What recovery options to offer for loyalty reward program members: Dollars vs. Miles?

Research shows that offering monetary compensation is effective in restoring customers’ equity perceptions following a service failure. However, little is known about loyalty reward program members’ responses to various types of recovery options. This study fills this important void by investigating two types of compensation: a discount coupon (in dollars) and bonus reward points (in miles) in the airline context. This study further investigates the boundary effect of controllability of a service failure. Our findings show that, when the flight delay is perceived as highly controllable by the airline company (i.e., scheduling error by flight crews, repatronage intention was higher in the 50-dollar discount vs. 2500 bonus miles condition. Conversely, repatronage intention did not differ between the two compensation options when the flight delay was perceived as uncontrollable i.e., inclement weather. Our findings help hospitality and tourism firms leverage service recovery initiatives for loyalty reward program members.     

Do reward programs truly build loyalty for lodging industry?

Hotel brands have sought numerous ways to build the relationship with their customers. Inspired by the airlines’ success, most major hotel chains have developed loyalty programs that reward customers for repeat business. However, the effectiveness of reward programs has been questioned. To explore reward programs’ potential to alter normal patterns to behavior, this research investigates how the timing of rewards affects customer loyalty for hotels and whether the effectiveness of these reward structures is moderated by customer satisfaction. This research also examines whether customer's value perception of loyalty program truly affect brand loyalty or program loyalty. In order to test the research framework, a 2 × 2 full-factorial, randomized, between-subject experimental design was conducted. In total, 209 respondents participated in the study. The results indicate that immediate rewards are more effective in building a program value than delayed rewards. Moreover, the value of loyalty program affects customer loyalty only through program loyalty to the extent that the program provides value to the customer. Finally, satisfaction plays an important moderating role on reward timing. Delayed rewards work better than immediate rewards only if customers are satisfied with hotel experience. In contrast, the immediate rewards in the dissatisfied experience become effective in their capacity to invoke customer loyalty.     

Customers’ Perceived Benefits of a Frequent-Flyer Program

Customer retention has grown in importance as most firms have acknowledged that customer retention has a bearing on profitability over the long term. Firms such as airlines, hotels, retailers, and car manufacturers offer loyalty programs to their customers to reward customers for their support and encourage continuous future support from such customers. Despite the popularity of loyalty programs, little academic research has been published in respect of how customers perceive the benefits offered by loyalty programs. This paper is a first to report on research that resulted in a model that can be used to manage the benefits perceived by members of an airline’s loyalty program. The model to measure and manage members’ perceived benefits of a loyalty program for an airline has good psychometric properties and consists of three underlying dimensions, namely recognition, convenience, and exploration.     

What influences company attachment and job performance in the COVID-19 era?: Airline versus hotel employees

Airline and hotel employees are experiencing multiple forms of precariousness amid the COVID-19 pandemic, which have increased workers' distrust of their respective airline/hotel businesses and affected job performance and retention. This research builds and tests two sturdy theoretical frameworks to explain airline and hotel employees' job performance and behavior during the COVID-19 pandemic. The frameworks, developed using a quantitative method, adequately account for employees' company attachment and job performance by using their perceived job insecurity, life satisfaction, and job satisfaction as the key antecedents; while employees' perceived job insecurity influences the formation of attachment to the company and job performance. The mediating nature of life and job satisfaction is also examined alongside the moderating role of two different industry types (airline versus hotel). The results show that the process of generating job performance differs between airline and hotel employee groups. The research implications and value are discussed.     

Tacit knowledge spillover and sustainability in destination development

This study examines tacit knowledge spillover among lodging firms within a destination and how it contributes to sustainable destination development. Longitudinal data for this study were collected primarily through in-depth interviews with lodging firms' managers and operators in a destination located in southern China. The findings suggest that tacit knowledge spillover in a region may lead to hospitality firm agglomeration. Furthermore, the eco-friendly hotel pioneers' tacit knowledge spillover may, over an extended time period, enhance the eco-friendly initiatives and operations of local hospitality firms, which may contribute to the successful development of sustainable destinations. The findings also indicate that local government's effective interventions tend to encourage and facilitate tacit knowledge spillover through establishing knowledge transfer mechanisms in the community, which is significant in the context of sustainable destination development.     

Marketing Culture and Business Performance in the Airline Industry

Abstract

In recent years the airline industry has witnessed increased emphasis on the cultivation of a culture which fosters the effective implementation of marketing programmes. This growing attention stems from the belief that sound marketing practices provide an important source of competitive advantage in the service sector which is characterised by high levels of interaction between firms and their customers. Moreover, marketing academics and managers proclaim that a strong marketing culture leads to customer retention, which in turn, yields higher profitability. In this study an attempt is made to investigate empirically the relationship between UK airline firms' marketing culture and business performance. Our results indicate a strong relationship between marketing culture and business performance. To conclude, implications of the findings for airline managers and avenues for future research are discussed.     

The Environmentally Friendly Programs in Hotels and Customers' Intention to Stay: An Online Survey Approach

This study surveyed customer perceptions about the environmentally friendly programs (i.e., green programs) in hotels and analyzed the degree to which such programs influenced customers' hotel selection. Data were collected from online travel communities by conducting Web-based online surveys. A total of members from 63 travel-related online communities participated in the survey. Multiple regression analysis results showed that the significant factors that affected client hotel selection were: Solid waste and water programs in guestrooms, energy programs, solid waste and water programs in housekeeping, and biodiversity programs. However, water program by customers' option did not influence customer decisions to stay at environmentally friendly hotels. Results also showed differences in customer awareness and demand for environmentally friendly hotels based on gender, income, and age.     

A comparison of planners' site-selection intentions towards a sustainability reward program,location, and overall costs

Previous research indicates that environmental attitudes do not always translate into environmentally sustainable behavioral intention. The current research uses sustainability reward programs as incentives for people to have environmentally friendly behavioral intentions. Specifically, this study investigates how sustainability reward program affect meeting planners' site-selection intention in comparison with other factors such as location and overall costs. While the results of the study discover that the effect of sustainability reward programs was not significant for planners' site-selection intention, considerable differences were found on the effects of other factors between different types of planners. The findings provide important theoretical and practical implications.     

Predicting Korean lodging firm failures: An artificial neural network model along with a logistic regression model

Using financial variables as predictors, this study developed logistic regression and artificial neural network (ANN) models to predict business failures for Korean lodging firms. While both models demonstrated comparable Type I errors, the ANN model showed considerably lower Type II errors for both in-sample and hold-out sample predictions. This study also found that interest coverage is the most important signal of business failure for the Korean hotel industry. This ratio is directly related to the hotel's solvency, ability to service debts and productivity of profits and can thus be regarded as a survival indicator of Korean hotel firms.     

Don't change my towels please: Factors influencing participation in towel reuse programs

Towel reuse is the flagship of hotel environmental practices. This paper examines the effects of consumer demographic, psychographic and behavioral characteristics influencing a two-stage decision making process including participation and support to a towel reuse program. A meta-analysis shows that 53% of customers are willing to financially support green hotels. A survey of 1304 Greek and foreign hotel customers in tourism hot spots in Greece reveals that 72% of hotel customers would adopt a towel reuse program while 44.1% are willing to pay extra an average of 2.15 euros per day to support it. Younger customers and customers that book high-priced hotels or with higher length of stay exhibit higher willingness to pay extra for towel reuse programs. As rising water and energy shortages in specific tourism hotspots bring hotels' environmental integration under increased scrutiny, the focal findings hold significant implications for hotel managers and tourism policy makers.     

Determinants of using operating lease in the hotel industry

This study investigated the determinants of using operating lease in the hotel industry. The hotel industry has utilized operating lease not only for operating equipment but also as a financing instrument through ‘sales and lease back.’ This study found that hotel firms with less internal funds and/or with higher debt ratios are more likely to use operating lease. Contrary to the studies of other industries, hotel firms with less financially distressed are more likely to use operating lease. This study indicated that operating lease decrease as firm size increases, but only up to a certain level, after that level operating lease increase as firm size increases. Contrary to our expectations, the growth opportunity of hotel firms appeared to have no relationship to use of operating lease. These findings contribute to further understandings of hotel industry-specific information regarding what drives hotel firms to use operating lease.     

The link among board characteristics,corporate social responsibility performance,and financial performance: Evidence from the hospitality and tourism industry

The aim of this study is twofold: to explore whether board characteristics (i.e. a sustainability committee, board independence, board diversity, and board diligence) lead to greater corporate social responsibility (CSR) performance, and to test whether CSR performance enhances firms' financial performance in the hospitality and tourism (H&T) industry. Data were collected from the Thomson Reuters Eikon database for the H&T firms listed there between 2011 and 2018. We employed panel data analysis, after which we ran robustness tests. The results indicated that having a CSR committee and female directors on the board are robust factors driving firms to show superior CSR performance in all dimensions, including environmental, social, and governance (ESG). Independent directors and directors' diligence selectively enhance the overall CSR score and individual pillars of CSR. Investigating the relationship between CSR performance and firms' financial performance did not produce a significant outcome. The findings propose a straightforward roadmap for H&T firms and policymakers to identify characteristics of CSR-friendly boards.     

Management of the change process in hotel companies: An investigation at unit level

The management of change has become an organisational necessity in the 1990s and will continue to be a major factor in the management of hotel companies in the future. This article investigates and evaluates management of the change process at unit level in hotel firms. The data was gathered through in-depth semi-structured interviews with ten hotel managers in the UK. Lewin’s three-stage model was found to be of limited use in practice. A five-stage model of the change process emerges from the research findings. This model reflects a more practical view of the management of change as an on-going, continuous process. Finally, the limitations of the research are discussed and further research areas identified.     

Bringing Hotels to Healthcare

Abstract

The field of medical tourism has grown and developed over the last ten years into a popular option for having a medical procedure done. Continuing success is expected, and becoming involved with medical tourism appears to be an excellent way for the hotel industry to differentiate their services. By integrating a medical tourism program into an existing hotel company's services, both aspects of the partnership will build off of the other's success and create a new and exciting travel experience. A joint partnership between a medical facility and a luxury hotel would enjoy abounding success in this new and exhilarating market.     

The impact of hotel CSR for strategic philanthropy on booking behavior and hotel performance during the COVID-19 pandemic

During the novel coronavirus (COVID-19) pandemic, some hotels have engaged in corporate social responsibility (CSR) activities to help overcome the crisis. Given that most existing research examines the impact of hotel CSR on a single stakeholder, how hotel CSR activities in a crisis are perceived by multiple stakeholders is unknown. Drawing on the concept of strategic philanthropy, this study examines the impact of hotel CSR activities during the pandemic, such as providing accommodations to healthcare workers, on hotel firms' market value and prospective hotel customers’ booking behavior. Adopting mixed-methods approach, this study finds negative impacts of hotel CSR for strategic philanthropy on firm market value and customer booking behavior. The study result indicates that the value of hotel CSR depends on the nature and environmental contexts of CSR. Specific theoretical and practical implications are provided.     

Key drivers of airline loyalty

This study investigates drivers of airline loyalty. It contributes to the body of knowledge in the area by investigating loyalty for a number of a priori market segments identified by airline management and by using a method which accounts for the multi-step nature of the airline choice process. The study is based on responses from 687 passengers. Results indicate that, at aggregate level, frequent flyer membership, price, the status of being a national carrier and the reputation of the airline as perceived by friends are the variables which best discriminate between travellers loyal to the airline and those who are not. Differences in drivers of airline loyalty for a number of segments were identified. For example, loyalty programs play a key role for business travellers whereas airline loyalty of leisure travellers is difficult to trace back to single factors. For none of the calculated models satisfaction emerged as a key driver of airline loyalty.     

Management of the change process in hotel companies: An investigation at unit level

The management of change has become an organisational necessity in the 1990s and will continue to be a major factor in the management of hotel companies in the future. This article investigates and evaluates management of the change process at unit level in hotel firms. The data was gathered through in-depth semi-structured interviews with ten hotel managers in the UK. Lewin's three-stage model was found to be of limited use in practice. A five-stage model of the change process emerges from the research findings. This model reflects a more practical view of the management of change as an on-going, continuous process. Finally, the limitations of the research are discussed and further research areas identified.     

The Impact of Supplier Development on Financial Performance in the Restaurant Industry

ABSTRACT

Many firms have come to recognize the crucial role that cooperative relationships with suppliers play in determining high financial performance. Of main concern in many firms are supplier development activities and behaviors (SDABs) of buying firms, which are an attempt to meet current and future business needs such as high financial performance by improving supplier performance. The purpose of this study is to evaluate how buying firms' SDABs affect supplier performance (in delivery as well as product and service quality) and its impact on financial performance of the buying firms. The authors critically revisit extant knowledge on the subject, develop a conceptual framework integrating buyer and supplier relationship marketing/management practices, and test the framework in the independent restaurant industry context. Using structural equation modeling and data collected from 236 restaurant owners and/or presidents in the United States, the results of this research support the usefulness of the framework, showing that buying firms' SDABs directly affect supplier performance, which leads to high financial performance of the buying firms.     

The Effect of Cross-Industry Cooperation on Performance in the Airline Industry

Summary

Airline services are one part of the inter-connected network of travel services. Brandenburger and Nalebuff (1995, 1996) suggested that firms may add value to their offerings by cooperating with other members of a firm's value net (competitors, substitutors, customers, and suppliers). In a 14-year longitudinal study, this paper explores the evolution of cooperative relationships between members of the U.S. domestic airline industry and other firms outside the U.S. domestic airline industry, with the goal of identifying performance effects associated with such cooperative alliances. Results of the pooled, cross-sectional time series regression indicate that cooperative alliances outside the U.S. airline industry contribute positively to performance when environments are rapidly changing and variable.     

Linking hotel manager behavior with outcome measures of effectiveness

Sixty-three property managers from three different hotel firms participated in a study to determine the perceived linkage between each of seven behavioral dimensions and fourteen common outcome measures of managerial effectiveness. At least one outcome measure was strongly related to each of the behavioral dimensions, though significant differences in collective perceptions by firm were also found. Implications for integrating behavioral and outcome measures, the timing of evaluations and the matching of managerial effectiveness with a hotel firm's business strategy are discussed.