A Study of Hotel Brand Loyalty Programmes of Mid- Scale Hotels in London
Brand loyalty has been defined as a “series of repeated purchases of the same brand”, more often that of having a positive attitude towards a brand (Betsch and Haberstroh, 2004, p. 299). Hotel Brand Loyalty in London has been primarily characterized by points accumulation and rewards points redemption. The dissertation focused on four Mid Scale Hotels in London namely Crowne Plaza Hotel, Renaissance Hotel, Intercontinental Hotel and Holiday Inn.
In relation with this the research has conducted both the Quantitative and Qualitative tradition of research in which a survey from a 120 sample size and an interview from four hotel managers were conducted. The research sought to know the consumer perspectives with regard to hotel brand loyalty programmes and brand loyalty to four Mid Scale Hotels in London. The results then of the survey were significantly related to Mid-Scale managers’ strategy in terms of marketing their brand and conducting their hotel loyalty programmes.
Based on the survey the research revealed that majority of the individuals who stay in Mid Scale hotels are male (80%) and are married (59. 2%) and are aged 46-50 years old (30. 8%). Forty-one point seven percent of the respondents are Europeans and has a Master’s Degree (45%). Majority of the respondents stayed for business purpose (56. 7%) and 60% of them said that they have not stayed with the same hotel before. Among the 120 respondents, 60% of them said that they are going to stay with the hotel again if by any chance they returned to London or whenever necessary.
In addition, majority of the participants (69. 2%) said that they checked-in the hotel alone or with a companion. Sixty-one point seven percent of the respondents said that their stay in the hotel is not in a promotion. The quantitative results are categorized into two major parts which are Brand Loyalty and Hotel Brand Loyalty Programmes. In measuring brand loyalty, results of the study revealed that consumers are not loyal with their hotels as evident on their unfamiliarity of the hotel advertisements, websites and perceived convenience.
There are also perceived low customer satisfaction and positive recalling pf thoughts upon hearing the hotel brand. In order to know if how much do clients value the aforementioned factors in terms of choosing a hotel, the five P’s of marketing were asked in which the research found out that consumers definitely value the abovementioned characteristics wherein respective Mid Scale hotels scored low on. In relation with this, the research found out that consumers does not perceive hotel brand loyalty programmes of Mid-Scale hotels as effective as they don’t feel that its cost effective and points retrieval are easy.
In relation with this, they don’t also find the hotel brand loyalty programme as the major reason that will drive them to book and the aforementioned has no distinct characteristics that will set it apart from its counter parts. The qualitative data revealed that managers perceived that that all of their brands are unique. Although they significantly pointed out that there is indeed a strong relationship between a strong brand and a strong customer pool.
It could be significantly noted as well that though managers perceived a number of problems in their hotel brand loyalty programmes, they still perceived it to be one of the major reasons that will make a client decide to book for them. Chapter I Introduction 1. 1 Overview Hotel Brand Loyalty Programmes of Mid-Scale Hotels within the United Kingdom is something that has been accounted for the rate of customer retention and customer loyalty among hotels. This dissertation looks into four different Hotel Brand Loyalty Programmes of four Mid-Scale Hotels: Crowne Plaza Hotel, Intercontinental Hotel, Holiday Inn and Renaissance Hotel.
The study took both the Qualitative and the Quantitative Tradition of research wherein an interview was given to 120 participants and a survey was conducted to four hotel managers both aiming to provide their perception of the said programme. 1. 2 Background of the Study The competition among hotel brands has been steadily increasing through-out the years. The rate and similarity amongst hotel brand loyalty programmes have caused consumer loyalty to be oblique, hence attempts on the end of Mid-Scale hotels are paramount in order to retain and attract new customers.
It has been argued by Schrage (2007) that at present, traditional and brand advertisings among hotels are no longer that effective. The author maintained that consumers’ brand attitude with regard to flawless services no longer counts, rather the company’s performance in terms of rapidly recovering from a mistake more often that not is the major factor that wins a particular customer’s loyalty and return business. It is with this respect that Schrage (2007) argued that the demise of brand loyalty programmes often times emerged from the industry’s poor conception of consumer behavior.
There are various factors that contribute to hotel brand loyalty. On this respect, the hotel brand loyalty programmes of Mid-Scale hotels has been perceived to primarily focus on the notion of rewards points that are accumulated from a consumer’s repeat businesses. Also, promotion in terms of new facilities, amenities, technologies and other state of the art additions within hotel rooms are often boasted to attract consumers (PR Newswire, 2006). The war against prices is also one of areas that Mid-Scale hotels focus into.
The notion that the rise of e-commerce has allowed consumers to seek and compare lowest prices has further added to the attempts of hotels to invest heavily on the use of technology to attract consumers (Rogoski, 2004). However despite the theories on the relationship of hotel brand loyalty to reward points, technologies and low prices speculations are still emerging whether these practices are indeed effective or not. A number of critics claimed that perfection is not really the major determining factor of hotel brand loyalty.
It is with this respect that this research has anchored further study to the dynamics of Mid-Scale Hotel Brand Loyalty programmes and consumers’ responses. 1. 2. 1 The UK Hotel Industry The UK Hotel Industry grew by 4. 6% by 2006 and is expected to reach a total value of $30. 5 billion. In addition with this, the industry is forecasted to reach the market value if $37 billion, which is a 21. 1% increase from its current market value (Datamonitor, 2007). The most lucrative market of the industry is comprised of the domestic consumer market which is able to create total revenue of $21,405 million which is equivalent to 70.
1% of the industry’s value all over Europe. The industry is also anticipated to have a CAGR of 3. 9% for the period of 2006-2011. In 2006, the domestic business segment was able to contribute $4,775 million that is equivalent to 15. 6% of the industry’s aggregate revenues. One of the most competitive hotel organizations in the region is Hilton Hotels Corporation (HHC) which includes brands such as Hilton, Hampton Inn, Doubletree and Embassy Suites. In 2005, HHC generated revenues of $4,437 million, which is a 7% increase in 2005.
HHC has a total of 475,000 rooms of which 81% is located in the American region while UK and Ireland is responsible to 3% of its total capacity. Much of the revenues of HHC came from management, franchising and leasing fees. In addition with this, the organization considers their hotel branding as a major factor in determining its position in the international hotel industry. 1. 3 Significance of the Study The study is relevant in order to know whether Mid-Scale Hotel brand loyalty programmes have been effective in terms of retaining clients, thereby creating a sense of brand loyalty.
The results of the study is expected to significantly contribute to the vast amount of studies in terms of consumer attitude and what makes the aforementioned choose and conduct repeated business from a particular hotel. Consumer perceptions are then significantly related to the Hotel’s perception to identify if consumer wants are aligned to the marketing norms, strategies and goals of the organisation. 1. 5 Research Question Are the Hotel Brand Loyalty Programmes of Mid-Scale Hotels enough to create a loyal customer base? 1.
6 Objectives of the Study The research’s objectives are the following: 1. To know the perspective of the Hotel Industry in London. 2. To know the types of Hotel Brand Loyalty Programmes of Mid-Scale Hotels 3. To know consumers’ perspective in terms of Mid-Scale Hotels’: a. Hotel Brand Loyalty Programmes b. Brand Loyalty 4. To know Mid-Scale Hotel managers’ disposition in terms of their Hotels’: a. Brand b. Hotel Brand Loyalty Programmes. 1. 7 Structure of the Study The study starts by presenting the background of the problem in hotel brand
loyalty programmes and presents the purpose and objectives of the study. The second chapter is centered on secondary research data which aimed to present a critical perception in terms of hotel brand loyalty and the importance of brand awareness and consumer loyalty for company profitability and increased market share. The methodology section of the dissertation discusses the two traditions of research that the dissertation adopts, along with the specifics on the sampling, instrument design, reliability and validity of the chosen methods and also on how will the data be analyzed.
The results and discussion then presented the outcomes of the primary data collection through the use of tables and graphs generated by the SPSS software. Finally, the conclusions and recommendations chapter presents the major points and findings from the primary data and certain areas that are further needed to be studied, along with scholarly perceptions that would further hotel brand loyalty effectiveness.