Switching Costs within the Travel Industry : The Impact on Brand Loyalty

Abstract: The travel industry is a fast-growing sector with an increasing competition. The three largest charter enterprises in Sweden are TUI, Apollo, and Ving. These enterprises offer similar services and, therefore, efficient branding is important to be able to create brand loyalty. Brand loyalty has had several studies, but there is a lack of research when it comes to brand loyalty within services. Furthermore, a major influence on loyalty is the different switching costs within this industry. This means what kind of costs that may appear when customers are switching brands. Moreover, we have conducted a Web survey to collect information about brand loyalty and switching costs. This is a quantitative method where the advantages are time-efficiency, it will approach respondents easier, and that it is well- structured. The survey reached out to 200 respondents, where we received a respondents’ loss of 18. However, it provided us with enough foundation to be able to fulfill our purpose. The two different analysis strategies that are being used are frequency analysis and correlation analysis. The frequencies were analysed with percentages and means to be able to show differences as well as the customers’ perspectives of the travel industry. The correlation analysis expresses if there are any correlations between loyalty and switching costs. The results are that satisfaction, trust, and reputation are few variables that make customers loyal towards a brand. However, in this industry, it is hard to become loyal and one major part of it is the low switching costs.