Do reward programs really build loyalty ? : a study on hotel loyalty programs in Egypt

Abstract EN

With the intensified competition in the hotel industry, hotel chains have sought many ways to nurture relationship with their customers.

Inspired by the airliires’ success, most major hotel chains have developed reward programs in an endeavor to foster customer loyalty and maximize long-term profits.

Despite the rapid growth of these programs, their effectiveness in boosting customer loyalty is still questionable.

Therefore, the purpose of tWs study is to investigate how reward schemes of hotel loyalty programs influence perceived value of the program and how value perception of the loyalty program affects brand or program loyalty.

In line with this thinking, this study investigates how variables such as reward t^e (c/irect vs.

i/idirect) and reward time vs.

delayed) affect brand loyalty or program loyalty and whether the effectiveness of these reward programs is moderated by customer satisfaction {satisfied vs.

dissatisfied).

In total, 285 respondents participated in the study.

The results indicated that customer satisfaction moderates the effects of reward programs on customer loyalty.

The findings enhanced that when customers are satisfied they prefer dircct and delayed rewards (of higher values) to immediate, direct rewards.

However, when customers are dissatisfied, direct and immediate rewards (of higher values) are more effective in building a program’s value than delayed rewards.

Finally, the value perception of the reward program influences hotels brand loyalty both directly and indirectly though program loyalty.