Cornell Article questions link between Hotel Loyalty Programs and Repeat Business

A study published by Cornell University calls into question the widely held belief that guest satisfaction means repeat business. The study, written by Cornell Hotel School Professor Judy Siguaw, was published in the August 2004 issue of the Cornell Hotel and Restaurant Administration Quarterly.

The theory that satisfied guests generate repeat business in the lodging industry was challenged by the results of a study of 364 guests at two similar big-city hotels. Analysis showed only a weak connection between satisfaction and loyalty, which is a precursor to repeat purchases.

Examining such factors as purpose of travel and demographics, the study revealed another finding that may give hoteliers pause, especially considering the industry's huge expenditures on frequent-guest programs. The study found that business travelers were among the least loyal of the guests responding to this survey.

Other findings:

- Chief factors that built guest loyalty were hotel design and amenities.

- The foremost factor in the purchase decision was employee service.

“The implication is that hoteliers might consider redirecting some of their frequent-guest expenditures toward strengthening human resources and improving guest experience through design and amenities,” Siguaw observed. 

The .pdf format article can be accessed at: https://www.hotelschool.cornell.edu/chr/pdf/showpdf/chr/featured/pdfs/aug04siguawskogland.pdf.

Judy Siguaw, D.B.A., is the J. Thomas Clark Professor of Entrepreneurship and Personal Enterprise at Cornell. She was supported in this report by Iselin Skogland, a recent Cornell Hotel School graduate.