EFFECTIVENESS OF HOTEL LOYALTY PROGRAMS

The Effectiveness of Hotel Loyalty Programs to Retain Customers in China

Executive Summary

Most hotels in China have grown as result of well planned growth strategies such as quality service, marketing of its services and good relationship with customers. Establishing a long lasting relationship with their respective reliable customers has been due to its establishment of customer loyalty programs that are meant to provide satisfaction to all customers staying in their hotel rooms and also maintaining them. Customer loyalty programs include strategic approaches employed in attracting new customers as well as maintaining the old ones. Through this program, customers are rewarded for as they spend in the hotel.

This paper investigates the loyalty programs which are employed in attracting and maintaining customers in China. The selected sector is the hotel industry, a case of Accor's Ibis group of hotel. It examines several programs, their nature, merits and limitations to the business profitability. This paper further studies the loyalty programs employed by several hotel groups and the way in which the programs have enhanced the brands' sustainable development. The research is conducted by observation of the behavior of several customers towards the loyalty programs in attracting customers. The researcher observes customers behavior in Ibis hotels; one major hotel business in Shanghai China. This Chinese hotel study offers the researcher necessary information regarding the businesses' operations, their strategic plans for development using loyalty programs.

Through this, the researcher is able to evaluate whether employing the most appropriate loyalty programs can help get the attention of customers into the business and retain them. It also explores how to employ these programs in enhancing business sustainable development. This also enables the researcher to come up with the necessary recommendations regarding the loyalty programs the company should employ in addition to the approach it should use to make sure that these programs are of significance to the hotel group in the country. Through this research, the researcher would be able to get the necessary knowledge on the most used customer loyalty programs which customers prefer to register and use and the ones which have less significance to the company and customers as well.

Table of Contents

Executive Summary2

Chapter One: Introduction5

Background5

Significance of the Study and Research Purpose11

Chapter Two: Literature Review14

Existing Business Environment Of Upper-Upscale Hotels in US14

Satisfaction and its impact on Guest Loyalty15

Chapter Three: Methodology25

Chapter Four: Findings and Discussion30

Frequency Analysis30

Characteristics of the Respondents30

Factor Analysis32

ANOVA Analysis35

Chapter Five: Conclusion38

References44

Appendix48

Sample Survey Questions48

The Effectiveness of Hotel Loyalty Programs to Retain Customers in China

Chapter One: Introduction

Background

In recent years, the term "loyalty" has become socially understood by many people, companies, industries, and the overall economy alike. People generally perceive loyalty to be an emotional or somewhat binding connection towards a product, a service rendered, or even a live person. Companies infer "loyalty" to have a similar meaning and have developed strategic marketing and advertising efforts around creating a connection between the company and its patrons. The goal is to foster a relationship with each customer in an effort to maintain their spending with ...