IDEAS home Printed from https://ideas.repec.org/a/gam/jsusta/v15y2023i10p8385-d1152641.html
   My bibliography  Save this article

Do New Luxury Hotel Promotions Harm Member Customers?

Author

Listed:
  • Luyao Zhi

    (Department of International Trade, Dongguk University, Seoul 04620, Republic of Korea)

  • Hong-Youl Ha

    (Department of International Trade, Dongguk University, Seoul 04620, Republic of Korea)

Abstract

Will customers regret their loyalty to a hotel and look for alternatives if the hotel neglects to communicate with them? Empirical research on this question is limited in the hospitality literature. To accurately determine the direction of future customer behavior, we investigate the impact of sales promotions on customer regret and switching intention, demonstrating that sales promotions can dilute customer loyalty. Using an experimental design study (n = 227) in Korea, our findings indicate that sales promotions have no effect on customer regret and switching intention. In particular, we find that customers’ regret of paying for a hotel membership is more salient than their regret of obtaining a free membership in the new luxury hotel context, regardless of the absence or presence of sales promotions. Moreover, the findings show that VIP club members tend to experience more regret and have greater switching intentions than free online membership customers. The higher the degree of customer regret, the more sensitive the customers’ reactions are to mixed promotions, leading to a rapid increase in switching intentions among customers. This study expands sale promotion knowledge by offering ample evidence of customer behavior and provides sustainable insights for hospitality managers responding to member customers’ demands.

Suggested Citation

  • Luyao Zhi & Hong-Youl Ha, 2023. "Do New Luxury Hotel Promotions Harm Member Customers?," Sustainability, MDPI, vol. 15(10), pages 1-15, May.
  • Handle: RePEc:gam:jsusta:v:15:y:2023:i:10:p:8385-:d:1152641
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2071-1050/15/10/8385/pdf
    Download Restriction: no

    File URL: https://www.mdpi.com/2071-1050/15/10/8385/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Clee, Mona A & Wicklund, Robert A, 1980. "Consumer Behavior and Psychological Reactance," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 6(4), pages 389-405, March.
    2. Ina Garnefeld & Eva Böhm & Lena Klimke & Andrea Oestreich, 2018. "I thought it was over, but now it is back: customer reactions to ex post time extensions of sales promotions," Journal of the Academy of Marketing Science, Springer, vol. 46(6), pages 1133-1147, November.
    3. Mahabubur Rahman & M. Ángeles Rodríguez-Serrano & Mary Lambkin, 2019. "Brand equity and firm performance: the complementary role of corporate social responsibility," Post-Print hal-02421283, HAL.
    4. Mahabubur Rahman & M. Ángeles Rodríguez-Serrano & Mary Lambkin, 2019. "Brand equity and firm performance: the complementary role of corporate social responsibility," Journal of Brand Management, Palgrave Macmillan, vol. 26(6), pages 691-704, November.
    5. Liu, Matthew Tingchi & Wong, IpKin Anthony & Tseng, Ting-Hsiang & Chang, Angela Wen-Yu & Phau, Ian, 2017. "Applying consumer-based brand equity in luxury hotel branding," Journal of Business Research, Elsevier, vol. 81(C), pages 192-202.
    6. Daniel Kahneman & Amos Tversky, 2013. "Prospect Theory: An Analysis of Decision Under Risk," World Scientific Book Chapters, in: Leonard C MacLean & William T Ziemba (ed.), HANDBOOK OF THE FUNDAMENTALS OF FINANCIAL DECISION MAKING Part I, chapter 6, pages 99-127, World Scientific Publishing Co. Pte. Ltd..
    7. Eleonora Santos & Ines Lisboa & Catia Crespo & Jacinta Moreira & Teresa Eugenio, 2022. "Evaluating Economic Sustainability of Nautical Tourism Through Brand Equity and Corporate Performance," Springer Proceedings in Business and Economics, in: Vicky Katsoni & Andreea Claudia Şerban (ed.), Transcending Borders in Tourism Through Innovation and Cultural Heritage, pages 105-118, Springer.
    8. Tsiros, Michael & Mittal, Vikas, 2000. "Regret: A Model of Its Antecedents and Consequences in Consumer Decision Making," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 26(4), pages 401-417, March.
    9. Gabler, Colin B. & Myles Landers, V. & Reynolds, Kristy E., 2017. "Purchase decision regret: Negative consequences of the Steadily Increasing Discount strategy," Journal of Business Research, Elsevier, vol. 76(C), pages 201-208.
    10. Davvetas, Vasileios & Diamantopoulos, Adamantios, 2017. "“Regretting your brand-self?” The moderating role of consumer-brand identification on consumer responses to purchase regret," Journal of Business Research, Elsevier, vol. 80(C), pages 218-227.
    11. Sloot, Laurens M. & Verhoef, Peter C., 2008. "The Impact of Brand Delisting on Store Switching and Brand Switching Intentions," Journal of Retailing, Elsevier, vol. 84(3), pages 281-296.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Tianhao Wen & Hong-Youl Ha, 2024. "Do Economic and Social Satisfaction Matter Equally in Sustainable Business? Hotel Membership Types and Sales Promotions," Sustainability, MDPI, vol. 16(7), pages 1-15, March.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Zhao, Haichuan & Wang, Xuehua & Jiang, Lan, 2021. "To purchase or to remove? Online shopping cart warning pop-up messages can polarize liking and purchase intention," Journal of Business Research, Elsevier, vol. 132(C), pages 813-836.
    2. Shahid Sameeni, Maleeha & Ahmad, Wasim & Filieri, Raffaele, 2022. "Brand betrayal, post-purchase regret, and consumer responses to hedonic versus utilitarian products: The moderating role of betrayal discovery mode," Journal of Business Research, Elsevier, vol. 141(C), pages 137-150.
    3. Vohra, Shalini & Davies, Gary, 2020. "Investor regret, share performance and the role of corporate agreeableness," Journal of Business Research, Elsevier, vol. 110(C), pages 306-315.
    4. Camille Magron & Maxime Merli, 2012. "Stocks repurchase and sophistication of individual investors," Working Papers of LaRGE Research Center 2012-02, Laboratoire de Recherche en Gestion et Economie (LaRGE), Université de Strasbourg.
    5. Frauke Sander & Ulrich Föhl & Nadine Walter & Vera Demmer, 2021. "Green or social? An analysis of environmental and social sustainability advertising and its impact on brand personality, credibility and attitude," Journal of Brand Management, Palgrave Macmillan, vol. 28(4), pages 429-445, July.
    6. Ivan Barreda-Tarrazona & Ainhoa Jaramillo-Gutierrez & Daniel Navarro-Martinez & Gerardo Sabater-Grande, 2014. "The role of forgone opportunities in decision making under risk," Journal of Risk and Uncertainty, Springer, vol. 49(2), pages 167-188, October.
    7. Lee, K.M.C. & Kraussl, R.G.W. & Paas, L.J., 2009. "The effect of anticipated and experienced regret and pride on investors' future selling decisions," Serie Research Memoranda 0057, VU University Amsterdam, Faculty of Economics, Business Administration and Econometrics.
    8. Shaun M. Powell, 2019. "Journal of Brand Management: year end review 2019," Journal of Brand Management, Palgrave Macmillan, vol. 26(6), pages 615-620, November.
    9. Rokonuzzaman, Md & Iyer, Pramod & Harun, Ahasan, 2021. "Return policy, No joke: An investigation into the impact of a retailer's return policy on consumers' decision making," Journal of Retailing and Consumer Services, Elsevier, vol. 59(C).
    10. Fernanda Muniz & Francisco Guzmán, 2021. "Overcoming the conflicting values of luxury branding and CSR by leveraging celebrity endorsements to build brand equity," Journal of Brand Management, Palgrave Macmillan, vol. 28(3), pages 347-358, May.
    11. Humphrey, Steven J., 2004. "Feedback-conditional regret theory and testing regret-aversion in risky choice," Journal of Economic Psychology, Elsevier, vol. 25(6), pages 839-857, December.
    12. Gifford, Katie & Bernard, John C., 2004. "The Impact of Message Framing on Organic Food Purchase Likelihood," Journal of Food Distribution Research, Food Distribution Research Society, vol. 35(3), pages 1-10, November.
    13. Özalp Özer & Yanchong Zheng, 2016. "Markdown or Everyday Low Price? The Role of Behavioral Motives," Management Science, INFORMS, vol. 62(2), pages 326-346, February.
    14. Mookherjee, Satadruta & Lee, Jennifer J. & Sung, Billy, 2021. "Multichannel presence, boon or curse?: A comparison in price, loyalty, regret, and disappointment," Journal of Business Research, Elsevier, vol. 132(C), pages 429-440.
    15. Zeeshan Ullah, 2023. "The determinants and performance outcome of the firm's capacity to maintain customer loyalty," Sustainable Development, John Wiley & Sons, Ltd., vol. 31(1), pages 265-279, February.
    16. Irandoust, Manuchehr, 2016. "Modelling Consumers' Demand For Organic Food Products: The Swedish Experience," International Journal of Food and Agricultural Economics (IJFAEC), Alanya Alaaddin Keykubat University, Department of Economics and Finance, vol. 4(3), pages 1-13, July.
    17. Rahman, Mahabubur & Faroque, Anisur R. & Sakka, Georgia & Ahmed, Zafar U., 2022. "The impact of negative customer engagement on market-based assets and financial performance," Journal of Business Research, Elsevier, vol. 138(C), pages 422-435.
    18. Mochales, Gerardo & Blanch, Javier, 2022. "Unlocking the potential of CSR: An explanatory model to determine the strategic character of CSR activities," Journal of Business Research, Elsevier, vol. 140(C), pages 310-323.
    19. Daniel Mochon & Janet Schwartz & Josiase Maroba & Deepak Patel & Dan Ariely, 2017. "Gain Without Pain: The Extended Effects of a Behavioral Health Intervention," Management Science, INFORMS, vol. 63(1), pages 58-72, January.
    20. Edwin Love & Tejvir Sekhon & Tara Ceranic Salinas, 2022. "Do well, do good, and know your audience: the double-edged sword of values-based CSR communication," Journal of Brand Management, Palgrave Macmillan, vol. 29(6), pages 598-614, November.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jsusta:v:15:y:2023:i:10:p:8385-:d:1152641. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.