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 Powered By Docstoc
					                                                ISSN
  International Journal of Management (IJM), OF 0976 – 6502(Print), ISSN 0976 –
 INTERNATIONAL JOURNAL (2013)MANAGEMENT (IJM)
  6510(Online), Volume 4, Issue 2, March- April

ISSN 0976-6502 (Print)
ISSN 0976-6510 (Online)
Volume 4, Issue 2, March- April (2013), pp. 132-137
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      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
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6510(Online), Volume 4, Issue 2, March- April (2013)

Market Research Division of the Ministry of Tourism, in tourism and hospitality industry a
healthy growth trend of 24.6 per cent during 2009-2010 was experienced as compared to
2008-2009. The total number of foreign tourist arrival was 5.58 million in the country in
2010 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 are
offered with a variety of choices and information. The condition is more complicated in case
of Hospitality Industry because of the characteristics like intangibility, inseparability and
heterogeneity and therefore, strategies like cost cutting is now become obsolete. In the
present scenario companies are paying more attention toward satisfying their customers and
creating a positive corporate image in their mind. But customer satisfaction and corporate
image alone cannot serve the purpose and unless old customers are retained in the
organization rather than attracting new one. From the available review it is clear that loyalty
not 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 the
years. 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 attitudes
and behaviours. Attitudes include intention to buy again, willingness to recommend the
supplier, and a resistance to switch to a competitor. Customer behaviour includes repeat
purchasing, purchasing of more and different products or services from the supplier, and
recommending the supplier to others.
        Bloemer and Kasper (1995) tested the complex relationship of consumer satisfaction
and brand loyalty and found that the positive impact of manifest satisfaction on true brand
loyalty is greater than the positive impact of latent satisfaction on true brand loyalty.
Backman and Crompton (1991) differentiated between high, spurious, latent, and low loyalty
participants in two leisure activities and proposed a 4-category typology of loyalty based on
respondents’ score on the attitude and behaviour dimensions: low, latent, spurious, and high
loyalty. Further in their study of usefulness of selected variables for predicting activity loyalty
they conceptualised psychological attachment and behavioural consistency as two dimensions
of loyalty.
        Zeithaml, Berry and Parasuraman (1996) state that recent research offers some
evidence that service quality and customer satisfaction positively affect the customer's
behaviour. Customers, who have no service problem, have the strongest levels of loyalty
intentions. Nevertheless, their intentions to pay more are not significantly higher than
customers who are experiencing service problems that are solved satisfactorily. Therefore,
companies willing to improve services, particularly beyond the desired service-level, should
do so in a cost-effective manner.
        Dekimpe, Steenkamp, Mellens and Abeele (1997) while studying decline and
variability in brand loyalty brought into being that modest support is found for the often-heard
argument that brand loyalty is gradually declining over time. They further elaborated that the
short-run variability around a brand’s mean loyalty level is significant, has systematically
increased over time; and it can be reduced considerably through a simple smoothing
procedure and the brand-loyalty pattern for market share leaders is found to be more stable
than for other brands.



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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 and
sense of belongingness with a particular organization.
        Global Loyalty Agency defined loyalty as the sum total of feelings and experiences
which make a customer consider buying a particular product, service, or brand again, or
decide to visit a particular firm, shop, or website once more.
        Jacoby (1971) proposed that brand loyalty is the tendency to prefer and purchase more
of one brand than of others. Brand loyalty is often defined as the proportion or percentage of
purchases devoted to any one brand in a product class or as the number of different brands
purchased 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) behavioral
response, 3) expressed over time, 4) by some decision making unit, 5) with respect to one or
more alternative brands out of a set of such brands, and 6) is a function of psychological
processes
        Jones and Sasser, (1995) defined it as ‘a feeling of bond, attachment to a firm, or
certain affection to people working there or products and/or services offered’.
        Gould (1995) depicted that a loyal customer is a person who recommends the
company to others and acts as a ‘free advocate’ of the firm.
        Oliver (1996) defines customer loyalty as a deeply held commitment to rebuy or
repatronise a preferred product or service consistently in the future, despite situational
influences and marketing efforts having the potential to cause switching behaviour.
        For Skogland and Siguaw (2004) loyalty is a deeply held commitment to re-buy or
patronize a preferred product or service consistently in the future, thereby causing repetitive
same-brand-set purchasing, despite situational influences and marketing efforts having the
potential 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 the
help of available review of literature and discussion with experts from industry. A total of 20
items 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 Likert
type scale where ‘1’’ denotes strongly disagree and ‘5’ as strongly agree. As far as universe
of the population is concerned all the hotels of Delhi and NCR region are included but for
sample 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 the
factors having loading greater than 0.5



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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 Bartlett's Test
Kaiser-Meyer-Olkin Measure of Sampling Adequacy.                                                  0.787
Bartlett's Test of Sphericity        Approx. Chi-Square                                        4825.422
                                     Df                                                             153
                                     Sig.                                                         0.000

Factor 1: First factor is associated with Satisfaction level, word of mouth recommendation
and similarity between hotel’s and guests’ values. It contains five items out of which first and
fourth items are related with the satisfaction received from products and services offered by
hotel and happiness of guests whereas second and third items are showing the effectiveness
of staff in meeting expectations and their dedication. The last item is indicating toward the
similarity between hotel’s and guests’ expectations. The factor is contributing eigen value of
4.671 and variance percent of 25.950.
Factor 2: Representing 16.643 per cent of variance and with an eigen value of 2.966, items
which are part of the second factor are reputation and ambience of the hotel, complaint
handling strategies adopted, Price charged and mails and messages sent by hotels to guests on
different 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
 hotel
Effectiveness in meeting expectations                     0.943
Word of mouth recommendations                             0.939
Dedication of the hotel staff                             0.872
 Happiness with the hotel                                 0.689
Similarity 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 Hotel
Credibility of the hotel                                                               0.742
Promises 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



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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 services
provided by the hotel. The items included in this factor are ‘Loyalty programmes for frequent
guests’, ‘after departure services of the hotel’ and up gradation facilities provided by the
hotel. This factor is explaining 10.136 per cent of variable and having an eigen value of
1.824.
Factor 4: With an eigen value of 1.738 the factor is having two items ‘credibility of the
hotel’ and ‘Promises kept by the hotel’. The said factor is explaining 9.655 per cent of
variance.
Factor 5: The last and final factor is linked with maintaining guest history and the items like
recognition of guests by hotel on his/her repeat visit and information provided to guests about
new schemes and offers introduced by hotel. The Eigen value is 1.365 and factor is
explaining 7.584 per cent of variance.

CONCLUSION

         The Hotel Industry in particular has in recent years become more interested in
developing loyal guests mainly because loyal guests are less likely to switch on to other hotels
that leads to his repeat visits. Besides this loyal guests offer a strong word of mouth, make a
business referrals and publicity which ensures sustainability of the organization and
accomplishment of its objectives. Earlier researches have too reflected that study on guests
loyalty has become very decisive in today’s competitive marketing situation. Therefore, the
researcher tried to examine the various factor affecting this very important issue i.e. loyalty. It
was observed that customer satisfaction is a precedent of loyalty and also word of mouth
communication and recommendation is also important in this regard. Further it was depicted
that loyalty programmes, after departure services and recognition of guests on their repeat
visit also play a very critical role in developing loyalty toward the organization. Though the
study has its limitation regarding sample and universe size but it can help the management of
the hotels to find out the new ways to satisfy their guests and converting them to their loyal
ones. It also will provide new directions to the future researchers to take up this important
issue in various dimensions.

REFERENCES

1. Backman, S. J., and J. L. Crompton (1991). "Differentiating between High, Spurious,
Latent, and Low Loyalty Participants in Two Leisure Activities." Journal of Park and
Recreation Administration, 9 (2): 1-17.
2. Bloemer, J. M. M., and H. D. P. Kasper (1995). "The Complex Relationship between
Consumer 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). "Decline
and 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. New
York: Wiley.


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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", American
Demographics, Jul, 1995, 10-13.
9. Skogland, I. and Siguaw, J. (2004). Understanding switchers and stayers in the lodging
industry. Cornell University Center for Hospitality Research Report.
10. T. O. Jones and W.E. Sasser, Jr.,“Whysatisfied customers defect,” Harvard Business
Review, 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 Behavioral
Consequences 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 Service
Quality Using Analytic Hierarchy Process (AHP)” International Journal of Industrial
Engineering 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 Relationship
Marketing”, International Journal of Management (IJM), Volume 2, Issue 2, 2011,
pp. 44 - 50, ISSN Print: 0976-6502, ISSN Online: 0976-6510




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