Influence of Guest Experience on Customer Loyalty

Running head: INFLUENCE OF GUEST EXPERIENCE ON CUSTOMER LOYALTY
Influence of guest experience on customer loyalty
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INFLUENCE OF GUEST EXPERIENCE ON CUSTOMER LOYALTY 1
Abstract
The engagement of customers could be used in studying the behavior of customers so
as to evaluate the relationship of customers towards a brand or a company. Increasingly,
organizations are realizing the core value of having effective and established relationships
with customers. The main aim of the research was to explore how customer loyalty is
associated with the dimensions of customer engagement at Coogee Pavilion Hotel in
Australia. Additionally, the research evaluates the influence and level in which new
customers and repeat customers impact the business. Completion of the questionnaire was
done by 240 customers from Coogee Pavilion Hotel, Merivane, Australia. The hypotheses
were tested by the use of exploratory factor analysis. The outcomes implied that the
engagement of customers in the hotel makes a great contribution to predicting loyalty to build
relationships with customers. The results are important for managers of hotels to engage their
customers while segmenting, differentiating, branding and marketing their business.
Customer segmentation strategies also offer a more inclusive and deeper knowledge of
customer relationships nature and how the engagement of customers could be fostered.

INFLUENCE OF GUEST EXPERIENCE ON CUSTOMER LOYALTY 2
Table of Content
Abstract......................................................................................................................................1
List of Tables..............................................................................................................................3
List of Figures............................................................................................................................4
1 Introduction.............................................................................................................................5
2 Literature Review....................................................................................................................7
2.1 Customer Engagement.....................................................................................................7
2.2 Customer Loyalty.............................................................................................................9
3 Research Methodology..........................................................................................................11
3.1 Research Instrument and Data Collection......................................................................11
3.2 Sample Size and Design.................................................................................................12
4 Research Findings.................................................................................................................13
4.1 Exploratory Factor Analysis..........................................................................................14
5 Hypotheses Testing...............................................................................................................15
6 Discussion.............................................................................................................................18
7 Recommendations and Implementation................................................................................19
8 Limitations and Future Research..........................................................................................20
References................................................................................................................................22
Appendices...............................................................................................................................25
Appendix 1: Interview Transcript with Manager................................................................25
Appendix 2: Questionnaire for Customers/Guests...............................................................27

INFLUENCE OF GUEST EXPERIENCE ON CUSTOMER LOYALTY 3
List of Tables
Table 1: Exploratory Factor Analysis (EFA)...................................................... 15
Table 2: Results of the Measurement Model....................................................... 17
Table 3: Regression Model 1: Customer Engagement Influence on Customer Loyalty......15
Table 4: Discriminant Validity, Reliability Analysis............................................. 18

INFLUENCE OF GUEST EXPERIENCE ON CUSTOMER LOYALTY 4
List of Figures
Figure 1: Research Model................................................................................ 11

INFLUENCE OF GUEST EXPERIENCE ON CUSTOMER LOYALTY 5
1 Introduction
The Australian hotel sector has been growing and developing rapidly by the
increasing number of foreign tourists and enhanced tourist movement in the country. From a
global perspective, the improved tourist activity has turned out to be a key player in the
development of hotels. For example, Australia receives approximately fifty million tourists
through the prediction by the United Nations World Trade Organization. Research conducted
by Pegg, Patterson and Gariddo (2012) shows that across the sub-segments, the hospitality
sector in Australia was likely to create 13.45 million job opportunities, tour operators/travel
agents with 0.66 million jobs and hotels with 2.3 million jobs. The hotel industry in Australia
has occupied a position which is central to the Australian service sector, having witnessed a
great intensification within the past decade.
The hospitality sector in Australia bears a potential which is significant for boosting
the growth of the economy, development of the social environment and enhancement of the
creation of new employment opportunities. Customers are therefore among the most
important assets of all hospitality businesses. Therefore, the development and maintenance of
engaging and long term business relationships with major guests is the essence for the
achievement of success in the service sector, including the hospitality sector. Engaging with
the guests is also critical in the evaluation of the performance of services based on the guests’
attitudes towards feelings of pride, passion, integrity, confidence and trust during the
provision of services to the guests.
The research is therefore significant for hospitality businesses to find prospects of
attaining a competitive benefit through the adoption of various marketing strategies and
practices through effective guest experience and engagement. In their research “Customer
engagement with tourism brands: Scale development and validation” So, King and Sparks
(2014) strongly present their belief that guest engagement clearly encompasses a major