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loyalty programs from both management as well
as member's perspectives. Section three denotes the
methodology followed by findings and discussion
in section four. Finally, Section 5 indicates conclu-
sion as well as future research. Thus, this study
explores the challenges encountered in adminis-
tering loyalty programs from hotel manager's per-
spectives. The main objective is to differentiate and
analyze the taxonomical challenges encountered.
vider. Thus, trying to be unique among competi-
tors probably can entice member's participation
and behavior to stay loyal. Hoteliers believed that
by providing the best and valuable benefits can
managed to drive customer's loyalty through their
loyalty programs (Shanshan, Wilco & Eric, 2011).
3 METHODOLOGY
This study used in-depth interviews with six hotel
managers to investigate the challenges encountered
in administering loyalty programs. Six loyalty pro-
grams in Malaysian city hotels were deliberated
comprising of Hotel A, B, C, D, E and F. The hotel's
names were not revealed for anonymity purposes.
Managers uttered their solicitude expressions in
revealing themselves as they are exposed to hidden
competitive advantage. The characteristics of all
hotels were as follows: located in Kuala Lumpur
area, five-star rated hotels and listed among the 45
city/business hotels associated and registered with
Malaysian Association of Hotels (MAH, 2012).
MAH member list (www.hotels.org.my, accessed in
October 2012) exhibits 14 out of 45 five-star rated
hotels that adopted loyalty programs. Researchers
invited all respondents through e-mails and phone
calls to take part in this study. Interview appoint-
ments were organized for those who responded
to the invitation and conformed to involve in this
study. Eight hotels declined to take part owing to
high occupancy, clashed with staffs training and
cluttered with events scheduled at their hotels.
One-on-one in-depth interviews were chosen
for this study attributable to richer data could be
gathered though it's more time consuming, costly
and labor intensive (Creswell, 2008). Purposive
sampling was utilized for participants' selection.
Front office or marketing department managers
were preferred due to their in-depth knowledge in
handling loyalty programs at their hotel. Moreo-
ver, most hotels appointed these two departments
in taking care of all administrative logistics posses-
sion to the programs. The interviewees' character-
istics for each hotel are exhibited in Table 1.
2 LITERATURE REVIEWS
2.1
Drawbacks of loyalty programs from
management perspectives
Issues on minimizing the undesirable features of
loyalty programs have been the prime interest of
loyalty program research in hotel industry. Com-
prehensive reviews of loyalty program studies indi-
cated that the conspicuous drawbacks of loyalty
programs evolved from management and members'
perspectives. Studies related to costs of managing
loyalty programs can be found in Berman (2006)
and Wansink (2003) work. Moreover, study by Xie
et al (2013) postulated that start-up cost for hotels
to acquire new members is higher considering cur-
rent intense competitive ambience. Thus, a long-
term commitment and dedication from hoteliers
are needed once customers join loyalty programs.
Members' redeemed points should be regarded as
hotelier's reliability (Berman, 2006).
2.2
Drawbacks of loyalty programs from
members perspectives
Loyalty Program offers both economic and non-
economic benefits to customers (Bridson, Evans &
Hickman, 2008), however on the other hand several
negative perceptions were induced by members on
loyalty programs. It includes member frustration,
erosion of market saturation and member com-
mitment (Xie
et al
, 2013). Additionally, though
many researchers have demonstrated that loyalty
programs provide incentives and reward to its
members as part of a marketing strategy (Omar,
Abd Aziz & Nazri, 2011; Leenheer, Van Heerde,
Bijmolt & Smidth, 2007), Stauss, Schimidt and
Schoeler (2005) displayed members' frustrations
as struggling to redeem programs rewards and
required extensive emotional and material cost to
attain benefits. Furthermore, Lacey and Sneath
(2006) claimed that revealing members' personal
information for loyalty programs might expose
members to the probability of personal risk. More-
over, Rowley (2004) highlighted that it's impossible
for loyalty programs to lead members purchasing
cycles toward commitments to single service pro-
Table 1.
The interviewees' characteristics.
Hotel
Position
Gender
A
Front Office Manager
Male
B
Front Office Manager
Female
C
Front Office Assistant Manager
Female
D
Marketing Assistant Manager
Male
E
Marketing Assistant Manager
Female
F
Front Office Assistant Manager
Female
*Self compiled by researchers.
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