Abstract
Tough competition has pushed four-star hotels in Surabaya to manage their competitive strategies. One of them is by providing relational benefits to maintain customer commitment and loyalty. This study is to reveal the impact of relationship benefits on customer loyalty with customer commitment as a mediating variable in four-star hotels in Surabaya. Partial Least Square (PLS) is used to analyze data. It is found that relationship benefits (confidence, social and special treatment benefits) have influenced customer loyalty with commitment as the mediating variable. The results show that relationship benefits have positive and significant impacts to customer commitment; and customer commitment also has positive and significant impact to customer loyalty.
Highlights
In recent years, hotel industry has grown very significantly due to the rapid growth of tourism industry
Customers, who have a high level of satisfaction, will provide a positive boost that will create an emotional bond, namely customer commitment (Hennig-Thurau et al, 2002). It is suggested by Morgan and Hunt (1994) that firms will commit themselves to developing and maintaining long-term relationships with customers who provide substantial benefits in return. This is similar with the results found by Hennig-Thurau et al (2002) that relationship benefits are directly related to the level of commitment the customer may fell towards the service provider
Using Partial Least Square (PLS), it is found that all indicators are valid as they have corrected item-total correlation bigger than 0.361 and all the variables have Cronbach Alpha bigger than 0.70 as per Table 1
Summary
Hotel industry has grown very significantly due to the rapid growth of tourism industry. The high number of tourists makes Indonesia ranked the third in Asia in the field of hospitality development after China and India (Industri Perhotelan dan Tren Pariwisata di Indonesia, 2014). This is due to the growing number of middleclass society who has more buying power, as well as air connectivity with competitive low cost carrier models that allow people to travel . Hotels certainly need appropriate strategies to get more customers to choose the hotels as their accommodation (Triangga & Kurniawan, 2004). Hotel strategies need to be adjusted . Hotels that were once more focused on transactional activities must begin to pay more attention to their activities in order to get closer relationship and know more about their customers’ needs and to provide more benefits to the customers (Hennig-Thurau, Gwinner, & Grembler, 2002)
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