Abstract. In the competitive coffee industry, coffee shops serve as social hubs and places for relaxation and productivity. Therefore, understanding the dynamics of service quality and customer satisfaction is crucial for operators who want to succeed in this bustling market. This research used descriptive-correlational design to elicit information from the customers visiting the selected coffee shops in Dumaguete City. A total of 120 respondents were customers, which comprised the sample size of this research. The findings reveal that customers perceive the service quality of coffee shops in Dumaguete City positively across various dimensions, including tangibility, reliability, responsiveness, assurance, and empathy. These dimensions contribute significantly to customer satisfaction and loyalty. The analysis of p-values shows a significant relationship between customer perceptions and service quality, highlighting the importance of mutual understanding and communication. The overall positive perception underscores the need for coffee shop owners and managers to understand customer needs and preferences and implement strategies to enhance service quality and loyalty. The research indicates that continuous assessment and improvement of service quality are crucial for sustaining customer satisfaction and fostering long-term loyalty in the competitive coffee shop industry.

Keywords: Coffee industry; Service quality; Customer satisfaction; Dumaguete City.