A Model of Hotel Defection at the Purchasing Stageby Sarah Tanford, Carola Raab, Yen-Soon Kim

Journal of Hospitality Marketing & Management

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Year
2013
DOI
10.1080/19368623.2013.728988
Subject
Tourism, Leisure and Hospitality Management / Management Information Systems / Marketing

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Publisher: Routledge

Informa Ltd Registered in England and Wales Registered Number: 1072954 Registered office: Mortimer House, 37-41 Mortimer Street, London W1T 3JH, UK

Journal of Hospitality Marketing &

Management

Publication details, including instructions for authors and subscription information: http://www.tandfonline.com/loi/whmm20

A Model of Hotel Defection at the

Purchasing Stage

Sarah Tanford a , Carola Raab a & Yen-Soon Kim a a William F. Harrah College of Hotel Administration, University of

Nevada, Las Vegas , Las Vegas , Nevada , USA

Accepted author version posted online: 16 Jan 2013.Published online: 16 Oct 2013.

To cite this article: Sarah Tanford , Carola Raab & Yen-Soon Kim (2013) A Model of Hotel Defection at the Purchasing Stage, Journal of Hospitality Marketing & Management, 22:8, 805-831, DOI: 10.1080/19368623.2013.728988

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Journal of Hospitality Marketing & Management, 22:805–831, 2013

Copyright © Taylor & Francis Group, LLC

ISSN: 1936-8623 print/1936-8631 online

DOI: 10.1080/19368623.2013.728988

A Model of Hotel Defection at the

Purchasing Stage

SARAH TANFORD, CAROLA RAAB, and YEN-SOON KIM

William F. Harrah College of Hotel Administration, University of Nevada,

Las Vegas, Las Vegas, Nevada, USA

Hotel operators spend millions of dollars each year to create customer loyalty. Less attention is paid to factors that cause customers to defect. In the current study, factors that influence hotel purchasing and established loyalty-related constructs were integrated into two models of hotel defection, one for full-service brand guests and one for limited-service brand guests. For full-service hotels, the decision to defect or not is driven by affective, or emotional, commitment, as well as switching costs, which are defined as the amount of discount that an otherwise loyal customer would require to switch to a competing brand. Hotel selection factors influence defection primarily through their impact on affective commitment.

For limited-service guests, value considerations play a central role.

Reward program membership and hotel selection factors influence defection through commitment, based on reward program benefits.

The findings emphasize the importance of tailoring hotel features and reward program benefits to the needs of target customer segments.

KEYWORDS loyalty, commitment, switching costs, hotel selection factors, reward programs

INTRODUCTION

Loyalty is a cornerstone of hotel success. Hotel operators spend millions of dollars on loyalty programs and marketing campaigns to increase brand loyalty. Much has been written about hotel loyalty, its determinants, and its

Address correspondence to Sarah Tanford, PhD, William F. Harrah College of Hotel

Administration, University of Nevada, Las Vegas, 4505 Maryland Parkway, Box 456021, Las

Vegas, NV 89154-6021, USA. E-mail: sarah.tanford@unlv.edu 805

D ow nl oa de d by [U niv ers ity of

A riz on a] at 12 :39 19

A pr il 2 01 5 806 S. Tanford et al. many positive effects. Less attention has been paid to the negative manifestation of loyalty—defection. For every loyal customer of a hotel brand, there are competitors out to steal that customer’s business. It is often stated that it costs five times more to replace a customer than keep an existing one.

Hotel operators need to understand what causes a previously loyal customer to be lured away by these efforts, in order to prevent the costly loss of customers.

Loyalty is manifested in a variety of ways. The lodging literature often defines loyalty in terms of behavioral intentions to revisit or recommend to others (Clemes, Gan, & Ren, 2011; Lee & Back, 2010; Matzler, Renzl, &

Rothenberger, 2006; Wilkins, Merrilees, & Herington, 2010). It is also associated with price insensitivity and frequency of visitation (Hu, Huang, &

Chen, 2010; Shoemaker & Lewis, 1999; Skogland & Sigauw, 2004). Many antecedents of loyalty have been identified, including commitment, trust, service quality, satisfaction, reward program attributes, brand equity, perceived value, and switching costs (e.g., Clemes et al., 2010; Kandampully &

Suhartanto, 2000; Lee & Back, 2010; Matzler et al., 2006; Narteh, 2013; Wilkins et al., 2010). When analyzing loyalty, it is important to distinguish between the outcomes of the hotel experience and the factors that influence purchasing behavior. Customers may be satisfied with their hotel stays and express intentions to return, but what happens during the booking process when they are faced with many hotel choices, each offering different features and prices? Is their experience-based loyalty the only factor that will influence their purchase decisions? Research has shown that many factors influence hotel selection, such as location, image, price, service, convenience, and amenities (Dolnicar & Otter, 2003; Lockyer & Roberts, 2009; Tanford, Raab, & Kim, 2012). These factors may take precedence over brand loyalty at the booking stage, causing some guests to switch away from a brand to which, if asked, they would normally consider themselves loyal.