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Crm In Hotel Industry Essay

4685 words - 19 pages

Int. Journal of Economics and Management 3(2): 297 – 316 (2009)

ISSN 1823 - 836X

Linking CRM Strategy, Customer Performance Measures and Performance in the Hotel Industry

Graduate School of Management, Universiti Putra Malaysia Faculty of Economics and management, Universiti Putra Malaysia

Customer relationship management (CRM) has been increasingly adopted because of its benefits of greater customer satisfaction and loyalty, which in turn, leads to enhanced financial and competitive performance. This paper reports on a study that examines the relationship between CRM strategy and performance and determines whether the use of ...view middle of the document...


International Journal of Economics and Management

Malaysian government’s determination to tap the potential of the tourism industry. For 2007, the number of foreign tourists who visited Malaysia exceeded the 20 million target set by the government. In terms of revenue, this industry earned RM46.1 billion which surpassed the targeted revenue of RM44.5 billion1. As part of the tourism industry, the hotel sector is entrusted with a significant role to continuosly assist the Malaysian government in realizing the economic potential of the industry. In the hotel industry, customer relationship management (CRM) becomes a strategic imperative for attracting and increasing guests’ patronage (Sigala, 2005). The hotel industry is facing an increasingly competitive market which signifies the greater need for the hotels to differentiate their customers. Since the hotels can collect and integrate a significant amount of their guests’ information, CRM is viewed as an opportunity for the hotels in Malaysia to use the information about their customers to improve the relationship for improving customers’ satisfaction and loyalty, and consequently, for increasing the hotels’ profitability. In this paper, CRM is regarded as a strategy, which focuses on customers for the purpose of retaining them, increasing their loyalty and subsequently, improving profitability of the organization. To retain customers, the relationship with customers has to be managed in a long-term and trusting manner for mutual benefits. Thus, the adoption of CRM should enhance the hotels’ performance through increasing customer satisfaction and loyalty, declining customer acquisition costs and increasing profitability by customers who are willing to pay a premium for better services (Piccoli et al., 2003). Although CRM is imperative for organizational survival, its implementation has resulted in mixed outcomes (King and Burgess, 2008) and prior empirical studies on CRM in the Malaysian context are still scarce. This study explores the contribution of the adoption of CRM strategy in enhancing performance of the 3- to 5-star hotels located in various parts of Malaysia. The star rating denotes universally accepted standards of luxury. It is only within these larger establishments that an interest in CRM would likely to be expected, thus, the emphasis of this study on the 3-star and above hotels. According to the 2007 Malaysian Association of Hotels Membership Directory, there are 332 hotels which have the star rating of 3-star and above. The objectives of the paper are twofold which are as follows: • examine the association between CRM strategy and performance and • determine whether the use of customer performance measures play a mediating role in the relationship between the CRM strategy and performance.

Information was obtained from the website Date of assessed was 30th June 2009.


Linking CRM Strategy,...

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