Relationship or revenue: Potential management conflicts between customer relationship management and hotel revenue management

Abstract

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Unfairness in consumer services: Outcomes of differential treatment of new and existing clients

“…Hicks, 1945), leading to additional profits (Kung et al, 2002;Sahay, 2007). This is especially true as regards services, where discrimination is widely practised by charging target segments different prices for essentially the same service in order to fill spare fixed perishable capacities, balance demand and maximize revenues per capacity unit (McMahon-Beattie, 2011;Wang, 2012). However, while this strategy may be effective for gaining new business it may also have negative effects on existing customers, who are practically "punished" for their loyalty.…”

The moderating effect of cost orientation on RMO adoption in the hospitality industry

“…One explanation is that the operationalisation of relational strategies is undermined when managers see RMO as less applicable to their businesses in situations of low profit margins than at times of plenty (Ang et al, 2000;Mascarenhas and Aaker, 1989;Mustafa, 2012;Wang, 2012), thus shifting attention from customer value creation to the bottom line in their budget. This being the case, relational practices succumb to price/cost-based competitive pressures (Jüttner et al, 2003), such that a recurring focus on cost cutting moderates the importance afforded by business to service quality and customer satisfaction (Hambrick, 1983;Palmer, 1996).…”

“…One perspective is that potential customers' transactional behaviours reflect 'multi-brand' allegiance and 'polygamous' purchasing behaviours in choosing a hotel (Gan et al, 2007;Kandampully and Suhartanto, 2000;Mohammed and Rashid, 2012), questioning the loyalty expectation and reducing the risk of negative effects from CO adoption. The other perspective is that the adoption of RMO as a business philosophy can be compromised, wittingly or unwittingly, by short-term competitive strategies, such as CO, since the business-environment dynamics may influence the effectiveness of a particular strategic orientation (McKee et al, 1989;Miles et al, 1978;Snow and Hrebiniak, 1980), and/or by implementation issues (Palmer, 1996;Wang, 2012). Considering both perspectives, one interpretation is that the effective adoption of RMO in the hotel trade hinges on the perceived trade-off between long-term performance and short-term objectives, since the short-term profit objectives prevalent in the industry may be inconsistent with the understanding that the lifetime value inherent to relational exchanges can take considerable time to realise a payoff (Tse et al, 2004;Wang, 2012).…”

“…The other perspective is that the adoption of RMO as a business philosophy can be compromised, wittingly or unwittingly, by short-term competitive strategies, such as CO, since the business-environment dynamics may influence the effectiveness of a particular strategic orientation (McKee et al, 1989;Miles et al, 1978;Snow and Hrebiniak, 1980), and/or by implementation issues (Palmer, 1996;Wang, 2012). Considering both perspectives, one interpretation is that the effective adoption of RMO in the hotel trade hinges on the perceived trade-off between long-term performance and short-term objectives, since the short-term profit objectives prevalent in the industry may be inconsistent with the understanding that the lifetime value inherent to relational exchanges can take considerable time to realise a payoff (Tse et al, 2004;Wang, 2012). That is, while RMO may be perceived as widely adopted in the hotel industry, situations of poor business performance, as illustrated by OTAs putting competitive pressure on hotel room rates and eroding both hotel-room income and -customer allegiance (Christodoulidou et al, 2007;Gazzoli et al, 2008;Murphy et al, 2005;Rohlfs and Kimes, 2007;Tso and Law, 2005), suggest that failure to achieve effective performance outcomes needs examining, in order to improve the quality of management information, hence enabling better decision-making.…”

Extent of Staff Professional Ethical on Customers' Commitment in Hotel Industry: An Empirical Study - Three-star Hotels in Jordan

“…As for organizations dealing with other parties such as suppliers, brokers and trade unions, it is outside the research framework, where the focus is on ethical -professional relationships between departments and employees and how they deal with these customers. Customer relationship management (CRM) in hotels has a strong effect on identifying and retaining the most profitable guests; and improving the commitment and loyalty of new guests (Wang, 2012).…”