Hotel loyalty programs: how valuable is valuable enough?

Abstract

Purpose – This study attempts to examine customers' perceived value of hotel loyalty programs, to identify the relationship between perceived program value and active loyalty, and to examine the effect of perceived program value in determining customers' active loyalty. Design/methodology/approach – An extensive sample of 15,000 respondents was randomly selected from a pool of US domestic tourists who previously requested tourism information from the Convention and Visitor's Bureau (CVB) websites across the country. The data for this study were collected using online survey questionnaires. The researchers sent out e-mails, embedding a link to a brief questionnaire and consent form to potential respondents. Findings – This study substantiates the impact of perceived program value, particularly the psychological value, on active loyalty. In addition, the study identifies significant differences in perceived financial value and externality value of the loyalty programs. Originality/value – This study breaks down loyalty program practices into individual brand levels and compares the perceived program value of 11 major hotel loyalty programs. This provides a better understanding of the perceived program value that may affect active loyalty and explains how the value varies by different hotel loyalty programs. This study offers recommendations on how hotels might craft value opportunities to cultivate the continued engagement of consumers. The results of this study offer insights into the under-researched domain of the drivers of active loyalty in the hospitality context and suggest methods for better strategic management of this loyalty form.