The effectiveness of loyalty programs in the hospitality industry: the case of hotels in Slovakia

This article deals with the issues of hotel loyalty programs implemented in the Slovak Republic. It analyzes the effectiveness of loyalty programs in relation to purchasing behaviour of Slovak customers. We propose a theoretical model of loyalty determinants, which we verify empirically. We try to explain the effectiveness of hotel loyalty programs in terms of value created and customer loyalty, due to the fact that building loyalty and the introduction of loyalty programs in the hotel requires substantial financial resources. The subjacent hypothesis is to determine if a loyalty program and its associated advantages manage to take precedence over other factors which influence choice and thus modify the probability of the hotel being chosen. More precisely, we seek to better understand the antecedents of commitment and trust and look at how these factors influence customer loyalty and thus determine the impact of loyalty schemes. Our empirical study, carried out on a sample group of consumers in Slovakia, enabled us to identify the four antecedents of loyalty (economic value of the exchange, reputation in terms of quality of the firm, communication, and shared values) so as to make managerial recommendations concerning the effectiveness of loyalty programs.