Does Customer Experience Management Pay Off? Evidence from Local versus Global Hotel Brands in South Korea

Abstract

ABSTRACTThis study investigates the role of customer experiences in increasing hotels’ sustainable competitiveness through its impact on service quality, customer satisfaction (CS), and brand relationship and then compares five local hotel brands and seven global hotel brands operating in Seoul, South Korea. Drawing on Schmitt’s (1999) Strategic Experiential Modules, we collected survey data from 300 respondents who had previous experiences with the hotel brands studied.We found that experiential modules (the “sense” module and “feel–think–act” module) affect service quality (measured as human service and physical service) for local hotel brands. The “feel–think–act” experiential module, however, only affects service quality for global hotel brands. Additionally, physical service has a strong effect on CS for both local and global hotel brands. Finally, CS has significant influence on consumer–brand relationships for both hotel types. In conclusion, the study provides the critical strategic implication that customer experience management can be utilized to sustain a competitive advantage, which may result in stronger consumer–brand relationships for hotel customers.