Sarah Tanford

The Influence of Reward Program Membership and Commitment on Hotel Loyalty

This research evaluated the role of reward membership and commitment on switching costs, defined as the price at which consumers would switch to a nonpreferred hotel brand. Online survey respondents were classified by reward tier and two types of commitment: value (reward program benefits) and affective (emotional attachment to brand). The results showed that all reward program members exhibit value commitment but upper tier members are more likely to develop an emotional bond. Participants rated likelihood to switch in response to 20 pricing scenarios that varied base price for the preferred brand and discount for a nonpreferred brand. Value commitment was associated with greater price sensitivity, whereas affective commitment produced less differentiation between prices and discounts. Findings indicate that value commitment and lower tier membership are associated with a utilitarian perspective, whereas high-tier members or those with high affective commitment value intangible benefits and are less susceptible to discounting by competitors.

Travel Packaging on the Internet: : The Impact of Pricing Information and Perceived Value on Consumer Choice

Packaging travel products on the Internet is increasing in prevalence, yet limited research exists on how consumers evaluate and purchase vacation packages online. Research on product bundling is plentiful but has been conducted primarily in non-Internet purchase settings. The current research seeks to fill the void in both areas by investigating consumer choices of Internet vacation packages. In this study, an online panel of research subjects chose between 12 pairs of Las Vegas vacation packages that varied as a function of rate transparency, savings, and price. The findings suggest that transparent pricing, that is, itemization of individual package components and discounts, is preferred if it reduces uncertainty or simplifies the decision process. Nontransparent pricing is more effective if savings are not shown or the price is higher than the alternative, in which case the itemized components complicate the decision process without providing useful information.

Evaluating Loyalty Constructs Among Hotel Reward Program Members Using eWOM

Electronic word-of-mouth has become a driving force for hospitality businesses. Achieving customer loyalty is a primary goal of hospitality businesses, and reward programs are one mechanism for doing so. Customer-based communication channels have the potential to undermine or support these efforts. This study investigated attitudes toward hotel loyalty programs among members of flyertalk.com, a forum for frequent travelers. A content analysis of 1,519 comments from members of five major hotel programs was conducted. The core categories that emerged were program experience, value, process, obtaining status, company-created communication, customer-created communication, and defection motivators and inhibitors. A paradigm model indicated that communication is the most important loyalty antecedent, and that all antecedents influence loyalty via the program experience. The emergent relationships suggest that managers should actively monitor online channels and take action to correct issues that cause member frustration and dissatisfaction. Otherwise, these problems can escalate through the rapid spread of electronic word-of-mouth.

Factors that Influence Attendance, Satisfaction, and Loyalty for Conventions

Convention loyalty was investigated in a survey of attendees at a major international convention. Five factors influenced both attendance and satisfaction: program, networking, external activities, location, and cost. Satisfaction exceeded motivation for destination-related attributes and matched motivation for program-related attributes. Behavioral loyalty was assessed with positive and negative indicators. Loyalty antecedents, namely emotional commitment and switching costs, were also rated. Emotional commitment was the strongest predictor of loyalty. Program satisfaction was a key determinant of intentions to return in the future or switch to a different convention. The findings have implications for meeting planners, associations, host properties, and event marketers.

Casino Loyalty: The Influence of Loyalty Program, Switching Costs, and Trust:

Customer loyalty has become a strategic goal to increase brand value and profitability. This study develops and tests a model of loyalty to understand the relative effects of loyalty program benefits (as positive barriers) and switching costs (as negative barriers) on emotional commitment and loyalty behaviors in the casino context. The findings showed that trust, perceived switching cost, and emotional commitment to the casino are more likely to influence relational or emotional outcomes such as word of mouth and voluntary partnership whereas the loyalty program is more likely to influence transactional outcomes such as repeat visitation and time spent in the casino. The emotional commitment served as a partial mediator in the model. The study has theoretical implications for understanding the loyalty process and practical implications for improving loyalty program effectiveness.

Price transparency of bundled vacation packages.

This research evaluated how rate transparency, component bundling, price, and savings of vacation packages influence online purchase decisions. Subjects chose between 12 pairs of Cancun vacation packages, one transparent (individual component pricing displayed) and one opaque (total package price only). The price and savings of the packages were systematically varied in a within-subjects design using a simulated online booking questionnaire. Price was the strongest determinant of choice, but transparent pricing increased favorable impressions of fairness and value. Transparent pricing was most effective when the pricing was different from an opaque alternative, enhancing the impact of a lower price and mitigating the impact of a higher price. There appears to be minimal benefit to transparent pricing if it is the same as an opaque alternative, and it can be detrimental if the savings is not revealed. Online travel providers can use the results to enhance their pricing strategies through the display of information.

Antecedents and Outcomes of Hospitality Loyalty A Meta-Analysis

Customer loyalty is vital for hospitality businesses. A large body of literature has accumulated on the topic, requiring integration to form generalizations and to make it accessible to operators. In this research, I provide a conceptual framework for classifying indirect and direct loyalty antecedents and outcomes, and quantifying its components using meta-analysis. I analyze 102 studies that produce 423 effect sizes, which are distilled into a summary effect size for each relationship. The analysis reveals strong relationships between direct loyalty antecedents (satisfaction, emotional commitment, service quality, trust, and switching costs) and overall loyalty. However, the magnitude of effects declines significantly as the outcome moves from attitudinal loyalty to behavioral intentions to behavior. As most of our knowledge about loyalty is based on intention measures, the findings suggest that effects on actual loyalty may be smaller than the research would suggest. Indirect loyalty antecedents include experiential, monetary, and relational attributes. It appears that each of these categories affect loyalty through somewhat different processes, although they all relate to satisfaction. The meta-analysis approach allows operators to glean key findings relevant to their business from a single source. It enables researchers to answer research questions and to summarize relationships from a body of literature that cannot be tested conclusively with a single study.

Understanding the Impact of Negative and Positive Traveler Reviews: Social Influence and Price Anchoring Effects

This research utilizes theories of social influence and price anchoring to provide insights into the psychological processes underlying travel purchases in the presence of online reviews. Two experiments were conducted in which subjects chose between two resorts for a Las Vegas vacation in a 2 × 3 experimental design that manipulated social influence (unanimous, non-unanimous reviews) and price (10%, 30%, and 50% higher or lower). Social influence was in the form of negative (experiment 1) or positive (experiment 2) traveler reviews. Perceptions of quality and value as well as discount to purchase/willingness to pay were measured. Results indicate that no amount of price reduction was sufficient to offset the impact of unanimously negative reviews, although an extreme price reduction influenced decisions when negative reviews were not unanimous. Price anchoring occurred for positive reviews, such that a higher reference price increased willingness to pay.

Segmentation of reward program members to increase customer loyalty: the role of attitudes towards green hotel practices.

Many organizations use reward programs to cultivate and retain loyal customers. Most programs classify customers into tiers and provide standard benefits at each level. Customers within each tier may have different psychographic and attitudinal characteristics even though their visitation frequency is similar. This study segments hotel reward program members using a matrix approach that classifies loyalty on attitudinal and behavioral dimensions. It introduces a new psychographic dimension, attitudes towards green hotel practices, which are becoming increasingly important in industry and society. Six clusters were produced and validated. All tier levels were present within each segment, and even upper tiers contained members who lacked elements of loyalty. The findings suggest that hotel companies can enhance reward program effectiveness by using a refined segmentation process that allows them to tailor benefits to the characteristics of each segment. Companies can promote sustainable practices by identifying and rewarding those customers who engage in them.

A Model of Hotel Defection at the Purchasing Stage

Hotel operators spend millions of dollars each year to create customer loyalty. Less attention is paid to factors that cause customers to defect. In the current study, factors that influence hotel purchasing and established loyalty-related constructs were integrated into two models of hotel defection, one for full-service brand guests and one for limited-service brand guests. For full-service hotels, the decision to defect or not is driven by affective, or emotional, commitment, as well as switching costs, which are defined as the amount of discount that an otherwise loyal customer would require to switch to a competing brand. Hotel selection factors influence defection primarily through their impact on affective commitment. For limited-service guests, value considerations play a central role. Reward program membership and hotel selection factors influence defection through commitment, based on reward program benefits. The findings emphasize the importance of tailoring hotel features and reward program benefits to the needs of target customer segments.