The Impact of Physical Environment on Customer Loyalty in Upscale Restaurants in Turkey

Abstract

This study investigates how physical environmental factors impact customer satisfaction and loyalty in upscale restaurants, employing partial least squares structural equation modeling (PLS-SEM) to overcome typical constraints of small and medium samples. PLS-SEM’s capacity to handle complex mediation and multiple latent variables strengthens the robustness of the findings. Data collected from fine-dining venues in culturally rich regions of southeastern Turkey indicate that elements such as aesthetics, ambiance, and service staff quality play significant roles in shaping customer satisfaction, which in turn strongly influences loyalty. Some environmental factors, including table setting and lighting, showed limited direct effects but still contributed indirectly through satisfaction. The interplay between physical environment and human interaction highlights a comprehensive approach to enhancing customer experience. While providing meaningful insights, the study’s focus on specific regional and cultural context limits generalizability, highlighting the need for broader research across different hospitality sectors and geographic areas. Nonetheless, the findings enhance the theoretical framework by confirming the mediating role of satisfaction within the DINESCAPE model and offer practical implications for hospitality managers aiming to foster customer retention through strategic environmental design. © 2025 Elsevier B.V., All rights reserved.