THE EFFECT OF LOYALTY PROGRAMS ON CUSTOMER LOYALTY IN THE HOSPITALITY INDUSTRY

Abstract

Loyalty programs have been extensively used to enhance customer loyalty. Despite the rapid growth of the programs, its effectiveness in boosting customer loyalty is still questionable. By employing meta-analysis technique, nine empirical studies in hospitality businesses are reviewed. Result shows that loyalty programs do not have a significant effect on increasing customer loyalty. The programs are only able to encourage customers to repeatedly purchase without having emotional attachment and personal relationship to the companies.