Loyalty membership for luxury hotels in Malaysia

Abstract

Purpose Loyalty membership is widely used as a marketing strategy to secure customer’s loyalty in many business sectors. The purpose of this paper is to focus on loyalty membership of customer in Malaysian luxury hotels, specifically, in the capital city of Kuala Lumpur, Malaysia by looking into the perceived value of economic, interaction and psychological needs. Design/methodology/approach Quantitative cross-sectional research was conducted to explore the feedback from customers who have loyalty membership with a luxury hotel. Surveyed data of 489 respondents were analysed using confirmatory factor analysis and structural equation modelling. Findings There is a significant positive relationship between the psychological needs and perceived value. The relationship between the perceived value and customer’s loyalty is also significant and positive. However, there is no significant relationship between the economic value and the interaction constructs with the perceived value. The perceived value functions as a mediator for the economic value, interaction and psychological needs in respect of customer’s loyalty. Practical implications Hotel management should prioritise addressing the elements of psychological needs to enhance the perceived value from the customers’ perspective. The strength of the perceived value indirectly stimulates customer’s loyalty to a hotel, followed by the interaction and economic value from the customer value perspective to ensure customer’s loyalty. Originality/value This research highlights on how customers can be secured by a luxury hotel chain through a loyalty membership strategy. The knowledge generated from this research is expected to provide insights to practitioners on how to enhance their loyalty membership marketing strategy.