A Study on the Factors Contributing to Customer Loyalty in Budget Hotels in Cairo And Alexandria, Egypt

Abstract

Customer loyalty has gained great consideration in recent years. It is crucial for hotel’s success and survival in this competitive market. This research intends to determine the factors contributing to customer loyalty in budget hotel sector in Egypt. This research was investigated by adopting a quantitative research approach. A structured survey was set up involving 33 items to measure customer loyalty and investigated constructs. The outcomes of this study highlighted low level of customer loyalty in budget hotels in Egypt. Four determinants were identified to have major positive impact on customer loyalty respectively: corporate image, price perception, physical environment and switching costs whereas CSR did not have significant effect on customer loyalty. The research implies that budget hotels’ managers should invest in improving the factors that were identified as influential/supportive to attract and retain customers. They should deal with customer loyalty as a strategic target and maintain a long-term relationship with customers to enhance their repurchasing intentions. This research contributes to boost customer loyalty in the context of budget hotel sector. It provides a range of tools and recommendations that will motivate customers’ re-buying behavior and make them more emotionally-tied to small hospitality organizations.