Customer Loyalty Programs In Luxury Hotels: A Case Study Of Siam Kempinski Hotel

The importance of customer loyalty programs in the hotel industry

Question:

Describe an analysis of customer loyalty schemes of Siam Kempimski Hotel in Bangkok?

In today’s competitive scenario, image of the restaurants are mostly recognised by the components of customer loyalty and thereby it is a corner store for the fine restaurant industries. As opined by Berman (2006), investments in customer loyalty program and schemes as a new weapon to leverage customer satisfaction. Hotel companies are driving a large portion of their profit from their loyal customer base. Customer loyalty leads to higher customer retention and business profitability whereas failure to satisfy customer’s needs would normally causes cessation of the business from the market place. Ju and Yoo (2009) evaluated the advantages of customer loyalty in terms of increasing per-customer revenue cost, reducing marketing cost, increasing profit and referrals. The creations of loyal customers are less likely to switch away to the other brands and at the same time, firms covered their business loss quickly while dealing with the loyal customers.

In the restaurant industries, investments of a significant amount of money to the customer loyalty schemes are important, as there is a positive interaction between customer satisfaction, customer loyalty and customer retention (Evanschitzky, 2011). Customer loyalty schemes are acts as a customer relationship-marketing device to enhance the development of rational behaviour and attitude among the customers towards a particular brand. The growing interest on the customer loyalty schemes is visible in types of industries, especially in the hotel sectors (Furinto et al. 2009). The current dissertation particularly focuses on to find out the ways in which the customer loyalty schemes encourage to form repeated business in the luxury hotels with the case study of Siam Kempinski hotel.

As mentioned in above, the researcher has conducted the research with a special focus on a case study of Siam Kempinski hotel, which is a reputed luxury hotel in Bangkok (Hayes, 2009). For accomplishing this research, the case study has been decided as the strategy, which involves an empirical investigation with the real life context by using a range of evident. The researcher has chosen the study of Siam Kempinski hotel Bangkok of Thailand as it offers appropriate insights to the research findings that cannot be achieved using other cases. The case study is appropriate to develop a good understanding about the behaviour of the customers using loyalty cards and the ways in which the loyalty programs motivate customers to make their purchase decisions. As an international hotel, Siam Kempinski influence customers in both local and global market by offering their international loyalty cards.  

Siam Kempinski is the largest hotel group in Europe with a history of more than 100 years. The history of the company began in Genrva in the year 1897 with the foundation of Hotelbetriebs- Aktiengesellschaft in Berlin. In 1997, the company has acquired its present name as Kempinski Aktiengesellschaft (AG). Since 2004, the company has changed its portfolio to the new empire of Thailand who ensures the growth of AG significantly further (kempinski.com. 2015). They have implemented worldwide extension methodology to create new markets for AG. With this extension methodology, Kempinski now operates a total of 75 five-star hotels in more than 30 countries worldwide (Lo and Im, 2014). Every year, the company invested a significant amount of its total profit in loyalty schemes to create loyal customers and profitable business. The loyalty program of Kempinski incorporates with the Global Hotel Alliance (GHA), which is a largest alliance of the independent luxury hotel brands, offers best loyalty, and rewards programs. There are three levels in the loyalty programs and they are Gold, Platinum and Black. All these levels are characterised by different facilities and customer receives loyalty program benefits as per their membership levels.

Examining the case of Siam Kempinski Hotel in Bangkok

The particular study aims at identifying how the loyalty programs in luxury hotel is helping them to drive their business and also to examine the perception of the customers changes with the implementation customer loyalty programs on the hotel industries.

• To analyze the reasons behind implementation of brand loyalty in the luxury hotel chain
• To understand the factors that motivate the customers to make their decisions in the luxury hotel chain
• To measure the significance of loyalty schemes in enhance new customer base
• To evaluate the ways in which luxury hotels can improve its customer loyalty

• Why do customers have brand loyalty in luxury hotel chain?
• Which factors motivate customers to make decision choosing luxury hotel chain?
• How can a loyalty schemes increase the new customers?
• How can a luxury hotel improve its customer loyalty?

• H₁ Customer satisfaction is positively associated with cognitive brand loyalty
• H₂ Cognitive brand loyalty is positively associated with affective brand loyalty
• H₃ Affective brand loyalty is positively associated with the conative brand loyalty
• H₄ Customer satisfaction mediates the relationship between image congruence and attitudinal brand loyalty

The basic reason for choosing this particular topic is to analyse the importance of customer loyalty program in the process of attracting and influencing purchasing behaviour of the customers in hotel industries (Stock and Zacharias, 2013) (Winters and Ha, 2012). For a long time, Siam Kempinski is giving priority to the loyalty programs as they believes that it can enhance their market share by increasing their customer focus towards their brand. As suggested by (Zakaria, 2014), loyalty schemes is more profitable approach in comparison to the other marketing activities, for instance discounting or promotional programs. As a mature business, hospitality sector always seeks to pursue market share gains rather than market growth gains. Because of promotional, advertisement, start-up operating expenses, the cost of developing new customer base is costly (Tanford and Malek, 2014). Thus, the marketing focus of the hospitality industries are moving towards the relationship marketing and establishing customer retention among the existing customer base. Presently, to secure their loyal customer base, it becomes fundamental for the tourism and hospitality organizations to develop terms of their business strategy on the basis of what their customer thinks about their hotels properties.     

However, still Kempinski is lacking to maintain its older customer base. Customers of the company gradually are diverting to the other brands probably for the higher satisfaction and rewards. The loyalty scheme followed by the company might not be effective enough to increase customer retention levels and thus in the competitive market place customers are finds it easy to switch to the other brands (Makasi, 2014). The particular research topic is significant as it seeks to evaluate the lacks in the current loyalty scheme of Kempinski. In the view of the scenario, the researcher also interested to analyse the attitude of the customers towards forming their purchasing decisions.  

Despite of conceder able attention given to the loyalty programs, the impact of loyalty program on Kempinski’s image is negligible. It has been observed that, the implementation of the customer loyalty program is not consistent with the needs of their targeted market. Undoubtedly, customer loyalty is critical for the accomplishment of any restaurants that focuses on maintain its market share. However, success of the program depends on how effectively it can satisfy needs and requirements of the customers (Shin and Park, 2014). Customers who receive poor service will generally relate their dissatisfaction with the company’s image. Even though the company invests a significant amount of its total profit on the loyalty programs, still there is a lack in its planning process that creates difficulties for the company to retain its older customer base. The dissatisfied customers are ruin business of Kempinski and thus they are losing their market share continually (Kristiani et al. 2013). In order to overcome these problems, it is very important for the company to create its position in the market by modifying its customer loyalty strategy in the market place. Restaurants must be aware about the customer’s needs and develop loyalty programs in line with targeted market preference and effectively know the ways in which they can manage their images to enhance the chance of their restaurants for success.

Understanding how loyalty programs contribute to customer retention, business profitability, and customer satisfaction

The primary purpose of the study is to analyse the importance of customer loyalty schemes to build  a positive and strong relationship among the customers and service provider in the hospitality industries. The researcher has carried out the entire research on the basis of the case study of Siam Kempinski, which is a well reputed hotel in Bangkok. To do so, the researcher has tried to evaluate various psychological and social factors that influence perceptions of the customers towards loyalty programs. Loyalty program for the luxury hotels are generally aims at boosting the customer’s sense of loyal belongingness towards the particular brand (Vesel and Zabkar, 2009). Focusing on the customer loyalty schemes, the current study intended to understand the basic characteristics of loyal programs that influence purchasing behaviour of the customers and their relational and attitudinal response to the loyalty programs. The study also intend to evaluate basic gaps in the current loyalty programs followed by Siam Kempinski and identify the reasons behind these gaps. In short, the current study aims to investigate three major implications and they are the impact of customer loyalty programs on attracting customer response, factors that motivates customers to make their decisions in the luxury hotel chain and the role of this program on developing the relationship firms and customers.

This examination of customer loyalty program in association with the relationship marketing will enrich the literature regarding the loyalty programs. The significant changes faced by hospitality industries provide its customers more choices for easily shifting to the other brands (Verhoef, 2002). Thus, building a strong relationship with the customers seems to be critical to imperative in the hospitality business. In order to build such relationship and develop better understanding, customer relationship programs are plays an important role. By identifying gaps in the present customer loyalty schemes followed by the company the study will investigate factors that needs to be included to develop a strong customer identity and cultivate the relationship in a better way.

In order to get a standard result of the study and maintain the flow of the work in an coherent manner, in it crucial to maintain a proper structure. Therefore, the researcher has segmented the entire dissertation into five different chapters. Details of the each chapter are discussed in below:

Chapter 1: Introduction

The first chapter of the dissertation acts as the introductory chapter to the study and therefore in this chapter the researcher has introduced some basic things about the research topic on which the research has been worked upon. A detail background of the study has been discussed here to develop a comprehensive idea on the study. Moving ahead, rationale and problem statement have been provided to address the issues that Kempinski is facing due ineffective customer loyalty programme and developing scope of the research work based on the topic. Finally, based on the entire discussion, research aim, objectives, research questions and hypothesis to the research are formulated.

Chapter 2: Literature Review

The second is supposed to be comprise theoretical concepts and models based no the research topic. The develop knowledge on the research topic, the researcher has done an extensive research on the concepts and theories based on the customer loyalty schemes, its importance in the hospitality industries, various strategies that are effective to achieve customer loyalty and outcome of the loyalty schemes. Having done that, the researcher has analysed importance of these schemes another details in Siam Kempinski’s context to relate the above mentioned concepts and gain knowledge about the gap areas.  

Evaluating the effectiveness of Kempinski's loyalty program

Chapter 3: Research Methodology

The third chapter of the study focuses on a clear descriptions of various methodologies that are being used by the researcher to work on the entire research. it is an important segment of the research as it serves the entire procedures which have been followed to established an objective based outcome.

Chapter 4: Data Analysis and Interpretations

Having discussed research methodologies in the earlier chapter, chapter four has laid down on analysing and assessment of the empirical information that has been gathered by the researcher through survey. The researcher has demonstrates the analysis with the help of SPSS statistical package in order to examine the data in better way and develops an effective understanding to the research findings.

Chapter 5: Conclusions and Recommendations

This is the last segment of the entire study which serves as concluding feedbacks based on the entire research. In this chapter, the researcher has presented a conclusion based on the knowledge that have deducted from the study. Some recommendations are also been enlisted at the end of the chapter that Kempinski could include to its customer loyalty schemes for improving its brand image, customer engagement, relationship building  and retain customer base.

This particular chapter provides an overview of the entire study and the implications of the research topic by discussing background, issues and needs to conduct the study. As identifies in this chapter, customer loyalty schemes are very effective to improve customer retention level in hospitality industries. Loyalty initiatives help to enhance customer satisfaction level. However, to maximize the benefits of the loyalty programs, proper implementation is crucial. This chapter briefly described the content of the research, like research aim, objectives and questions. Followed by this chapter, the next chapter literature review has been formulated that comprises various models and theoretical concepts related to the customer loyalty schemes and purchasing behaviour of the customers. Based on the basic theme of this chapter, the following chapters will continue to enhance the knowledge levels of the researcher as well as the reader.

The data analysis and interpretation is prominent in relation to the reflection of the collected primary data from the survey. In this particular chapter, the researcher will interpret the data collected from the respondents and analyse them by using various statistical data, which will be used to measure the validity and reliability of the data set. The involvement of different types of customers of Siam Kempinski, the researcher will be able to collect the relevant information in relation to the research area. The researcher will be present various types of data for achieving the aim of the study. Feedbacks on different aspects and factors that affects purchasing behaviour of the customers and implementation of the loyalty programs are been collected from the involved respondents of the company. As per the research objectives, viewpoints of the respondents are gather in relation to provide better quality to the result. The collected data has been analysed with the help of SPSS software, where reliability test, regression, T-test, Chi- Square test and ANOVA will be used in the study.

The attitude of customers towards forming their purchasing decisions

Table: Reliability Cronbach’s Alpha Test

As illustrated by Greene (2003), Cronbach’s Alpha is the measure of internal consistency of the data set, i.e. how closely the data are related to each other. In statistics, alpha can be viewed as the expected correlation of the two tests with same constructs. It generally defines the average consistency and the variance of total score.  For the current data set, the Cronbach’s Alpha test has been used to test the reliability of the questions being asked to the respondents. The reliability test included in the SPSS is termed as the Cronbach’s Alpha Test. The alpha coefficient for the data set is .993, suggesting that the chosen items have high internal consistency. The score denotes that the highly reliable with respect to the research topic and aim of the study.

Table 4.1: Gender of the respondents

Gender
		Frequency	Percent	Valid Percent	Cumulative Percent
Valid	Male	34	34.0	34.0	34.0
	Female	66	66.0	66.0	100.0
	Total	100	100.0	100.0

Figure 4.1: Gender of the respondents

The male female ratio for the respondents is 34:66, which represents female visitors are comparatively more than the females. Around 34.0% of the respondents are male while the remaining 66.0% are the female customers.

Table 4.2: Age of the respondents

Age
		Frequency	Percent	Valid Percent	Cumulative Percent
Valid	Under 20	4	4.0	4.0	4.0
	20-29	72	72.0	72.0	76.0
	30-39	18	18.0	18.0	94.0
	40-49	6	6.0	6.0	100.0
	Total	100	100.0	100.0

Figure 4.2: Age of the respondents

Analysis:

Majority of the respondents (72.0%) are lies in the age range between 20 to 29 years follows by  the customers lying between 30 to 39. Apart from them, 6.0% of the respondents falls in the age group 40 to 49 and remaining 4.0% falls in the age group under 20.

Table 4.3: Occupation of the respondents

Occupation
		Frequency	Percent	Valid Percent	Cumulative Percent
Valid	Student	22	22.0	22.0	22.0
	Employed	46	46.0	46.0	68.0
	Self-employed	22	22.0	22.0	90.0
	Unemployed	10	10.0	10.0	100.0
	Total	100	100.0	100.0

Figure 4.3: Occupation of the respondents

Analysis:

As indicated by the above table, customers of Siam Kempinski Hotel belong to diverse occupational groups. Among them most of the customers (46.0%) who participated in the survey are employed. Students and self-employed respondents are 22.0% and 22.0% respectively. The remaining 10.0% belonged to the unemployed category. So, the consumers of the Siam Kempinski Hotel belong to diverse occupational group.

Table 4.4: Purpose of Visit

POV
		Frequency	Percent	Valid Percent	Cumulative Percent
Valid	Business	40	40.0	40.0	40.0
	Leisure	46	46.0	46.0	86.0
	Convention	10	10.0	10.0	96.0
	Other	4	4.0	4.0	100.0
	Total	100	100.0	100.0

Figure 4.4: Purpose of Visit

Analysis:

As per the above information, it signifies that majority of the customers are visits Siam Kempinski Hotel for their business and leisure purpose. Hence the consumers prefers to visit the hotel as it provides them great comfort during their leisure time and busy schedule.

Table 4.5: How did you find us

General1
		Frequency	Percent	Valid Percent	Cumulative Percent
Valid	Friend and family	18	18.0	18.0	18.0
	Exhibition	10	10.0	10.0	28.0
	Internet	67	67.0	67.0	95.0
	Travel Agency	5	5.0	5.0	100.0
	Total	100	100.0	100.0

Figure 4.5: How did you find us

Social media or internet tortures have become one of the most vital forms of advertisement. There are several advertisements of the amenities and other facilities offered by the Siam Kempinski Hotel and this helps the individual to gain knowledge about the brand. Thus, internet sources help to develop a good relationship with the customers. The results depicts that, majority of the customers have gathered information about the hotel via internet sources.

Table 4.6: Reason to chose Siam Kempinski Hotel

 

General2
		Frequency	Percent	Valid Percent	Cumulative Percent
Valid	Room rate	24	24.0	24.0	24.0
	Location	46	46.0	46.0	70.0
	Amennities and Facilities	14	14.0	14.0	84.0
	Special package	16	16.0	16.0	100.0
	Total	100	100.0	100.0

Figure 4.6: Reason to choose Siam Kempinski Hotel

The Siam Kempinski Hotel is located in Bangkok, which is a one of the best city of tourism attraction worldwide. Seven top tourist attraction in Bangkok are Bangkok Klongs, Khao San Road, Wat Arun, Temple of the Reclining and Grand Place & Wat Prakeaw. Because of these tourist spots, many people comes to Bangkok and visits this hotel. Among the total respondents, 46.0% have chose their visiting purpose as the location. However, people also visits this hotel for attractive room rate and other facilities offered by the hotel.

Table 4.7: Have you previously used our services

General3
		Frequency	Percent	Valid Percent	Cumulative Percent
Valid	Yes	78	78.0	78.0	78.0
	No	22	22.0	22.0	100.0
	Total	100	100.0	100.0

Figure 4.7: Have you previously used our services

Maximum number of respondents (78.0%) participated in the survey have said that they have used and aware about the service offered by the Siam Kempinski Hotel. On the other hand, the remaining 22% have said that they never used the service provided by the hotel previously.

1. Customer Satisfaction
   
   1.1 I am happy about my decision to stay at this hotel.

Table 4.8: Happy about their decisions to stay at this hotel

Figure 4.8: Happy about their decisions to stay at this hotel

From the above table, it can be stated that majority of the respondents (20.0 % strongly agreed and 16.0% agreed) has agreed that they are happy about their decision to stay at Kempinski hotel. However, there are 24.0% of the respondents are neutral with respect to the particular question. They have given an unbiased answer regarding the particular question. Following to the table, about 10% respondent (2.0% disagree and 8.0% strongly disagreed) are not happy with their decision.

Kempinski tries to focus on attracting attention of the customers and have implemented the loyalty program that helps them to add large number of customers with the company. From the collected data it has been observed that, large number of respondents believes that Kempinski provides enough facilities to its customers and thereby they are happy with their decisions and likes to chose the hotel in future too. Still, some respondents think that there are some other hotels those offers better service in comparison to Kempinski and thus they are not happy with their decisions. The management team of the hotel needs to improve their service quality in order to maintain their position in the highly competitive market.  

Table 4.9: They did the right things when they stayed at this hotel

 

Figure 4.9: They did the right things when they stayed at this hotel

From the above figure, the researcher finds that around 18.0% strongly agreed and 22.0% agreed that they did the right things when they had stayed at Kempinski. On the other hand, only 6.0% and 2.0% of the respondents slightly disagreed and disagreed the statement. However, 24.0% of the respondents gives neutral answer to this fact.  

From the result, the researcher found that the majority numbers of customers are happy with the service quality of Kempinski. The company always tries to provide high quality service to its customers. Kempinski has given focus on the implementation of the customer loyalty schemes to retain its customer as loyalty programs are one of the main aspect through which the company can penetrate its customer base. However, some respondents think that the service quality of Kempinski is not competitive enough to stand up with their expectations. So, it is very important for the company to restructure its service quality according to the market requirements in order to attract more customers.

Table 4.10: Respondents are satisfied with their decisions

Table 4.10: Respondents are satisfied with their decisions

In accordance to the collected data, about 32% of the respondents (20.0% strongly agreed and 12.0% agreed) are in favour of the fact that they are satisfied enough with their decisions to stay at Siam Kempinski hotel. Majority of the respondents (42.0%) agreed with the fact. However, it is found that nearly 10% respondents are slightly disagreed with this question while 12.0% of the respondents preferred to remain as a neutral.

From the above findings, the researcher finds that majority of the customers are happy with their overall decision to stay at this hotel. Most of the customers are satisfied with the price strategy and service quality of Kempinski. It will positively influence the brand image of the company (Sathi, 2011). Customers of Kempinski will preferably like to stay in this hotel in future too. But there are some customer who are not satisfied with the service quality and other facilities at Kempinski and therefore in future they will prefer to go for to chose some other hotels. The management team of the hotel needs to improve their service quality and other facilities to enhance their market share and capture their brand image.

2.1 The Siam Kempinski Hotel provides me superior service quality as compared to any other hotel brand.

Table 4.11: Siam Kempinski Hotel provides superior quality

Figure 4.11: Siam Kempinski Hotel provides superior quality

From the above figure it has been found that around 12.0%b of the respondents strongly agreed and 16.0% of the respondents agreed that Siam Kempinski hotel provides them superior service quality as compared to the other hotel brands. However, 14.0% of the respondents slightly disagreed with the fact. 24.0% of the respondents are followed by neutral option.  

In relation to the above findings, it can be infer that majority number of respondents (14% of the respondents slightly disagreed) thinks that the service quality provided by the company is not superior in comparison to the other hotels. Even though some customers are happy with their decision to stay at Kempinski, they agree that there are some other hotels those provides better service than Kempinski. This kind of image over the customer’s minds can hamper business profile of Kempinski and hamper its brand image. Thus, Kempinski needs to improve its service quality to retain its existing as well as capture new customers. Company needs to improve its service quality so that customers from all levels are easily gets attracted to the service of Kempinski and the company can expand its market share.

Table 4.12: No hotels can perform better that Siam Kempinski Hotel

Figure 4.12: No hotels can perform better that Siam Kempinski Hotel

As per the presented in the above figure and demonstrated, it is observed that around 28.0% of the participants followed by the neutral option in response to the fact that no other hotel can perform services better than the Siam Kempinski. On the other hand, 26.0% and 26.0% of the respondents slightly agreed and slightly disagreed option respectively with this fact. The disagreed option is followed by only 5.0% of the respondents.

From the above findings the researcher has found that majority of the customer has given unbiased option regarding whether Siam Kempinski provides best service quality or not. The respondents were quite confused about the question. They agreed that the service quality of Kempinski is good enough. However, they also thinks that there are some other hotels too who may provides better quality service than Kempinski. In the competitive market, some hotels are becoming more concerned to satisfy their customers and achieve delighted customers. Thus, it becomes very important for Kempinski to provide greater emphasis on improving their service quality and retaining their customer base. 

Table 4.13: Siam Kempinski Hotel provides more benefits than others

Figure 4.13: Siam Kempinski Hotel provides more benefits than others

As per the data has been presented and represented in the above table, a considerable 30.0% of the respondents (23.0% slightly disagreed and 7.0% disagreed) seems to be disagreed with the fact that Siam Kempinski has more benefits in comparison to the other hotels in its category. Only 17.0% of the respondents are slightly agreed that Kempinski provide more benefits to its customer than other hotels while 25.0% of the respondents preferred to remain as a unbiased judge.  

From the above response it can be said that customers have provides mixed response to this particular question. Some respondents think that, Kempinski provides range of benefits to its customers and there are no other brands those can match it. However, majority of the respondents have been provided unbiased judgement with respect to this question. Even though, Kempinski provide range of benefits to its customers, there are some other hotels too who also attached a large range of benefits for their guests. Hence, it is evident that, Kempinski needs to work more on its customer loyalty program to create its unique position in the market.

3.1 I love staying at the Siam Kempinski Hotel.

Table 4.14: They love staying at Siam Kempinski Hotel

Figure 4.14: They love staying at Siam Kempinski Hotel

From the above table it has been found that, majority of the customers (18.0% strongly agreed and 17.0% agreed) response that they love to stay at the Siam Kempinski Hotel. Only 4% respondents disagreed with this fact. However, the neutral option followed by 26.0% of the respondents.

From the above findings, the researcher gets that customers are basically loves to stay at Siam Kempinski Hotel because of its service quality, pricing strategy and other benefits. The researcher also finds that, because of the high emphasis on the customer loyalty programs, it has highest market share in the market. But if the competitors also started to provide same or better service then it must lose its market share and customer base. Thus, the company needs to modify its loyalty schemes to retain its old customer base as well as attracting newer ones.     

Table 4.15: Respondents feel better when I stay at the Siam Kempinski Hotel

Figure 4.15: Respondents feel better when I stay at the Siam Kempinski Hotel

Majority of the respondents amounting to 23.0% slightly disagreed that they feels better when they were stayed at Siam Kempinski Hotel. However, only 8.0% of the respondents strongly agreed that they feel better when they were stayed at this hotel. Finally, 25.0% of the respondents followed neutral option in response to this particular question.

It is evident from the result that, customers generally does not convey very good experience with Siam Kempinski Hotel, as majority of the respondents disagreed to the question. There might be some other competitive hotels those provides better facilities to their guests (Kim et al. 2013). Thus, customers do not feel better when they visit Kempinski Hotel. In order to improve their market position, the management team of Kempinski Hotel connect their customer loyalty program with the market requirements and needs of their customers.  

Table 4.16: Respondents like the Siam Kempinski Hotel more than other hotel brands

Figure 4.16: Respondents like the Siam Kempinski Hotel more than other hotel brands

In response to the above question, nearly 16.0% of the respondents strongly agreed that they like Siam Kempinski Hotel more than the other brands. On the other hand, around 24.0% of the respondents (13.0% strongly disagreed and 11.0% disagreed) with the fact. Around 25.0% of the respondents followed the neutral option.

From the above data it has been observed that, majority of the respondents do not prefer Siam Kempinski Hotel over other brands. Most of the customers believe that, other brands in the hotel sectors are more capable to satisfy their customers’ needs and offers better facilities to their guests. Therefore, these brands are gets an advantage over Kempinski over the customers’ minds.

4.1 Even if another hotel brand were offering a lower room rate, I would still stay at the Siam Kempinski Hotel.

Figure 4.17: Overall response to the customer’s preference to stay at the Siam Kempinski Hotel

Figure 4.17: Overall response to the customer’s preference to stay at the Siam Kempinski Hotel

Around 19.0% of the respondents are disagreed that they would prefer to stay at the Siam Kempinski hotel, even if another brand offers a room with lower rate. However, 20.0% of the respondents slightly agreed with the statement. 15.0% of the customers are prefer to remain as a neutral.

Customers are price sensitive. Now a days, majority of the customer prefer to make cost effective decisions regarding booking a hotel rooms and other facilities to their visiting place. Thus, charging higher price adversely affects customer’s decisions. If other brands in hotel sector offer rooms and other facilities at lower rate, then customers would preferably buy hotel service from these brands. Thus, the management team of Kempinski Hotel has to charge competitive price to capture the market.     

Table 4.18: Intend to continue staying at Siam Kempinski Hotel

Figure 4.18: Intend to continue staying at Siam Kempinski Hotel

About 23.0% of the respondents slightly disagreed with the fact that they will continue to staying at the Siam Kempinski Hotel in future too. Only 12.0% of the respondents said that they would prefer to continue staying at the hotel. However, 24.0% of the respondents are confused with their decision and made chide in favour of neutral option.

Customers generally prefer to visit a hotel further if they have some good experience with the hotel in terms of better service quality, reasonable price and other benefits (Anderson and Gerbing, 1998). Various types of customer loyalty schemes are necessary component to retain customers. Loyalty schemes are necessary to improve customer retention and boosts profitability condition. But might be the loyalty schemes followed by the company is not effective enough to attract customers and thereby most of them will likely to be prefer to go for some other brands.       

Table 4.19: Response to Siam Kempinski Hotel to be first lodging choice

Figure 4.19: Response to Siam Kempinski Hotel to be first lodging choice

The figure depicts that majority of the respondents have disagreed (3.0% disagree and 25.0% slightly disagree) that Siam Kempinski Hotel is their first lodging choice. With respect to this question, a large portion of the respondents has given an unbiased answer. However, only 8.0% of the respondents are strongly agreed with this fact.  

As suggested by Allaway et al. (2006), lodging choice by the customers depends on various factors and they are price strategy, reputation of the hotel, loyalty programs and rewards, special promotion and benefits. Loyalty initiatives helps to enhance customer satisfaction and thereby customer retention. In the contemporary business environment, customers chose their visiting hotel on the basis of loyalty schemes as they feels rewarded. However, the study reveals that majority of the customer does not consider Siam Kempinski Hotel as their first lodging choice. Thus, the management team of the hotel needs offers their customer something new that they will appreciate.

A Chi- Square test is basically a hypothesis test in which the sampling distribution represents Chi- Square distribution when the null hypothesis is true (Greene, 2003). The Chi- Square test is also called the test of interdependence that discovers the relationship between two categorical variables. In the current study, the researcher has used Chi- Square test to analyse the relationship between gender vs. occupation; and occupation vs. purpose of visits.

Case Processing Summary
	Cases
	Valid		Missing		Total
	N	Percent	N	Percent	N	Percent
Gender * Occupation	100	100.0%	0	0.0%	100	100.0%

Gender * Occupation Cross tabulation
			Occupation				Total
			Student	Employed	Self-employed	Unemployed
Gender	Male	Count	6	12	14	2	34
		Expected Count	7.5	15.6	7.5	3.4	34.0
	Female	Count	16	34	8	8	66
		Expected Count	14.5	30.4	14.5	6.6	66.0
Total		Count	22	46	22	10	100
		Expected Count	22.0	46.0	22.0	10.0	100.0

Chi-Square Tests
	Value	df	Asymp. Sig. (2-sided)
Pearson Chi-Square	11.212a	3	.011
Likelihood Ratio	10.771	3	.013
Linear-by-Linear Association	1.491	1	.222
N of Valid Cases	100
a. 1 cells (12.5%) have expected count less than 5. The minimum expected count is 3.40.

The Chi-Square statics are generally used to examine the test of independence between two variables. In SPSS, the Chi- Square statistics operates an option for analysing cross tabulation between two variables. From the above table, the following results are evaluated. The Chi-Square Test has been conducted to define the association between the two variable and they are gender of the respondents and their occupation. The Chi- Square test established between these two variables is 12.5%, which reflects that these two variables are closely interrelated to each other. It reveals that, the occupations of the respondents are segregated according to their gender category.

4.3.2 Occupation vs. POV

Case Processing Summary
	Cases
	Valid		Missing		Total
	N	Percent	N	Percent	N	Percent
Occupation * POV	100	100.0%	0	0.0%	100	100.0%

Occupation * POV Cross tabulation
			POV				Total
			Business	Leisure	Convention	Other
Occupation	Student	Count	22	0	0	0	22
		Expected Count	8.8	10.1	2.2	.9	22.0
	Employed	Count	18	28	0	0	46
		Expected Count	18.4	21.2	4.6	1.8	46.0
	Selt-employed	Count	0	15	7	0	22
		Expected Count	8.8	10.1	2.2	.9	22.0
	Unemloyed	Count	0	3	3	4	10
		Expected Count	4.0	4.6	1.0	.4	10.0
Total		Count	40	46	10	4	100
		Expected Count	40.0	46.0	10.0	4.0	100.0

Chi-Square Tests
	Value	df	Asymp. Sig. (2-sided)
Pearson Chi-Square	105.122a	9	.000
Likelihood Ratio	105.669	9	.000
Linear-by-Linear Association	62.101	1	.000
N of Valid Cases	100
a. 10 cells (62.5%) have expected count less than 5. The minimum expected count is .40.

In the above table, the Chi-Square Test has been conducted to test the association between occupation of the respondents and purpose of their visiting. The test results that the association between these variable are 62.5%, which reveals that there is no significant relationship between these two variables. Thus, propose of visiting is not related to the occupation of the respondents.

According to Greene (2003), a T-test is basically hypothesis test in which the test statistics follows Student’s- t distribution if the null hypothesis is true. In other word, it is a statistical examination of two sample means. T-text is used to compare the means between two unrelated but dependent variables. In the current study, the T-test has been used for testing difference between the means and variance at different times.

One-Sample Statistics
	N	Mean	Std. Deviation	Std. Error Mean
SWLS1	100	5.10	1.307	.131
SWLS2	100	5.16	1.261	.126
SWLS3	100	5.08	1.346	.135
SWLS4	100	4.82	1.266	.127
SWLS5	100	4.21	1.282	.128
SWLS6	100	4.43	1.423	.142
SWLS7	100	4.87	1.468	.147
SWLS8	100	4.42	1.319	.132
SWLS9	100	4.62	1.556	.156
SWLS10	100	4.36	1.773	.177
SWLS11	100	4.63	1.529	.153
SWLS12	100	4.42	1.304	.130

One-Sample Test
	Test Value = 0
	t	df	Sig. (2-tailed)	Mean Difference	95% Confidence Interval of the Difference
					Lower	Upper
SWLS1	39.034	99	.000	5.100	4.84	5.36
SWLS2	40.918	99	.000	5.160	4.91	5.41
SWLS3	37.741	99	.000	5.080	4.81	5.35
SWLS4	38.062	99	.000	4.820	4.57	5.07
SWLS5	32.851	99	.000	4.210	3.96	4.46
SWLS6	31.128	99	.000	4.430	4.15	4.71
SWLS7	33.177	99	.000	4.870	4.58	5.16
SWLS8	33.498	99	.000	4.420	4.16	4.68
SWLS9	29.700	99	.000	4.620	4.31	4.93
SWLS10	24.598	99	.000	4.360	4.01	4.71
SWLS11	30.290	99	.000	4.630	4.33	4.93
SWLS12	33.894	99	.000	4.420	4.16	4.68

The mean and standard deviation of overall level of agreement are listed in the above table. The mean score of overall level of satisfaction are 4.67, with a range of 4.21 to 5.16. The standard deviation ranged from 1.261 to 1.773. The customers has shown middle level of agreement for the restaurant image, benefits and customer loyalty schemes.

Further, the sig (2 tailed) value is less than the .05, which reflects that there is a statistically significant difference between the mean numbers of the variables. As the significant value is less than .05, it can be said that the standard division or the variances are not the same.

R-square:

R-square is a statistical measure that defines how closely the data are fitted to the regression line (Greene, 2003). The R-square value indicates the level at which the model is accurate to define the variability of the data in response to its mean. In this study, the R- square test has been used to compute how the data are fitted to the regression line. 

Model Summary
Model	R	R Square	Adjusted R Square	Std. Error of the Estimate	Change Statistics
					R Square Change	F Change	df1	df2	Sig. F Change
1	.924a	.854	.834	.320	.854	42.459	12	87	.000
a. Predictors: (Constant), SWLS12, SWLS3, SWLS8, SWLS10, SWLS4, SWLS2, SWLS5, SWLS9, SWLS11, SWLS1, SWLS7, SWLS6

Coefficientsa
Model		Unstandardized Coefficients		Standardized Coefficients	t	Sig.
		B	Std. Error	Beta
1	(Constant)	-.053	.215		-.248	.804
	SWLS1	.148	.119	.246	1.240	.218
	SWLS2	-.298	.127	-.478	-2.349	.021
	SWLS3	-.211	.084	-.361	-2.502	.014
	SWLS4	.235	.108	.378	2.181	.032
	SWLS5	.483	.104	.787	4.662	.000
	SWLS6	.046	.123	.083	.373	.710
	SWLS7	-.198	.113	-.371	-1.752	.083
	SWLS8	.190	.100	.319	1.892	.062
	SWLS9	.035	.095	.070	.369	.713
	SWLS10	.237	.075	.535	3.177	.002
	SWLS11	-.083	.098	-.162	-.847	.399
	SWLS12	-.082	.117	-.136	-.702	.485
a. Dependent Variable: POV

The regression analysis for the current data set has been conducted by using linear regression. The linear regression has been conducted as the entire sample of the dependent variable is constant.  The F value was calculated to be 42.459 at the significance level .000, which revels the significance o all the variable of the hypothesis in respect to the dependent variable. The formula for the test series is that if the F value if greater than the F critical value then the null hypothesis will be rejected and vice versa. As depicted in the above table, the df₁ value is 12 and df₂ value (total sample size – total variable) is 87. The F value for the current data are 42.459 and the F critical value was evaluated to 1.63, which represents that the null hypothesis will be rejected and alternative hypothesis will be accepted. Also the R-square being .854 reflects a good fit of the dependent and the independent variables. The evaluated R square value is .854, which means around 85% of the variance can be explained by the variables in the regression equation.

In this chapter, the researcher has summarised the importance of customer loyalty schemes in hotel industries with special reference to Siam Kempinski Hotel. The entire discussion on the selected topic has been conducted with the help of various statistical methods, like quantitative method, T-test, Chi-square statistics and F-test. The study of the chapter described the response of the customer on various aspects to evaluate the significance of loyalty programs on luxury hotels. The collected data tried to highlight the role played by customer loyalty schemes in framing customer’s choice while they are selecting their hotel rooms.

Conclusions and Recommendations

5.0 Conclusion:

This dissertation developed by focusing on the effectiveness of the customer loyalty schemes that builds a strong and positive customer relationship. The primary goal of implementing customer loyalty programs is to enhance loyal customer base and retain them.  In today’s competitive business environment, almost all kinds of hotels spend a significant amount of their profit on the customer loyalty program. They consider the loyalty program as an important aspect of their marketing strategy. It has been revealed from the study that Siam Kempinski Hotel also has implemented some customer loyalty schemes, such as choice of newspaper, free local amenities, guaranteed room availability, choice of amenity and so on, in order to create more passionate customer base and improve its marketing process (Czepiel, 1990). The management team of the hotel encourage their customers to make repeated purchase by offering loyalty cards and other facilities. However, there are some gaps as identified from the responses of the customers. Even though the customers appreciates various benefits and reward provided by the hotel to its guests, still they thinks that there are some other competitive hotels in Bangkok those offers better facilities than Siam Kempinski. Thus, a significant amount of the respondents has revealed that they have a tendency to divert to the other hotel brands.

Having conducted the entire study, this particular chapter ensured that the dissertation has successfully met the research objectives and answered all the question properly, which are been asked in the very first chapter of the dissertation. In this chapter, the researcher has followed a triangular approach to link the research objectives, literature review and research questions with the research findings. In short, the final chapter of the dissertation reflects the effectiveness of the entire study in achieving the aim and objectives of the research and also proving the hypothesis. Based on the subject of matter, the researcher will also listed some recommendations and states the limitation and future scope of the study.

In order to test the hypothesis of the research, the researcher have used ANOVA test. The ANOVA or one-way analysis of variance is used to define whether there is any significant difference between the means of two or more unrelated variables (Greene, 2003). The following table represents ANOVA statistics, which has been evaluated from SPSS statistical software.

ANOVAa
Model		Sum of Squares	df	Mean Square	F	Sig.
1	Regression	52.240	12	4.353	42.459	.000b
	Residual	8.920	87	.103
	Total	61.160	99
a. Dependent Variable: POV
b. Predictors: (Constant), SWLS12, SWLS3, SWLS8, SWLS10, SWLS4, SWLS2, SWLS5, SWLS9, SWLS11, SWLS1, SWLS7, SWLS6

From the ANOVA table, it can be stated that the significance value .000 is less than .05. It implies that there is a significant difference between the mean values of the variables. However, it does not tell which conditions means are different. The F- value as founded from the table is 42.459 with degree of freedom 12. On the other hand, the evaluated F- critical value with same degree of freedom is 1.63. It implies that the alternative hypothesis will be accepted and the null hypothesis will be rejected.

Hypothesis 1: Customer satisfaction is positively associated with cognitive brand loyalty

The findings indicate that, when measuring the impact of customer satisfaction on the cognitive brand loyalty, these determinants are classified as having positive relationship. As the F- critical value is less than the F- value, the null hypothesis for the present case will be rejected and the alternative one will be accepted. Thus, it can be infer that, the customer satisfaction is positively related to the with the cognitive brand loyalty. When it comes to significance, there is a significant relationship between these two constructs (as significance level is .000). 

Hypothesis 2: Cognitive brand loyalty is positively associated with affective brand loyalty

As for the current study, the null hypothesis has been rejected and the alternative one has been accepted, it can be said that the cognitive factors of brand loyalty is positively associated with the affective loyalty factors. In order to form a better loyalty schemes, a deep knowledge on both the factors are important.

Hypothesis 3: Affective brand loyalty is positively associated with the conative brand loyalty

As mentioned in above, the evaluated F value is greater that the F critical, the alternative hypothesis will be accepted in this case also. Thus, affective brand loyalty is positively associated with the conative brand loyalty.

Hypothesis 4: Customer satisfaction mediates the relationship between image congruence and attitudinal brand loyalty  

Lastly, in this part also the null hypothesis will be rejected and the alternative one will be accepted. Therefore, it can be infer that, the customer satisfaction all the relationship between these factors and ensures attitudinal brand loyalty on the customer’s mind.

The customer satisfaction is the basis of all types of loyalty programs and schemes. The primary purpose of the study was to investigate the relationship between the customer satisfaction and loyalty programs in luxury hotel with special reference to Siam Kempinski Hotel. From the results from the tests, is has been found that the loyalty measurement basically forms by using behavioural and attitudinal brand loyalty constructs. Among the total respondents who have been considers for the survey, were business travellers who stayed at the hotel. The results from the entire investigation suggested that the customer satisfaction has a strong positive and direct impact on the behavioural loyalty of the customers when it mediates by attitudinal brand loyalty, including cognitive – affective and conative loyalty stages. At the same time, the customer satisfactions in luxury hotels are ensured by implementations of customer loyalty programs. Thus, all the variables are interrelated to each other.

In this section, the researcher has tried to establish a link between the objectives of the study that had been laid down in the first chapter of the dissertation and their practical implications. It has been done as to relate the findings with the literature section and hence to improvise reliability of the work.   

Linking with the Objective 1: To analyze the reasons behind implementation of brand loyalty in the luxury hotel chain

This particular objective has been reflected in the Part -3 of the quantitative analysis section in the question number 1.1, 1.2, 2.1, 2.2, 2.3. The researcher also discussed this objective in the sub point 2.4 of the literature section. As noted from the table no. 4.8, majority of the customers are agreed that they like to stay at Siam Kempinski Hotel as it offers various types of loyalty schemes to make the customer loyal to the organization. Further, table no. 4.11 visibly denotes that the preferences of the customers are highly influenced by the service quality and loyalty programs. Majority of the customers have response that there are some others hotels who provide better service quality as comparison to Siam Kempinski Hotel and they have a tendency to divert to the other brands.

In reference to section 2.4 of the literature part, it clearly discussed that, brand loyalty is an act to attract consumers consistently. Hotel sectors generally establish their brand loyalty through strong advertisement, customer loyalty schemes and high quality service. It is beneficial to attract the existing customers and make them loyal towards the organization. Loyalty programs positively contribute towards reducing the organizational cost and thereby improve the profitability level.     

Linking with the Objective 2: To understand the factors that motivate the customers to make their decisions in the luxury hotel chain

The researcher has reflected this objective in Part-3 of qualitative analysis in the question number 2.1, 2.2, 3.2, 4.1 and 4.3 as well as discussed this topic in the sub point of 2.8 in the literature review. As observed in the table no. 4.11, the service quality is an important factor that influences customer’s decision to choose a hotel room. However, regarding the service quality of Siam Kempinski Hotel, majority of the respondents have given an unbiased answer. The respondents have agreed that, the service quality of the hotel is good, but there are some other hotels those offers better facilities than Siam Kempinski Hotel. So, it is clear that Siam Kempinski Hotel lacks in delivering superior quality service to its customers. Apart from that, reasonable room rate also an important for motivating the customers to make their decisions in the luxury hotel chain and is highlighted by figure 4.1. If the other brands offers lower room rate then they will prefer to give it a try. If such occurs, Siam Kempinski Hotel will not only lose its customers, but also its market share.

Further, from the literature section, it can be said that the cognitive state of human behaviour adequately and inadequately influenced by benefits and rewards. The loyalty schemes are used to recognise and reward the customers.  

Linking with the Objective 3: To measure the significance of loyalty schemes in enhance new customer base

The quantitative question number 2.1, 2.3, 3.3, 4.1 and 4.2 of Part 3 and H₁ is related to this objective. The mentioned questioned reflects that loyalty schemes are the basis of ensuring customer retention. As figured in the table, only 9.0% of the respondents agreed that Siam Kempinski Hotel provides superior quality service than others. According to the response, the other hotel brand offers better service and facilities than Siam Kempinski and thereby the customers have a tendency to divert. Investment in the loyalty schemes reduce marketing and operating cost, the cost involve in attracting new customers and increase the profitability in hospitality industry. Even though Siam Kempinski makes a significant amount of investment on the customer loyalty schemes, it is not very effective and thereby provides negative impact on Kempinski’s brand. Majority of the respondents do not likes to stay in this hotel in future days and it can be a cause for deteriorating the profit of the company.      

Linking with the Objective 4: To evaluate the ways in which luxury hotels can improve its customer loyalty 

The above objective has been evaluated in response to the question number 4.2 and 4.3 in the quantitative section. The entire study reveals that, the company has lacks in implementing competitive customer loyalty schemes and thereby majority of the customer has an tendency to divert to some other brand in future. The recommendations in next section are based on the findings of the analysis of both primary and secondary data.

Make the customer loyalty program more competitive: Siam Kempinski Hotel needs to align their loyalty programs with the price and service quality of its competitors so that the existing customers remain loyal to the brand. Apart from their existing loyalty schemes, the management team of the company can introduce some other offers and discounts for their guests to retain the loyal customers (marketingdonut. 2015). Apart from that, the company also needs to connect the loyalty program with the customer’s needs. Various types of consumers are visits in the hotel and thereby willingness to pay among the consumers differs. Thus, the company should different package of loyalty cards among different consumers according to their preference. Siam Kempinski should cut down profit level per service as it not only help them to retain their customer base but also attract new customers.

Structure non-monetary loyalty programs around the customer’s value: Besides monetary facilities, customers also demands for non-monetary loyalty programs, such as discounts coupons, TV, room service, loyalty cards and free WiFi connection are also essential to ensure customer satisfaction in hotel industries. Siam Kempinski Hotel should attach non-monetary and rewards to their loyalty schemes to provide value to their customers in better way. It will give them an opportunity to be connected with their customer in long run.

One of the vital limitations of the research is limited number of respondents that resulted insignificant result in various circumstances. Because of the time and budget constraint, the researcher was unable to survey large number of customers for collecting data. Another limitation of the study is the lack of support from the managerial segment is also weakened the overall results. The strength of the dissertation has not reached to its highest level of touch. Perceived trustworthiness appeared from the customer segment played the central role to conduct the entire study.  Finally, limited availability of the secondary resources also hampered the findings.  Most of the data and reports are not freely available on internet and has to be purchase from online database, for which the researcher did not have enough funds.

The current study has been designed to analyse the importance of customer loyalty schemes on the luxury hotels. The study reflected the relationship between these two factors from various dimensions. However, the need of studying the influence of loyalty schemes on the luxury hotels in future will be highly relevant. The current research restricted only among the customers of Siam Kempinski Hotel, where the consumers are restricted to a single loyalty programs. In reality, luxury hotels are provides various types of loyalty schemes (multiple loyalty programs). Thus, in order to study the usefulness of loyalty programs, it will be relevant to include a number of luxury hotels to gather different opinions from the customers. This study only focus on the structural relationship between these two variables, but it would be important to articulate the longitudinal effect too in order to identify the loyalty program distinctiveness and important issues related to loyalty programs.

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