Loyalty Card Promotional Activity in Budget Hotel

Abstract: Loyalty card is one of the most commonly used promotional activities in business. Thus far, there are some research has been done on luxury hotel, but very few researches are on budget hotel. So, the purpose of the thesis is finding out the Swedish customers’ attitude and behavior towards budget hotel’s loyalty card; getting to know what factors influence Swedish customers’ response towards the loyalty card and budget hotels. In the thesis, the main research problem is “How do Swedish customers respond to the Budget hotel’s Loyalty Card promotional activity in Sweden?” Under the main research problem, four sub questions and four hypotheses are designed. Face-to-face interview is implemented for collecting primary data. Interviewees include business traveling interviewees and leisure traveling interviewees, altogether 23 interviewees are interviewed. Secondary data is from articles and journals. The secondary data includes Purchasing/Decision making, Marketing communication, Sales promotion, Pricing, Customer Relationship Management (CRM) and Relationship marketing, Customer satisfaction and loyalty, Personality and Marketing segmentation. The secondary data and primary data are mixed together for the main research problem’s analysis. After the research, the thesis comes out that Swedish loyalty card holders show much awareness/ preference/ satisfaction/ loyalty towards the membership budget hotel. Swedish customers use loyalty card in a constant manner only when the benefit is large and the benefit can be gained fast. For the Swedish customers, the Budget hotel loyalty card’s benefit is important, but the benefit is not big enough to make them feel excited. Simple and clear loyalty card rules are appreciated. Reference groups’ comments, fast internet information, loyalty card rule’s complexity, customers’ previous experiences, original price, psychological quality feeling and perceived price level also affect the loyalty card’s effectiveness. By implementing loyalty card, the membership customers’ satisfaction can be increased. The non-membership customers’ satisfaction isn’t negatively affected. Compared with the Swedish leisure travelers, Swedish business travelers show even stronger and much more stable loyalty towards the membership hotel. Leisure traveler is much benefit oriented. But the business traveler is habit oriented. Psychologically, business travelers think that a budget hotel loyalty card can not provide them as much good feeling as the luxury hotel’s loyalty card does.