Influence of Guest Experience on Customer Loyalty at Coogee Pavilion

Verified

Added on  2023/04/11

|30
|5523
|117
Report
AI Summary
This report examines the influence of guest experience on customer loyalty at the Coogee Pavilion Hotel in Australia. The study explores the relationship between customer engagement and loyalty, investigating how factors such as staff performance and service quality impact customer satisfaction. The research involved customer questionnaires and an interview with the cellar department manager to gather data. The report reviews relevant literature on customer engagement and loyalty, including dimensions like interaction, attention, and enthusiasm. The findings highlight the importance of guest experience in fostering customer relationships and driving business success in the hospitality sector. The research also provides recommendations for hotel managers to enhance customer engagement strategies and improve overall business performance. The report also highlights the impact of new and repeat customers on the business. The report concludes by discussing limitations and suggesting areas for future research.
Document Page
Running head: INFLUENCE OF GUEST EXPERIENCE ON CUSTOMER LOYALTY
Influence of guest experience on customer loyalty
Name
Student ID
Unit
Institutional affiliation
tabler-icon-diamond-filled.svg

Paraphrase This Document

Need a fresh take? Get an instant paraphrase of this document with our AI Paraphraser
Document Page
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.
Document Page
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
Document Page
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
tabler-icon-diamond-filled.svg

Paraphrase This Document

Need a fresh take? Get an instant paraphrase of this document with our AI Paraphraser
Document Page
INFLUENCE OF GUEST EXPERIENCE ON CUSTOMER LOYALTY 4
List of Figures
Figure 1: Research Model………………………………………………….………….......... 11
Document Page
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
Document Page
INFLUENCE OF GUEST EXPERIENCE ON CUSTOMER LOYALTY 6
position in regards to its contribution to the understanding of customer outcomes and service
performance. The relationship pattern of providing for customers has resulted in the
production of great attention academically in getting to know the various kinds of guests’
relational behaviors with the providers of hotel services. The relationship intensity among
service providers and guests has acquired a great interest in in the literature of marketing.
The relationships of hotel service providers with their guests usually establish the
foundation for the development of guest engagement and experience. In the current years,
guest engagement has developed to be an outstanding construct and has increasingly been
gaining great recognition among academicians as well as practitioners. However, empirical
investigation on Guest experience and engagement is relatively limited. Hospitality
organizations have however adopted the strategies of guest experience and engagement
extensively, although further understanding of the concept is still vital. Guest engagement
and experience can greatly affect guest behavior and has been continuously considered as an
acquisition and retention strategy for the establishment and sustainment of competitive
benefits in the hotel sector. In dynamic and interactive business settings, guest engagement
and experience presents an imperative which is strategic for the creation of corporate
performance which is superior, including superior profitability, sales growth and corporate
performance. Engaged guests positively contribute to innovation processes of the
organization, value, customer loyalty and experience co-creation and creation of brand
referrals.
The research will be based on Coogee Pavilion, a five-star hotel located at New South
Wales, Australia. Coogee Pavilion Hotel is perfect for casual dining and family get-togethers.
In addition, the hotel has an arena for nostalgic games. The in-house theatrette, ping pong and
a giant magnetic scrabble keep children entertained. Furthermore, Coogee Pavilion Hotel has
tabler-icon-diamond-filled.svg

Paraphrase This Document

Need a fresh take? Get an instant paraphrase of this document with our AI Paraphraser
Document Page
INFLUENCE OF GUEST EXPERIENCE ON CUSTOMER LOYALTY 7
an adults-only Rooftop comprising of four outdoor and indoor bars, a mouth-watering
Mediterranean menu and a huge wrap-around balcony which guarantee guests a good time.
Therefore, the research intends to evaluate the independent objective of the influence
of guest/customer engagement on customer loyalty at Coogee Pavilion Hotel, Merivale in
Australia. The research dependent objectives to be addressed will include:
a) Finding out the effects of dimensions of guest experience and engagement in the
formation of customer loyalty at Coogee Pavilion Hotel, Merivale in Australia.
b) Understanding the influence and level of the various study concepts (interaction,
identification, enthusiasm, absorption and attention) on customer loyalty among
various customer groups/segments at Coogee Pavilion Hotel, Merivale in Australia.
c) Resolving the applicability of the practices of customer relationships on gaining
customer loyalty at Coogee Pavilion Hotel, Merivale in Australia.
The research will cover the Literature Review (Customer Engagement and Customer
Loyalty), Research Methodology (Research Instrument and Data Collection, and Sample Size
and Design), Research Findings, Recommendations and Implementation, Limitations of the
Study and Future Research.
2 Literature Review
2.1 Customer Engagement
The engagement of guests is among the highest priorities for companies in the service
sector. According to research conducted by Hamilton (2009) customer engagement has been
defined as the level of clients’ emotional, physical and cognitive presence in an organization.
In addition, customer engagement has been defined as the personal connection and
involvement intensity of guests with the offerings of an organization. While many researchers
propose that the guest engagement conceptualization requires pure outside action that should
mainly be focused on integrating both psychological and behavioral dimensions of customers.
Document Page
INFLUENCE OF GUEST EXPERIENCE ON CUSTOMER LOYALTY 8
The literature review shows various customer engagement dimensions namely behavioral,
emotional and cognitive. Specifically, the three customer engagement dimensions have been
cited widely in the literature.
However, precise expression of the dimensions may be different across specific
concepts that are engagement-based. According to Hollebeek (2011) the engagement of
customers in marketing literature has been alienated into two different categories namely
multi-dimensional conceptualizations involving emotional, cognitive and uni-dimensional,
and secondly, uni-dimensional conceptualizations mostly involving the elements of behavior
in regards to Guest engagement. While various conceptualizations in regards to the customer
engagement multi-dimensional construct have been predicted to disclose the vital
conceptual/theoretical underpinning for customer engagement, the research builds on So,
King, Sparks and Wang (2016) customer engagement conceptualization of customer
engagement. The conceptualization includes interaction, absorption, identification, attention
and enthusiasm. Therefore, the important five customer engagement dimensions jointly show
the behavioral and emotional perspectives of customer engagement.
Enthusiasm entails the interest and level of excitement intense of a person in regards
to the engagement focus, for example, service offerings/provider. Fernandes and Esteves
(2016) recommend that the enthusiasm outlooks which is positive excitement should be an
essential guide in regards to customer engagement. Engagement refers to attention which is
focused that encapsulates the degree of attention of a customer towards their service provider.
Similarly, the philosophy of marketing supports how attention is inserted as a facet of the
engagement of customers. Research by Brodie, Hollebeek, Jurić and Ilić (2011) shows that
attention which demonstrates customer concentration and attentiveness offerings is measured
as an important dimension for customer engagement. On the other hand, absorption has been
a state which is pleasant as it illustrates and represents the customers as being deeply
Document Page
INFLUENCE OF GUEST EXPERIENCE ON CUSTOMER LOYALTY 9
engrossed, concentrated and completely happy when representing their role as consumers of a
service or brand. In addition, absorption represents one of the customer engagement
dimensions which are important.
Harrigan, Evers, Miles and Daly’s (2017) research in “Customer engagement with
tourism social media brands which focuses on an investigation of its correlates among
tourism social media brands found out that interaction is an aspect that is essential in
customer engagement literature and it entails both offline and online customers’ involvement
with their offering/provider. Further research by Roberts and Alpert (2010) proposed that
interaction is characterized by sharing and changing feelings, ideas and opinions in regards to
a customer’s experience with offerings. Due to these reasons, interaction therefore represents
a dimension of behavior that is essential to customer engagement. Moreover, identification
refers to the perceived oneness with or belongingness of a person to a company (Wirtz et al.,
2013). Identification arises when customers perceive a company’s self-image as overlapping
the brand’s image at the brand level.
2.2 Customer Loyalty
According to their research, Ramaseshan, Rabbanee and Tan (2013) refer to a loyal
customer as one who rebuys from the same provider of services whenever possible and
persists on recommending other consumers to the same service provider while retaining an
attitude which is positive towards that specific provider of services. Further research by
Howat and Assaker (2013) in their research on “The hierarchical effects of perceived quality
on perceived value, satisfaction, and loyalty: Empirical results from public, outdoor aquatic
centres in Australia depicts loyalty as a process of increasing or retaining the patronage of
consumers over the long term thus raising the consumers’ value to the organization. Mao and
Zhang (2014) also found out that the selling of services and products to customers who are
new costs three to six times more as compared to selling to customers who purchase on a
tabler-icon-diamond-filled.svg

Paraphrase This Document

Need a fresh take? Get an instant paraphrase of this document with our AI Paraphraser
Document Page
INFLUENCE OF GUEST EXPERIENCE ON CUSTOMER LOYALTY 10
repeat basis. Therefore, marginal increases in the retention of customers can lead to dramatic
profit increase (Patiar & Mia, 2009). Over the years, the customer loyalty concept has greatly
gained interest among professionals and academicians due to the numerous benefits of
maintaining a loyal customer base. Therefore, customer loyalty is believed to be a construct
that is essential in the attainment of enduring sustainability and business achievements.
In addition, Baumann, Elliott and Burton (2012) identify loyalty as a marketing
success indicator which is important in the hospitality industry. Furthermore, enhancing the
loyalty of customers’ results in marketing outcomes which are positive including word-of-
mouth, cross-selling, loyalty and share of wallet. Marketing researchers believe that customer
engagement has the potential of increasing loyalty, attitudes and purchase decisions of
customers due to the long-term and robust psychological connection of customers to their
service providers supplemented by post-purchase brand experiences. Yee and Faziharudean’s
(2010) research shows that customer engagement significantly and positively influences
customer loyalty in the tourism and hospitality settings.
Based on the review of the literature, the following hypotheses have been identified:
a) Customer engagement is a construct which is multidimensional and is reflected by the
interaction, identification, enthusiasm, absorption and attention dimensions.
b) The loyalty of consumers is positively and significantly influenced by customer
engagement.
c) Consumer loyalty is influenced by interaction, identification, enthusiasm, absorption
and attention positively and significantly.
d) There is a great significance of consumer loyalty and engagement among new groups
of customers.
e) There is a great significance of consumer loyalty and engagement among repeat
customer groups.
Document Page
INFLUENCE OF GUEST EXPERIENCE ON CUSTOMER LOYALTY 11
Based on the literature review, a conceptual model is proposed which is the
theoretical model to be used in this study and is represented in Figure 1.
Figure 1: Research Model
3 Research Methodology
3.1 Research Instrument and Data Collection
The adopted scales for the research were based on Chen and Hu’s (2010) work. The
research used questionnaires as the primary data sources with two parts consisting of firstly,
customer loyalty and customer engagement scales and secondly demographic information
like frequency of stay at the hotel, nature of the visit, nationality and income of respondents,
occupation, gender, age, etc. Both constructs were measured Likert scale of seven points
whereby 1 was for strongly disagree while 7 was for strongly agree to assist in ascertaining
the level of agreement among respondents. The study’s target population was limited to the
guests who had booked into and stayed at Coogee Pavilion Hotel hotels at least once. The
geographical location selected for the collection of data was Coogee, New South Wales.
Respondents were interviewed with the use of a structured questionnaire to know their
chevron_up_icon
1 out of 30
circle_padding
hide_on_mobile
zoom_out_icon
[object Object]