Development of Loyalty Programmes in the Hotel Industry

Abstract

Purpose – In the very beginning when loyalty programs were being developed, hoteliers were mostly involved as partners of airline companies. However, once they realized the obvious numerous advantages that airlines were gaining, hoteliers began to design their own loyalty programs. The idea of a loyalty program is to strike a balance between what guests want and what is offered to them as a reward, and to find other program partners whose services guests will also use. This paper will look at the basic tenets of loyalty programs in the hotel industry, the methods of keeping records about guests, and the necessity of creating, structuring and managing guest databases.

Design – Four main areas are discussed, namely: loyalty program, loyalty cards, guest database, and value for guest. The structure of the paper follows this classification.

Approach and methodology – The paper is theoretical; it provides review of previous research and gives novel insights into hotel loyalty program. Various kinds of loyalty programs are analyzed with emphasis placed on loyalty programs that have emerged based on the differentiation of guests with regard to price policies. This approach is regarded as a considerable contribution to further research into loyalty programs in the hotel industry.

Research findings and originality – While being a major precondition to guest loyalty towards a hospitality facility, guest satisfaction is not the only factor involved. Varying degrees of satisfaction and differing reactions to a specific service create discrepancies between less or more loyal guests regarding the same service or product. Research in this paper focuses on guest loyalty in the hotel industry, that is, on a long-term relationship based on loyalty and trust between a hotel and its guests. The paper’s basic hypothesis is accepted: Well-organized hotel loyalty programs can help to create an improved approach to guests, from which will result a higher level of satisfaction with services rendered.

Keywords: hotel industry, service quality, loyalty programme, guest satisfaction

JEL Classification: L83