A Canonical Correlation Analysis of E-Relationship Marketing and Hotel Financial Performance

Abstract

Hotel companies have used their websites to nurture customer relationships. One question is whether or not relationship marketing (RM) pays. The evidence of this empirical study involving 39 top hotel companies indicated a strong canonical correlation between the level of website development in relationship marketing and financial performance. In the proposed three-level e-relationship marketing ‘financial’ model (Basic, Accountable, and Partnership), a significant canonical variate disclosed that the ‘basic’ level and the ‘partnership’ level were positively correlated to the changes in sales revenue but negatively correlated to net income. This finding may imply that relatively more capital investment is necessary to create basic e-relationships and upgrade online customers to the partnership level than to maintain e-relationships at the ‘accountable’ level.