EXAMINING THE EFFECT OF LOYALTY PROGRAMME ON CUSTOMER LOYALTY IN CHINA’S HOTEL INDUSTRY

Loyalty programmes are an important way for hotels to maintain a relationship with their guests. A large number of studies have demonstrated that this approach is conducive to customer retention, cost savings and revenue creation, and increasing customer loyalty. However, there has been limited research studying the effectiveness of loyalty programmes in building customer loyalty and their impact on customer attitudes and behaviours. As the implementation and maintenance of a loyalty programme requires high investment costs, this paper identified and explored the factors associated with loyalty programmes and their impact on customer loyalty and behaviour. In this study initial data collection entailed a combination of both quantitative data and qualitative data. Through the analysis of the data obtained from a total of 273 questionnaires and 4 semi-structured interviews of Chinese five-star hotel brands, the effects of hotel loyalty programmes on customer attitudinal loyalty and behavioural loyalty and the reasons for these effects were investigated. The results of the study provide evidence that hotel loyalty programmes are positively correlated with customer loyalty and can serve as an effective mechanism for building loyalty. Members of reward programmes were found to have higher attitudinal loyalty and behavioural loyalty than non-members. Additionally, high-level tier members were found to have a higher level of loyalty when compared to the attitudes and behaviour of lower-tier members. In addition, the research results provide an indication that economic rewards and immediate rewards can improve the behavioural loyalty of guests