The link between loyalty programs and customer satisfaction in 5-star hotels on the Maltese islands

Abstract

Loyalty schemes within the hospitality industry, mainly hotels, are premeditated to be of crucial importance, as they increase brand awareness and recognition. There are many researchers that argue that loyalty programs influence customer satisfaction levels.. This study concentrates on analyzing the relationship between customer satisfaction and customer loyalty and if there is a link between satisfaction and the loyalty schemes employed by fivestar hotels on the Maltese Islands.

One on one interviews were conducted with three (3) well known five-star hotels in Malta, with different types of loyalty schemes. The hotels studied are: 1. Hilton Malta: Makes part of an international hotel chain that has its own loyalty program known as Hilton Honors. 2. Corinthia Palace Hotel and Spa: Makes part of an international hotel chain but makes part of a global loyalty program known as Discovery. 3. The Palace Hotel: makes part of a national hotel chain known as AX Hotels and has its own loyalty schemes known as Loyalty Scheme. This study aims to describe, compare different loyalty programs that are employed by several hotels in Malta with a 5-star standard and their impact on customer satisfaction, if any. In sequence, this study will go into what affects the level of customer satisfaction, both of in- house guests as well as walk-ins. Moreover, this study will also focus on the consumer demand there is for loyalty programs, and why is there such demand and what alterations can be done to these schemes to refine them in a way that attracts more people.

The study is going to be both qualitative and quantitative in nature. Firstly, a hypothesis will be drawn from the readily available data, otherwise known as secondary data. This data will then be correlated with the data obtained by the author through interviews conducted in the hotels mentioned above. Consumer demand for loyalty program will be tackled through a deductive approach by handing out surveys to guests staying in one (1) or more of the fivestar hotels being studied in this long-essay. These surveys will also refer to the added factors that might influence customer satisfaction and so, customer loyalty.

This research revealed that even though there is a link between loyalty program and customer satisfaction, there are other factors that affect the latter and customer loyalty.