A little bit more value creation and a lot of less value destruction! Exploring service recovery paradox in value context: A study in travel industry

Abstract Service failure recovery, recovery strategies, and service recovery paradox have always been among the most controversial discussions of services marketing especially in travel and leisure researches. Although value creation is proved as an effective factor in service recovery, it is widely neglected on service recovery paradox (SRP). Most of the previous literature only investigated the role of regular recovery strategies (e.g. compensations, apology, explanation, etc.) in the service failure recovery and service paradox, and some others also engaged the value creation in this process as complementary option. This study attempts to suggest a novel approach for the concept of service failure recovery using a look to the past. Two experiment and field experiment studies were performed to examine the role of value creation, value destruction, and compensations in failure recovery and service failure paradox occurrence. The results indicate that while recovery per se doesn't cause service paradox, utilizing value creation leads to this phenomenon. In addition, results reveals destructive impact of value destruction on recovery strategies so that it counteract regular recovery strategy's effect in some cases. Managerial implications and discussion on results are also presented in the last section of the study.