Guest Satisfaction and Guest Loyalty
Introduction 3
Main Section 4
Arguments Against the Correlation between Satisfaction and Loyalty 4
Arguments For the Correlation between Satisfaction and Loyalty 6
Opinion: Increasing Guest Satisfaction results in Guest Loyalty 10
Conclusion 13
Introduction
This paper will attempt to explore the intricate relationship between guest satisfaction and guest loyalty. There has been an ongoing debate on why guest satisfaction does not always result in guest loyalty, and it is an interesting topic of study.
The opinion posited is that guest loyalty is the product of superior guest satisfaction (as opposed to just regular satisfaction) and that this superior objective may be achieved by a combination of quality services provision in the hotel industry.
This opinion will be supported by analyzing the academic literature on the subject, and focus on three main sections. The first is “Arguments Against the Correlation between Satisfaction and Loyalty”, to approach the debate. The second is “Arguments For the Correlation between Satisfaction and Loyalty", to give the other side of the debate. The third section is "Opinion: Increasing Guest Satisfaction results in Guest Loyalty”, which will build upon the previous sections to suggest modes of action. It will also be used literature on marketing and customer loyalty as the results from these can be extrapolated into the tourism and hospitality industries.
Main section
Arguments Against the Correlation between Satisfaction and Loyalty
There has been some debate in academia of whether guest satisfaction results in guest loyalty to a venue (such as a Hotel, Spa or Resort) or a specific brand (such as Marriot, Hilton or Iberostar). Some research has pointed out that there is a weak correlation between satisfaction measurements and loyalty (Van Looy, B., Gemmel, P. and Dierdonck, R., 2003). However, it is certain that poor satisfaction results in non-returning guests. A study by Zoghbi-Manrique-de-Lara, P., Suárez-Acosta, M., and Arias-Febles, J. (2014) indicates that service failure is a commonplace and costly problem to hotels. They give the example that every year Hampton Inn spends about 0.5% of its room revenue attempting to satisfy guests in procedures of service recovery (actions to rectify service failure). Additionally, if satisfaction with service recovery is not achieved, it may be related to many guest responses that can weaken the success of the hotel, such as reduced customer loyalty or revisiting intention, customer complaint behavior, negative word-of-mouth, poor interaction about the hotel, and low perceived service quality (Zoghbi-Manrique-de-Lara, P., Suárez-Acosta, M., and Arias-Febles, J., 2014). French, A. and Smith, G. (2013) also posited that a corporate strategy could focus on the capability of charging a price premium above high-stars hotels to induce the perception of quality.
On the other hand, customer satisfaction is apparently sought after, according to the hospitality academic literature. The importance of guest satisfaction is a current theme in academic circles. Cases such as the “Sage Hill Inn Above Onion Creek Lodge” (Pass, M., 2015) are a consequence of this perception. Furthermore, guest satisfaction has even driven software applications such as CRM (Customer Relationship Management) solutions. Hussain, F., Rahman, M., and Hassan, M., 2012 describe CRM implementation and practices which focus on customer satisfaction and preference. They also mention that hotels should prioritize other issues, showing dedication to improving services. The hotel administration additionally needs to spend money on individuals, providing staff training, hiring, and lowering turnover (Hussain, F., Rahman, M., and Hassan, M., 2012).
Such arguments create a curious debate: if guest service does not necessarily result in loyalty, why is the hospitality academic literature so interested in increasing service quality? Reference can be made to marketing research, which has a few things to say about the erosion of brand equity and resulting lack of loyalty of consumers.
Grossman, G. (1994) pointed out that brand equity occurs whenever ‘clusters of values’ or traits surrounding a brand – built over time – generate the desired experience for clients. Equity is the complete experience customers derive far from using a product or service, such as being a guest in a hotel of a specific brand (for example, Marriot). Grossman, G. (1994) also indicates that the brand equity is an encompassing standard that includes not only tangible but also intangible features. The author exemplifies the Coca-Cola brand, which logo has been slowly upgraded over decades, leaving the brand image unchanged. Other characteristics include the distinctive use of red and white colors, the flavor under careful control for consistency, the unique bottle shape, and the perceived quality of the drink (Grossman, G., 1994).
If not nurtured, a brand's equity and value erode and become obsolete (Grossman, G., 1994). A similar effect can be extrapolated to the hospitality industry: if service quality decreases, so does the perception of quality that surrounds the brand. Guests become unsatisfied not directly because of poor service, but because of the eroded brand equity. Therefore, those guests will not be willing to pay for that brand again – in the sense that no guest would pay Marriot prices for Ibis services. Ultimately, guest loyalty decreases. Even if guest satisfaction did not lead to guest loyalty lack of guest satisfaction surely leads to guest ‘disloyalty’.
Arguments For the Correlation between Satisfaction and Loyalty
On the other hand, the majority of academic arguments side on the issue is that there is a positive relationship between satisfaction and loyalty. Articles that favor this argument will be reviewed in this section.
Taylor, C., and Wheatley-Lovoy, C. (1998) performed a study of Disney, indicating that a measurable relationship exists between exactly how ‘Cast Members’ (Disney employees who deal with the public) feel about their jobs and how these feelings impact the level of service. Innovative and quality solutions for guests link directly to their intent to visit Disney once more. Since implementing initiatives of Performance Excellence initiatives, the visitor return price at Walt Disney World has risen by more than 10%, and turnover rates for Cast Members have plummeted. The authors state that they can now verify statistically what they thought intuitively five years back: there was a direct link – strong and specific correlation – between a quality Cast Member experience, a quality guest experience, and company revenues. For example, wherever Cast Members rate their managers as extraordinary when they listen, coach, and empower Members, the Guest satisfaction ratings soar. “As [company official] Judson said, ‘The linkage between our objectives and the process of measurement has been the vehicle for moving our Cast from isolation to involvement to ownership, and finally to excellence.’” (Taylor, C., and Wheatley-Lovoy, C., 1998).
Other authors have a similar viewpoint that the quality of service a major driver to the success of a resort, since the higher the perception of quality, the more likely guests will make a return visit, spread positive word-of-mouth. Moreover, such guests will intensify brand loyalty (Keith, N., and Simmers, C., 2013). Disney and these authors attribute guest satisfaction to guest loyalty in a very direct way.
Roustasekehravani, A., Hamid, A., and Hamid, A. (2015) wrote a detailed article pointing out the relationship among brand personality, brand name satisfaction and resulting future behavioral intentions and attitude, i.e., how brand personality may influence the perception of consumers or guests and lead to loyalty. This paper will elaborate on these authors’ article to establish a few drivers of top performance regarding satisfaction.
Roustasekehravani, A., Hamid, A., and Hamid, A. (2015) begin by presenting their findings on attitudinal and behavioral Loyalty. These terms are defined as follows: "Attitudinal loyalty refers to the suitable temperament towards the brand," while “behavioral loyalty can be seen through a promising repeat buying pattern” (Bandyopadhyay, S. and Martell, M., 2007). The measurements of attitudinal loyalty consist of factors like the willingness to repurchase, optimistic word-of-mouth, and commitment. In contrast to behavioral loyalty, attitudinal loyalty is distinct from typical purchasing.
Of main importance is the concept of brand personality, described as “the set of human features related to a brand” (Aaker, J., 1997). Customers tend to favor products or services that connect their ‘self-image’ with brand personality, that is, brands that mirror traits such as their social class, age, gender, or predilections. Roustasekehravani, A., Hamid, A., and Hamid, A. (2015) give the examples of Marlboro’s cowboys and Mercedes high-class, high-quality vehicles as superior brand personalities. The authors posit very clearly that brand personality improves the relation between the brand and consumers, generating brand equity and brand loyalty.
Ahmad, A. and Thyagaraj, K. (2014), in their article, indicated that there exist many scholarly studies showing the impact of brand personality on brand loyalty, which they posit as a factor of an encompassing brand equity. They suggest that brand equity and brand personality guide the choice and buying intention of consumers, that is, repeated buying behavior. Furthermore, studies are concentrated on the effect on brand personality; the reason why may be that brand personality is itself a source of buyer preference. As mentioned, brand personality elicits emotions and fosters trust and commitment towards the brand, that is, brand loyalty (Ahmad, A. and Thyagaraj, K., 2014). Sangster, A., Wolton, J., and McKenney, S. (2001), also explored and the possibility to retain guests by building brand loyalty.
Lin, A., Huang, Y., and Lin, M. (2015) report that the results of their research have implications for the hotel industry regarding brand equity and clients' repurchase intention. Their results recommend that hotel administration and strategy should take advantage from the significance of brand equity to further improve guests' repurchase intention, and hence customer loyalty. They suggest the use of advertising to influence customers' perception of equity and repurchasing decisions (Lin, A., Huang, Y., and Lin, M., 2015).
Opinion: Increasing Guest Satisfaction results in Guest Loyalty
The opinion initially posited in the introduction is that guest loyalty is the product of superior guest satisfaction (as opposed to just regular satisfaction) and that this superior objective may be achieved by a combination of quality services provision in the hotel industry. This opinion is not without controversy, as it was shown in the two previous sections; this paper can summarize previous findings as:
Poor satisfaction results in non-returning guests;
Guests become unsatisfied not directly because of poor service, but because of the eroded brand equity;
Excellence of service creates good brand personality and adds to brand equity;
Hotels, resorts, and spas can leverage on brand equity to further guest loyalty.
Because of this reasoning, based on the reviews academic literature, the opinion suggested is that excellent service produces superior satisfaction, such satisfaction adds value to the brand equity, and finally resulting in guest loyalty. The next articles reviewed act as a support to this opinion.
Kim, M. (2011) in his article, indicates that managers have mostly concentrated on improving customer satisfaction to increase customer loyalty. The author's research shows that supervisors have to understand the importance of not only client satisfaction, "but also delight in directly driving customer loyalty” (Kim, M., 2011). Simple satisfaction is not sufficient to get guests’ or clients’ attention and obtain loyalty in the face of competition: recent changes in hospitality industry require more than attending to customer satisfaction, and managers and marketing strategists need to cater to customer delight (Kim, M., 2011). This author's view is interesting as he points out to extra reasons on why satisfaction does not lead to loyalty; delight may come in play as well. In other words, satisfaction is insufficient, and delight becomes paramount in achieving loyalty. Kim, M. (2011) further states that the front-line personnel, which interact with clients directly, can be a major source to deliver delight through good relationships with customers.
An interesting example of building brand loyalty is indicated by Hussain, Z., Lema, J., and Agrusa, J. (2012) in their description of the Maldives tourism industry and community. They say that, as the culture of the Maldives appeals as mysterous for visitors, the country could foster the intriguing charm of the islands. “Gastronomy, the combination of local cuisine () with the culture, traditions, and festivals () could become a dynamic package for guests”, hence adding value to Maldivian hospitality industry (Hussain, Z., Lema, J., and Agrusa, J., 2012) They posit that this bundling of tourism activities connects to the authenticity of the Maldives, resulting in greater loyalty to the destination.
How can satisfaction turn into delight? Yan suggests the enhancement of guests' satisfaction percentage by applying “Guests Strategies.” Yan, Z. (2006) first points out there is interest that is common between the hotel and visitors. The guests give the hotel profit in exchange for the use, and the gain is realized by the hotel within the attempt to sell items and service. Yan, Z. (2006) further suggests that there is co-dependence and cooperation that links guests to the hotel. “The most primary and ultimate factor, which influences the loyalty of the guests, is the Guest Satisfaction” (Yan, Z., 2006). The author explains the satisfaction in the following way: the visitor ultimately extracted the benefits deriving from the desired products, and to gain the visitor satisfaction becomes the ultimate cause of struggle among hoteliers. The guest strategies to achieve superior satisfaction or delight include the following: “paying regard to the psychological service for the guests” (Yan, Z., 2006). That means not only meeting the functional need of guests but heeding to their overall authentic experience of being served (as suggested by the Disney company official, in the article of Taylor, C. and Wheatley-Lovoy, C., 1998). The strategies also include creating a wonderful experience for the guests and winning their loyalty (Yan, Z., 2006), reminiscent of the Maldives tourism strategy described by Hussain, Z., Lema, J., and Agrusa, J. (2012).
Lockyer, T. (2005) reports recent research on dining, a service that guests report as critical in their overall hotel experience. The author describes a survey with a data set of 506 useable responses in New Zealand, which allowed for an equation model that significantly explained the researched data. This model revealed the significance of hygiene, the excellence of the foodstuff and service quality towards the dining experience. More importantly, however, was the conclusion of Lockyer, T. (2005) that not a single attribute is essential to guest satisfaction; furthermore, even if a single factor does not reach expectations, as long as the remainders perform as required, global guest satisfaction will ensue. As a result, hotel managers ought to view “the dining experience in a multifaceted way rather than over emphasizing individual aspects of it” (Lockyer, T., 2005). This conclusion underlines the overall ‘experience’ of a service, echoing the ‘psychological service’ of Yan, Z. (2006), the Disney approach described by Taylor, C. and Wheatley-Lovoy, C. (1998), and the Maldives strategy referred by Hussain, Z., Lema, J., and Agrusa, J. (2012). In other words, no single service experience will result in superior guest satisfaction, but a combination of services may reach this objective.
Conclusion
This paper was a modest attempt to explore the difficult relationship between guest satisfaction and guest loyalty. As posited initially, this article supports the opinion that guest loyalty is the result of superior guest satisfaction.
Zoghbi-Manrique-de-Lara, P., Suárez-Acosta, M., and Arias-Febles, J., (2014) showed the commonality and high cost of providing poor services to guests and indicate that such poor services result in non-returning guests. Furthermore, regular satisfaction may be unable to generate loyalty, as suggested by Kim, M. (2011), and poor satisfaction is a common reason for guests not being loyal. In other words, only superior satisfaction can generate guest loyalty. This superior satisfaction can be achieved through great service (as indicated by the articles of Keith, N. and Simmers, C., 2013, and Lockyer, T., 2005), through authenticity of experience (as suggested by Taylor, C. and Wheatley-Lovoy, C., 1998 and by Hussain, Z., Lema, J., and Agrusa, J., 2012), and the development of strong brand equity. Brand equity is a result of strong brand personality (posited by Ahmad, A. and Thyagaraj, K., 2014, and by Roustasekehravani, A., Hamid, A., and Hamid, A., 2015) and results in guest loyalty,
If corporate strategists, managers and front-line personnel provide an excellent service and an outstanding guest experience, they can achieve superior satisfaction for the guest. Performed consistently, brand personality and brand equity ensue, and those are predecessors of guest loyalty.
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