International Journal of Hospitality Management 31 (2012) 319328

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International Journal of Hospitality Management

journal homepage: www.elsevier.com/locate/ijhosman

Determinants of customer loyalty and purchasing behavior for full-service and

limited-service hotels
Sarah Tanford a, , Carola Raab b,1 , Yen-Soon Kim b,2
a
b

University of Nevada-Las Vegas, William F. Harrah College of Hotel Administration, 4505 Maryland Parkway, Box 456021, Las Vegas, NV 89154-6021, United States
University of Nevada-Las Vegas, William F. Harrah College of Hotel Administration, 4505 Maryland Parkway, Box 456022, Las Vegas, NV 89154-6022,United States

a r t i c l e
Keywords:
Segmentation
Hotel selection
Decision factors
Reward programs
Commitment

i n f o

a b s t r a c t
This study investigated factors that inuence consumer purchasing decisions for two hotel segments:
full-service and limited-service. Results from an online survey indicated that full-service hotel guests
were more likely to be reward program members and be emotionally attached to their preferred brand.
Price was the most important factor for limited-service guests purchase decisions, while both price and
utility were important for full-service guests. Limited-service guests had lower switching costs, that is,
they required less of a discount to switch to a non-preferred brand than full-service guests. The ndings
have implications for hotel pricing and marketing strategies.
2011 Elsevier Ltd. All rights reserved.

1. Introduction
Within the hotel industry, there are clearly dened business segments, which vary in their level of service and amenities, and attract
different customer types with different needs. Surprisingly, there
is very little scholarly research evaluating the factors that inuence
customers to choose one hotel segment over another, or the prole
of those customers.
Customer loyalty is a primary goal of hotel operators, most
of whom have reward programs designed to attract and retain
hotel guests (McCall and Voorhees, 2010; Shoemaker and Lewis,
1999). There is considerable research on the drivers and results
of loyalty in hospitality businesses (e.g., Baloglu, 2002; Bowen
and Shoemaker, 2003; Hu et al., 2010; Hyun, 2010; Mattila, 2001,
2006; McCall and Voorhees, 2010; Sui and Baloglu, 2003; Tanford
et al., 2010), but none that has investigated loyalty determinants
for different hotel types within a single study. This issue is especially important for operators of major chains, such as Marriott or
Hilton, which have multiple business segments represented within
their portfolios. Offering a single loyalty program to customers that
patronize different hotel segments could result in the failure to offer
rewards that are valuable to some customers.
Research has separately examined factors that are important
to hotel guests (Dolnicar and Otter, 2003); and factors that drive

Corresponding author. Tel.: +1 702 895 5982.

E-mail addresses: sarah.tanford@unlv.edu (S. Tanford), carola.raab@unlv.edu (C.
Raab), yen-soon.kim@unlv.edu (Y.-S. Kim).
1
Tel.: +1 702 895 5406.
2
Tel.: +1 702 895 5443.
0278-4319/$ see front matter 2011 Elsevier Ltd. All rights reserved.
doi:10.1016/j.ijhm.2011.04.006

customer loyalty (e.g., Bowen and Shoemaker, 2003; Ramanathan

and Ramanathan, 2011; Wilkins et al., 2010); but in most cases,
both concepts were not investigated in the same study. In addition,
most research has investigated these concepts for a single business
segment or an aggregate sample of all customers.
The objective of the current study is to integrate concepts of loyalty, purchase determinants, and business segmentation for hotel
guests. One objective is to develop a prole of each segments
demographics, travel behaviors, and reward program membership.
A second goal is to evaluate differences between patrons of fullservice and limited-service hotels to determine what drives their
hotel choices. A third objective is to compare the two hotel segments in terms of the level and type of commitment they have to
their preferred brand and its reward program. The research has
practical applications for multi-brand hotel operators as well as
those that serve a specic hotel segment. Understanding the customers that patronize each business segment will help operators
market to new customers and build loyalty among existing guests.
2. Literature review and hypotheses
2.1. Reward program membership
The effectiveness of reward programs can be evaluated along a
variety of dimensions, including program structure, reward structure, and customer factors (McCall and Voorhees, 2010). Under
customer factors, McCall and Voorhees posed several important
research questions that should be investigated, including whether
certain customer types are more prone to participate in loyalty programs, and how to assess the t between customers and reward
programs. Despite the prevalence of reward programs in hospital-

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S. Tanford et al. / International Journal of Hospitality Management 31 (2012) 319328

ity, most of the studies reviewed by McCall and Vorhees were done
in non-hospitality settings. Within the hospitality domain, research
has investigated characteristics of the reward structure that are
most likely to build hotel loyalty (Hu et al., 2010). Research has also
suggested that reward programs for airlines are more successful
than those for hotels (Dekay et al., 2009). Reward tiers are an important component of hotel loyalty, yet only one study has investigated
the impact of reward tier on loyalty-related attitudes and behavior
(Tanford et al., 2010). In that study, high tier reward members differed from low tier members on a several variables, including level
and type of commitment, likelihood to switch, and switching costs.
The question posed by McCall and Vorhees could be extended to
ask whether certain customer types are more likely to belong to
different tier levels in loyalty programs. In the current research,
customer types were dened by whether they typically patronized full-service or limited-service hotels. Differences in reward
tier/membership could have implications for the loyalty behavior
of these two customer segments.
H1. There will be a signicant difference between the type of hotel
respondents most often use and their reward program membership
levels.
2.2. Purchase decision factors
Hotel selection and attributes that are important to travelers have been extensively researched using a variety of methods
(Callan, 1995, 1998; Chu and Choi, 2000; Clow et al., 1994; Dolnicar,
2002). After reviewing 21 studies related to hotel attributes,
Dolnicar and Otter (2003) categorized the attributes into the following areas of the hotel: (1) image, (2) price/value, (3) hotel, (4)
room, (5) services, (6) marketing, (7) food and beverage, (8) others, (9) security, and (10) location. They found that some attributes
were included in nearly every study and that cleanliness was the
top priority, followed by hotel location. Service items were the most
frequently studied hotel attributes and marketing was the least
studied area. Service was also the strongest factor in research by
Cobanoglu et al. (2003), followed by price and value, security, extra
amenities, technology, room comfort, and food and beverage.
It can be noted that the above studies did not include any
attributes related to sustainability or green hotel practices/policies.
Following Dolnicar and Otters review, which covered studies
through 2000, the current authors reviewed the same research
and business journals from 2001 to the present. Many additional attributes were discovered, including some directly related
to a new category the environment. The following sustainable hotel attributes were identied: the use of dispensers for
soap/lotion, water and energy saving programs, recycling and towel
re-use programs, visible communication about green practices,
use of environmentally friendly suppliers and purchase of green
products, communication and training about sustainability. An
additional new category was created, corporate responsibility,
which includes sustainability as well as a new attribute found in the
literature, a rms employee rights record. In a study that specically addressed sustainability, Millar and Baloglu (2008) found that
policies such as changing sheets upon request and installing energy
saving light bulbs in guest rooms were most important for hotel
guests. Table 1 displays a summary of all hotel attributes that were
included in hospitality research for the last 26 years.
Relatively few studies have segmented customers or products
in relation to purchase decision factors. Business and leisure travelers were compared in a study by Chu and Choi (2000), which found
that the two segments were quite similar in the rated importance
of hotel selection factors, with the exception of business facilities,
which were naturally more important to business guests. Differences between business and leisure travelers in perceptions of

Table 1
Frequency ranking of hotel areas studied (19842010).
Attribute category

Frequency of inclusions

378
Services
Room
288
Hotel
237
101
Price/value
100
Food and beverage
68
Location
61
Security
56
Image
category)
Corporate responsibility including sustainability (new 29
19
Marketing
Other
15

value for a hotel stay were obtained in research by Kashyap and

Bojanic (2000). For business travelers, room quality was not a signicant predictor of value, whereas quality of public areas was. For
leisure travelers, quality of public areas and quality of staff and
services did not signicantly inuence value perceptions, whereas
price and room quality did. Seven hotel factors were identied by
Choi and Chu (1999): staff service quality, room quality, general
amenities, business service, value, security, and IDD (International
Direct Dial) facilities. All of these attributes were signicantly more
important to patrons of High-Tariff (i.e., higher priced) hotels,
compared to Medium-Tariff hotels. Staff service quality and room
quality were the most important attributes for high-tariff guests,
while security was most important to medium-tariff guests, followed by room quality and service quality.
Although numerous studies exist on factors that inuence hotel
selection, relatively few focus on loyalty. Bowen and Shoemaker
(2003) identied a list of factors that are intended to foster loyalty,
of which upgrades, exible check-in, check-out, and customized
marketing were rated most important. Many of Bowen and Shoemakers attributes are related to benets of the reward program,
whereas there are other factors that could inuence loyalty. In their
model of hotel loyalty, Wilkins et al. (2010) identied three factors that contributed to service quality, namely physical product,
food and beverage, and service experience. Service quality was the
main indirect determinant of loyalty in their model. In a qualitative survey, hotel guests were asked what does loyalty to a hotel
mean to you? (Mason et al., 2006). Among the items mentioned
most frequently were: (1) return visits, (2) an implied service level
agreement, (3) special deals, (4) recognition and rewards, (5) special treatment, (6) price/value and (7) service quality. In a study of
UK hotels using online customer ratings, value for money was the
top attribute that inuenced customers intentions to revisit. Customer service, room quality and quality of food were negative
loyalty drivers, that is, they inuenced decisions not to revisit if
they were not satisfactory (Ramanathan and Ramanathan, 2011).
Drawing from previous research, the current research included
attributes related to operational factors as well as loyalty and sustainability. It was hypothesized that the two hotel segments would
differ in the importance of these factors in purchase decisions.
H2. There will be a signicant difference between the type of hotel
respondents most often use and purchase decision factors.
2.3. Determinants of hotel loyalty
2.3.1. Commitment
The role of commitment in loyalty has been well documented.
Affective commitment, also referred to as emotional or relationship commitment, can be described as an emotional attachment
that creates a sense of belonging and personal identication and
a desire to maintain a long term relationship with the provider
(Allen and Meyer, 1990; Baloglu, 2002; Benapudi and Berry, 1997;

S. Tanford et al. / International Journal of Hospitality Management 31 (2012) 319328

Bowen and Shoemaker, 2003; Fullerton, 2003, 2005; Mattila, 2001,

2006; Sui and Baloglu, 2003). Affective commitment is considered
key to building relationships within the hotel industry (Bowen
and Shoemaker, 2003; Shoemaker and Lewis, 1999). Hospitality
research has documented the role of affective commitment and
relationship quality in loyalty to hotels (Mattila, 2006; Tanford
et al., 2010), casinos (Baloglu, 2002; Sui and Baloglu, 2003) and
restaurants (Hyun, 2010; Mattila, 2001). In those studies, affective commitment has been shown to be a stronger determinant
of loyalty than other forms of commitment.
A second type of commitment has been termed calculative
commitment (Mattila, 2006) or value commitment (Tanford et al.,
2010). Value commitment is characterized by the perceived value
of benets received from the providers reward program. Value
commitment is less enduring and associated with greater price sensitivity and willingness to switch hotels than affective commitment
(Tanford et al., 2010).
Commitment can be related to purchase decision factors. A
study on restaurant loyalty found that food quality, service and
atmosphere were equally important motivators to dine at a particular restaurant for subjects high or low in affective commitment
(Mattila, 2001). Value for the price and location were more important for low commitment subjects, while personal recognition and
a memorable past experience were more important for the high
commitment group. A utility factor, containing attributes such as
convenience, location, service and price, was found to be more
important for purchase decisions made by respondents with high
value commitment, that is, commitment driven by reward program benets (Tanford et al., 2010). A loyalty factor, which included
brand reputation, prestige, status, and reward membership was
important in decisions for respondents with high affective commitment as well as those with high value commitment.
There is limited research on commitment as a function of
business segments. There are differences between reward program members and non-members, as one would expect. Reward
members, regardless of tier level, reported higher value (i.e.,
benet-driven) commitment than non-members (Tanford et al.,
2010). In terms of affective (i.e., emotional) commitment, only high
reward tier members had signicantly higher ratings than low-tier
members or non-members. Reward tier also affected ratings on
purchase decisions factors. Loyalty-related attributes were more
important for upper tier members than lower tier or non-members.
Just as there are differences between reward tiers in terms of commitment, Hypotheses 3 and 4 predict that there will be differences
between hotel segments. Although one could speculate that the differences between full-service and limited-service hotel segments
might be similar to high and low reward tiers, in the absence of
prior research no directional hypotheses were formulated.
H3. There will be a signicant difference between the type of hotel
respondents most often use and their affective commitment.
H4. There will be a signicant difference between the type of hotel
respondents most often use and their value commitment.
2.3.2. Willingness-to-pay
In the loyalty context, willingness-to-pay (WTP) has been
dened as the willingness to accept higher prices than a competitor and continue to do business with a preferred brand if it raises
its prices (Fullerton, 2003; Zeithaml et al., 1996), or as the percentage of expenditures made with a preferred supplier (Wirtz et al.,
2007), also known as share-of-wallet (SOW). WTP has been shown
to increase as a function of loyalty and affective commitment (Aydin
and Ozer, 2005; Fullerton, 2003; Skogland and Sigauw, 2004). In
research on insurance companies, loyalty program membership
and affective commitment were both positively related to share
of purchases (Verhoef, 2003), while rated attractiveness of the pre-

321

ferred brands loyalty program in relation to others was positively

related to SOW for credit card customers (Wirtz et al., 2007).
If willingness to pay is the premium that customers will pay for
a brand to which they are loyal, a related concept is the amount of
discount that a competitor must offer to steal a customer from a
preferred brand. Survey research found that respondents higher in
affective commitment required a greater discount to switch hotel
brands, whereas value commitment did not affect the amount of
discount needed to switch (Tanford et al., 2010). In addition, reward
program members required a greater discount to switch than nonmembers, but only in the luxury hotel price range. That does not
necessarily mean that a luxury hotel brand could raise its prices
by that amount and retain its customers. In a sample of loyal hotel
guests, Bowen and Shoemaker (2003) found that the majority did
not consider a large price increase to be acceptable, and many said
their feelings about the hotel would change and they would check
other hotel rates for future stays. It is reasonable to assume that
patrons of limited-service hotels would be more price-sensitive
than full-service guests, since they prefer lower-priced hotels. That
assumption is supported by Tanford et al.s (2010) research, in
which subjects required a greater discount to switch at higher price
points.
H5. There will be a signicant difference between the type of hotel
respondents most often use and the amount of discount required
to switch brands.
3. Methodology
3.1. Subjects
Subjects were obtained from an online sample purchased from
Zoomerang.com, an online survey research company. The survey
company sampled randomly from its online respondent panel in
four geographic U.S. regions: North, East, South and West. In order
to participate in the survey, subjects were required to be at least
18 years of age and to have stayed in a hotel at least twice in the past
12 months. A total of 535 subjects met the requirements and submitted questionnaires with complete data. The sample contained
306 respondents whose primary lodging choice was full-service
hotels and 229 subjects who primarily stayed at limited-service
hotels. A quota sampling procedure was used to ensure there were
adequate samples in each group for subsequent analyses conducted
separately for the two lodging types.
3.2. Instrument and procedure
The instrument was administered in an online format by
Zoomerang.com. Respondents who opened the survey link were
rst presented with a standard University Consent form. Those who
agreed were taken to a second question asking if they had stayed at
a hotel in the past 12 months, and those who responded yes were
asked how many trips they had taken in the past 12 months where
they stayed at a hotel. Respondents who checked 01 trips were
excluded from the survey, as were those who did not agree to the
consent form or who answered no when asked if they had stayed
at a hotel in the past 12 months. The original version of the instrument was pilot tested on a sample of 60 subjects recruited through
Zoomerang.com and administered with the same procedure. Based
on the results, minor modications were made to produce the nal
questionnaire.
After qualifying respondents, questions were utilized to classify
them into limited- and full-service groups and to prime them to
focus on their preferred brand. Subjects were rst asked which of
the two categories describes the type of hotel where they stay most
often, followed by the category label and denition of full-service

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S. Tanford et al. / International Journal of Hospitality Management 31 (2012) 319328

and limited-service hotel types. Depending on their response, they

were taken to one of two brand lists, showing the parent brand
and limited or full-service sub-brands within it, listed in parentheses. For example, in the limited-service condition, one of the brand
selections was Choice (Comfort Inn, EconoLodge, Quality Inn, Sleep
Inn, Rodeway Inn). Subjects were instructed to think about their
preferred brand, that is, the brand they just selected, for the subsequent questions. To classify reward membership, respondents
were rst asked if they were a member of their preferred brands
reward program. Those who responded afrmatively were asked
to identify their tier level as either the lowest tier or a higher
tier.

3.3. Measures
The independent variable used in this study was the type of
hotel where respondents most often stayed (full-service versus
limited-service). The study then tested for signicant differences between these two groups in regard to the following
variables: reward program membership, purchase decision factors, commitment levels, switching discount, and customer prole
information.
Commitment was measured along two dimensions: affective and
value. Affective commitment was dened using a set of ve 7-point
bipolar agreedisagree scales that assessed emotional attachment,
loyalty, and personal meaning of the brand. The items were adapted
from previous research on commitment as it relates to loyalty programs (Fullerton, 2003; Mattila, 2001, 2006; Tanford et al., 2010;
Wirtz et al., 2007). Value commitment was dened as the evaluation of benets from the preferred brands loyalty program, and
was measured using eight 7-point ratings (from poor to excellent) of different reward program features. The items were adapted
from previous studies on hotel loyalty (Mattila, 2006; Tanford et al.,
2010).
Purchase Decision Factors consisted of ratings of the importance
of 38 attributes is respondents decisions to choose a particular hotel, rated on a scale from 1 (extremely unimportant) to 7
(extremely important). The items were adapted from previous
research on factors that are important to hotel buyers (e.g., Callan,
1998; Cobanoglu et al., 2003; Chu and Choi, 2000; Lewis, 1984;
Lockyer, 2005; Millar and Baloglu, 2008), and supplemented with
items created for the current research. The objective was to capture the broad dimensions that drive hotel selection, as opposed to
obtaining detailed information about a specic dimension such as
service, which was the approach used by many of the reviewed
studies. The ratings were divided in half and presented to the
respondents on two screens, within which the items were ordered
randomly. Factor analysis was employed to reduce the items to a
set of meaningful variables that could be used to evaluate Hypothesis 2, which predicts differences between hotel segments in terms
of the factors that inuence their purchase decisions.
Switching discount is dened as the discount that a nonpreferred hotel brand would have to provide in order to get
someone to switch from their preferred brand to the alternative.
In other words, it is the cost to the competitor (in hotel rate) of
stealing another brands loyal customers. Switching discount was
measured using an open-ended format and customized by hotel
type by asking How much cheaper would a (full-service/limitedservice) hotel that is NOT your preferred brand have to be for you to
choose that hotel over your preferred hotel? Enter the exact dollar
amount of discount in the space below.
Customer prole information was gathered at the end of the survey. It included questions on travel behaviors and experiences as
well as demographic indicators.

4. Results
4.1. Customer prole
Table 2 presents a prole of patrons of full-service versus
limited-service hotels in terms of their travel behaviors in the
past 12 months. There are several notable differences between
the two groups. Full-service hotel guests were more likely to be
high frequency travelers, taking 810 hotel trips (13.4% of fullservice versus 7.9% of limited-service) and staying more than
10 nights at their preferred brand (17.3% of full-service versus
9.3% of limited-service). Full-service guests were more likely to
travel on business (25.0%) versus limited-service guests (14.2%),
although the majority of both groups were leisure travelers. Not
surprisingly, limited-service guests paid less per night on average for a hotel room. The largest percentage of limited-service
guests paid under $100 (78.9%), while most full-service guests
paid $100$150 (59.7%). Although both groups were similar in
their booking method, with most using the hotel website, limitedservice guests were more likely than full service guests to call
the hotel directly (25.0% versus 19.3%). Another interesting difference is that none of the full-service customers were walk-ins,
while 5.3% of the limited-service customers walked in without a
reservation.
Table 3 provides a demographic prole of the two respondent
types. Several differences are apparent in these comparisons. The
full-service sample was somewhat younger, with 52.5% under age
45 compared to 44.2% of the limited-service group, which had more
respondents age 65 or older (21.1% of limited-service versus 16.1%
of full service). Not surprisingly, the full-service group had a larger
percentage of employed respondents than the limited-service
group (67.3% versus 52.4%), while the limited-service group contained more unemployed, homemakers and retired respondents
(30.1% in total) compared to the full-service group (21.8%). Most of
the sample was college educated, although this applied to a greater
percentage of full-service customers (79.3%) than limited-service
guests (69.5%). The full-service sample contained nearly twice the
proportion of respondents in the $100,000+ income bracket (41.3%
versus 21.0%), while the limited-service sample contained more
respondents with incomes under $50,000 (19.1% versus 13.5%).
Although one would expect this pattern of results due to the
differences in room rates between the two hotel segments, the
results are not symmetrical. That is, a substantial number of more
afuent customers still choose limited-service accommodations,
whereas fewer low income customers selected full-service hotels.
In terms of ethnic group, both groups were predominantly Caucasian, but the full-service group contained a substantial proportion
of Asian customers (7.2%) whereas this percentage was negligible among limited-service guests. There were minimal differences
between the two groups in terms of marital status, although
the limited-service group contained somewhat more widowed,
divorced or separated respondents (12.3%) versus the full-service
group (7.9%).
4.2. Reward program membership (Hypothesis 1)
The study applied t-tests and chi-square analysis to test for differences between the two groups (full-service and limited-service)
within the sample. Table 4 shows that there was a signicant difference (2 = 13.03, p < 0.000) between the two groups of respondents.
Therefore, Hypotheses 1 was supported. The results further show
that full-service respondents were more likely to belong to their
preferred brands reward program, and to be members of higher
reward tiers within the program. Sixty-ve percent of full-service
respondents were reward program members, compared to 54.6% of
limited-service respondents. Moreover, close to one-third (32.0%)

S. Tanford et al. / International Journal of Hospitality Management 31 (2012) 319328

323

Table 2
Travel prole of full-service versus limited-service respondents.
Survey question

Value

Hotel respondent type

Full service

Limited service

Number of hotel trips in the past

12 months

24
57
810

67.0%
19.6%
13.4%

73.8%
18.3%
7.9%

Number of nights at preferred

brand in past 12 months

02
35
610
>10

27.1%
37.6%
18.0%
17.3%

35.7%
40.1%
15.0%
9.3%

Purpose of travel

Business
Leisure
Other

25.0%
74.4%
0.3%

14.2%
84.1%
1.8%

Average spent per night for a hotel

room

Under $100
$100$150
$150$200
More than $200

21.6%
59.7%
14.1%
4.6%

78.9%
20.2%
0.9%
0.0%

Stay period

Midweek
Weekend
Week Long

38.2%
46.1%
15.7%

34.6%
53.1%
12.4%

Most frequent booking method

Hotel website
Online travel merchant
Call hotel directly
Travel agency
Walk-in
Corporate travel dept.
Airline website
Other

47.2%
21.6%
19.3%
5.6%
0.0%
2.3%
2.0%
2.0%

44.3%
18.4%
25.0%
2.2%
5.3%
0.9%
0.9%
3.1%

Table 3
Demographic prole of full-service versus limited-service respondents.
Characteristic

Value

Hotel respondent type

Full-service

Limited-service

Gender

Female
Male

52.8%
47.2%

50.7%
49.3%

Age

1834
3544
4554
5564
65 or higher

25.6%
26.9%
18.0%
13.4%
16.1%

20.2%
24.2%
19.4%
15.9%
21.1%

Employment

Employed full time

Employed part time
Retired
Homemaker
Unemployed
Full time student

67.3%
10.6%
15.8%
3.0%
3.0%
0.3%

52.4%
15.3%
20.5%
5.2%
4.4%
2.2%

Education

High school
Some college
College degree
Trade/technical
Graduate degree

7.0%
12.2%
44.4%
1.6%
34.9%

5.7%
21.8%
36.7%
3.1%
32.8%

Income

Under $35k
$35$50k
$50$75k
$75$100k
More than $100k

4.3%
9.2%
22.3%
23.0%
41.3%

13.8%
14.3%
29.5%
21.4%
21.0%

Ethnic group

Caucasian/White
Asian/Asian American
African American
Hispanic/Latino
Other

82.0%
7.2%
4.6%
3.9%
2.3%

93.0%
0.9%
2.2%
3.1%
0.8%

Marital status

Married
Single
Separated/divorced
Widowed

71.5%
20.7%
5.9%
2.0%

68.4%
19.3%
7.9%
4.4%

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S. Tanford et al. / International Journal of Hospitality Management 31 (2012) 319328

Table 4
Reward membership as a function of hotel respondent typea .
Hotel respondent type

Not a member
Lowest
Higher
Total
a

Full service

Limited service

Count
% within group
Count
% within group
Count
% within group

105
34.3
103
33.7
98
32.0

104
45.4
82
35.8
43
18.8

Count

306

229

 = 13.03, p < 0.000.

2

of full-service guests belonged to higher reward tiers, compared to

18.8% of limited service guests.
4.3. Purchase decision factors (Hypothesis 2)
The 38 ratings of attribute importance were analyzed using
exploratory factor analysis in SPSS 16.0. A Principal Components
analysis with Varimax rotation and Kaiser Normalization was utilized. The KMO measure of sampling adequacy was 0.943 and
Bartletts test of sphericity yielded a 2 of 13,375.40, p < 0.0001,
with both measures indicating that factor analysis was highly
appropriate for the data. Table 5 presents the results of the analysis, showing all factors with eigenvalues greater than 1 ranked by
variance explained. The analysis produced six factors that together
explained 64.23% of the variance in the data.
All the factors are readily interpretable, and labels have been
supplied to describe each factor. The rst factor, utility, includes
the basic attributes necessary for a satisfactory hotel stay, including service, convenience, location, cleanliness, and safety. The green
factor encompasses environmentally responsible practices and features. Brand contains items associated with a particular hotel chain
or brand. Amenity includes in-room features as well as the range
of services and facilities provided at the property. Image consists of
information that customers can obtain about the hotel from various
sources such as the internet and through advertising, as well as the
propertys image as conveyed through its design. Price is the importance of price, value and discounts. All factors displayed sufcient
reliability with Cronbachs scores ranging from 0.75 to 0.95.
Hypothesis 2 was tested by analyzing the differences between
preferred hotel type on respondents factor scores for each component. Table 6 shows the t-test results, along with the factor scores
analyzed and the average rating for the items within each factor.
Items are ranked according to their overall importance based on
the average rating. The analysis revealed signicant differences
between full-service hotel and limited-service hotel users for all
factors, at p < 0.001 for amenity, image and price; and p < 0.05 for
utility, green and brand. Thus, Hypothesis 2 was supported. Full
service patrons assigned higher importance to every factor except
price, on which limited-service patrons placed signicantly more
importance. The price-related items were most important on average for limited-service guests, followed by utility items, while
full-service guests rated utility most important, followed by price.
Overall, environmentally responsible green practices were least
important in both groups purchase decisions. On average, limitedservice guests were neutral with respect to green practices, with a
mean rating of 3.5 on the 7-point scale.
4.4. Commitment (Hypotheses 3 and 4)
Table 7 shows the result for testing Hypothesis 3, which
predicted signicant differences between the type of hotel respondents most often use and their affective commitment. The

results showed that 3 out of the 5 questions measuring affective commitment revealed signicant differences between the two
groups. Therefore, Hypothesis 3 can only be partially supported.
Full-service patrons had signicantly higher ratings than limitedservice guests for the following questions: I feel emotionally
attached to (preferred brand) (t = 5.102, p < 0.001), My relationship with the brand has a great deal of personal meaning to me
(t = 5.508, p < 0.001), and I feel part of the family as a customer of
(brand) (t = 4.520, p < 0.001). I consider myself a loyal customer of
(preferred brand) and I do business with this company because
I like it did not reveal signicant differences between groups. In
a factor analysis which included all 5 items, the nal item had a
substantially lower factor loading than the others, so it may not be
as strong an indicator of emotional commitment.
Table 8 displays the results for t-tests that investigated the
differences between the type of hotel respondents most often
used and their value commitment, that is, their perceived value
of reward program benets. Hypothesis 4 was supported since all
questions (except one) measuring value commitment showed signicant differences between the two groups at the 99 percent level.
The rating of ability to earn points toward future stays showed
a signicant difference at the 95 percent level. For all items, full
service respondents rated their preferred hotel brands reward program higher than limited-service respondents.
4.5. Willingness-to-pay (Hypothesis 5)
Table 9 shows the difference between the type of hotel respondents most often use and their average switching discount, that
is, the amount of discount they would require to switch to an alternative hotel brand. Hypothesis 5 was supported because the test
revealed a signicant difference (t = 7.158, p < 0.001) between hotel
segments and their average switching discount. Full-service hotel
guests required a higher discount to switch to the competition from
their preferred brand ($39.49) than limited-service guests ($22.46).
Due to the open-ended nature of the response, it is also informative
to examine other measures of price sensitivity. The modal response
for full-service guests was $50, with a median of $30 and a range
from $0 to $200. For limited-service guests, the mode and median
were both $20 and values ranged from $0 to $100.
5. Discussion
Based on the research ndings, a prole of the typical full- and
limited-service guest emerges. There were signicant differences
between respondents who stay most often at full-service hotels
and those who stay at limited-service hotels on every dimension
investigated, supporting all ve hypotheses. In terms of loyalty
program membership, full-service guests are more likely than not
to belong to their preferred brands program, and equally likely
be low or higher tier members. The typical limited-service guest
is not a member or belongs to a lower reward tier. Overall, full-

S. Tanford et al. / International Journal of Hospitality Management 31 (2012) 319328

325

Table 5
Factors inuencing hotel purchase decisionsa .
Factor

Components

Factor loading

Utility
Service quality
Friendliness of hotel staff
Cleanliness
Guestroom comfort
Safety and security
Speed and efciency of service
Location
Attentiveness of hotel staff
Convenience
Check-in/check-out process
Prior experience, familiarity

0.81
0.77
0.77
0.75
0.70
0.70
0.68
0.68
0.67
0.65
0.60

Waste recycling procedures

Participation in green practices
Water conservation features
Utilization of energy-efcient devices
Solar-based energy use
Environmental certication
Towel re-use program

0.91
0.90
0.90
0.86
0.82
0.82
0.75

Reward program membership

Personal commitment to brand
Consistency of chain across locations
Brand reputation

0.69
0.64
0.57
0.52

Property facilities (tness center, pool, spa, etc.)

In-room technology
Free extras (newspaper, continental breakfast, etc.)
In room amenities (bath products, coffee, etc.)
Business services
Dining options

0.59
0.58
0.58
0.58
0.54
0.53

Customer reviews
Recommendations from others
Star rating
Prestige, status
Print or television advertising
Hotel website
Building design and architecture

0.72
0.70
0.58
0.54
0.50
0.44
0.41

Price
Value for the money
Availability of special discounts

0.75
0.68
0.52

Green

Brand

Amenity

Image

Price

Eigenvalue

Variance explained

Cronbachs

7.18

18.89%

0.92

5.99

15.76%

0.95

3.06

8.05%

0.79

3.04

8.01%

0.78

2.93

7.72%

0.84

2.21

5.80%

0.75

a
Extraction method: principle components analysis with Varimax rotation and Kaiser normalization. KMO measure of sampling adequacy = 0.943; Bartletts test of
sphericity, 2 (703) = 13375.40, p < 0.0001.

Table 6
Purchase decision factors as a function of hotel respondent typea .

Table 7
Affective commitment as a function of hotel respondent typea .

Hotel respondent type

Price
Utility
Amenity
Brand
Image
Green

Hotel respondent type

Full service

Limited service

t(533)

0.174 (5.78)
0.082 (5.79)
0.218 (5.04)
0.085 (5.01)
0.142 (4.35)
0.076 (4.00)

0.223 (5.84)
0.109 (5.54)
0.291 (4.39)
0.113 (4.55)
0.190 (3.78)
0.101 (3.50)

4.759***
2.191*
6.014***
2.272*
3.859***
2.031*

p < 0.05.
p < 0.001.
a
t-tests conducted on factor scores; values in parentheses represent the mean
rating of the items within each factor.
***

service guests have greater commitment to their preferred brand,

both affective (emotional) and value (reward-based). However, further examination of the two groups reveals that limited-service
guests have brand commitment based primarily on reward program benets (value) whereas full-service guests are committed
both emotionally and based on reward benets. This conclusion

I consider myself a loyal

customer of (preferred
brand)
I do business with this
company because I like it
I feel emotionally attached to
(brand)
My relationship with (brand)
has a great deal of personal
meaning to me
I feel like part of the family as a
customer of (brand)
***
a

Full service

Limited service

t(533)

4.79 (1.59)

4.52 (1.578)

1.955

5.39 (1.28)

5.27 (1.26)

1.133

3.65 (1.72)

2.92 (1.54)

5.102***

3.70 (1.74)

2.90 (1.57)

5.508***

3.93 (1.76)

3.26 (1.63)

4.520***

p < 0.001.
Standard deviations appear in parentheses.

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S. Tanford et al. / International Journal of Hospitality Management 31 (2012) 319328

Table 8
Value commitment as a function of hotel respondent typea .
Hotel respondent type

Ability to earn points toward

future stays
Ability to earn airline miles
Special amenities and services
Extended check-out
Priority check-in
Room guarantees
Upgrades
Opportunity to earn bonus
points
*
**
***
a

Full service

Limited service

t(533)

5.00 (1.53)

4.69 (1.54)

2.293*

4.03 (1.65)
4.98 (1.33)
5.03 (1.36)
5.04 (1.40)
5.21 (1.36)
4.91 (1.42)
4.82 (1.50)

3.62 (1.72)
4.18 (1.33)
4.33 (1.42)
4.23 (1.49)
4.74 (1.45)
4.13 (1.40)
4.26 (1.59)

2.760**
6.892***
5.798***
6.418***
3.802***
6.270***
4.208***

p < 0.05.
p < 0.01.
p < 0.001.
Standard deviations appear in parentheses.

Table 9
Average switching discount as a function of preferred hotel typea .
Hotel respondent type

Mean
Mode
Median
Range
***
a

Full service

Limited service

T(493)

$39.49 (32.17)
$50.00
$30.00
$0$200

$22.46 (15.90)
$20.00
$20.00
$0$100

7.158***

p < 0.001.
Standard deviations appear in parentheses.

was reached by examining the mean ratings of limited-service

guests, which were below the midpoint of 3.5 on the 7-point
scale on the 3 affective commitment attributes that distinguished
them from full-service guests; whereas the ratings for full-service
guests were above the midpoint on all affective commitment items.
Although limited-service guests considered themselves to be loyal
customers to the same extent as full-service guests, they nonetheless did not feel the same emotional attachment and personal
relationship. On value commitment ratings, both groups were well
above the midpoint on average, and differed only in degree. Some
of this difference could be attributed to the fact that the limitedservice group contained more non-members and low tier members,
so they were not receiving the same benets as full-service patrons.
Since the full-service group contained more high tier reward members, the results are consistent with Tanford et al.s (2010) research,
which found that high tier members are more likely to develop
affective commitment and have higher switching costs than low
tier members, who are inuenced to a greater extent by value
commitment.
The ndings showed that overall, factors have the same relative
importance in purchase decisions of full-service and limitedservice guests, they are just more important for full-service guests.
The exception to this pattern is price (which includes price, value
and discounts), which was the most important factor for limitedservice guests and signicantly higher than its importance for
full-service customers. Purchase decisions of full-service guests are
affected by factors similar to respondents high in affective commitment in previous research (Mattila, 2001; Tanford et al., 2010),
while limited-service guests are inuenced by factors related
to value commitment (Tanford et al., 2010). In Mattilas (2001)
research, value for the price was more important for subjects low
in affective commitment, while personal recognition was more
important for high commitment respondents. In Tanford et al.s
(2010) research, high commitment of either type resulted in greater
rated importance of loyalty-related attributes, whereas a utility
factor (which included price) was only impacted by value com-

mitment. The parallels are further established by the fact that

respondents in Tanford et al.s research exhibited higher price sensitivity in response to discount amounts. Limited service guests
showed greater price sensitivity, and were willing to switch to a
non-preferred brand at a lower price point ($22 on average) than
full-service guests ($39). Of course, this difference could also be due
to the fact that full-service patrons pay more for their hotel rooms
($100$150) than limited-service guests ($100).
In summary, we nd that limited-service guests are driven
primarily by value considerations, in the form of reward program benets and pricing. Full-service guests are more likely to
develop personal brand commitment, and value non-price related
attributes. Full-service guests are more likely to remain loyal to
their preferred brand, even in the face of discounts; while limitedservice guests may be more likely to switch if the perceived value of
the price discount outweighs the benets of the reward program.
The ndings extend previous research on hotel attributes by
identifying six factors that are important in hotel purchase decisions among regular hotel guests. Much of the previous research
has focused on operational attributes associated with the hotel stay
itself (Dolnicar and Otter, 2003). In the current research, an attempt
was made to evaluate a broader range of attributes, with less detail
on any specic area. When analyzed from this perspective, many
of the operational items loaded on a single factor, labeled utility,
which was the most important determinant of purchase decisions,
along with price. This factor included the basic requirements of a
hotel stay, such as service, safety, cleanliness, convenience, location, and room comfort. In Dolnicars (2002) review of previous
studies, service, room, location, hotel and security each formed
their own dimension in many cases. It may be that there are two levels of attribute evaluation a broader level that takes place during
the purchasing stage, in which the overall utility of the property is
considered, and a narrower level that occurs during the hotel stay
and determines satisfaction with different aspects of the experience. Price/value was a separate dimension in the current research
and in previous studies as well, suggesting that price is a purchase
determinant that is distinct from all others.
The research obtained support for a unique dimension associated with green hotel practices, supporting Millar and Baloglus
(2008) research and adding to the recent area of Corporate Responsibility. The green dimension was the least important factor
in respondents decisions, especially for limited-service guests,
but it did account for the second highest proportion of variance in the data, indicating that it should be included in any
current taxonomy of purchase decision factors. Three additional
factors, amenity, brand, and image were intermediate in
importance, with amenity and image being the strongest differentiators between full- and limited-service patrons. These may
be among the attributes most likely to generate loyalty, although
that remains to be investigated in future research. That is, utility
and price are important to everyone, green practices are relatively unimportant, whereas hotels can differentiate themselves
by providing a unique image, superior amenities and a respected
brand.
5.1. Implications
There are several implications that can be derived from this
study. The ndings suggest that reward program membership plays
a different role for patrons of the two hotel segments, implying
that distinct approaches may be required for each group. Fullservice respondents are more likely to belong to the preferred
brands reward program, and higher reward tiers within the program. Their commitment is based on both reward program benets
and emotional attachment. This indicates that marketers for fullservice hotels can make successful use of their reward programs

S. Tanford et al. / International Journal of Hospitality Management 31 (2012) 319328

when targeting this group and be condent that their marketing

efforts will create repeated patronage. On the other hand, only
about half the respondents that frequent limited-service hotels are
members of reward programs, most of those are low tier members,
and their commitment is based primarily on perceived value of
reward program benets. Reward programs alone as a marketing
tool may not be as effective, since they are subject to counteroffers with greater perceived value. Other measures such as price
and value need to be emphasized for the limited-service segment.
Furthermore, the knowledge of differences in purchase decision factors between market segments can be of great importance.
In this study the purchase factor amenities exhibited the most
signicant difference between the groups, which indicates that
marketers of each hotel segment need to be highly aware which
amenities are most appropriate for their respective target markets. Conversely, the factor utility displayed the least difference
between the groups a not surprising result since basic aspects
such as service quality, cleanliness and safety are naturally desired
by all customers and management must guarantee these qualities.
In addition, the identication of the same priorities for both groups
suggests that the similar marketing programs relating to hotel
attributes can be applied for different hotel segments, which may be
particularly useful for multi-brand companies. For example, in this
study, price consciousness was identied for both groups signifying the importance of value creation through discounts, upgrades
and careful revenue management strategies. On the other hand,
uniform price consciousness between segments may not exclude
the need for managers to understand a difference in switching discounts, which were shown to exist between segments. In this study
it was also recognized that green practices were not as important
as other more basic attributes for both segments, which may suggest that a focus on basics may be in order when marketing to the
mainstream customer.
Moreover, it is crucial to know of customers perceptions of
items that constitute affective commitment. Full-service patrons
had signicantly higher ratings than limited-service guests for
questions that measured emotional connections to the hotel, while
questions that inquired about repeated patronage did not reveal
any signicant difference. These results may suggest to management that marketing efforts directed to full-service patrons should
aim at emotional connections, while marketing to limited service
guests may need to place a greater emphasis on hotels attributes
and price. However, it is also desirable to cultivate affective commitment among limited-service guests, in order to increase their
switching costs and make them less susceptible to competitor
tactics. Initially, value commitment can be elevated for the limitedservice customers by attracting this group increasingly into reward
program membership. Affective commitment can be established by
motivating them to reach higher tier levels and providing both tangible and intangible benets that they cannot receive elsewhere.
Some examples might be upgraded in-room amenities or products, an exclusive lounge area with refreshments, or some form
of personal recognition. The idea would be to create a similar
experience to the full-service elite guest, but at a limited-service
level.
In addition, this study identied switching discounts for each
group, which is of great importance to hotel management. Marketing efforts to attract competitors guests can be based on these
values and allow for more precise and efcient targeting. Finally,
in regard to travel patterns and demographics there were several
differences between the two groups. Marketing efforts can focus on
the fact that full-service patrons are somewhat younger, more fulltime employed, have higher incomes, travel more during the week
for business, spend more on hotel rooms and book more frequently
online.

327

5.2. Limitations and future research

The research has some limitations that must be considered in
future research. The sample was recruited from an online research
panel, and may not be representative of all hotel guests. However,
by requiring two hotel trips within the past year, it was possible
to recruit a sample of more frequent travelers. The research used
a general population of travelers, so it was not possible to control the brand or reward program being considered. However, by
grouping all of the higher tier levels together, and comparing them
to the lowest tier, which is relatively similar across programs, any
brand-specic bias was reduced. Also, having respondents select
their preferred brand at the outset, and providing an other option
for those whose preferred brand was not listed helped ensure
that respondents were focusing on their preferred brand as they
completed the survey. In future research, it would be desirable to
partner with a hotel company and survey members of its reward
program at different tier levels, thereby controlling brand and surveying known users of that brand.
The research investigated two broadly dened hotel segments
full-service and limited-service. The typical hotel classication
system includes a ner stratication of hotel types: luxury, upper
upscale, upscale, midscale with food and beverage, midscale without food and beverage, and economy. It was not possible to segment
the sample any further with the methodology utilized in this study.
Future research partnering with a multi-branded hotel company
that has brands within each segment could be used to develop a
rened segmentation of hotel types. Future research could apply
segmentation to gain a better understanding of loyalty and purchase determinants in other denable groups, such as business
and leisure travelers, different demographic and psychographic
groups, and resort, urban, and highway venues. In addition, a similar methodology could be applied to other hospitality businesses,
such as restaurants or cruises. A segmented approach could identify those factors that are universal as well as those that are unique
to specic business or customer segments.
The research utilized U.S. respondents only, whereas many of
the related studies were conducted in non-U.S. markets. Since those
studies did not investigate the same variables, it was not possible
to compare ndings between domestic and international destinations. However, the evaluation of hotel segments in different
regions throughout the world holds great interest for future investigations. In addition to comparing between regions, a comparison
of overseas versus domestic travelers to the same region would
provide valuable insight that could assist in marketing and pricing
decisions.
The research investigated factors that are considered important
in hotel loyalty, namely commitment and switching discounts, as
well as factors that inuence purchase decisions. However, actual
loyalty behavior was not evaluated, and purchase decisions were
not made. Thus, research is required to integrate these variables
into the decision process itself. A different methodology may be
needed for this purpose, where research participants make decisions that have actual monetary and behavioral consequences. In
the current research, as in much survey research, respondents made
hypothetical ratings and provided a dollar discount required to
switch, a measure of willingness-to-pay. It has been noted that
customers true WTP is an unobservable construct (Voelckner,
2006, p. 137) in most laboratory studies, and the current research
is no exception.
Finally, the research found that utilization of green practices was
relatively unimportant compared to other factors; however, this
may have been a case of aggregation that failed to reveal a segment
of the population that does value green practices and is willing to
pay for them. In Millar and Baloglus (2008) research, certain green
attributes were more important than others, and further investiga-

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S. Tanford et al. / International Journal of Hospitality Management 31 (2012) 319328

tion should be done to investigate which attributes will inuence

consumer behavior for hotels and other hospitality businesses.
Future research should also investigate the relationship between
pricing and green practices, and quantify the premium that hotels
can charge for these practices, much as the current research quantied the discount that non-preferred providers must provide
to induce switching for different segments. Given the increasing
importance of environmental sustainability in the broader cultural
context and the hospitality industry, identifying those customers
who value it could provide a competitive advantage for hotels that
implement sustainable practices.
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