Deluxe hotel Millennium Gloucester Hotel Essay Example

style="text-align: justify;">Lowering the rate of employee turnover has the potential to result in greater productivity, decreased expenses for training, and possible advantages in customer spending due to loyalty based on recognition and trust of the company.

Scholars have emphasized the importance of word of mouth for businesses. According to McColl-Kennedy (2003), receiving information about a product or service from friends and family can provide customers with accurate information and help reduce discrepancies between expectations and actual service. Silverman (2002) emphasizes that word of mouth has a significant impact on marketing, being more powerful than traditional advertising. Additionally, Bowen and Chen (2001) highlight Raman's (1999) research on loyal customers who recommend companies and spread positive word of mouth.

The hotel industry considers loyal customers as valuable assets and service organisations rely on customer loyalty to set themselves apart from competitors, resulting in potential cost savings such as reduced marketing expenses. However, there are concerns regarding the execution of loyalty programs.

The evolving demands of people's sophisticated lifestyles require hotels to keep up-to-date with their customers' current needs, such as wireless internet which has become an important factor for business travelers when choosing accommodation. In order to satisfy customers and maintain loyalty, hotels must meet these expectations within their loyalty program.

According to Chew and Wirtz (2002), word-of-mouth is viewed as a powerful communication tool that can have both positive and negative effects on organizations' interactions with potential customers. To generate positive word-of-mouth, organizations must provide extremely good, high-quality, and excellent service. Conversely, providing poor service or making mistakes when serving loyal customers could result in negative word-of-mouth. Nonetheless, even if customers

receive good service, they may not necessarily share their satisfying experiences with others.

Negative feedback is deemed to have greater impact than positive remarks, as per some authors. Its effect also intensifies with time, which can lead to a tarnished reputation and reduced profits for businesses. Moreover, Divett, Crittenden and Henderson (2003) cite studies that suggest loyalty cards can be misleading.

Despite the considerable resources devoted by organizations to loyalty programs, there is no assurance that these initiatives will yield successful outcomes in fostering customer loyalty. The efficacy of these programs in forging enduring bonds between customers and firms, or in appealing to both potential and repeat customers to sustain engagement with products and services, remains a matter of contention. This raises the fundamental question about the worthiness of pursuing such marketing strategies, and whether they are merely viable in theory.