loyalty program in hospitality industry

Topics: Loyalty program, Frequent-flyer program, Customer loyalty programs Pages: 9 (3131 words) Published: October 12, 2013
Introduction
In recent years, the hospitality industry in China has experienced tremendous changes with the ups and downs of the real estate industry, which also includes the expansion campaign in full swing in a field set off by the series of the world's leading high-end hotel group. For most of the world's top hotel group, the rapid growth of the Chinese market profits undoubtedly like a straw to help them flee out of financial crisis. With this background, hotels in China will face the enormous challenges with huge competition, especially the star hotels. Many hotels have to consider that how to increase the market share and attract the customers from competitors. More solution is that five stars hotels become regards as the development symbol of the cities, so many cities’ governments ignore the reality about if the environment can support the hotel with enough customer source and if there is an everlasting marketing demands about the hospitality. To win the competition, more and more hotels focus on how to attract the customers to be loyal. With the big pressure of running, the loyalty program becomes the attractive role in the operation of hotels. What is customer loyalty program? It is the practice of finding, attracting and retaining customers who regularly purchase from you and refer new clients to you, which is the definition from Lisa M. Star. (ISPA Austin 2009). Loyalty program is just an appropriate tool to attract and keep the customers to become the returned customers. In this way, customers could get more specially experience form service and the hotels could get more loyalty customers to increase the sales revenue. Great customer loyalty is the inexhaustible motive force of the hotel’s development which could bring the unexpected revenue and benefits, reduce the risk of business, enhance the reputation of brand and moreover it could bring a good benefit for employee. Otherwise, the hotels will be break down in the competition with other hotels. Thus it is necessary to research about the customer loyalty program. So the purpose of this study is to investigate what is the main factors influence the customers’ loyalty and provide the suitable ways to solve it. Modern consumer rewards programs first appeared in 1981. On May 1, 1981 American Airlines launched the first full-scale loyalty marketing program of the modern era with the A Advantage frequent flyer program (Philip, 2005). This revolutionary program was the first to reward "frequent fliers" with reward miles that could be accumulated and later redeemed for free travel. Once it launched, American Airlines’ market share rose dramatically. But good times don’t last long. Other relative companies discovered this new method before long. And each of them launched its own loyalty program separately. In this essay, I am going to talk about the working principle of customer loyalty program, factors impacting customer loyalty, procedures of setting customer loyalty program. Factors that impact customer loyalty

Customer satisfaction
Generally speaking, customer satisfaction is the fundament for effective service delivery. Customer satisfaction is the post-consumption evaluative judgment concerning a product or a service. The customers will have an expectation just before or during they get the product and service depends on their payment mainly, then they will get the performance during or after the consumption experience that is the result. If the consumption experience matches the expectations, customers will satisfied. For a long time, managers think that customer loyalty will grow up with the enhancement of customer satisfaction. However, an investigation conducted by Bain & Company showed that 65%-85% customers who were very satisfied with a product will still buy other product. For catering industry, there are about 60%-80% customers stills choose other product in this situation. It shows that customer satisfy doesn’t work on the loyalty because...
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