Complete 8 pages APA formatted article: Evaluating Hotel Reward Programs and Working Towards Improving Them. Loyalty programs include points accumulations associated with bookings that can be redeemed for discounts, future stays at the hotel, or even certain prizes made available by the hotel firm. Other programs maintain opportunities for consumers to accumulate airline miles or even the ability to upgrade their accommodations to a more lavish room in the future.
Whilst the implementation of hotel rewards programs would appear to be a significant incentive for consumers to develop loyalty toward the issuing hotel, it has been criticized that these programs are ineffective, long-term, toward increasing hotel profitability and establishing a loyal consumer base. Several studies have found that genuine consumer loyalty is achieved by the establishment of absolute customer satisfaction (Taylor, Celuch and Goodwin 220. Mittal and Lassar 177). In this context, loyalty is theoretically determined by illustrating superior service quality and perceived trust in the hotel. Therefore, the purpose of this literature review is to explore the dynamics of hotel reward programs to determine whether the points accumulation scheme, tiered loyalty programs, upgrade opportunities and airline miles are sufficient in establishing legitimate customer loyalty. Can these incentives be sufficient enough to create recurring purchase commitment and, if not, what can be done to improve them? The literature supports that service quality related to the loyalty program would be more important for hotels to emphasize, to provide tiered program members more equity between the higher-level and lower-level tier members, and structure the program so that consumers can perceive rapid and more valuable rewards.
It is believed that loyalty programs give consumers a perceived sense of ownership of the firm and the impression of belongingness at the firm (Hart, Smith, Sparks and Tzokas 542), hence having a potent psychological impact which theoretically drives more loyalty.