Predictors of guest retention: Investigating the role of hotel’s corporate social responsibility activities and brand image - Theory and Practice in Hospitality and Tourism Research - page 139

Predictors of guest retention: Investigating the role of hotel's corporate
social responsibility activities and brand image

N.Z. Othman
KFCH International College, Malaysia

M.A. Hemdi
Faculty of Hotel and Tourism Management, Universiti Teknologi MARA, Shah Alam, Malaysia

ABSTRACT: The purpose of this study is to investigate the relationship between Corporate Social
Responsibility (CSR) activities, hotel brand image and guest retention. Data from 283 respondents from
twenty four five-star hotels in Kuala Lumpur were analyzed. Findings from this study showed that CSR
activities have a significant positive influence on hotel brand image and consequently influence guest to
return. Specially, CSR activities pertaining to sustainable development, environmental practices, involve-
ment in community project and community involvement in quality of life have significant positive influ-
ence towards hotel brand image and guest retention. Hotel brand image has also been found to be a
significant mediator between CSR activities and guest retention. Theoretical and practical implications of
the findings were discussed. Limitations and future research approaches were forwarded.

Keywords : Brand image, Corporate Social Responsibility (CSR), guest retention

1 INTRODUCTION 2005). Nonetheless, there were limited studies on

the effects of CSR activities in hotel setting (Boh-
danowicz & Zientara, 2008, Hemdi & Othman,
2013). Hence, the purpose of this study is to inves-
tigate whether CSR activities and brand image
have significant influence on guest retention.

Tourism industry contributes significantly towards
Malaysian economy. By 2020, Malaysia is targeting
to receive 36 million tourist arrivals accounted for
RM168 billion tourist receipts ( Economic Trans-
formation Programme Annual Report , 2011). The
developments of tourism industry in Malaysia have
increased the hotel rooms' supply. As more hotels
are built, competitions for guests become stiffer.
Thus, hotels need to be innovative and proactive in
attracting and retaining guests in order to compete
and sustain. Ability to retain loyal guest plays an
important aspect towards hotel performance and
profitability. Nadiri, Hussain, Ekiz and Erdagon
(2008) stated that guest retention occurs when the
guest continue purchasing a product or service
over an extended period of time.
Besides good services and excellent physical
facilities of the hotel, Corporate Social Respon-
sibility (CSR) activities of the hotel towards
environment and community are also important
in influencing guest retention. Previous studies
show that CSR was significant influence towards
hotel profits (Mackey, Mackey & Barney, 2007),
employee organizational commitment (Ali, Reh-
man, Ali, Yousaf & Zia, 2010), improved invest-
ment (Maigan, Ferrell & Ferrell, 2005) and good
organizational image (Cramer, Heijden & Jonker,

2 LITERATURE REVIEW

2.1 Guest retention
Guests retention is defined as the process when
customers continue to buy products and services
within a determine time period. Guest retention
occurs when a guest is loyal to a company, a brand
or a specific product or service, expressing long-
term commitment and refusing to purchase from
competitors (Narayandas, 1996). The measures of
guest retention can be assessed through repurchase
intention. Ranaweera and Prabhu (2003) defined
future behavioral intentions as the future propen-
sity of a customer to continue or to stay with the
service provider. Repurchase intention are usually
obtained from surveys of current customers assess-
ing their tendency to purchase the same brand,
same product or service from the same company.
Cronin, Brandy and Hult (2000) have treated
behavioral intentions and repurchase intention as
synonymous constructs. This is in line with many