The Influence of Reward Program Membership and Commitment on Hotel Loyalty

Abstract

This research evaluated the role of reward membership and commitment on switching costs, defined as the price at which consumers would switch to a nonpreferred hotel brand. Online survey respondents were classified by reward tier and two types of commitment: value (reward program benefits) and affective (emotional attachment to brand). The results showed that all reward program members exhibit value commitment but upper tier members are more likely to develop an emotional bond. Participants rated likelihood to switch in response to 20 pricing scenarios that varied base price for the preferred brand and discount for a nonpreferred brand. Value commitment was associated with greater price sensitivity, whereas affective commitment produced less differentiation between prices and discounts. Findings indicate that value commitment and lower tier membership are associated with a utilitarian perspective, whereas high-tier members or those with high affective commitment value intangible benefits and are less susceptible to discounting by competitors.