From Loyalty to Profitability

Abstract

This paper explores the viability of a paid subscription-based membership model within the staycation sector of the hotel industry, focusing on consumer preferences and willingness to pay (WTP). Amidst the persistent popularity of staycations following the COVID-19 pandemic, this study leverages quadrant analysis to evaluate the importance of WTP for various subscription features proposed by hotels. A significant element of this research involves comparing these preferences against the published rates of comparable hotel services to ascertain the financial feasibility of the proposed model. This research's novelty is that it applies quadrant analysis to investigate the viability of the hotel-paid subscription model. The quantitative method is used to map quadrant analysis based on 49 respondents. Initial findings indicate a generally low WTP among potential consumers, suggesting challenges in aligning the perceived value of subscription benefits with their actual costs. By conducting an independent t-test, the study tests hypotheses concerning the economic viability of the subscription model, ultimately revealing that the low WTP values significantly undermine the potential for profitable implementation. The paper concludes that while the subscription model offers a novel approach to enhancing customer loyalty and operational stability, its success is contingent upon a deep understanding of consumer valuation of proposed benefits, suggesting further investigation into alternative benefits that could align more closely with customer expectations. It can be started by investigating the feasibility of designing a bundling package with a vast network of related industries in tourism and hospitality.