| Author: | Tao, Wei |
| Title: | The effect of loss aversion on the relationship between hotel loyalty programs and customer loyalty |
| Advisors: | Xiao, Qu (SHTM) |
| Degree: | DHTM |
| Year: | 2019 |
| Subject: | Hospitality industry -- Customer services Customer relations -- Management Hotels -- Marketing Loss aversion Hong Kong Polytechnic University -- Dissertations |
| Department: | School of Hotel and Tourism Management |
| Pages: | ix, 255 pages : color illustrations |
| Language: | English |
| Abstract: | With increasing market competition in the hotel industry, hotel groups are paying more and more attention to customer relationship management, and loyalty programs are becoming a popular customer relationship management tool for hotel businesses. Although many famous hotel groups often have membership numbering in the millions, many reports have indicated that most registered members are mainly inactive all year round, making it difficult for hotel groups to achieve their expected sales outcomes. In order to increase member engagement in hotel loyalty programs and to promote more purchase behavior, this study focuses on "loss aversion", a relatively new concept in psychology affecting people's decisions and behaviors. Loss aversion is the tendency for people to perceive the negative utility of a loss as more significant than the positive utility of an equivalent gain. In other words, the negative feeling of losing something (e.g., an amount of money, an item, etc.) is greater than the positive feeling of gaining the same thing. Specifically, this study aims to find answers for two research questions regarding the hotel loyalty programs of IHG, Marriott, Hilton, Starwood, Wyndham and Hyatt: (1) Does the threat of loss aversion influence the relationship between hotel loyalty programs and customer loyalty? If yes, how does the threat of loss aversion affect such relationship? (2) How does loss aversion level affect a loyalty program member's purchase behavior? To answer the first research question, Structural Equation Modeling and Multi-group Analysis were applied to analyze the data collected from 476 hotel members across six hotel groups. The results revealed that loss aversion could influence the relationship between hotel loyalty programs and customer loyalty. Loss aversion had a negative effect on that relationship, which means when using the same hotel loyalty program, members with low loss aversion levels perceived higher program value than those with high loss aversion ones. This study also revealed that perceived program value had a positive effect on customer loyalty. Therefore, loss aversion negatively moderated the relationship between hotel loyalty programs and customer loyalty, which means when using the same hotel loyalty program, members with low loss aversion levels had higher customer loyalty than those with high loss aversion. To answer the second research question, data from a second survey of 302 hotel members were analyzed, and the negative effects of members' loss aversion levels on their purchase behaviors were confirmed. This finding suggests that hotel groups may efficiently increase members' purchase behaviors by providing them with incentives tailored to their different loss aversion levels. As the first study investigating the effects of loss aversion on the relationship between hotel loyalty programs and customer loyalty, this study expands on the current literature on hotel loyalty programs, customer loyalty and members' purchase behaviors. This study also offers practical guidelines to hotel groups by identifying important factors influencing customer loyalty and members' purchase behaviors, and suggests a measurement tool for hoteliers to decide appropriate incentive volume. |
| Rights: | All rights reserved |
| Access: | restricted access |
Files in This Item:
| File | Description | Size | Format | |
|---|---|---|---|---|
| 5417.pdf | For All Users (off-campus access for PolyU Staff & Students only) | 7.71 MB | Adobe PDF | View/Open |
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