¶ … Sands Rewards Club on Venetian Macao/ "Research & Reporting": How does the hotel membership system (Sands Rewards Club) affect the Venetian Macao Hotel itself?

How does the Hotel Membership System (Sands Rewards Club)

Affect The Venetian Macao Hotel itself?

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Authors, names and Class designations

This work describes the affect of the Sands Rewards Club on the Venetian Macao Hotel through an exploration of three key themes. 1.The role of loyalty program membership on customer loyalty in the hotel industry as influenced by repetition of stays at Sands Hotels and specifically at The Venetian Macau Hotel. 2. The influence of loyalty program membership on customer purchase behavior, by comparing both member and non-member purchases. 3. The relationship between membership purchase discounts and/or privileges and purchasing behavior by comparing member and non-member purchases of a single promoted hotel package that is marketed and discounted for members. Research Question: How does the hotel membership system (Sands Rewards Club) affect The Venetian Macao Hotel itself? Research Objectives: To analyze the variety of loyalty programs that exist within the hotel sector.To analyze the effectiveness / profitability of the loyalty programs (Sands Rewards Club) to the Venetian Macao Hotel. The work offers the development of ideas and research associated with the development and continued improvement of customer loyalty programs in the hotel industry with results that support the results of previous literature as well as suggestions for future research development. Customer loyalty rewards programs greatly affect the hospitality sector and in particular the Venetian Macao Hotel as members of programs are more likely to be return guests to the hotel and have a higher likelihood of purchasing and using programming packages that increase utilization of facilities and increase profitability of the hotel.

Key words/concepts: customer loyalty programs, hospitality loyalty rewards programs, customer repetition, Sands Rewards Club

Acknowledgments

This work would not have been possible without the enduring assistance of the marketing staff at the Venetian Macao Hotel as well as other staff members who added to the important access needed to maintain confidentiality of guests while collecting useful data.

Table of Contents

Abstract 2

Acknowledgments 3

Table of Contents 4

List of Illustrations 5

List of Appendices 6

Literature Review 7

Methodology 8

Chapter 1 9

Figure 1 10

Figure 2 12

Chapter 3 14

Conclusion 16

References 17

Bibliography 18

Special Notes 20

Appendix 1 Survey Data Request 21

Appendix 2 Sands Reward Program Membership Application 22

Appendix 3 Sands Reward Club Tier Benifits 23

List of Illustrations

Figure 1 Loyalty Program Types p. 12

Figure 2 Potential Benefits of Loyalty Programs p. 14

List of Appendices

Appendix 1 Survey data request

Appendix 2 Sands Reward Program Membership

Appendix 3 Sands Reward Program Tiered Benefits

Literature Review

To find out the variety of loyalty programs and the effectiveness of the loyalty programs within the hotel sector, an analysis of literature about the relationship between the hospitality industry and customer loyalty programs was conducted (Bareham, 2004; Barsky, 2011; Berman, 2006; Meyer-Waarden, 2008; Osman, Hemmington, & Bowie, 2009) To analyze the effectiveness of the loyalty programs to the hotel industry, and the membership system as one of the most successful and popular aspects of the hotel loyalty program, a review of various usages and history of membership systems in the hotel sector was conducted (Palmer, McMahon-Beattie, & Beggs, 2000).

There are three key themes of focus within the work. They are; 1.The role of loyalty program membership on customer loyalty in the hotel industry (Barsky, 2011) 2. The influence of loyalty program membership on customer purchase behavior, (Meyer-Waarden, 2008). 3. The relationship between membership purchase discounts and/or privileges and purchasing behavior. (Bareham, 2004; Osman, Hemmington, & Bowie, 2009; Sahoo, 2011). To expand each of these key themes the work will look at both literature and the primary research.

The research provided new insight regarding the issues of interest. Loyalty programs usually reflect the business environment of a hotel in which they operate. So this is not only a marketing tool of a hotel to improve customer loyalty, but also like a checklist of the business itself, providing crucial information about customer usage as well as customer satisfaction and hence quality of services provided (Meyer-Waarden, 2008). It was also found that how the hotel collects, analyses and uses the customer information can affect the implementation of new strategy to be decided associated with a loyalty program...

1.The role of loyalty program membership on customer loyalty in the hotel industry (Barsky, 2011) as influenced by repetition of stays at Sands Hotels and specifically at The Venetian Macau Hotel. 2. The influence of loyalty program membership on customer purchase behavior (Meyer-Waarden, 2008), by comparing both member and non-member purchases. 3. The relationship between membership purchase discounts and/or privileges and purchasing behavior (Bareham, 2004; Osman, Hemmington, & Bowie, 2009; Sahoo, 2011) by comparing member and non-member purchases of a single promoted hotel package that is marketed and discounted for members. The survey data will therefore include questions associated with each of these themes. A self-created survey tool was utilized to analyze historical data on purchasing behaviors of both members and non-members of the Sands Rewards Program at the Venetian Macau Hotel. (survey tool see Appendix 1) The research purpose: To determine the affect of the Sands Rewards Club on the Venetian Macau Hotel as well as to compare the customer loyalty. The survey tool asked staff marketing representative to look at members and non-members purchasing behaviors and particularly at package purchasing but also some demographic data associated with the groups. The work looked at a short period (2 weeks). The staff was asked to generate a total number of guests, a total number of member guests as well as how many of these individuals were repeat guests, guest of other Sands resorts previously and compare members to non-members in package/promotion purchases during the whole period of the two weeks in question. Sample includes a convenience sample of guests as historical data was collected. The system also utilized an existing database associated with the hotel marketing department. The numbers associated with the 2 weeks of the data focus generated a total of 5000 guests, 1175, member guests and 3825 non-member guests. The two-week period demonstrates a guest number at 70% capacity as reflected by total number of rooms occupied, but the numbers reflect customers, whose single stay reflected more than 1 day stay, including some who stayed for the entire two-week period and others who stayed for a single night only. Data collected was then analyzed to determine the data of interest.
Chapter 1

The influence of loyalty program membership on customer purchase behavior, (Meyer-Waarden, 2008). In the retailing industry Meyer-Waarden found that customer membership loyalty programs highly influenced purchasing behaviors, demonstrating that the programs increased purchase amounts at every level (2008, p. 88). While studies that looked specifically at the hotel industry determined that customer loyalty program membership was indicative of both repeat stays at a single hotel outlet and repeat stays at other hotels in the membership program plan.

According to Barsky, chief research officer at Market Metrix an industry marketing firm, "loyalty programs rank fourth among reasons why consumers select a hotel (the top three reasons are location, price and past experience)" (2011, p. 12).The research was conducted on several of the main chains offering rewards programs and each fared differently depending on terms and usage of plans. The work goes on to say that the percentage of guests that reported the importance of their choice to stay at a particular hotel was "very important" across the industry was 34.5% in 2010 and January and February of 2011(p. 12).

It is also important to note that the Sands Rewards Club is a tiered program where members as they use the rewards, length of membership and rewards accumulated indicate the level of tier the individual is eligible for. Members all begin at the first tier (Gold) and progress to the top tiers (Ruby and Diamond) through use and rewards benefits. Membership is free (see Appendix 2) and utilization is voluntary for purchases other than those associated with core services of the hotel, in other words card holders are not obligated to present the card for discounts at affiliate locations but when they do the purchases are logged and result in increased points and greater benefits within each tier (see Appendix 3). The program data as to tier of member is available but not included in the data, as a result of its non-inclusion in the survey tool. The identification of the loyalty program as a type 3 program offers greater knowledge in understanding the type and kind of reward program offered by the Sands Rewards Program (see figure 1).

Figure

1

Loyalty Program Types

Berman, B 2006, 'Developing an Effective Customer Loyalty Program', California Management Review, 49, 1, p. 125, Business Source Premier, EBSCOhost,…