Customer retention management for the hotel industry in Gauteng
Petzer, Daniël Johannes
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The effects of globalisation, local economic conditions, and developments in the service-, tourism-, and hotel industries, as well as increasing competitiveness, have led to major changes in the operating environment of South African hotels, in Gauteng particularly. These changes necessitate marketing responses from the hotels so that they can gain, but also (more profitably) retain customers. The present study develops a customer retention framework for Gauteng hotels. The study's literature review reveals that service businesses, such as hotels, need to put in place competitive marketing strategies to improve competitiveness, and retain customers. Also, once demand is created for the hotel's offering, it needs to manage this demand, as well as its capacity to deliver. It transpires that customer retention management has several components. It is important to build relationships with customers, manage customer-to-customer interaction to reduce dissatisfaction, as well as try to reduce potential defections. Also, service failures should be managed, and hotels have plans for service recovery. A questionnaire sent to a representative sample of Gauteng hotels determined their customer retention management practices. The majority of these hotels do measure customer retention rates and consider activities and strategies associated with customer retention management as important in retaining guests. Gauteng hotels also conduct these activities frequently. It transpires too that different types and sizes of hotels, even those which do not measure their customer retention rate, differ very little in the importance they give to customer retention activities, and in the frequency with which such activities are performed. These results enable the formulation of a customer retention framework for hotels in Gauteng, for use by any type of hotel, whatever its size.
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