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11/01/2016

Hotel Communication Preferences Impact Guest Perception of Loyalty Programs

In this two part series, Natasa Christodoulidou, Ph.D., Director of the Hospitality Technology Research Institute (HTRI) and Associate Professor in the Department of Management and Marketing, College of Business Administration and Public Policy at the California State University Dominguez Hills, discusses the methodology and some of the results of a study that examine how hotels' communication preferences regarding their loyalty programs could be affecting the way guests perceive and use such programs. Look for the second part of this series to be posted on Nov. 2nd.

Dr. Christodoulidou co-authored this article with Orie Berezan, Richard Malamud, Melissa St.James, and Meng Zhao at California State University.
 
Part 1
 
Balancing Style and Quality: Effectively Communicating to Hotel Loyalty Program Members
 
Loyalty programs are a standard part of the product offered by many hospitality companies. So standard in fact that there are few differences between the loyalty programs, including the manner in which information is communicated to members. A recent qualitative study found that hotel reward program member loyalty may be impacted by the type of communication channel used to obtain information about the program, including websites, customer-to-customer (C2C) electronic word-of-mouth (eWOM), employees, and traditional word of mouth. While websites and employees provide official information, online travel forums have become an important outlet for customers to share their experiences and give advice to other travelers.
 
The purpose of this study is to empirically evaluate the impact of common communication channels (eWOM, program websites, employees and traditional WOM) on the communication style and information quality as perceived by hotel reward program members.  Through this study, hotel management may see opportunities to add value to their programs with more strategic communication practices, rather than enhancing tangible aspects that are easier for the competition to imitate.
 
Communication Channels, Communication Style and Perceived Information Quality

This study evaluated the impact of both company-created (websites and employees) and customer-created (social media and personal word of mouth) communication channels on program member perception of communication style and information quality. Loyalty members selected the communication channel that they perceive to be easier to use and of better value to them, largely based on communication style and perceived information quality.
 
In our study, communication style for each channel was examined by participants’ evaluation of the following descriptions: positive, personalized, customized, professional, interactive, easy, pleasant, courteous, friendly, attentive, and responsive.

The perceived quality of communication for each channel was examined using the following attributes: trustworthiness, accuracy, clarity, helpfulness, usefulness, timeliness, continuity, proactivity, accessibility, and thoroughness. Participants were asked to rate how much they agreed or disagreed with each of the descriptions on a 7-point Likert-type scale, anchored at “strongly disagree” and “strongly agree”.
 
Sample

The targeted sample for this study was active loyal members of hotel reward programs. Two criteria were used for sampling: (a) subjects have a favorite hotel reward program, and (b) subjects have stayed at a hotel at least twice in the past six months. Subjects include members from all elite levels of hotel reward programs. The final sample for this study included a total number of 541 participants from an online data collection agency with more than six million qualified panel members.
 
The majority of this sample (56.7 percent) reflects one of the most powerful markets in the United States: people older than 50. More than half of the sample was male (52 percent), married (70 percent), and either had a college degree (43.6 percent) or a post graduate degree (33.5 percent). Most of the sample traveled for leisure (74 percent) with the remaining 24 percent having traveled for business.
 
Results

The results indicate that the hotel's choice of communication channel has a significant impact on perceived communication style and quality of the program for which they are seeking or sharing information.
 
For instance, under communication style, the “customized” variable showed significant differences among the four communication channels. While the program website was perceived to be the most customized followed by personal word-of-mouth and company employee, social media was perceived as the least customized communication channel in loyalty programs.

This could be attributed to social media being a standard messaging platform for everyone, so it may not be able to satisfy everyone’s preferences concurrently. In the same construct, the company website was perceived to be the most professional in communicating, followed by company employee interaction, word-of-mouth, and social media. It is likely that the website of a loyalty program has more resources dedicated to updates and maintenance, and company employees having more training when responding via chat, phone, or e-mail.

For this study’s participants, social media is relatively in its infancy stage of acceptance by an older age demographic. At the same time, the website may be perceived as easy to use and better value to the consumer, while social media may require extra effort and energy, especially to the demographic over the age of 45, which made up more than 75 percent of the survey participants.
 
END of Part 1 of 2.

Part 2 can be found here: http://bit.ly/2edIfID