The Determining Factors of Customer Loyalty for Luxury Hotels in US

Dr. Danna Liang, Department of Hospitality Management, Ming Dao University, Taiwan

ABSTRACT

This research aims to examine which determinants (i.e. perceived quality, trust, satisfaction, perceived value, and
membership programs) have significant effect(s) on customer loyalty for luxury hotel. In order to get the answer, this
study surveyed 308 online users to investigate the determining factors that affect customer loyalty for luxury hotel in US.
The multiple regression statistical method, ANOVA, frequency tests and factor analysis were used for data analysis. The
study results show that among the determining factors and their relationship against attitudinal and behavioral loyalty,
satisfaction was consistently valued the most, followed by trust. The attitudinal loyalty measurement regarded
membership program as its third most valued while the behavioral loyalty positioned perceived quality as its third.
Results for the fourth most valued factor, indicated perceived quality from the attitudinal loyalty measurement, while
perceived value was behavioral loyaltys fourth most valued. The least valued factors for attitudinal and behavioral
loyalty were perceived value and membership program, respectively. On a greater scale, in measuring overall
loyalty, the determining factors were ranked as follows, in descending order from most to least important:
satisfaction, trust, perceived quality, membership program, and perceived value.
This study can serve as a model to be adopted for years to come in the determining factors of loyalty in luxury
hotels in US. The constructs, specifically perceived value, perceived quality, satisfaction, and trust have been
of use for years, through various industries. These particular determinants will continue to be of use across industries
as efforts are made to measure customer loyalty.
Keywords: determining factors; customer loyalty; luxury hotel; hospitality industry; determinants

INTRODUCTION

Loyalty has become important over the past few years because of increased competition within respective
industries. Companies infer loyalty to have a similar meaning and have developed strategic marketing and advertising
efforts around creating a connection between the company and its customers. Within the hospitality industry, the
number of accommodation choices from which customers can choose cannot be any more apparent. In realizing the
ongoing competitiveness that is to occur within the industry, many hotel corporations have shifted their focus to
relationship marketing, particularly through the concept of loyalty. With the increased bargaining power consumers are
obtaining, hotel corporations are realizing the key to their success will be to foster strategic relationship marketing
efforts, particularly through the usage of loyalty measures.
As an hotelier in the industry, it is important to offer products or services that enable sustainability in the industry. At
the same time, it is important to be knowledgeable of the guests who patronize your hotel(s). Knowing their needs and demands,
and utilizing this information for product or service implementation purposes, will go a long way towards long-term sustainability
and loyalty creation efforts. It is also important to give considerable attention to the efficiency of the facilities and
services provided. Customers expect service to be delivered in an expedient manner. Gold (2005) validates this inherent
belief and also discusses how instant gratification and convenience are important from the customers perspective
The focus of this research is directed towards luxury hotels. According to Smith Travel Research (2005), luxury
hotels represent over 500,000 guest rooms in over 1,300 hotels. Although this segment accounts for the highest number
of guest rooms with respect to number of hotel properties, luxury hotels only represent less than 12% of the total
number of guest rooms in the U.S. hotel industry. It is important to note, however, when it comes to room revenue, this
segment accounts for the highest amount of revenue generated of any major segment in the industry. It can be
concluded from these figures that the luxury segment for hotel companies as well as the overall hotel industry can serve
as an important topic to investigate based on the highest contribution in sales revenue and high financial return being
retained. Through the assessment of customer loyalty, invaluable findings can greatly assist with measuring guests
perspectives on determinants that will represent the level of service associated with hotels in this respective segment,
and will also contribute to the advancement of hospitality research and provide a newfound viewpoint on how loyalty is
vital for upscale hotels.
The objectives of this study are as following:
1. To identify and examine which antecedents (i.e. perceived quality, trust, satisfaction, perceived value, and
membership programs) have significant effect(s) on customer loyalty in luxury hotels
2. To compare perceptions of antecedents and loyalty behaviors across various brands of luxury hotels as well as with
regard to customers demographic and socioeconomic variables
3. To derive invaluable findings that assists in understanding various perspectives of customers loyalty for luxury hotels.

The Journal of International Management Studies, Volume 3, Number 2, August, 2008 167
 LITERATURE REVIEW

Taylor, Celuch, & Goodwin (2004) identified satisfaction, service quality and value, resistance to change, brand
affect, trust, and brand equity as predictors of customers perceptions of loyalty using structural equation analysis; the
researchers identified customer loyalty as a function of both behavioral and attitudinal loyalty. This approach was taken
in response to a valid proposition and supportive findings that were made by White & Schneider (2000). Baloglu (2002)
also incorporated attitudinal and behavioral loyalty into customer loyalty dimensions. His reasoning was conceptual and
practical. Studies have demonstrated that customer loyalty is a multi-dimensional concept and that it involves both
behavioral and attitudinal elements. Another finding by Taylor, Celuch, & Goodwin (2004) served as a major reference
in measuring customer loyalty. The framework developed in their research demonstrated the formation of a solid
structure that would allow for collecting invaluable findings. This study will extend and adapt the previous loyalty
model. Additional insight and perspectives from notable researchers, such Mittal & Lassar (1998), Zeithaml (1998),
Baloglu (2002), and others will also solidify the viability of each determining factor described and its contribution to the
overall assessment of customer loyalty. Each factor is discussed in detail to allow for understanding its importance as it
relates to the subject matter.

Impact of Satisfaction on Customer Loyalty

Satisfaction is a pursuit hoteliers must continually strive to meet with the guests of its property or company. Taylor,
Celuch, & Goodwin (2004) show that satisfaction has a direct influence on customer loyalty. Mittal & Lassar (1998)
discussed how satisfaction has been proven to directly affect loyalty. They further analyzed this impact by discussing
the importance of looking at satisfaction and service quality together as they related to customer loyalty and likeliness
to return. They stated satisfaction alone only tells whether the customer is satisfied or not. However, when measured
with quality, there is greater ability to determine what aspects of service are below par and need improvement as they
relate to guest satisfaction. Karatepe (2005) took the same measurement approach as Taylor, Celuch, & Goodwin
(2004), and other researchers just mentioned. Skogland & Siguaw (2004) measured the degree to which satisfaction
influenced loyalty. These two particular researchers felt the degree to which the customer was involved in the purchase
decision had a strong effect on the propensity to switch service providers. They measured this impact by using the
confirmation-disconfirmation and comparison-level theories. The satisfaction antecedents used included service quality,
product quality, price, and location.
Based on the above beliefs in regard to satisfaction and guest loyalty, the following hypothesis is tested to
determine whether a relationship exists:
H1: Satisfaction has a positive impact on loyalty

Impact of Perceived Quality on Customer Loyalty

Zeithaml (1988) defined perceived quality to be The consumers judgment about an entitys overall excellence or
superiority. Antony, Antony, & Ghosh (2004) believed service quality to be so intangible that objective measurement
is impossible.
To improve service quality, increase relationship marketing and the overall loyalty of guest patronization, it will be
important to narrow the gap between appearances and perceptions. In order to alleviate this deficiency, it is vital to
consider both functional and technical quality as they both impact overall service quality. Several major developments
over the past few decades will assist with performing this measurement. One particular development is (service quality)
SERQUAL, a measurement tool covering the areas of tangibility, reliability, responsiveness, assurance, and empathy
(Kang, Okamoto, Donovan, 2004). Through the usage of SERQUAL, it is believed that assessment of service quality
and also customer-contact can increase expected value provided to the guest. Gold (2005) stated in What Inspires
Loyalty today? that pleasant surprises [with the] proactivity of service above and beyond [will] stick in the
mind of guests and drive loyalty (p. 2). McCain, Jang, & Hu (2005) discussed how service quality plays an important
role in the assessment of customer loyalty. Antony, Antony, & Ghosh (2004 ) also stated service quality as being linked
to customer satisfaction and customer loyalty. The researchers measured this impact by looking at tangible and
intangible elements of service through technical and functional quality.
In order to achieve the aims from this study, the following hypothesis is tested:
H2: Perceived quality has a positive impact on loyalty

Impact of Perceived Value on Customer Loyalty

In the realm of perceived value, an excerpt written by Brady & Cronin (2001, p. 243) stated, Customers value
perceptions seem to drive their future behaviors such as repurchase intent and word-of-mouth referrals. They also
proposed that consumers affective responses were directly related to perceived value in highly experiential service
settings. Zethaml (1988) defined perceived value as the consumers overall assessment of the utility of product based
on perceptions of what is received and what is given. Oliver (1999) asserted that value is a unique construct stemming
from both satisfaction and quality, also outcome variables such as loyalty.

168 The Journal of International Management Studies, Volume 3, Number 2, August, 2008
 From a measurement standpoint, Bojanic (1996) asserted that a firms value can change if the firm changes what it
is doing. When it came to pricing, Danziger, Israeli, & Bekerman (2006, p. 2) stated, Many firms establish prices
based on internal costs. They further stated that this, what can be considered a cost incurred vs. price offered
measurement, does not assist hotels with being able to attract customers. A final pricing strategy should combine a
supply side focus with the value customers place on its offerings. This is based on the evaluation of strategic assets
(corporate affiliation, brand name, hotel size). By conducting this evaluation, Danziger, Israeli, & Bekerman (2006)
believed that firms may signal strategic assets to target audiences to justify a reason for paying a premium price, to
generate above average returns, and to form the basis of sustained competitive advantage.
In order to achieve the aims from this study, the following hypothesis is tested:
H3: Perceived value has a positive impact on loyalty

Impact of Trust on Customer Loyalty

Fukuyama (1995) defined trust as the expectation that arises within a community of regular, honest, and
cooperative behavior, based on commonly shared norms, on the part of members of that community. Other notable
researchers have each defined trust differently over the course of the past four decades. Rotter (1967, p. 651) defined
trust as A generalized expectation upheld by an individual, as to whether the word of the other party is trustworthy.
Crosby, Evans, & Cowles (1990) defined trust as A belief that the service is going to behave in such a way that the
buyers long-term interests are going to be taken into account. San Martin Gutierrez (2000) defined trust as The
emotional security that leads one party to think that the other is responsible and will be concerned about it, which
implies the willingness of the former to be vulnerable to the actions of the second party, regardless of its ability to
control the latter.
Based on the above beliefs as it regards trust and guest loyalty, the following hypothesis will be tested to determine
whether a relationship exists:
H4: Trust has a positive impact on loyalty

Impact of Membership Programs on Customer Loyalty

From a non-theoretical perspective, hotels have given considerable focus to the impact customer loyalty programs
have on guest retention within the company. Virtually every hotel corporation has developed and implemented a loyalty
membership program to foster this connection with its guests. Various services, amenities, and other offerings are
provided to meet the demands and preferences guests have in regards to their membership. Although loyalty programs
provide benefit to hotel corporations through their offerings, a concern was raised as regard true loyal customers.
Baloglu (2002) endeavored to separate friends from well wishers. The researcher focused on determining whether
frequent guests were truly loyal by assessing both guests attitudes and their actions. He classified the dimensions of
customer loyalty as being low, latent, spurious, and true loyalty. In terms of effectiveness, Lal & Bell (2003) alluded to
the fact that few studies shed light on the return obtained from loyalty programs. Dowling & Uncles (1997, p. 71)
concluded that given the popularity of loyalty programs, they are surprisingly ineffective. In the assessment of this
study, it is very important to measure guests perspective on the usage and their dependence on membership programs.
Through this research study, the following hypothesis is tested in an effort to assess its relevance:
H5: Membership Program has a positive impact on loyalty
For illustration purposes, the following figure highlights the studys proposed cumulative assessment of the
independent variables mentioned and their impact(s) on the dependent variable.

Satisfaction

H1
Perceived
Quality H2

Perceived H3 Behavioral/
Value Attitudinal
Loyalty
H4
Trust
H5
Membership
Program
Figure 1. Conceptual Model

The Journal of International Management Studies, Volume 3, Number 2, August, 2008 169
 DATA COLLECTION AND RESEARCH METHODOLOGY

The design of this study encompassed causal and descriptive research. Incorporating causal research design
allowed the investigation of cause-and-effect relationships, while incorporating descriptive research allowed
understanding the demographic profile of respondents, summary of key factors, and overall customer loyalty. The target
population was guests of luxury hotels belonging to the members of Leading hotel of the worldsystem in the U.S.
hotel industry and came from a hotel listing obtained from Smith Travel Research (2005). Sample data were gathered
from those hotels data base of membership. Approximately 1,300 emails were sent to individual members directly as
survey invitations. Within the email invitation were access information to the survey web site and a hyperlink to the
URL of the online survey. This enabled the recipient to go directly to the survey page with one click from the email. The
Web-based survey was online for two month. A total of 308 surveys were collected and were able to be applied for use
in achieving the purposes of this study
A 42-item survey instrument was developed following this extensive period of research in determining antecedents
to assess the focus of this study. The instrument consisted of three sections. At the outset, the respondents were asked to
select the luxury hotel which they visited during their last hotel stay.
This research study incorporated various statistical methods through SPSS in efforts to gather the necessary
information. Based on the research designs, the multiple regression statistical method measured the cause-and-effect
relationship between the independent and the dependent variables. One-way analysis of variance (ANOVA) assessed
the relationship between elements of the independent variables and a chosen dependent variable. Both of these major
statistical methods allowed for the ability to attest to the findings obtained and their validity. This study also
incorporated frequency tests and factor analysis to further extrapolate additional information in efforts to meet the
overall objectives for this study.

RESEARCH FINDINGS

Characteristics of the Respondents

The data findings from table 1 indicated that each question served as a representation of its related determinant and
also provided a major contribution to the focus of this study. This statement is based on the value of each response
illustrated in table 3 that resulted from factor loading, variance, Cronbachs reliability, and eigenvalue measurement
testing. Membership Programs, as a factor group, is of major use in this study, based on its findings, each of the other
determinants also serves in the same intent. Although questions relating to each factor were valued higher than .67,
thereby meeting loading cut-off qualifications, particular findings are important to illustrate for research purposes. It
was revealed during this form of analysis that respondents did not perceive The overall tangible and intangible
elements of service for the hotels food and beverage outlets (i.e. restaurant, room service) were excellent to be of the
same regard as the other two questions relating to perceived quality (.69). Respondents also did not favor the question
I trust the hotel and its staff to be of the same nature of context as the two other questions representing trust (.67).
As mentioned earlier, membership program responses were of great favor. Two particular questions well-regarded
were The tangible rewards from joining a hotel rewards program is important in my decision making (.91) and The
intangible rewards from joining a hotel rewards program are important in my decision-making. (.91). Attribute 3,
relating to the offering of affinity programs, can afford relative improvement as findings indicated a value of .86 in
comparison to the other two questions related to membership program.

Table 1. Factor Analysis (Prescribed Determinants of Guest Loyalty) Varimax Rotated Loading
Factor and Variables Factor Factor Factor Factor Factor
1 2 3 4 5
F1 Membership Programs
Tangible rewards were important .91
Intangible rewards were important .91
Affinity program offerings were important .86

F2 Satisfaction
Service renderings met highest expectations .78
Hotel is the highest amongst other choices in the area .75
Service received met personal expectations .78

F3 Perceived Quality
Overall tangible/intangible elements for rooms were excellent .75
Overall tangible/intangible elements for F&B were excellent .69

170 The Journal of International Management Studies, Volume 3, Number 2, August, 2008
Overall hotel tangible/intangible elements were excellent .83

F4 Perceived Value
Hotel value vs. price paid was good .72
Hotel provided good deal .75
Hotel was a bargain for benefits received .78

F5 Trust
I trust the hotel and its staff .67
I relied on associates to carry out requests made .76
I felt safe conducting business with the hotel .79
Total Variance
Explained
% of Variance explained 16.38 13.06 12.59 11.97 11.94 65.94
Cronbanchs Alpha .89 .73 .68 .66 .66
Eigenvalue 3.69 2.11 1.57 1.34 1.19

Note: Kaiser-Meyer-Olkin (KMO) Measure of Sampling Adequacy (MSA): 0.81

Bartletts Test of Sphericity X2 = 1294.41, significance at p=.000

ANOVA test disclosed that respondents showed significant difference (p<.10) in the mean value of satisfaction,
trust, and perceived quality among different luxury brands. However, respondents did not show any significant
differences in membership programs and perceived value among the six hotel brands at the .10 level.

Table 2. Determinant Responses (with respect to hotel brands)

Perceived Quality Perceived Value Trust Satisfaction Membership Program
Hilton 3.93 (n=49) 3.55 (n=49) 3.89 (n=49) 4.25 (n=49) 3.14 (n=49)
Hyatt 3.89 (n=49) 3.44 (n=49) 3.55 (n=49) 4.05 (n=4) 2.85 (n=49)
Inter-continental 3.62 (n=60) 3.44 (n=60) 3.60 (n=60) 3.76 (n=60) 2.75 (n=60)
Marriott 3.82 (n=76) 3.43 (n=76) 3.69 (n=76) 4.09 (n=76) 3.09 (n=76)
Starwood 3.97 (n=53) 3.52 (n=53) 3.78 (n=53) 4.06 (n=53) 3.01 (n=53)
Wyndham 3.80 (n=21) 3.23 (n=21) 3.68 (n=21) 3.88 (n=21) 2.82 (n=21)
F-value 1.87 .61 1.88 2.35 1.28
P-value .09 .68 .09 .04 .273
a. Represents average mean score based on a five point, Likert-type scale

Based on these findings, there is a major need for each hotel to improve on the tangible and intangible rewards
offered to guests through its membership programs, particularly the Wyndham (2.82). There is also a need to revisit
offerings of affinity programs. Each hotel can also afford improvement to its service offerings as regards the remaining
key factors of this study (perceived quality, perceived value, trust, and satisfaction). Results indicate that
Intercontinental ranked the lowest when it came to perceived quality. Wyndham also underperformed when it came to
perceived value (3.23). There was no indication of an outlying value when it came to trust and satisfaction and
the responses received. As the findings also indicate, there are hotels performing well as regards certain and/or all the
prescribed determinants. Hilton has the highest mean responses for a majority of the prescribed determinants. Aside
from the results for this hotel brand, Wyndham is ranked well in its perceived quality and responses for Starwoods
perceived value were also favorable. Findings for Marriott were also regarded well when it came to satisfaction and
membership program.

The impact of determinants on Attitudinal Loyalty

Based on the findings illustrated in table 3 in regard to the studys determinants and attitudinal loyalty, the
coefficient of the determinant (R2) was .39 and the adjusted R2 was .38. As it regarded attitudinal loyalty, the F-ratio
value was 36.96 (p<.01), indicating that the results of this regression model could hardly have occurred by chance. In
order to assess the relative importance, beta coefficients are used: the higher the beta coefficients, the more important
each factor. It is important to note that all five turned out to be statistically significant (p<.01) antecedents influencing
attitudinal loyalty. The most important factor affecting guest attitudinal loyalty was found to be satisfaction with a
beta value of .38 followed by trust with .30, and membership program with .29. Perceived value with a beta value
of .13 was found to be the least important key factor affecting guest attitudinal loyalty and perceived quality with .25
was the second least important one. Luxury hotel guests perceive satisfaction to be of highest importance and

The Journal of International Management Studies, Volume 3, Number 2, August, 2008 171
perceived value to be least important, based on beta value and significance level. To detect multi-collinearity,
variance influential factor (VIF) testing was conducted. No serious multi-collinearity is present with respect to the
determinants against attitudinal loyalty components, since a variation inflation factor (VIF) of 1 is much smaller than
the threshold value of 10 (Hair et al., 1995). It can be concluded that, in descending order, trust, satisfaction, membership
program, perceived quality, and perceived value were found to be significant determinants of attitudinal loyalty.

Table 3. Regression of Attitudinal Loyalty a

Independent Variable b Beta t Sig. VIF
Constant .04
Satisfaction .36 .38 8.24 0.000 1.00
Trust .29 .30 6.43 0.000 1.00
Membership Program .28 .29 6.35 0.000 1.00
Perceived Quality .24 .25 5.39 0.000 1.00
Perceived Value .13 .13 2.79 0.006 1.00
a. R= .63, R2 = .39, adjusted R2= .38, F= 36.96, p <.01

The impact of determinants on Behavioral Loyalty

Results of the studys determinants impact on behavioral loyalty indicated a coefficient of the determinant (R2)
of .528 and an adjusted R2 of .520. In measuring importance, findings indicated a wide distribution of responses.
Satisfaction (beta =.42) was again regarded as being most influential on behavioral loyalty followed by Trust (.41)
and Perceived quality (.36). While membership program with a beta value of .29 was found to be the third most
influential determinant on attitudinal loyalty, membership program has the least impact on behavioral loyalty with beta
value of .13. When it came to the F-ratio, the value based on behavioral loyalty was 65.15, further indicating the
regression results did not happen by chance. An illustration of these results can be found in table 4.

Table 4. Regression of Behavioral Loyalty a

Independent Variable b Beta t Sig. VIF
Constant .03
Satisfaction .41 .42 10.53 0.000 1.00
Trust .40 .41 10.14 0.000 1.00
Membership Program .35 .36 8.95 0.000 1.00
Perceived Quality .19 .20 4.94 0.000 1.00
Perceived Value .13 .13 3.24 0.000 1.00
a. R= .73, R2 = .53, adjusted R2= .52, F= 65.15, p<.01

The impact of determinants on Overall Loyalty

As regards guests measurement of the determinants and their impact on overall loyalty, the data indicated that an
R2 existed of .53; also that an adjusted R2 resulted in a value of .52. For illustration purposes, additional data relating to
the results can be found in table 5.

Table 5. Regression of Overall Loyalty a

Independent Variable b Beta t Sig. VIF
Constant .04
Satisfaction .41 .44 10.88 0.000** 1.00
Trust .37 .481 9.51 0.000** 1.00
Membership Program .32 .33 8.23 0.000** 1.00
Perceived Quality .16 .16 4.07 0.000** 1.00
Perceived Value .23 .24 5.91 0.000** 1.00
a. R= .73, R2 = .53, adjusted R2= .52, F= 65.07, p<.01

Consistent with the previous two regression results, satisfaction and trust showed the highest influence on overall
loyalty, with beta values of .44 and .38, respectively. Membership program (beta=.24) and perceived value (beta=.16)
were the least influential determinants on overall loyalty. When it came to measuring the F-ratio, this statistically
significant value was represented at 65.07. This was a clear sign of significance, based on the assessment of the
determinants against overall loyalty (p<.01). It is important to note, for clarification purposes, that overall loyalty
represents guests cumulative responses of both attitudinal and behavioral loyalty considerations. As regards the presence
of multicollinearity, VIF indicated no correlation exists when considering the determinants against overall loyalty.

172 The Journal of International Management Studies, Volume 3, Number 2, August, 2008
 HYPOTHESIS TESTING

To evaluate whether each key factor posed a positive impact on guest loyalty, the following discussed statistical
findings to support the claim being made about the hypothesis being tested. It important to note that loyalty can be
inferred to represent overall loyalty (both attitudinal and behavioral loyalty components).
Hypothesis 1 Satisfaction has a positive impact on Loyalty
Findings indicated that when measuring the impact of satisfaction on loyalty, this determinant was classified as
having a beta coefficient of .44 and a t score of 10.88. Both values are the highest of all other determinants
measured. In accounting for the amount of variance, this factor was responsible for 13.06% of the total variance. For
reliability purposes, it is important to note that this factor received a finding of .73 as regards the usage of Cronbachs
alpha measurement. When it comes to significance, there is a significant relationship between the two constructs (.000).

Based on these findings, it can be concluded that satisfaction has a positive impact on loyalty.

Hypothesis 2 Perceived Quality has a positive impact on Loyalty

Guests perceived this determinant to play a major role in their loyalty considerations. The results indicated that a
beta coefficient of .33 and a t score of 8.23 existed with respect to this assessment. Testing also revealed that this
determinant encompassed 12.59% of the total variance. When it came to reliability, this factor received a Cronbach
alpha measurement score of .68. Lastly, in regard to significance, perceived quality and overall loyalty were found
to have a statistically valid level of significance (.000).

Based on these findings, it can be concluded that perceived quality has a positive impact on loyalty.

Hypothesis 3 Perceived Value has a positive impact on Loyalty

Perceived value received a beta coefficient of .16 and a t score of 4.07 in comparison to the responses related
to other determinants. When it came to Cronbachs reliability measurement, perceived value received a response
score of .66. It also represented a variance level of 11.97%. Most importantly though, when it came to significance, the
determinant was discovered to possess a level of significance (p=.000). Thereby, it is concluded that perceived value
does have a positive impact on loyalty.

Thereby, it is concluded that perceived value does have a positive impact on loyalty.

Hypothesis 4 Trust has a positive impact on Loyalty

Data results indicated that the trust determinant received a beta coefficient response of .384 (second highest of
all other determinants) and it also had a t score of 9.51. Cronbachs reliability measurement indicated that determinant
received a score of .66. Variance testing revealed that trust accounted for 11.94% of the total variance. As it regarded
significance, findings revealed that a significant relationship does exist between the two constructs.

Based on these findings, it can be affirmed that trust has a positive impact on loyalty.

Hypothesis 5 Membership Programs has a positive impact on Loyalty

As the study discussed previously, the focus of marketing efforts for hotels have shifted from being tactical to
becoming more strategic in nature. The findings related to membership program revealed that a beta coefficient
existed of .24 and that the determinant had a t score of 5.91. Membership program was also discovered to account
for 16.38% of the total variance. For reliability purposes, Cronbachs measurement revealed a score of .88 for the
determinant. Based on significance testing, there is a significant relationship between the two constructs.
Thereby, based on the abovementioned findings, it can be inferred that membership program does have a positive
impact on loyalty.

CONCLUSION

Results from ANOVA test indicated that perceived quality, trust, and satisfaction were perceived to be
statistically different between the various luxury brands represented. The two remaining determining factors, perceived
value and membership program, however, were not found to be discriminate factors among the different luxury
brands represented. Based on the findings, there is also a disparate range of determinant mean responses, thus indicating
that improvement is needed. Among the determining factors and their relationship against attitudinal and behavioral
loyalty, satisfaction was consistently valued the most, followed by trust. Disparity, however, become apparent
when it came to the remaining determining factors (perceived quality, perceived value, and membership program). The
attitudinal loyalty measurement regarded membership program as its third most valued while the behavioral loyalty

The Journal of International Management Studies, Volume 3, Number 2, August, 2008 173
positioned perceived quality as its third. Results for the fourth most valued factor, indicated perceived quality from
the attitudinal loyalty measurement, while perceived value was behavioral loyaltys fourth most valued. The least
valued factors for attitudinal and behavioral loyalty were perceived value and membership program, respectively.
On a greater scale, in measuring overall loyalty, the determining factors were ranked as follows, in descending order
from most to least important: satisfaction, trust, perceived quality, membership program, and perceived
value.
From this analysis, it is quite apparent that differences exist between attitudinal and behavioral loyalty components,
and both differ from the overall assessment of guest loyalty. The results from this study were found to comparably
reflect the findings of notable researchers such as Taylor, Celuch, and Goodwin (2004, p. 223) as they found that brand
equity and trust consistently appeared to be most influential in fostering both behavioral and attitudinal loyalty. The
same was the case with Baloglu (2002, p. 54) as his study found that its truly loyal customers had more trust and
emotional commitment to the casino than either of the other loyalty groups. It is based on the cross-comparison of these
two findings that demonstrate how this particular studys findings are somewhat similar in terms of classifying trust
as an important key factor of customer loyalty.
It is important to note, however, that as was alluded from this study, satisfaction was found to be most valued by
guests of luxury hotels. This is believed to be due to characteristics of the hotel industry. Unlike most industries,
specifically the manufacturing industry, the hotel industry has evolved to the point that guests have greater options by
which to choose their accommodation needs. It is very apparent that satisfaction is regarded as the salient dimension
affecting customer loyalty among guests who patronize luxury hotels.
As a result of the accommodation choices provided, there is a relatively lower switching cost (if any) incurred by
the guest in choosing to stay with a different hotel or companies for its accommodations. This hinders hoteliers abilities
to retain guests, to foster trust and, ultimately, to promote guest loyalty towards its hotel and/or company. Since this
study focuses on hotels, unlike other studies testing customers who patronized manufacturing products, particularly, it
can be intuitively believed that findings relating to loyalty will vary as the customers and their perceptions differ from
the other industries. This, thereby, serves as reasoning as to guests valuing of satisfaction over trust; it also serves
as testament to hoteliers efforts to measure and assess trust through surveys disseminated to hotel guests. Based on
the abovementioned, it can be concluded that this study can serve as a new and greater way to measure customer loyalty.
This particular study differs from other loyalty studies in the fact that it adapts determining factors from loyalty studies,
not only within the hospitality industry, but also from other industries, as well.
From an academic perspective, this study can serve as a model to be adopted for years to come in the key factors of
loyalty in upscale hotels. The constructs, specifically perceived value, perceived quality, satisfaction, and trust
have been of use for years, through various industries. These particular determinants will continue to be of use across
industries as efforts are made to measure customer loyalty. However, as regards current practices of the hotel industry,
the adaptation of membership program, will be beneficial as can be affirmed by the findings from this study. Loyalty
programs have been developed with the purpose of inspiring loyalty efforts. However, as the study indicates, this
determinant can provide greater loyalty assessment through its inclusion with the other prescribed key factors. This
topic serves as a rare study relating to customer loyalty that includes the membership program determinant, which is
an industry-specific variable. Researchers can build upon what has been done in this study to further assist in providing
insight to hotels desiring to foster customer loyalty.

FURTHER RESEARCH

It would be of great benefit to re-conduct this study in the future to measure and compare the findings over two or
more occurrences. Although findings from this study do not illustrate concerns to consider as regards reliability, validity,
and statistical significance, it is of great assurance to re-conduct this study before implementing the model constructed
from this study. This is to ensure relative consistency in the findings derived. An additional study could also be
conducted to measure customer loyalty with and without the inclusion of the determinant affect, and this particular
measurement would provide insight as to its contribution to this assessment.

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