The relationship between market orientation, customer loyalty and business performance: A sample from the Western Europe hotel industry

Abstract

This study explores the nature of the relationship between market orientation and business performance and the mediating role of customer loyalty in this relationship. Empirical analysis was based on a sample from the Western European hotel industry. Research results indicate that market orientation has a positive direct effect on business performance and that the effects of market orientation on business performance are mediated through customer loyalty. Market orientation produces a positive effect on customer loyalty, which in turn has a positive effect on business performance, showing that market orientation has a significant and positive indirect effect on business performance. These findings suggest potential major implications for the hotel industry. For example, by developing a market-oriented organization, hotels could produce positive effects on customer loyalty and consequently on their business performance.