to offer social support and encouragement. WOM shapes consumer attitudes and behaviors towards firms and their products (Brown and Reingen, 1987). Mazzarol et al., (2007) suggested that the WOM is a way to achieve competitive advantage in the market place and can be viewed as an indicator of customer loyalty. Srinivasan et al. (2002) suggested that one of the behavioral outcomes of e-loyalty is positive word of mouth. This is consistent with Ranaweera and Prabhu (2003) which examined the combined effects of customer satisfaction and trust on customer retention and positive word of mouth (WOM). Data from a large-scale survey of fixed line telephone users in the UK confirmed that both satisfaction and trust have strong positive associations with customer retention and WOM. Lin and Wu (2011) investigated the role of customers' expected future use and customer retention. Findings suggested that the assertion that that the effects trust, commitment, and satisfaction on service retention is mediated by customers' expected future use. Results show that satisfaction, trust and commitment is related to expect future use and retention, while expected future use is also related to retention. Service firms can increase retention through enhancing relationship quality and expected future use. Customers' expected future use plays an important role in service retention, and represents a valuable marketing opportunity in customer relationship management. Marketing managers will find it beneficial to integrate expected future use into marketing communication, retention^based marketing, and other marketing interactions. Smith and Chang (2009) studied the Taiwanese credit card market and the relationship of firm's intangible assets - most notably the important role played by customers in increasing a firm's value. Findings suggested that customer lifetime value is shown to be the most important indicator of financial performance and the firm's shareholder value and that marketing strategy has a central role in the formulation of financial policy, since such strategies can be shown to have an impact on the financial value of the business. Ferrell and Hartline (2011) indicated that customer retention can lead to significant benefits to companies include reducing operating cost and increasing revenue by referrals (word-of-mouth). Similarly, customer retention requires clear direction and this is the first strand of customer retention (Farquhar, 2003). In order to effectively retain customers, a significant commitment and clear signal from company's top management is highly sought. After a study and review of the research literature on Customer Retention, 3 measurement dimensions were added which consisted of the following: 1)Word-of-mouth (WOM)-Customer loyalty is critical to a company's long term vitality and therefore one of the most widely accepted notions in consumer behavior is that word-of-mouth (WOM) communication plays an important role in shaping the target-consumers' attitudes and behaviors(Roy et al., 2008; Brown and Reingen, 1987; Mazzarol, Sweeny and Startar, 2007; Srinivasan et al., 2002; Smith and Chang, 2009; Ranaweera and Prabhu, 2003). 2)Retention-Tourist customer retention is the activity that a hotel or resort undertakes in order to reduce customer defections. Successful customer retention starts with the first contact an organization has with a customer and continues throughout the entire lifetime of a relationship.(Brink &Berndt, 2003;Zeithaml et al., 2009;Peng and Wang, 2006; Menon and O'Connor, 2007; Segoro, 2013; Lin and Wu, 2011; Ferrell and Hartline, 2011; Farquhar, 2003) 3)Customer loyalty-Tourist customer loyalty is the result of consistently positive emotional experience, physical attribute-based satisfaction and perceived value of an experience, which includes the product or services (Mazzarol et al., 2007; Smith and Chang, 2009). Customer Relationship Management (CRM) Customer relationship management (CRM) is a combination of people, processes and technology that seeks to understand a company's customers (Chen and Popovich, 2003) and is an integrated approach to managing relationships by focusing on customer retention and relationship development. CRM has evolved from advances in information technology and organizational changes in customer-centric processes and companies that successfully implement CRM will gain benefits from customer loyalty and long run profitability (Chen and Popovich, 2003). This is consistent with Aspara (2013who noted that the customer relationship management (CRM) is a support system and should focus on a long-term marketing process. The company should focus on how to get new customers while at the same time monitoring existing customer potential. Supporting this is the work from Wahab et al. (2011) that stated that E- Service Quality will have a positive effect on operational results and customer relationship management. Research conducted on Mass Customization (MC) by Hongyi and Man (2011) found that customer retention has a significant impact on MC. Research combined customer relationship management (CRM) and the three stages of MC; customer consumption emotional and customer loyalty. This is consistent with Gilaninia et al. (2011) which found that managing customer relationships is a key tool in a firm's communications with customers as well as giving them the ability to attract and retain customers and create better customer satisfaction. A study by Ivanovic et al. (2011) stated that tourism is a service industry which is based on selling services, which has found great benefits and advantages from using CRM. Thus, in the tourism sector, CRM has become one of the most important strategies in attracting and increasing tourist arrivals, in filling destination facilities and in satisfying the needs of guests. The main goals of CRM are to attract tourists while achieving customer loyalty. Implementation of CRM systems is very demanding and requires commitment at all levels of the company with large problems coming from legacy system integration but companies who invest in the technology realize huge benefits quickly (Ivanovic et al., 2011). Knowledge and interaction management technologies represent the key resources firms need to build long-term, profitable customer relationships. CRM success is primarily driven by the functionality and user acceptance of the technology firms implement in an attempt to build customer knowledge and manage interactions (Cataln-Matamoros, 2012). After a study and review of the research literature on Customer Relationship Management, 4 measurement dimensions were added which consisted of the following: 1.People-Customer referrals are important to CRM and customers who willingly commit more of their purchases to a preferred supplier are generally more satisfied than customers who do not. (Wahab et al., 2011; Hongyi and Man, 2011; Ivanovic et al., 2011; Cataln-Matamoros, 2012; Macintosh, 2002; Almotairi, 2009). 2.Process-CRM requires company-wide, cross-functional, customer-focused business process reengineering. Managing a successful CRM implementation requires an integrated and balanced approach to technology, process, and people (Injazz et al, 2003; Chen and Popovich, 2003; Aspara, 2011; Wahab et al.,2011;Parida and Baksi 2011. 3.Technology-CRM is the technology used to blend sales, marketing, and service information systems to build partnerships with customers (Cataln-Matamoros, 2012; Ariffin,2013; Thompson et al., 2006; Wahab et al., 2011). 4.Communication- SRM requires the specification of the processes and roles which enables managers to specify inter functional dynamics, including communication flows and coordination patterns (Gilaninia et al., 2011; Kucukkancabas et al.,2009; Gurau, 2008). Service Quality Service quality is needed for creating customer satisfaction and service quality is connected to customer perceptions and customer expectations (Kabir and Carlsson, 2010). This is consistent with Zeithaml et al. (1990) which gave a definition that the perceived quality of the product/service is caused by the expectation of customers or clients using the service. In the measurement of Service Quality, the SERVQUAL model is probably the best know and was originally developed in the mid-1980s (Parasuraman, 1985). Later it evolved into what is now referred to as 'RATER', which is a quality management framework reduced to 5 main components by the use of factor analysis (Pongcharnchavalit and Fongsuwan, 2014). These five dimensions are: * Tangibles: This is the physical facilities, equipment and appearance of personnel. * Reliability: Ability to perform the promised service dependably and accurately. * Responsiveness: Willingness to help customers and provide prompt service. * Assurance: The knowledge and courtesy of employees and their ability to inspire trust and confidence as well as their competence, courtesy, credibility and security. * Empathy: Caring and individualized attention that the firm provides to its customers including access, communication and listening to the customer. Research on tourism service quality by Dean et al. (2002) revealed that while many consumers were able to pay more for travel services, fewer were willing to do so. Secondly, overall service quality and its underlying dimensions were positively associated with selected Willingness-To-Pay-More (WTPM) items. Liao and Hsieh (2011) investigated how image, perceived service quality and satisfaction determine loyalty and found that service quality, brand image and customer satisfaction with leisure activities are all interrelated. This is consistent with Mat Som et al., (2011) which indicated that customer satisfaction is correlated to the loyalty of the tour company. Parida and Baksi (2011) conducted a study concerning customer retention and profitability in a CRM Environment and found that service quality is a major factor that causes satisfaction and customer retention. This is consistent with Osman and Sentosa (2013) which studied service quality, customer satisfaction and customer loyalty in Malaysia rural tourism whose results confirmed that customer satisfaction has a significant and positive partial mediating effect on service quality and customer loyalty relationships in Malaysia rural tourism. The findings imply that the relationship of service quality, satisfaction and customer loyalty will lead to rural tourism operators' profitability. Therefore service quality and customer satisfaction play a crucial role within the Malaysia rural tourism industry. Pereshki (2009) conducted research and found that service quality and customer satisfactions were crucial in the process of retaining customers. This is consistent with Wang and Cheng (2012) which studied relationship among perceived quality, customer satisfaction and customer retention in the restaurant industry. The main findings were: (1) both perceived service quality and perceived product quality positively influence customer satisfaction significantly; moreover, perceived service quality imposes greater impact on customer satisfaction than perceived product quality in the hot pot industry; (2) customer retention is significantly and directly influenced by perceived service quality and customer satisfaction, but there is no significantly direct effect between perceived product quality and customer retention; and (3) service empathy is the most vital dimension of perceived quality to influence customer satisfaction and customer retention, which is followed by service responsiveness and assurance, special products, service tangibles, and general products. Al-Rousan et al. (2010) researched the Marriott Hotel chain in Jordan, collecting 322 surveys from 3 hotels. It was again confirmed that service quality is a vital competitive policy to keep customer support and build a sustainable guest base with hotels trying to win customer loyalty by providing enhanced quality services. Furthermore, the results showed that dimensions of service quality such as empathy, reliability, responsiveness and tangibility significantly predict customer loyalty. Specifically, among the dimension of tourism service quality, the most significant predictor of customer loyalty is tangibility. After a study and review of the research literature on Service Quality, the 5 service quality dimensions were added which consisted of the following: 1)Tangibles-The tangible Service Quality dimension refers to the appearance of the physical surroundings and facilities, equipment, personnel and the way of communication (Al-Rousan, 2010; Parasuraman, 1985; Parasuraman et al.,1988; Dean et al., 2002; Liao and Hsieh, 2011; Pezeshki, 2009; Wang and Cheng, 2012). 2)Reliability-The reliability Service Quality dimension refers to how the company are performing and completing their promised service, quality and accuracy within the given set requirements between the company and the customer (Kabir and Carlsson, 2010;Pongcharnchavalit and Fongsuwan, 2014; Parida and Baksi, 2011. 3)Responsiveness-The responsiveness Service Quality dimension refers to the willingness of the company to help its customers in providing them with a good, quality and fast service (Al-Rousan, 2010. 4)Assurance-The assurance Service Quality dimension refers to the company's employees and relates to the ability and skills of the employees and their ability to gain the trust and confidence of the customers. If the customers are not comfortable with the employees, there is a significant chance the customer will not return to do further business with the company(Zeithaml et al., 1990; Osman and Sentosa, 2013. 5)Empathy-The empathy Service Quality dimension refers to how the company cares and gives individualized attention to their customers and actually combins the 2nd, 3rd and 4th dimensions, elevating the quality to a higher level. If the customers feel they get individualized and quality attention, there is a substantial chance that they will come back again(Mat Som et al., 2011. After reviewing the relevant literature, a research model was developed as shown in Figure 2 and Table 2with the following assumptions: Hypothesis 1 (H1):Customer Relationship Management has a direct and positive influence on Service Quality Hypothesis 2 (H2):Customer Relationship Management has a direct and indirect effect on Customer Retention through Service Quality Hypothesis 3 (H3):Service Quality has a direct and positive effect on Customer Retention Methodology Questionnaire Design Questionnaires were constructed to be a tool to measure concept definition and practice. The instrument or questionnaire used the 7-Point Likert Scale (Likert, 1972) as the measurement scale. Monitoring of quality and content was accomplished with tools used in the research and as a measurement of quality with both content validity and reliability being assured by 5 experts in their associated fields with an evaluation index consistent with the content and the purpose of the research Also, Rovinelli and Hambleton's (1977)index of Item-Objective Congruence (IOC) was employed to carry out the screening of questions using a factor 0.5 to determine the sample validity. The conceptual framework for determining the internal consistency measured by coefficient alpha (-coefficient) of Akron BAC (Cronbach) to calculate the average value of the correlation coefficient which was between 0.704 to 0.827which was considered to be highly reliable as all values lower than 0.70 were eliminated from the measurement after the update from the initial 30 query samples. Data Collection and Analysis Research data analysis was conducted using AMOS software to assist in the analysis of the variables as well as the application of the Structural Equation Model (SEM) analysis of the causal relationship between variables. To attribute a high correlation analysis as well as high statistics showing a pattern of relationships between variables, the researchers took into consideration the sample size adopting a ratio of 20 survey samples for a single variable used in the research (Tanaka and Huba, 1987). Schumacker and Lomax (2010) have stated that the analysis of structural equation models requires larger sample sizes than the analytical approach and in order to estimate the population accuracy reliability. Hair et al. (2010) has said that the sample size has to be large enough to be used in the data analysis by the application of the model equations with the structure and the distribution of data (using a normal curve) but a response rate of 30% is however acceptable for a survey (Hair et al., 2010). Therefore, in this study the researchers collected data from 240 individuals who were Long-stay foreigners from provinces which have the greatest potential for Long-stay tourism in Thailand including the northern mountain region of Chiang Mai, Chon Buri's coastal area including Pattaya, NongKhai and its proximity to Vientiane in Laos and the Mekong River , the mountainous region of Kanchanaburi near Myanamar's border, the Gulf of Thailand coastal province of PrachuapKhiri Khan,the Andaman Sea island province of Phuket and the capital city of Bangkok. Model Measurement Results Quantitative measurement analysis of long-stay foreigners in Thailand used a measurement instrument or questionnaires utilizing a 7-Point Likert Scale (Likert, 1972). Both convergent validity and discriminant validity were employed within the analysis. Convergent validity was used to express how well each variable loaded onto its respective factor, whereas discriminant validity was used to test how poorly each variable loaded onto other factors other than the factor it loaded most highly on. Statistical theory says that in many situations where a population value is estimated by drawing random samples, the sample and population values will be within two standard errors of each other 95% of the time. That is, 95% of the time (Dallal, 2000), ... This is the case for means, differences between means, proportions, differences between proportions, and regression coefficients. After an appropriate transformation, this is the case for odds ratios and even correlation coefficients. The researchers have therefore used this fact to construct 95% confidence intervals by restating the result as ... The AVE values (convergent validity) are well above the minimum required level of .50, thus demonstrating convergent validity for all three constructs (Hair et al., 2013). Additionally, the CR value should not go below 0.60 and the R2 values should not be under 0.20 (Lauro and Vinzi, 2004; Henseler et al., 2009). AVE varies from 0 to 1, and it represents the ratio of the total variance that is due to the latent variable. It can be seen from Figure 3 and Table 3 that the weight of the variable component Customer Relationship Management is between 0.781 and 0.882. The weight of the variable component Service Quality is between 0.697 and 0.873. The weight of the variable component Customer Retention is between 0.719- 0.935. According to Dillon and Goldstein (1984), a variance extracted (AVE) of greater than 0.50 indicates that the validity of both the construct and the individual variables is high. Composite reliability (CR) is a measure of the overall reliability of a collection of heterogeneous but similar items which is a construct of the latent variable. Additionally CR is a measure of scale reliability that assesses the internal consistency of a measure (Fornell and Larcker, 1981). Since each component is between 0.648 to 0.688 (which is greater than 0.5), it is a reasonable value considering the CR (Composite reliability) of each component is found to be between 0.823 to 0.901. It was also found that the CR value is higher than 0.60 while R2 was between 0.646- 0.841. Lauro and Vinzi (2004) indicared that R2 values should be greater than 0.20 which indicates that the measurement is valid. [radical]AVE In the column of interest is higher than the cross construct correlation all the values in the same column indicate that the measure has construct validity which is classified in the AVE of being higher than 0.50. All measurements are shown in Table 4 below which shows the discriminative validity and reliability. Confirmatory Factor Analysis (CFA) was employed to understand shared variance of the measured variables that are believed to be attributable to the factors or latent constructs. AMOS v.21 was used to perform for the Structural Equation Modeling (SEM) to perform the confirmatory factor analysis. In the context of SEM nomenclature, the CFA was called 'the measurement model', while the relations between the latent variables are called 'the structural model' to test the 3 hypotheses shown in Figure 2 and the final model shown in Figure 3. Analysis of the overall goodness of-fit (GFI) indices of the Confirmatory Factor Analysis (CFA) measurement model indicates a satisfactory fit with Chi-square per degree of freedom (2/degree of freedom)=1.318, GFI =0.972, NFI =0.982, CFI =0.996 and RMSEA = 0.033 which are all considered excellent and significantly above the acceptable thresholds suggested by Hair et al. (2010) and PrasithRathsint et al. (2008).Figure 3 shows the final model and the details on the estimation of the model parameters, while Table 5 shows the results of hypotheses testing of the direct, indirect and total effects. Research found that Customer Relationship Management had a direct and positive influence on Service Quality =0.917, p