Travel Reference
In-Depth Information
J. Anuar
Faculty of Hotel and Tourism Management, Universiti Teknologi MARA, Terengganu, Malaysia
N. Sumarjan & S.M. Radzi
Faculty of Hotel and Tourism Management, Universiti Teknologi MARA, Shah Alam, Malaysia
ABSTRACT: This study explores the challenges encountered in administering loyalty programs from
hotel manager's perspectives. The main aim is to differentiate and analyze the taxonomical challenges
encountered. In-depth interviews with six city hotel managers, either Front Office or Marketing depart-
ment that have loyalty programs were conducted. The interview sessions were recorded using audio visual
tapes. The transcripts were then analyzed, coded and summarized into categories. Challenges were then
discussed and suggestions were provided. Findings were then structurally compared. Three levels of chal-
lenges taxonomy are developed: core challenges, partially common challenges and individual challenges.
Findings revealed that these six city hotels shared the same six core challenges namely administering costs
of loyalty programs, maintaining, updating and upgrading databases, unattractive reward value, sameness
of the rewards by competitors, difficulty to claim reward as well as employee customer knowledge. Find-
ings also revealed that all the participating city hotels encountered three partially common challenges and
individual challenges. Future research may focus on guest perceptions of challenges that they encountered
with their loyalty program membership. This study furnishes hoteliers with competitor analysis which is
helpful and can be a reference for hoteliers in enhancing their loyalty programs.
Keywords
:
Challenges, city hotels, hotel managers, loyalty programs, taxonomy
1 INTRODUCTION
Studies also argued on the negative impacts of
the program. Researchers' demanded that 'loyalty
programs do not create loyalty' (Bellizzi & Bristol,
2004; De Wulf, Odekerken-Schroder & Iacobucci,
2001; Reinartz, 2010). These mixed findings had
hindered the proper evaluation of the loyalty pro-
grams and suggest a need to understand the pro-
grams better, especially from hoteliers' point of
views. This study outlined the challenges faced
by hotel operators in administering their loyalty
programs. Challenges can be regarded as opportu-
nities given the innovative measures taken by hotel-
iers in addressing the issues. At present, unknown
empirical study has been conducted on challenges
of loyalty programs comprehensively in Malaysian
hotel scenario. This study is unique as it guides
hoteliers to refine and execute an advance loyalty
programs as well as inspire future research. Addi-
tionally, Kumar et al (2012) highlighted that there
are only few studies that emphasize on the success
or failure of specific loyalty program due to organ-
izations are likely to admit of their poor perform-
ance. The remainder of this study is constructed
as follows. Section two furnishes the drawbacks of
Loyalty program research has dominated the hos-
pitality realm since its introductory chapters in the
1980s. To date, many huge industry sectors such
as rental car companies, cruise lines, spa resorts
and hotel chains adopted loyalty programs (Xie
& Chen, 2013). Probably, interest in loyalty pro-
grams that exploded among many organizations
are built mainly on the reason that it is cheaper
to market to existing customers than to acquire
new ones (Kumar & Reinartz, 2012). Research-
ers give credence to loyalty programs in enhancing
positive behavioral intentions of repeat purchases
(Meyer-Waarden, 2008), transmitting customers'
share of wallet (Wirt, Mattila & Lwin, 2007) as
well as strengthening the customers-service provid-
ers bonding (Mattila, 2006). Many hotels' loyalty
programs promoted themselves as a passport to
excellent value, affordable accommodation, dining,
entertainment and other great benefits. However,
some advocators claimed that loyalty programs do
not perform much (Kim, Lee, Bu & Lee, 2009) and
their profitability is uncertain (Wansink, 2003).
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