Factors influencing guests’ loyalty behaviour a case study of selected hotels


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Factors influencing guests’ loyalty behaviour a case study of selected hotels

  1. 1. International Journal of Management (IJM), OF 0976 – 6502(Print), ISSN 0976 – INTERNATIONAL JOURNAL (2013)MANAGEMENT (IJM) ISSN 6510(Online), Volume 4, Issue 2, March- AprilISSN 0976-6502 (Print)ISSN 0976-6510 (Online)Volume 4, Issue 2, March- April (2013), pp. 132-137 IJM© IAEME: www.iaeme.com/ijm.aspJournal Impact Factor (2013): 6.9071 (Calculated by GISI) ©IAEMEwww.jifactor.com FACTORS INFLUENCING GUESTS’ LOYALTY BEHAVIOUR: A CASE STUDY OF SELECTED HOTELS Dr. Sanjeev Kumar, Dr. Sandeep Malik Assistant Professors Institute of Hotel & Tourism Management Maharshi Dayanand University, Rohtak ABSTRACT Objective: The main objective of the present study is to recognize different factors influencing loyalty behaviour of guests in Hotel Industry. Research Design/Methodology – A structured schedule pertaining to guests’ loyalty behaviour which includes items related to satisfaction, loyalty programmes, trust and recommendations was administered to the guests visiting sampled hotels of Delhi and NCR region and responses of respondents were analysed using factor analysis. Findings – The present study shows that loyalty is dependent on various factors like satisfaction from products and services provided by the hotels, reputation & ambience, loyalty and frequent programmes provided by hotels, credibility and recognition of repeat guest. Research limitations/implications – The results of this study are based on the opinions of respondents and therefore their accuracy is open to question. Proposed utility – The study would be a helping hand to the Management of hotels to identify the important factors contributing toward the loyalty level of guests and they can adopt relevant strategies to retain their guests. Keywords: Hospitality, Customer Satisfaction, Loyalty. INTRODUCTION Hospitality and Tourism Industry is one of the largest and fastest growing industries in the world. As per World Tourism Organization, it accounts for 10.2 per cent of world GDP and employs around 7.8 percent of global workforce (Walker, 2009). Being the largest service sector, Indian Tourism and Hospitality Industry contributes around 6.23 percent to the national GDP and 8.78 per cent of the total employment in the country. According to the 132
  2. 2. International Journal of Management (IJM), ISSN 0976 – 6502(Print), ISSN 0976 –6510(Online), Volume 4, Issue 2, March- April (2013)Market Research Division of the Ministry of Tourism, in tourism and hospitality industry ahealthy growth trend of 24.6 per cent during 2009-2010 was experienced as compared to2008-2009. The total number of foreign tourist arrival was 5.58 million in the country in2010 as compared to 5.17 million in 2009, showing a rise of 8.1 per cent.In the era of competition it is not easy to sell the products and services as consumers areoffered with a variety of choices and information. The condition is more complicated in caseof Hospitality Industry because of the characteristics like intangibility, inseparability andheterogeneity and therefore, strategies like cost cutting is now become obsolete. In thepresent scenario companies are paying more attention toward satisfying their customers andcreating a positive corporate image in their mind. But customer satisfaction and corporateimage alone cannot serve the purpose and unless old customers are retained in theorganization rather than attracting new one. From the available review it is clear that loyaltynot only leads to profitability but also cover the losses due to less loyal customer.REVIEW OF LITERATURE Researchers have touched various dimensions of this very important aspect over theyears. A brief review of some of them is used here to strengthen the construct of study.Prus and Brandt (1995) suggest that customer loyalty is reflected by a combination of attitudesand behaviours. Attitudes include intention to buy again, willingness to recommend thesupplier, and a resistance to switch to a competitor. Customer behaviour includes repeatpurchasing, purchasing of more and different products or services from the supplier, andrecommending the supplier to others. Bloemer and Kasper (1995) tested the complex relationship of consumer satisfactionand brand loyalty and found that the positive impact of manifest satisfaction on true brandloyalty is greater than the positive impact of latent satisfaction on true brand loyalty.Backman and Crompton (1991) differentiated between high, spurious, latent, and low loyaltyparticipants in two leisure activities and proposed a 4-category typology of loyalty based onrespondents’ score on the attitude and behaviour dimensions: low, latent, spurious, and highloyalty. Further in their study of usefulness of selected variables for predicting activity loyaltythey conceptualised psychological attachment and behavioural consistency as two dimensionsof loyalty. Zeithaml, Berry and Parasuraman (1996) state that recent research offers someevidence that service quality and customer satisfaction positively affect the customersbehaviour. Customers, who have no service problem, have the strongest levels of loyaltyintentions. Nevertheless, their intentions to pay more are not significantly higher thancustomers who are experiencing service problems that are solved satisfactorily. Therefore,companies willing to improve services, particularly beyond the desired service-level, shoulddo so in a cost-effective manner. Dekimpe, Steenkamp, Mellens and Abeele (1997) while studying decline andvariability in brand loyalty brought into being that modest support is found for the often-heardargument that brand loyalty is gradually declining over time. They further elaborated that theshort-run variability around a brand’s mean loyalty level is significant, has systematicallyincreased over time; and it can be reduced considerably through a simple smoothingprocedure and the brand-loyalty pattern for market share leaders is found to be more stablethan for other brands. 133
  3. 3. International Journal of Management (IJM), ISSN 0976 – 6502(Print), ISSN 0976 –6510(Online), Volume 4, Issue 2, March- April (2013) Researchers, while, defining the loyalty emphasized on the aspect of friendship andsense of belongingness with a particular organization. Global Loyalty Agency defined loyalty as the sum total of feelings and experienceswhich make a customer consider buying a particular product, service, or brand again, ordecide to visit a particular firm, shop, or website once more. Jacoby (1971) proposed that brand loyalty is the tendency to prefer and purchase moreof one brand than of others. Brand loyalty is often defined as the proportion or percentage ofpurchases devoted to any one brand in a product class or as the number of different brandspurchased during a given period of time or the sequences and frequency of such purchases.But at the same time customers may be loyal to several brands. Jacoby and Chestnut (1978) described brand loyalty as 1) the biased, 2) behavioralresponse, 3) expressed over time, 4) by some decision making unit, 5) with respect to one ormore alternative brands out of a set of such brands, and 6) is a function of psychologicalprocesses Jones and Sasser, (1995) defined it as ‘a feeling of bond, attachment to a firm, orcertain affection to people working there or products and/or services offered’. Gould (1995) depicted that a loyal customer is a person who recommends thecompany to others and acts as a ‘free advocate’ of the firm. Oliver (1996) defines customer loyalty as a deeply held commitment to rebuy orrepatronise a preferred product or service consistently in the future, despite situationalinfluences and marketing efforts having the potential to cause switching behaviour. For Skogland and Siguaw (2004) loyalty is a deeply held commitment to re-buy orpatronize a preferred product or service consistently in the future, thereby causing repetitivesame-brand-set purchasing, despite situational influences and marketing efforts having thepotential to cause switching behaviour.OBJECTIVE OF THE STUDY The purpose of the present study is to recognize various factors influencing guests’loyalty behaviour visiting sampled hotels.RESEARCH METHODOLOGY In line with the objective of the study a structured questionnaire is prepared with thehelp of available review of literature and discussion with experts from industry. A total of 20items were selected initially but two items were completely deleted using Delphi technique.Finally questionnaire with 18 items was prepared. The data was collected on 5 point Likerttype scale where ‘1’’ denotes strongly disagree and ‘5’ as strongly agree. As far as universeof the population is concerned all the hotels of Delhi and NCR region are included but forsample only 5 star and 5 star deluxe hotels are taken.ANALYSIS AND DISCUSSION Factor analysis is performed on the data collected. A good value of KMO (Table: 1)signifies that data is fit for performing factor analysis and all 18 items pertaining to thefactors having loading greater than 0.5 134
  4. 4. International Journal of Management (IJM), ISSN 0976 – 6502(Print), ISSN 0976 –6510(Online), Volume 4, Issue 2, March- April (2013) TABLE: 1 GOODNESS OF FIT TEST FOR FACTOR ANALYSIS OF LOYALTY KMO and Bartletts TestKaiser-Meyer-Olkin Measure of Sampling Adequacy. 0.787Bartletts Test of Sphericity Approx. Chi-Square 4825.422 Df 153 Sig. 0.000Factor 1: First factor is associated with Satisfaction level, word of mouth recommendationand similarity between hotel’s and guests’ values. It contains five items out of which first andfourth items are related with the satisfaction received from products and services offered byhotel and happiness of guests whereas second and third items are showing the effectivenessof staff in meeting expectations and their dedication. The last item is indicating toward thesimilarity between hotel’s and guests’ expectations. The factor is contributing eigen value of4.671 and variance percent of 25.950.Factor 2: Representing 16.643 per cent of variance and with an eigen value of 2.966, itemswhich are part of the second factor are reputation and ambience of the hotel, complainthandling strategies adopted, Price charged and mails and messages sent by hotels to guests ondifferent occasions. TABLE: 2 IMPORTANT DIMENSIONS OF LOYALTY Factor Loadings 1 2 3 4 5 Factor 1: Satisfaction, Recommendation and Staff effectiveness Satisfaction from products and services provided by 0.946 hotelEffectiveness in meeting expectations 0.943Word of mouth recommendations 0.939Dedication of the hotel staff 0.872 Happiness with the hotel 0.689Similarity between hotel and guests’ values 0.640 Factor 2: Reputation and price charged Reputation of the hotel 0.815 Complaint handling strategies of hotel 0.715 Price charged by the hotel 0.711 Mails by hotel on different occasions 0.710 Ambience of the hotel 0.622 Factor 3: Loyalty Programmes and after departure services Hotel Provides loyalty programme for frequent 0.713 guests After departure services of the hotel 0.699 Up gradation facilities provided 0.590 Factor 4: Credibility of the HotelCredibility of the hotel 0.742Promises kept by the hotel -0.669 Factor 5: Guest History Recognition by hotel on repeat visit of guests 0.802 Information of new schemes to past guests 0.539 Variance Percent 25.950 16.643 10.136 9.655 7.584 Eigen Value 4.671 2.966 1.824 1.738 1.365 135
  5. 5. International Journal of Management (IJM), ISSN 0976 – 6502(Print), ISSN 0976 –6510(Online), Volume 4, Issue 2, March- April (2013)Factor 3: The third important factor is about loyalty programmes and after sales servicesprovided by the hotel. The items included in this factor are ‘Loyalty programmes for frequentguests’, ‘after departure services of the hotel’ and up gradation facilities provided by thehotel. This factor is explaining 10.136 per cent of variable and having an eigen value of1.824.Factor 4: With an eigen value of 1.738 the factor is having two items ‘credibility of thehotel’ and ‘Promises kept by the hotel’. The said factor is explaining 9.655 per cent ofvariance.Factor 5: The last and final factor is linked with maintaining guest history and the items likerecognition of guests by hotel on his/her repeat visit and information provided to guests aboutnew schemes and offers introduced by hotel. The Eigen value is 1.365 and factor isexplaining 7.584 per cent of variance.CONCLUSION The Hotel Industry in particular has in recent years become more interested indeveloping loyal guests mainly because loyal guests are less likely to switch on to other hotelsthat leads to his repeat visits. Besides this loyal guests offer a strong word of mouth, make abusiness referrals and publicity which ensures sustainability of the organization andaccomplishment of its objectives. Earlier researches have too reflected that study on guestsloyalty has become very decisive in today’s competitive marketing situation. Therefore, theresearcher tried to examine the various factor affecting this very important issue i.e. loyalty. Itwas observed that customer satisfaction is a precedent of loyalty and also word of mouthcommunication and recommendation is also important in this regard. Further it was depictedthat loyalty programmes, after departure services and recognition of guests on their repeatvisit also play a very critical role in developing loyalty toward the organization. Though thestudy has its limitation regarding sample and universe size but it can help the management ofthe hotels to find out the new ways to satisfy their guests and converting them to their loyalones. It also will provide new directions to the future researchers to take up this importantissue in various dimensions.REFERENCES1. Backman, S. J., and J. L. Crompton (1991). "Differentiating between High, Spurious,Latent, and Low Loyalty Participants in Two Leisure Activities." Journal of Park andRecreation Administration, 9 (2): 1-17.2. Bloemer, J. M. M., and H. D. P. Kasper (1995). "The Complex Relationship betweenConsumer Satisfaction and Brand Loyalty” Journal of Economic Psychology, 16 (2): 311-29.3. Dekimpe, M. G., J.-B. E. M. Steenkamp, M. Mellens, and P. V. Abeele (1997). "Declineand Variability in Brand Loyalty." International Journal of Research in Marketing, 14(5): 405-20.4. Gould, G. (1995). Why it is customer loyalty that counts (and how to measure it).Managing Service Quality, 7(4), 4-26.5. Jacoby, J. (1971). "A Model of Multi-Brand Loyalty." Journal of Advertising Research,11(June): 25-31.6. Jacoby, J., and R. Chestnut (1978). Brand Loyalty Measurement and Management. NewYork: Wiley. 136
  6. 6. International Journal of Management (IJM), ISSN 0976 – 6502(Print), ISSN 0976 –6510(Online), Volume 4, Issue 2, March- April (2013)7. Oliver, Richard L. (1996), "Satisfaction: a behavioral perspective on the consumer",Irwin/McGraw- Hill, Boston, Massachusetts, USA.8. Prus, Amanda and Brandt, D. Randall. (1995), "Understanding your customers", AmericanDemographics, Jul, 1995, 10-13.9. Skogland, I. and Siguaw, J. (2004). Understanding switchers and stayers in the lodgingindustry. Cornell University Center for Hospitality Research Report.10. T. O. Jones and W.E. Sasser, Jr.,“Whysatisfied customers defect,” Harvard BusinessReview, vol.73, pp. 88–99, Nov./Dec. 1995.11. Walker, R.J. (2009), “Introduction to Hospitality, 5/E, Printice Hall Publication.12. Zeithaml, Valarie A., Berry, Leonard L. and Parasuraman, A. (1996), "The BehavioralConsequences of Service Quality", Journal of Marketing, Apr, 1996, Vol. 60, Iss. 2, 31-46.13. Parul Gupta and R.K. Srivastava, “Analysis of Customer Satisfaction in Hotel ServiceQuality Using Analytic Hierarchy Process (AHP)” International Journal of IndustrialEngineering Research and Development (IJIERD), Volume 2, Issue 1, 2011, pp. 59 - 68,ISSN Online: 0976 - 6979, ISSN Print: 0976 – 6987.14. TR.Kalai Lakshmi and Dr. SS Rau, “Creation of Loyal Customers With RelationshipMarketing”, International Journal of Management (IJM), Volume 2, Issue 2, 2011,pp. 44 - 50, ISSN Print: 0976-6502, ISSN Online: 0976-6510 137