Tóm tắt Luận án Research on customer loyalty in hanoi hotel industry

Nội dung text: Tóm tắt Luận án Research on customer loyalty in hanoi hotel industry

1. MINISTRY OF EDUATION AND TRAINING THUONGMAI UNIVERSITY NGUYEN MINH TUAN RESEARCH ON CUSTOMER LOYALTY IN HANOI HOTEL INDUSTRY MAJOR: Business administration CODE: 934.01.01 Summary of doctoral thesis in economics Hanoi, 2021
2. The work was completed at Thuongmai University Supervisor: Dr. Luc Thi Thu Huong Dr. Nguyen Thi Tu Reviewer 1: Reviewer 2: Reviewer 3: The thesis will be defended before School level thesis evaluation council meeting at Thuongmai University. At . hour date . month . year . The thesis can be found at: National Library of Vietnam Library of Thuongmai University
3. 1 INTRODUCTION 1. Urgency of the topic In terms of practice, the market for accommodation business in Vietnam is increasingly competitive. In recent years, many large corporations in the hotel industry such as Hilton, Intercontinental, Marriott, etc. continue to target the Hanoi market in particular and Vietnam in general. At the same time, many famous domestic corporations such as FLC, VinGroup, Mount Than also constantly upgrade and expand branches. The entry of leading companies, along with the way of management, operation, and professional service has created competition among enterprises in the hotel industry which demand to change the operation method to improve service quality, increase their position, attract customers, and build customer loyalty. On the other hand, scientific and technical progress especially 4.0 technology, is applied in all fields, and the hotel is no exception. Domestic or international tourists tend to search for hotels, prices, and services, etc. on the internet for their trip before deciding which enterprise chose to provide their services. Social networks, online travel agencies, and websites are all bridges between customers and the hotel. In the period from 2015 to 2019, along with the upward development of Vietnam's hotel business, the number of tourist accommodation establishments in Hanoi increased rapidly. In 2015, the number of accommodation establishments in Hanoi was 2,871 accounting for about 9%, and 45,769 rooms accounted for about 10% compared to the whole country. In 2019, the total number of accommodation establishments in the city is 3,546, increasing by 1.24 times compared to 2015. The number of accommodation establishments in the area accounts for a high rate compared to the whole country reached 15.2%. Many 5- star hotels have come into operation such as JW Marriott Hotel, Lotte Center, Grand Plaza, InterContinental Westlake, etc. In addition, the demand, tastes, and quality requirements of customers are getting higher with more choices. Many hotel projects in Hanoi that have been built or are nearing completion have faced stiffer competition. At the same time, under the impact of the Covid-19 pandemic, the Hanoi tourism industry in general and the hotel service business, in particular, were seriously affected by the decrease in international and domestic tourism demand. From this reality, what do hotel managers need to do to satisfy customers, and at the same time achieve sales, growth, and customer retention goals? There are many options to
4. 2 answer the above question, but currently, most managers do not understand the real wants and needs of customers. Therefore, to make tourists continue to use the products and services at the hotel, the managers need to find out the factors that affect the customer's loyalty. Building customer loyalty will create many benefits to the tourism industry in general and the hotel business in particular. Specifically, customer loyalty makes an important contribution to increasing the profitability of the hotels, and the cost of retaining customers is much lower than the cost of finding new customers. With the loyalty of customers, enterprises will obtain high profits and reduce marketing costs (Reichained and Sasser, 1990). Theoretically, customer loyalty in the hotel industry has been studied by many domestic and foreign scientists. The empirical studies on customer loyalty in the hotel system mainly focus on factors such as service quality, satisfaction, empathy, tangible means, and service capacity (Rousan et al., 2010; Xiangyu and Jarinto, 2012; Kofi et al., 2013; Galib, 2013; Saleem and Raja, 2014; Tefera and Govender, 2016). However, these studies were all conducted in cities of developed countries where have many economic and cultural differences compared to Hanoi, Vietnam. On the other hand, domestic studies on customer loyalty in the hotel system in Ho Chi Minh and Vinh Long (Le Gia Bao et al. 2017; Nguyen Son Tung, 2019) are also different from the hotel system in Hanoi. The research on hotels in Hanoi such as the study of Nguyen Van Huy and Pham Van Hanh (2017) investigates the relationship between service quality, customer satisfaction, and loyalty. The results indicate that service quality directly and positively affects customers satisfaction. Moreover, the study shows that in 5 scales of service quality, assurance and reliability play the most important role in influencing the quality of service provided by Hanoi hotels. All of the above analysis shows that customer loyalty in the Hanoi hotel industry has not been studied popularly. Building and developing customer loyalty is very necessary for the hotel business greatly affected by the Covid-19 pandemic. Therefore, the research on customer loyalty in the Hanoi hotel industry is the topic, which meets the theoretical and practical requirements of the hotel business in Hanoi. 2. Overview and research gaps The studies on customer loyalty presented different views and definitions of customer loyalty from different fields such as tourism; online shopping; homestay service or convenient shops system at the same time, these studies also show factors affecting loyalty
5. 3 such as service quality; satisfaction; tourist experience; switching costs, However, most studies have not mentioned customer loyalty in the business performance of enterprises. Previous studies on customer loyalty to hotels have been conducted in developed countries such as Rousan et al. (2010);Research on customer loyalty in hotels with service quality as studies of Jordan or Kofi et al (2013) about the 5-star hotel system; researching the impact of service quality on customer loyalty in the hotel sector in Ghana;In different cities in Vietnam, Phan Thanh Long (2018) researches factors affecting customer loyalty using services at 4.5-star hotels in Ho Chi Minh, in Can Tho, and Vinh Long. Thus, there have not been many studies that deeply research the understanding of maintaining and developing customer loyalty for hotels in Hanoi, this is a research gap in both theoretical and practical aspects. 3. Research objectives and tasks The overall goal of the thesis is to study the theoretical issues of customer loyalty in the hotel industry and propose solutions and recommendations to build and develop customer loyalty in the Hanoi hotel industry and propose directions and solutions to build and develop customer loyalty in the hotel system in Hanoi until 2025, with a vision to 2030. To achieve the research objectives, the thesis must perform three tasks including (1) Establishing a theoretical basis for customer loyalty in the hotel system; (2) Surveying and evaluating customer loyalty in from 3 to 5-star hotel system in Hanoi; (3) Proposing some feasible solutions for the hotel industry in Hanoi in particular and Vietnam in general. 4. Object and scope of research - Research object is customer loyalty to the hotel in Hanoi. - Scope of the study: Regarding the research space, the actual data used in the thesis were surveyed from hotels rated from 3 to 5-stars in inner-city districts of Hanoi. Regarding research time, the thesis conducts research on data related to customer loyalty in the period from 2016 to 2020, proposes solutions to 2025, vision to 2030. About research content, the thesis focuses on researching and assessing customer loyalty to the hotel according to 4 groups consisting of disloyalty; false loyalty; implicit loyalty, and loyalty. 5. Research methodology To ensure comprehensiveness, objectivity, and accuracy, the thesis used a combination of primary and secondary data collection methods. Secondary data was
6. 4 collected from the Vietnam National Administration of Tourism, General Statistics Office, Hanoi Department of Tourism, and textbooks, books, and magazines related to the research topic. Primary data was collected by two methods: 1) Survey with a sample size of 691 customers; 2) In-depth interview including hotel managers, the business and marketing department. With the collected data, the thesis uses two methods of quantitative and qualitative analysis to make judgments and assessments about the status of customer loyalty to hotels in Hanoi. 6. New contributions to science and practice of the thesis 1) Regarding research methods, the thesis has combined both primary and secondary data collection methods, two qualitative and quantitative research methods, in which, the new contributions of the thesis shown in the research framework include tools to maintain and develop customer loyalty; 2) In terms of theory, the study complements and completes the theoretical framework on customer loyalty in the hotel industry through a direction of little previous research done. In addition, the study gives evaluation criteria of customer loyalty. 3) In practice, the thesis has analyzed and assessed objectively and reliably the status of customer loyalty to hotels in Hanoi such as vision and strategy of hotel industry; technical facilities; service quality; accommodation rates and payment terms; and loyalty program. 7. Structure of the thesis In addition to the parts such as the declaration, table of contents, list of abbreviations, list of tables and figures (8 pages), general conclusion (2 pages), list of references (9 pages), and appendix (45 pages), the thesis consists of 159 pages. The structure of the thesis includes Introduction; Chapter 1: Theoretical basis of customer loyalty in the hotel industry; Chapter 2: Assessing the status of customer loyalty in Hanoi hotel industry; Chapter 3: Solutions to maintain and develop customer loyalty in Hanoi hotel industry. CHAPTER 1 THEORETICAL BASIS OF CUSTOMER LOYALTY IN THE HOTEL INDUSTRY 1.1. Overview of hotel industry and its customers 1.1.1. Concept and classification of hotel * Concept of the hotel Hotel is an accommodation establishment, with the size of ten bedrooms or more, ensuring the quality of facilities, equipment, and necessary services to serve guests staying
7. 5 and using. The hotel is the most popular and typical type in the system of tourist accommodation establishment. The hotel is built systematically, and synchronously meeting necessary quality and comfort standards to serve the needs of accommodation, meals and other needs during their stay in order to make profit. * Classification of hotel Hotels are classified according to the following criteria: According to geographical location, hotels include five types such as city hotels; resort hotels; floating hotels; roadside hotels, and transit hotels. About hotel size, hotels can be divided into three categories consisting of large-scale hotels; medium-sized hotels; small-sized hotels For the level of service provision, hotels are divided into four categories: High-class and luxury hotels; hotels with full services; hotel with limited service and budget hotel. About the rating standard, the hotel is ranked from 1-star to 5-star according to the standard of facilities, equipment, service quality, and amusement park. 1.1.2. System of providing customer service at the hotel Hotel services are regulated by the type of hotel business, the size, the location, the organizational structure and business policies in the market of the hotel. The service delivery system at the hotel is divided into 3 lines including the customer interaction line is at the top, followed by the visible line, the internal interaction line at the bottom. This arrangement shows that customer satisfaction is the end result of the system. Internal interaction line is the line representing the activities happening inside the hotel business to create service quality, service experience for customers including reservation and registration system. Visible line separates the activities visible to the customer and the activities invisible. Customer interaction line is the interaction flow between the service provider and the customer, where the customer will become a co-producer of the service experience. Activities on this line will determine if guests return to use the service or not. By surveying activities above the customer interaction line, hotel managers can identify important activities, which influence on customer satisfaction. As a result, hotel managers will focus on these activities such as booking, check in, and check out in order to improve the service quality and experience of guests so that they return come back. 1.1.3. Guests
8. 6 * Concept of guests Guests are customers of the hotel's products, who are not limited by the purpose, time and space of consumption. * Classification of guests Hotel guests include four categories: - Pure guest is a person who makes a trip with the main purpose of rest and relaxation. - Official guest is a person who makes a trip for business purposes; attends conferences, seminars, and fairs, research the market, or sign contracts. Relative guest makes a trip with the main purpose of visiting relatives, resolving family and social relationships. Other guests make a trip for other purposes such as attending sports events, going for medical purposes, studying, researching, etc. 1.2. THEORETICAL OF CUSTOMER Loyalty 1.2.1. Theory of customer behavior According to Kotler (2006), consumer behavior is considered as the response of customers to marketing stimuli and other stimuli. Kotler (2006) also uses a conscious black box model to represent consumer behavior. Factors affecting customer behavior: Customer behavior is influenced by many different factors, and researchers divide the factors affecting customer behavior into four groups: (1) cultural factors; (2) social factors; (3) personal factors, and (4) psychological factors. Decision-making process: A consumer decision-making process consists of five stages that actual consumers go through when purchasing a product/service. In these stages, the consumer recognizes a need, gathers information, evaluates alternatives, makes a purchase decision, and evaluates post-purchase. The theory was developed by Oliver (1997) and is used to study customer satisfaction with the quality of the company's services or products. That theory includes two sub- processes that have an independent impact on customer satisfaction: service expectations before purchase and service perception after the experience. TH1: PV = EV: Perceived value is equal to the expected value TH2: PV < EV: The perceived value is less than the expected value. Customers are not satisfied with the products/services of the business
9. 7 TH3: PV > EV: The perceived value is greater than the expected value. Customers are satisfied with the products/services of the business 1.2.2. The concept and role of loyalty 1.2.2.1. The concept of customer loyalty So far, there are many different approaches to customer loyalty in general and customer loyalty in the hotel industry in particular. Within the scope of this research, the author inherited the study concept of Dick & Basu (1994); Oliver (1999); Zineldin (2000); and Caruana (2002). Then the author proposed the concept of customer loyalty as follows: "Customer loyalty is the commitment in customer behavior and attitude that emphasizes intentions or plans coming back in the future, and recommend, encourage others to use your products/services”. 1.2.2.2. The role of loyalty Customer loyalty plays an important role, and hotel businesses are trying to increase their customer loyalty through retention programs, loyalty programs, experiences and marketing strategies (Hallowell, 1996). Customer loyalty is important because loyal customers bring many benefits to businesses such as reduced advertising costs, increased profits, etc. 1.2.3. The level of Customer loyalty According to Dick & Basu (1994), customer loyalty is seen as the strength of the relationship between an individual's relative attitude and repeat purchases. Relative perceptions, feelings, and attitudes contribute to loyalty along with cognitive and behavioral outcomes Loyalty is classified as follows: (1) Disloyalty: A low attitude associated with Low repeat behavior indicates a lack of loyalty. (2) False Loyalty: A low attitude that accompanies high repeat behavior is false loyalty characterized by disproportionate influences on behavior; (3) Latent loyalty: Relatively high attitude with low repeat patronage, reflecting latent loyalty, an important relationship for marketers. Because the non-relational market influences such as subjective norms and situational effects are at least equal if not more influential than attitudes in determining patronage behavior. (4) Loyalty: the most preferred of the four conditions, indicating a favorable correspondence between relative attitude and repetitive behavior. 1.2.4. Customer loyalty cycle The loyalty cycle offers a way to build customer loyalty, including 3 processes that are building a loyalty foundation; creating loyalty value and reducing the conversion ability
10. 8 of customers through digital marketing programs, customer management, specifically as follows: - To build customer loyalty, hotels need to segment the market by the needs of the target market and the hotel's resources. At the same time, hotels need to select customers in line with their core values and ensure service quality for customers. - To create a bond between the customer and the hotel, through customer reward programs such as financial rewards, financial fees at the same time, it is necessary to provide additional services and package selection services for customers. The hotel wants customers to use its products/services without switching to competitors, customer managers take actions to reduce the likelihood of customers converting such as handling complaints 1.3. MAINTENANCE, DEVELOPMENT TOOLS, AND CRITERIA FOR ASSESSING CUSTOMERS LOYALTY To HOTEL 1.3.1. Tools to maintain and develop customer loyalty 1.3.1.1. Service quality Service quality creates an impact on the development of customer loyalty. Service quality considers as one of the most frequently analyzed factors that determine customer loyalty. The tangible and intangible nature of service quality is very important in assessing the customer's view of the service provider or the customer's trust in the business. Five criteria to evaluate service quality are listed in order of relative importance to customers, which are: 1) Reliability: Reliability is the ability to provide service as promised reliably and accurately. Reliable service performance is one of the basic expectations of customers; 2) Responsibility: The willingness to actively help customers and provide service with enthusiasm. In the event of service failure, the ability to recover quickly can create a positive perception of quality. 3) Assurance: Is performing service politely and respectfully to customers, communicating effectively with customers, genuinely caring, and keeping them confidential. 4) Empathy: Shows attentive care, individual attention to customers. Empathy includes the ability to reach out and make an effort to understand the needs of the customer. 5) Tangibility is the presence of working conditions, equipment, people, and media. 1.3.1.2. Price and terms of payment Hotel businesses can charge as many different rates as they want, but if customers perceive the hotel's price policy and payment method as not suitable for customers, this will affect their satisfaction, and they will not return to the hotel in the future. Hotel businesses
11. 9 do not just set a single price, but must develop a pricing structure that reflects changes in demand and costs according to market requirements, seasonality, and product/service volume ordering, and other factors. Methods of determining rates in hotels, in particular: Based on the cost of the hotel; Discounts; Promotional rates; Distinguished rates according to the list of products/services the hotel provides to customers. 1.3.1.3. Loyalty program Loyalty program is a marketing plan designed to increase customer loyalty by providing customer promotions with added benefits. Most loyalty programs are designed with 3 types: (1) the gift card with the lowest purchase price; (2) is a customer discount card (including gift cards, special discounts for members, great benefits programs for members); (3) are lottery programs. There are five value components of loyalty programs: value for money, redemption options, desirable value, relevance, and convenience. 1.3.2. Criteria for evaluating customer loyalty Attitudinal loyalty evaluation criteria: Measurement aspects of attitudinal loyalty include: trust, commitment, price insensitivity, response to service unavailability of the hotel, does not convert behavior and response to hotel service incidents (except for repurchase behavior). The criteria for evaluating behavioral loyalty: the first is the rate of hotel visits; second, positive word of mouth, third, a partnership that is working together to achieve common goals and a customer's willingness to help the hospitality business (active cooperation to create emotional commitment). 1.4. FACTORS INFLUENCE CUSTOMERS’ LOYALTY TO HOTELS 1.4.1. Customer behavioral factors determine loyalty 1.4.1.1. Demographic characteristics Demographics continue to be one of the popular and accepted bases in market and customer segmentation. By specifically identifying the key demographics of a target market, a baseline data of target customers emerges. Even when other types of segmentation variables are used (e.g., behavioral, psychographic), managers must know and understand the demographics to assess the size, scope, and efficiency of the market. Evaluate the influence of socio-demographic factors on customers' perception of loyalty in the hotel system. The results show that the relationship between service quality and customer loyalty is strongly influenced by socio-demographic characteristics. In which, factors such as age, gender, marital status, occupation, education, income, length of stay, frequency and purpose
12. 10 of visit are the moderators that have an important influence on service quality and customer loyalty. 1.4.1.2. Customer experience at the hotel Customer experience is a set of interactions between a customer and the products/services of a business or part of a hotel business organization. Building customer experience intrinsically relates to customers' perceived, emotional, and physical reactions to the hotel business. This experience is created not only by factors that the business can control (e.g. service interface, assortment, pricing), but also by factors beyond the company's control such as: shopping purposes, influence from others Customer experience is the internal subjective response of customers when directly or indirectly interacting with products/services of enterprises. Thus, customer experience is also the interaction between the organization providing the product/service and the customer, which is a combination of actions, senses, and emotions compared with customer expectations in the process, and contact process. 1.4.1.3. Customer's Commitment Customer commitment is the desire to buy and have a clear priority with the business. Common values for possible commitment are beliefs, shared values, and beliefs about the difficulty of replacing products or services by businesses or consumers. Commitment is a two-way structure, and both customers and service providers want to come to a commitment with a closer, closer relationship. Commitment is considered as the "glue" in the relationship between customers and suppliers to create stability such as: 1) Attitudinal loyalty positively relates to behavioral loyalty, 2) Customer satisfaction positively relates to trust, 3) Affective commitment positively relates to attitudinal loyalty, 4) Computational commitment negatively relates to attitudinal loyalty, 5) Public image also positively relates to loyalty mediating the relationship between trust and attitude loyalty, 6) Computational commitment mediates the relationship between trust and loyalty with attitude, 7) Corporate image mediates the relationship between trust and attitudinal loyalty. 1.4.2. Competitors According to Motherbaugh and Hawkins, (2016) KS enterprises need to clearly identify their competitors, thereby assessing the objectives, strategies, strengths, weaknesses,
13. 11 and reactions of competitors to choose the way to compete. Confront or avoid competitors. 1.4.3. Hotel interior 1.4.3.1. The hotel's vision and strategy Positioning strategy is the process by which hospitality businesses try to develop a distinctive and favorable position in the mind of the target market, relative to their competitors. The goal of positioning is to ensure that the target market clearly understands the product, service or brand in the market. Market research and analysis of market segments will help hotel managers better understand their customers and know what they really want from the business. Thereby, managers can evaluate the strengths of the hotel which can be developed into product or service with different points, at the same time, and identify the weaknesses of competitors. From there, it is possible to create effective product or service differentiation. The following positioning strategies in hospitality businesses have been identified such as: 1) Product features or special attributes; 2) Price/quality; 3) Customer's benefits; and 4) Product purpose. 1.4.3.2. The hotel's physical and technical facilities Facilities are the provision of physical facilities to provide convenience to customers in performing actions or activities to be able to meet their needs. Facilities are the physical resources available that support the existence of a business for goods or services. Therefore, many aspects of the facility are considered by owners in their business operations. Starting from the completion of facilities, the attractiveness of interiors, and exteriors design to the hygiene of facilities in the hotel business. Empirical studies show that consumers consider the availability of facilities in making purchase and service decisions. Facilities have a significant influence on purchasing decisions, customer behavior such as customer commitment, customer experience, and also influence retention and development of customer loyalty (quality of service, loyalty program, price and payment terms, which means that if the hotel has good facilities, customers will be interested in using the product/service and creating trust, good experience for customers. 1.4.3.3. Hotel resources The resources of the hotel business are divided into tangible, intangible and human resources. In particular, tangible resources include tangible assets of business that can bring advantage in production costs such as size, location, flexibility of equipment and input materials. Intangible resources include technology, brand, and culture of hotel business. In
14. 12 which, technological resources include intellectual property, patents Human resources include relational, management and organization resources in the hotel business. 1.4.4. Macro environment The thesis has synthesized macro-environmental factors affecting customer loyalty, including: Economy, politics - law; technology; sociocultural. CHAPTER 2 ASSESSMENT OF THE STATUS OF CUSTOMER LOYALTY IN THE HANOI HOTEL INDUSTRY 2.1. OVERVIEW OF THE HOTEL INDUSTRY IN HANOI 2.1.1. Overview of Hanoi city and the role of the hotel industry 2.1.1.1. Overview of Hanoi city Hanoi city is the capital, the economic - political - social center of Vietnam. Therefore, the tourism - hotel industry in Hanoi not only attracts tourists but also diplomatic and business guests participating in economic - political - social events. Hanoi has great potential for tourism-hotel with hundreds of scenic spots, historical and cultural relics, traditional craft villages, and festivals. 2.1.1.2. The role of the Hanoi hotel industry The hotel business plays a significant position in the socio-economic development in general and the hotel industry in particular. In fact, operating revenue of the hotel business accounts for a large proportion in the tourism industry about 50 to 70% that reflects the importance of hotel service. Thus, the hotel system cannot be separated from tourism industry, where has major contribution to the economy and employment. In 2019, the hotel industry contributed 12.54% GDP of Hanoi city, of which the direct contribution of 5.16% and the indirect of 7.38%; at the same time, supplied 151,823 workers, accounting for 24.9% of the total workforce in the tourism industry. 2.1.2. Overview of the hotel industry in Hanoi 2.1.2.1. Number of accommodation service establishments in Hanoi In Hanoi, there are currently 3,578 accommodation establishments with 64,887 rooms and apartments, bringing the total number of rated accommodation establishments to 576 hotels with 23,676 rooms, accounting for 16.3%. There are 76 hotels/apartments rated from 3-5 stars with 11,863 rooms, reaching 13.19%). Specifically, 5-star hotels consist of 16 hotels with 5,153 rooms accounting for 2.78%; 4-star hotels have 19 hotels with 2,784 rooms, accounting for 3.30%; 3-star hotels include 33 hotels with 2,392