Hotel Loyalty Programs: Strategies, Benefits, and Brand Trust
This paper surveys academic research on hotel loyalty and benefits programs, drawing on sources from Marketing Science, the Cornell Hotel & Restaurant Administration Quarterly, the Journal of Marketing, and related journals. It examines why brand loyalty has declined, how commitment and trust underpin effective relationship marketing, and what specific program features—pricing transparency, emotional bonding, and capacity management—determine whether rewards programs build genuine customer assets or produce costly liabilities. The paper reviews contributions from Morgan & Hunt, Shugan, Kapferer, Kivetz, Mattila, Wansink, and others to construct a comprehensive picture of best practices and common pitfalls in hospitality loyalty marketing.
- Introduction: The Decline of Brand Loyalty in Hospitality: Why hotel chains launched rewards programs amid declining loyalty
- Literature Review: Commitment, Trust, and Relationship Marketing: Shugan and Morgan & Hunt on trust, commitment, and customer assets
- Customer Emotions, Pricing Transparency, and Reward Design: Emotions, pricing fairness, and effort-reward trade-offs in programs
- Capacity Management, Program Effectiveness, and Data Utilization: Rewards programs as tools for capacity and competitive pricing management
- Summary and Conclusions: Trust and emotional bonding outweigh transactional reward offerings
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What makes this paper effective
- The paper synthesizes a wide range of peer-reviewed sources—spanning Marketing Science, the Journal of Marketing, and Cornell hospitality journals—into a coherent argument about what makes loyalty programs succeed or fail.
- Each source is introduced with its author's credentials and publication context, giving the reader clear signals about the authority and relevance of each contribution before the findings are discussed.
- The paper maintains a consistent evaluative thread—distinguishing genuine loyalty-building from short-term "sham" programs—that ties together otherwise disparate empirical studies.
Key academic technique demonstrated
The paper demonstrates effective thematic literature review: rather than summarizing sources in isolation, it groups them around recurring concepts (commitment, trust, emotional bonding, pricing fairness, capacity management) and explicitly shows how earlier foundational work (Morgan & Hunt 1994) influenced later applied research. This layered citation strategy signals strong command of the field's intellectual history.
Structure breakdown
The paper opens with a contextualizing introduction citing Kapferer on declining brand loyalty, then moves through a structured literature review organized by individual scholars and their contributions. A brief summary section synthesizes the key takeaways—particularly the primacy of emotional engagement and trust over transactional rewards—before closing with a full Works Cited list formatted in a consistent journal-citation style.
Introduction: The Decline of Brand Loyalty in Hospitality
Hilton Hotels (HHonors), Marriott (Honored Guest), Holiday Inn (Priority Club), Hyatt (Gold Passport), Sheraton (Club International), and numerous other hotel brands have over the past few years developed benefits and rewards programs. They launched these programs because these and other hotel chains felt the sting of waning customer loyalty; they are battling back with rewards, benefits, and other special marketing programs to regain some of that lost loyalty. Indeed, saying that brand loyalty is in decline is, at the very least, "an understatement," according to Jean-Noel Kapferer. Writing in Ivey Business Journal Online, Kapferer (Professor of Marketing at HEC Paris, Graduate School of Management) asserts that while brand loyalty is the "holy grail" of marketing (Kapferer 2005), locating and holding on to that holy grail has become more difficult in recent years because consumers are more versatile and "less loyal" than they have ever been.
Many studies have shown, Kapferer continues, that satisfied customers, when considering their next purchase, do not automatically buy the same brand or stay in the same hotel; instead, the customer tends to select from several brands within the same product category. Kapferer uses the analogy of the institution of marriage, which is supposed to be a long-lasting relationship based on fidelity. And yet, in many cultures and countries, men and women divorce and remarry "many times" in their lives. Given this lack of fidelity and loyalty between men and women across widely diverse cultures, it is then "unreasonable" for brands to "demand exclusive long-term relationships" with customers, Kapferer explains. Moreover, it is "logically impossible" for a brand such as Hilton or Marriott to expect loyalty when it is "not reciprocal." This is the key point Kapferer offers in his research: brands wine and dine their customers and expect "total faithfulness" when in fact brands should simply treat their customers as good friends and offer them the gratitude befitting good friends. This is where benefit programs enter the picture.
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